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Analysis: Green oil or green industry?Deadlock puts Norway in trouble

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The view of the Johan Sverdrup oil field in the North Sea on January 7, 2020. Carina Johansen/NTB Scanpix/From Reuters

Oslo — The Norwegian oil and gas industry is relying on renewable energy from hydroelectric power plants to cut Emissions From its offshore platform, but the competitive demand from the green economy is playing a role.

The decision to continue investing in new oil and gas projects was to abandon fossil fuels in the face of increasing global pressure and Norway’s own reputation as a supporter of the green economy Electric car The average per capita is higher than that of any other country, and almost all electricity relies on renewable hydropower.

But Oslo is unwilling to give up Norway’s advantageous position as one of the world’s top oil and gas producers, accounting for more than 40% of its exports, but wants to make the industry more environmentally friendly.

“The Norwegian Parliament has set a goal of reducing emissions from the Norwegian continental shelf by 50% by 2030. Shore power is the only technology that can provide cost-effective emission reductions that can bring the industry closer to this goal,” said Deputy Minister of Petroleum and Energy for Energy Minister Tony C. Tiller told Reuters.

There are practical problems with the plan.The power grid in Norway is restricted at certain moments, and the needs of other industries, especially green economy participants, such as battery Factory and hydrogen Plants must be taken into consideration.

Earlier this year, State Grid operator Statnett told Norwegian state-owned oil company Equinor and partner Aker BP to find power capacity elsewhere, which may add “nine zeros” to the current estimated cost of 50 billion kronor (US$6 billion). “. According to Karl Johnny Hersvik, CEO of Aker BP, they are powering some of their platforms.

Statnett’s proposal is a violent awakening of the oil industry, which makes Norway one of the richest countries in the world. Analysts said that due to rising emissions costs, if cheap renewable energy is not available, some of its oil fields may have to be closed early.

Environmentalists say this is what should happen and that renewable energy should not be used to extend the life of the fossil fuel industry.

“We call it greenwashing because we believe that the oil and gas industry should be eliminated, not expanded, and since it should be eliminated, it makes no sense to invest in marginal improvement,” Friends’ principal, Truls Gulowsen, Earth Norway, told Reuters Society.

He added that this measure will only solve a small part of the total emissions of oil and natural gas, while absorbing electricity from shore that is essential for the development of new green industries.

The Norwegian Ministry of Petroleum and Energy told Reuters that it “categorically” rejected the allegations of “greenwashing” because electrification would solve a large part of the country’s total emissions.

According to data from the Bureau of Statistics, the industry’s greenhouse gas emissions in 2020 will be 13.3 million tons of carbon dioxide equivalent, accounting for 27% of the country’s total.

The government stated that electrification may reduce the industry’s emissions to around 11.5 million tons by 2025 and slightly less than 9 million tons by 2030.

Lundin Energy of Sweden, one of its partners, said that due to electrification, the carbon dioxide emissions per barrel of oil produced by Norway’s largest oil field, Johan Sverdrup, is 0.45 kg, which is 40 times lower than the global average.

Greener oil

Using renewable energy to make heavy-polluting industries more environmentally friendly is one of the most controversial aspects of the transition to a low-carbon world.

Norway and many other oil-producing countries ignored the International Energy Agency’s call to stop investing in new fossil fuel projects this year.

Oslo has pledged to reduce its national emissions by 50-55% by 2030, which is in line with the EU’s goals, but not as ambitious as the United Kingdom, which is the second largest oil and gas producer in Western Europe, after Norway.

Like other oil-producing countries, Norway’s target does not take into account the emissions of oil and natural gas it sells to other countries.

The government predicts that by 2050, oil and gas extraction will naturally drop by 65%.

At the same time, produce oil at the lowest possible price Carbon Footprint It can help the country sell its products in a cleaner way than its competitors and reduce the risk of the industry’s expected increase in carbon taxes in the next few years.

On the west coast of Norway, Equinor and its partner Aker BP are waiting to hear whether the power regulator NVE will support their proposal to connect the drilling platform in the so-called NOAKA area, which is the largest oil and gas project in the North Sea after Sverdrup. It is expected that no decision will be made before the end of 2022.

“We still believe that this is the best and most cost-effective solution,” Aker BP’s Hersvik told Reuters.

He added that if it does not go well, the company needs to choose another further inland connection, they may still be able to start production in 2026, but the cost will rise.

NVE is a government agency under the Ministry of Petroleum and Energy. Its licensing decision can be appealed to the Ministry which has the final decision right.

According to Statnett, it will take 8 to 10 years to connect NOAKA at the preferred grid point because a new transmission line must be built.

A recent report by the Norwegian industrial lobby group NHO and the country’s largest union, LO, shows that Norway’s renewable energy demand will increase from an average of 135 TWh in the past five years to 170 to 190 TWh in 2030 The country’s surplus in 2020 is approximately 20.5 TWh.

The government is currently looking for ways to speed up the much-needed grid defenses, but for now, the problem of conflict of interest is still a headache.

Statnett’s regional partner on the West Coast, BKK, said in a statement: “The electrification of the shelf has greatly reduced greenhouse gas emissions, but it is important that it cannot be at the expense of restructuring and land-based business development.”

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