Norway’s PM promises to keep looking for oil ‘as long as it is profitable’

Prime Minister Erna Solberg says demand is key in considerations of how Norway will approach gas and oil extraction in future.

Norway’s PM promises to keep looking for oil 'as long as it is profitable'
A file photo showing a North Sea oil platform off the coast of Scotland. Photo: AFP

Solberg was responding to increased focus within her own Conservative (Høyre) party on the government’s approach to the oil industry, including taxation, as it seeks to form a strategy heading towards the 2021 election.

The youth wing of the Conservatives – Unge Høyre – has also called for a “prejudice-free” discussion of a reimbursement system [Norwegian: leterefusjonsordningen, ed.] by which the state covers 78 percent of the cost of a company’s oil exploration, provided it results in a profit for the company, NRK reports.

Solberg told the broadcaster that she supports a stable framework for the oil industry and that the exploration subsidy – which is effectively a reimbursement of the tax value of explorations costs – is key to that.

You can read more about the Norwegian tax regime for petroleum exploration here.

“(The reimbursement system) is well-justified with regards to the variety of companies, such that new technology is developed,” Solberg said to NRK.

The scheme has also acted as an incentive for oil companies to invest in exploration in Norway.

The PM added she supports continuing to explore in new areas provided there is demand and profit in the oil market.

“It is profitability which will determine whether we will expand oil and gas (industry) in future,” she said.

Conservative MP Lene Westgaard-Halle, who also supports the reimbursement system, said a discussion of how to update taxation of the oil industry was necessary, but that climate was not the primary factor.

“This is not primarily about climate, but about being economically viable when oil changes and the price of oil changes,” Westgaard-Halle told NRK.

“We are going to have oil for many years to come, whether you like it or not, but we must prepare for a scaling-down because we are seeing huge cuts on the consumer side,” she added.

READ ALSO: Critics blast Norwegian budget for 'small change' measures on climate


NGOs take Norway to European Court over Arctic oil exploration

Two NGOs and six young climate activists have decided to take Norway to the European Court of Human Rights (ECHR) to demand the cancellation of oil permits in the Arctic, Greenpeace announced on Tuesday.

NGOs take Norway to European Court over Arctic oil exploration
Northern Norway. Photo by Vidar Nordli-Mathisen on Unsplash.

It’s the latest turn in a legal tussle between environmental organisations Greenpeace and Young Friends of the Earth Norway on one side and the Norwegian state on the other.

The organisations are demanding the government cancel 10 oil exploration licenses in the Barents Sea awarded in 2016, arguing it was unconstitutional.

Referring to the Paris Agreement, which seeks to limit global warming to less than two degrees Celsius above pre-industrial levels, the organisations claim that the oil licenses violated article 112 of Norway’s constitution, guaranteeing everyone the right to a healthy environment.”

The six activists, alongside Greenpeace Nordic and Young Friends of the Earth Norway, hope that the European Court of Human Rights will hear their case and find that Norway’s oil expansion is in breach of human rights,” Greenpeace said in a statement.

In December, Norway’s Supreme Court rejected the claim brought by the organisations, their third successive legal defeat.

READ MORE: Norway sees oil in its future despite IEA’s warnings 

While most of the judges on the court agreed that article 112 could be invoked if the state failed to meet its climate and environmental obligations– they did not think it was applicable in this case.

The court also held that the granting of oil permits was not contrary to the European Convention on Human Rights, in part because they did not represent “a real and immediate risk” to life and physical integrity.

“The young activists and the environmental organisations argue that this judgment was flawed, as it discounted the significance of their environmental constitutional rights and did not take into account an accurate assessment of the consequences of climate change for the coming generations,” Greenpeace said.

On Friday, the Norwegian government unveiled a white paper on the country’s energy future, which still includes oil exploration despite a warning from the International Energy Agency (IEA).

The IEA recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

The Norwegian case is an example of a global trend in which climate activists are increasingly turning to courts to pursue their agenda.