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SOVEREIGN WEALTH FUND

Norway opposition leader calls for more ethical use of country’s oil fund

Labour leader Jonas Gahr Støre wants Norway’s oil fund to be invested more in renewable energy and infrastructure for renewable energy.

Published: 12 November 2019 14:47 CET
Norway opposition leader calls for more ethical use of country’s oil fund
Labour leader Jonas Gahr Støre. File photo: AFP

The sovereign wealth fund is responsible for managing the country's vast oil revenues.

“It may be that, according to current practice, the oil fund would not invest in a company that produces shale gas or is in oil sands, even though this is fully legal in the country in which this occurs,” he said to Aftenposten.

READ ALSO: Norway sovereign fund scales back plans to reduce oil investments

“We expect the (oil) fund to prioritize that the companies it invests in respect human rights, do not cause serious environmental damage or unacceptable greenhouse gas emissions. That is a political signal of what we want to do with the fund,” he also said.

Climate risk is something that must be given greater emphasis in the future in assessing the fund's investments, Støre argued.

Equinor, Norway’s largest oil company which is 67 percent state-owned, is not bound by the same ethics standards when exploring for oil abroad as those applied in investment of the country’s sovereign fund.

That could constitute an ethical mismatch which should be addressed, Støre said in the interview with Aftenposten.

The Labour leader responded in the interview to a question on whether his recent calls for stricter ethics rules for use of the fund were paradoxical, given Equinor can potentially earn Norway money through oil exploration in sensitive natural areas.

“I do not exclude that it must also be discussed, without going into the examples you mention,” he told the newspaper.

Støre also responded to the suggestion that, given that Equinor can be perceived as a Norwegian interest in a similar way to the sovereign fund, different ethics arguably apply depending on whether the country is investing or earning money.

“Yes, but there are many paradoxes in the world. During my time as foreign minister, I was confronted with the fact that Norway, which is concerned with climate, is an oil and gas nation,” he said.

“I replied that this is the whole paradox of the world that we want our emissions down and renewable sources to save the climate, but that we will still be dependent on oil and gas for many years,” he continued.

The Labour leader and former minister also said he felt people see the clear difference between listed company Equinor and the state oil sovereign wealth fund.

OIL

Norway sees oil in its future despite IEA’s warnings

Norway, Western Europe's biggest oil producer, plans to continue its oil exploration and drilling in the coming decades, the government said on Friday, despite warnings from the International Energy Agency (IEA).

Published: 11 June 2021 14:31 CEST
Norway sees oil in its future despite IEA's warnings
A North Sea oil rig. Photo by Jan-Rune Smenes Reite from Pexels

In a white book on its energy future, Oslo said it wanted to “extend the current practice with regular concession cycles on the Norwegian continental shelf to give the industry access to new prospecting zones.”

“We will supply energy to the world as long as the demand exists,” Oil and Energy Minister Tina Bru told a press conference.

“The government will therefore maintain an oil policy that facilitates profitable oil and gas production in the framework of the Norwegian climatepolicy and our climate goals,” she said.

The Scandinavian country aims to reduce its greenhouse gas emissions by between 50 and 55 percent by 2030, and to almost nothing by 2050.

But it is regularly criticised for the CO2 emissions generated abroad by the oil it exports.

READ MORE: Norway taps oil wealth to cushion Covid impact

This week, Norway launched a call for applications for a new licensing round in new offshore zones.

The Norwegian position contrasts sharply with that of the IEA, which recently warned that all future fossil fuel projects must be scrapped if the world is to reach net-zero carbon emissions by 2050.

International observers have criticised the Norwegian position.

“The Norwegian government and industry cannot ignore science,” said Sandrine Dixson-Decleve, co-president of international think tank The Club of Rome.

“We look to Norway for leadership and ambition on the energy transition – not complacency and backtracking,” she said in a statement.

Meanwhile, the head of climate and energy issues at the WWF, Manuel Pulgar-Vidal, said that “by standing on the side of fossil fuel interests, Norway risks having stranded assets.”

“Norway’s position will increase the risk of the world reaching fragile climate tipping points, which in turn will cause devastating impacts on the natural world on which we depend,” he said.

In 2018, Norway was the world’s 14th biggest producer of oil and 8th biggest producer of natural gas, according to the latest figures from the US Energy Information Administration.

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