Norwegians go to polls next Monday: oil and gas industry is under intense spotlight

 


With a new election looming, the oil industry that transformed Norway from a poor nation in Europe to one of the wealthiest countries in the world in five decades, with an enviable welfare state to match, suffered a setback recently, which could have far-reaching consequences in the years to come.

Norway recently offered eight licences for the exploration of oil, both in the North Sea and Barents Sea, while facing mounting criticism by its Green movement. Much to its horror, only four of them were taken by the companies interested in the task.

In short, the oil companies have been forced to take the public mood on board before deciding to expand their activities in the sector.

The Norwegian government has already decided to cut down on subsidies to the oil and gas sector, buckling under pressure from the Green movements, which can potentially determine the next government.

The indigenous groups in Norway too have increased their agitation against the moves in exploring new oil fields, hindering the government’ attempt to go back to good old days while filling up the coffers with oil revenues.

At present, Norway produces around 4 million barrels per day and the revenues are essential to maintain the status quo, when it comes to maintaining the welfare state and its economy.

Norwegian oil production in July

As this is the case, the Norwegian government knows the serious risks, both in the short-run and long-run, in the event of turning its back on the fossil fuel industry that brought in unbelievable prosperity in a relatively short time; in short, it is easier said than done.

The Conservative government, led by Erna Solberg, the prime minister, in Norway is facing the polls on September, 2021, and the opinion polls indicate a tight fight.

She has advocated the concept that Norway should not abandon its oil and gas industry, despite the calls by the IEA, International Energy Agency, to do otherwise.

Although she admitted a change in direction is inevitable as far as fossil fuel production is concerned, refused outright to speed things up for political reasons at the expense of Norwegian economy.

Ms Solberg argues that the petroleum producers are needed to earn the necessary capital for investing in renewable energy, something that her Green rivals do not agree with.

The popularity of Ms Solberg rose last year when she joined the prestigious club of successful woman leaders across the world in combating Covid-19, despite being fined by police for breaking the very rules inadvertently once.

The outcome of the forthcoming elections comes at a critical time for the oil and gas industry in general and the Scandinavian country in particular, when the entire sector is being demonized mercilessly for every rising index of climate related phenomena, ranging from flash floods to wild fires.

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