Arctic oil drill splits Norway’s government 14 March 2011 -original article here

Norway’s Labour-led coalition government is preparing for crisis talks after one of its parties, the Socialist Left (SV), pledged to hold out against oil drilling in the pristine Lofoten region.

The oil industry views the untapped waters around the Lofoten and Vesteraalen islands as one of the best remaining prospects off Norway, the world’s fifth biggest oil exporter, whose output has fallen by a third in the past decade. But Norway’s green and socialist movements oppose oil and gas activities in the region, which is home to Europe’s largest cod stock and unique cold water reefs.

A decision on whether to order an impact assessment study for drilling in Lofoten – the most divisive issue in Norwegian politics – is due within weeks. On March 9, Labour MPs asked Prime Minister Jens Stoltenberg to negotiate a way out of the stalemate with SV, possibly by changing the study’s name or tweaking its scope. But the Socialists rejected this. “We can’t accept any study that leads to opening the region for oil and gas activities,” SV’s energy spokesman Snorre Valen told Reuters. “We simply won’t compromise on this.”

Oil industry pressure
The ruling coalition has survived for six years, partly by delaying decisions on the Lofotens. But pressure from the oil industry, trades unions and some local people is forcing Labour to move on the issue. The SV environment minister Erik Solheim played down the chances of a government collapse to the Aftenposten newspaper.

“The government has for the past six years shown a phenomenal ability to survive. We have like Lazarus risen from the dead, and several times at that,” he was reported saying. Norway’s oil row comes as a report by the US National Academy of Sciences warns of a new struggle for oil and gas resources in the Arctic by 2030. Melting ice cover due to climate change will upset the Arctic power balance and intensify unresolved disputes among countries with Arctic borders. These include Norway, the US, Canada, Denmark, Russia, Iceland, Sweden and Finland.

“The geopolitical situation in the Arctic region has become complex and nuanced, despite the area being essentially ignored since the end of the Cold War,” the study says. It predicts a low chance of conflict but cautions that that “co-operation in the Arctic should not be considered a given even among close allies.”

(EurActiv with Reuters.)


The resource-rich Arctic is becoming increasingly contentious as climate change endangers many species of the region’s flora and fauna but also makes the region more navigable. Up to 25% of the planet’s undiscovered oil and gas could be located there, according to the US Geological Survey.

No country owns the North Pole or the region of the Arctic surrounding it. The surrounding Arctic states of the USA, Canada, Russia, Norway and Denmark (Greenland) have a 200 nautical mile economic zone around their coasts.

In August 2007, a Russian icebreaker reached the North Pole and a Russian mini-submarine planted a titanium Russian flag on the seabed there. The move was widely interpreted as a bellicose claim by Russia to the North Pole seabed and its resources.

Norway covers between 10 and 18% of EU oil demand and about 15% of its natural gas. The country, a member of the European Economic Area since 1994, is the world’s third largest exporter of oil and gas after Saudi Arabia and Russia.

By 2015-2020, natural gas deliveries from Norway to the EU are expected to grow from 85 billion cubic metres to 120 bcm, covering 7-9% of the EU’s entire gas consumption by 2020.

New Norwegian oil minister open to Arctic drilling

March 4, 2011 | 08:07
Reuters Original article here
Norway replaced its oil and energy minister on Friday, appointing a rising politician who is more open than his predecessor to the prospect of drilling in a pristine Arctic archipelago.

Terje Riis-Johansen, who personally opposed drilling in the Lofoten region, resigned after months of criticism of his handling of a costly and delayed carbon capture facility and a plan to build power cable across a scenic fjord.

He was replaced by fellow Centre Party politician Ola Borten Moe, a 34-year-old farmer who is the grandson of former Prime Minister Per Borten and a rising star in Norwegian politics.

The oil industry has said that only by allowing drilling off the Lofoten Islands, a region rich in fish and unique cold-water reefs, can Norway prolong its oil boom as output from North Sea oilfields dwindles.

“Under certain circumstances I would not exclude the opportunity (of drilling in Lofoten),” Moe told Reuters after being presented to the King as the new oil minister.

Norway is the world’s No. 5 oil exporter and No. 2 gas exporter, although its oil output, now about 2 million barrels per day, has dropped by a third since peaking in 2001.

Moe said his position was consistent with the Centre Party view that no formal impact assessment of drilling off the Lofotens should be allowed during this parliamentary term, which ends in 2013.

The Labour-led coalition government is discussing whether to carry out such a study, largely seen as a stepping stone to opening the region for oil exploration.

Moe has said previously three conditions would need to be met for him to support drilling: Norwegian oil firm Statoil would need to show greater efforts on safety and the environment; oil spill preparedness must be improved; and jobs would have to be created in northern Norway region.

Moe told Reuters he was in favour of building gas power plants in Norway, a controversial topic in a Nordic country whose electricity is generated by hydroelectric power, although their emissions should be captured by carbon capture and storage.

Prime Minister Jens Stoltenberg said his government’s energy policy would remain largely unaffected by the minister. “(Moe) stands on the same political foundation as the whole government,” Stoltenberg told Reuters.

“Everyone who is interpreting things should take it easy.”

Aside from environmental controversies, Riis-Johansen has taken heat over revelations that his ministry awarded power generation concessions to two publicly-owned companies that made illegal donations to his agrarian-backed Centre Party.