Arctic oil plans under fire in Norway

September 8, 2016

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Politicians, environmentalists, fishermen and even oil analysts have expressed outrage and dismay at Norway’s plans to open up two new areas for petroleum exploration close to fish spawning grounds and one of the most picturesque parts of the Arctic.

Norway’s oil ministry is inviting companies to nominate exploration blocks , just inside the Arctic Circle and home to the world’s largest cold water coral reef, as well as in More in mid-Norway, an important spawning ground for herring.

The move by the centre-right government — a year ahead of parliamentary elections — has caused consternation because the 2013-17 coalition agreement explicitly ruled out oil exploration in Lofoten, More, and other Arctic areas such as Vesteralen and Jan Mayen.

“Of course, it’s an act of war. It’s a stupid act. This kind of politics belongs to 20 years ago. They are missing what is happening in the world,” said Jonny Berfjord, chairman of the Norwegian Fishing Vessel Owners’ Association.

Nina Jensen, head of environmental group WWF in Norway, said: “I am so furious. It’s a complete denial of the changes that are happening in the world. It’s just back to business as usual.”

A Norwegian official conceded that the move was “very provocative”. Potential exploration of the Lofoten and Vesteralen islands has long been controversial, pitting those who argue it would deliver more jobs for Norway’s remote north against environmentalists.

Mr Berfjord said the jobs argument was bogus as opening up these areas would cost more jobs than it would provide. “The reputation of the Norwegian fish industry, the Norwegian government, and the Norwegian oil industry is going to suffer,” he added.

The disputed decision could also become a political headache for Conservative prime minister Erna Solberg: the Liberal party and Christian Democrats, whose support is crucial for the centre-right government to have a majority in parliament, are both against drilling in these areas.

“Oil minister Tord Lien must clean this up. There is no doubt that the More blocks and Nordland 6 [next to Lofoten] should not have been on the list,” Ola Elvestuen, a Liberal MP, told the NTB news agency. A public demonstration against the move is planned for Thursday afternoon in Oslo.

, the government-controlled oil company, has been one of the most vocal proponents of opening up the area around Lofoten for development, arguing that Norway’s oil production would otherwise continue to decline. , Statoil’s chief executive, even recently declared that oil from Lofoten would be “good for the climate” because Norwegian oil production has lower emissions than the global average — a claim that is refuted by environmentalists.

Oil analysts expressed scepticism over the new areas would be, given that they would be unlikely to start producing oil until about 2030 when technology — including the likes of electric cars and 3D printing — could have changed the demand for petroleum. “I’m not really sure that these areas will be profitable. The more expensive producers such as Norway will have a lot of challenges going forward,” said Thina Saltvedt, analyst at Nordea, the Nordic bank.

The outcry comes as the one oilfield producing in the Norwegian Arctic — the Goliat platform run by Italian oil company — is under intense scrutiny from regulators after a series of mishaps including an electricity blackout and a serious accident involving a worker. Production is stopped at the moment until Eni can convince the regulator on safety.

Category: Oil & Gas