With a new election looming, the oil industry that
transformed Norway from a poor nation in Europe to one of the wealthiest countries
in the world in five decades, with an enviable welfare state to match, suffered
a setback recently, which could have far-reaching consequences in the years to
come.
Norway recently offered eight licences for the
exploration of oil, both in the North Sea and Barents Sea, while facing
mounting criticism by its Green movement. Much to its horror, only four of them
were taken by the companies interested in the task.
In short, the oil companies have been forced to take
the public mood on board before deciding to expand their activities in the
sector.
The Norwegian government has already decided to cut
down on subsidies to the oil and gas sector, buckling under pressure from the
Green movements, which can potentially determine the next government.
The indigenous groups in Norway too have increased their
agitation against the moves in exploring new oil fields, hindering the
government’ attempt to go back to good old days while filling up the coffers
with oil revenues.
At present, Norway produces around 4 million barrels
per day and the revenues are essential to maintain the status quo, when it
comes to maintaining the welfare state and its economy.
As this is the case, the Norwegian government knows
the serious risks, both in the short-run and long-run, in the event of turning
its back on the fossil fuel industry that brought in unbelievable prosperity in
a relatively short time; in short, it is easier said than done.
The Conservative government, led by Erna Solberg,
the prime minister, in Norway is facing the polls on September, 2021, and the
opinion polls indicate a tight fight.
She has advocated the concept that Norway should not
abandon its oil and gas industry, despite the calls by the IEA, International
Energy Agency, to do otherwise.
Although she admitted a change in direction is
inevitable as far as fossil fuel production is concerned, refused outright to
speed things up for political reasons at the expense of Norwegian economy.
Ms Solberg argues that the petroleum producers are
needed to earn the necessary capital for investing in renewable energy,
something that her Green rivals do not agree with.
The popularity of Ms Solberg rose last year when she
joined the prestigious club of successful woman leaders across the world in
combating Covid-19, despite being fined by police for breaking the very rules
inadvertently once.
The outcome of the forthcoming elections comes at a
critical time for the oil and gas industry in general and the Scandinavian
country in particular, when the entire sector is being demonized mercilessly
for every rising index of climate related phenomena, ranging from flash floods
to wild fires.
