Result of Norwegian elections could affect Arctic oil drilling

In the United States, issues of Arctic resource management are rarely national issues, let alone ones that could decide an election. Drilling in the Arctic National Wildelife Refuge in Alaska comes up as a hot button topic now and then, but is hardly as sensitive as oil drilling in Norway.

The Norwegian elections on September 14 could prove to be a turning point in the country’s position on drilling in the Arctic. The race is too close to call right now, so both oil companies and environmentalists are waiting with baited breath to see how the hammer will fall. Currently, the so-called Red-Green coalition, which is a center-left coalition between the Labour, Socialist Left, and Centre Parties headed by Prime Minister Jens Stoltenberg, has blocked drilling in the pristine waters around the Lofoten Islands, which are estimated to hold two billion barrels of oil. The coalition is tracking at 46.7%. The opposition parties, which would likely form a four-party center right coalition, has 50% of the vote in opinion polls. If they win, the waters around the Lofoten Islands could be opened up to oil exploration and exploitation.

The lure of oil

Oil drilling around Lofoten would begin around 2020, right when projected supplies are expected to fall off sharply. An expansion of the industry would create new jobs, which is a selling point with the Labour Party. Perhaps most importantly, it would allow Norway’s Government Pension Fund to continue raking in the kroner. Interestingly, the oil fund itself is trying to move towards more environmentally-friendly investments as it tries to set the standard for sovereign wealth funds around the world [1]. But what good are green investments when the country’s own oil industry is responsible for 2.7% of the world’s carbon dioxide emissions?

It appears that Norway feels a certain amount of guilt for having an oil industry. A country that prides itself on its traditional respect of nature, encapsulated in the word friluftsliv, or “open air living,” with people hiking in fjords and skiing down snowy slopes, has at the same time become the world’s fifth-largest oil exporter and a major carbon dioxide emitter. In order to mitigate the industry’s negative impact on the global environment, the government has invested in many environmental projects abroad through foreign aid, such as its donation of $1 billion to rainforest preservation in Brazil. Norway hopes to become carbon neutral by 2030, yet this will only come through foreign aid and the purchase of carbon credits, not by an actual reduction of the national oil industry. For instance, 100 million kroner would purchase 100 times as many emission credits as the amount that oil exploration in the Lofoten Islands would cause, making it easy for Norway to become carbon neutral on paper. [2]

Yet even if a victorious center-right coalition were to open up the wells around Lofoten and generate more revenue, this won’t guarantee them long-term popularity. No government has been relected in 16 years, a statistic which Stoltenberg is trying to change. He has spent more of the oil and gas money than any other Norwegian government in history in order to prevent a recession, yet his party is still behind in the polls. [3] Norwegians seem to always want their government to spend more money, yet politicians prefer investing it for a rainy day when all of the wells are dry.

Problems of drilling in the Lofoten Islands

Drilling in the Lofoten would be particularly troublesome for two major reasons. First, the rigs would be placed relatively close to the islands, since the continental shelf is narrow. This presents both an aesthetic problem and an environmental problem. If there are any mishaps on the rig, the oil slick could come close to shore. It also would be slow to dilute given the cold temperatures of the northerly waters.

Secondly, the Norwegian Sea is plentiful, and a major fishing grounds for a country in which fishing is still the third largest export sector. When researchers from the Norwegian Petroleum Directorate attempted to survey the area to find out how large the oil deposits were, they offered compensation to fishermen whose activities would be disturbed by the seismic testing. Some fishermen were so opposed that they refused the money, leaving the survey partially incomplete. [4] Suffice it to say that if actual drilling were to occur, much more controversy would erupt, and those hardy Norwegian fishermen probably will no’t go gentle into the Arctic night.

News Links

[1] “Norway fund moves towards green investments,” New York Times

[2] “Lofoten olje verdt 100 mrd,” e24.no (in Norwegian)

[3] “Stoltenberg struggles in election after record handout,” Bloomberg

[4] “Norway vote may break Lofoten drilling gridlock,” Reuters