Johan Sverdrup oil field off the North Sea is shown on Oct. 9, 2018. Europe’s frantic search for alternatives to Russian natural gas has dramatically increased the demand — and price — for Norway’s oil and gas. (Carina Johansen/NTB Scanpix via AP)

Norway is seemingly a paradox: they want to be at the forefront of international efforts to address climate change, yet the country aims to cash in on oil and gas for years to come. Norway’s centre-left government has said its lucrative oil and gas sector will be developed – not dismantled – as long as there is worldwide demand. Norway will “meet the world’s growing need for energy … with a minimum climate footprint”, according to Karl Hersvik, CEO of Aker BP, an energy company operating on the Norwegian continental shelf. The Norwegian government expects record income in 2023, up fivefold from 2021, and have made significant commitments (up to 50 per cent of investments) to lower the GHG emissions from their production practises.

As part of the US$5.7 billion plan announced in 2021, Equinor (formerly Statoil – Norwegian state-owned multinational energy company headquartered in Stavanger, Norway) plans to replace most of the existing gas and diesel turbines currently used to power its producing platforms with DC cables linked to new offshore wind power and the national grid, which is virtually all hydro. By using this green electricity to power the platforms the company plans to: 1) cut emissions from operations and 2), have increased sales of gas which the EU desperately needs.

Norway believes sharply reducing emissions across the production sector is an essential cost of continuing to do business. Norwegian Prime Minister Jonas Store stated last year, “if we were to say from one day to the other that we close down production from the Norwegian shelf, I believe that would put a stop to an industrial transition that is needed to succeed in the momentum towards net zero…So we are about to develop… not close down.”

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Given that Canada is 3rd in the world in proven oil reserves, should we not do something similar? How about nuclear as the energy source for the oilsands production rather than natural gas?

Not a new idea, a nuclear plant located at Fort MacMurray has been tossed around for at least 25 years. This should be a national priority. With the longest reserve life index of any producer in the world – it’s a no-brainer – because infrastructure costs can be amortized over decades. And as production wanes at oil sands over the coming decades, such a reactor could help Alberta further with non-emissions producing electricity added to the residential grid. Canada is, therefore, in a better position than Norway to make the necessary investments to reduce or eliminate emissions from production practises. In the absence of nuclear power can we also accelerate CCS – carbon capture and storage for emissions reduction?

2022 Global Oil Reserves

billions of barrels

Proven Proven and Probable Proven Life of Reserves (yrs)
Saudi Arabia 56 136 14.2
Russia 45 120 12.2
Canada 32 41 19.2
Iraq 19 39 10.5
United States 27 36 6.1
Iran

……..

14 29 11.3

 

……… Norway 5 7 7.6

Source: Rystad Energy

The Pathways Alliance, a group representing 95 per cent of oilsands companies, has plans to make its production carbon neutral by 2050. What is needed to accelerate the timelines of that process? World demand for oil will be around for a long time. Let’s not block this great commercial potential for the whole country – at a time when the world wants and needs oil and gas. At the same time let’s not dismiss the business case to clean up our production.

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Norway has found a way to navigate and find that middle ground, while at home we put up roadblocks. In a recent interview with Amanda Stephenson of The Canadian Press, Mike Belenkie, CEO of Advantage Energy Ltd, said “… the industry has almost given up on the notion that we will ever be able to deliver more energy to the world.” In contrast, “the Norwegian government sends clear signals and industry finds solutions by working with the government not against it” according to Norway’s ambassador to Canada, Jon Elvedal Fredriksen.

In an all too familiar refrain, the Government of Canada does not support the oil and gas industry – despite the vast reserves. The Canada Energy Centre has noted that “Canadian LNG exports to Asia could provide the annual net emissions equivalent reduction of removing every single car from Canadian roads.” While Deputy Prime Minister Chrystia Freeland said that Canada has a “political responsibility” to aid its allies, Environment Minister Steven Guilbeault has rejected the idea of building LNG terminals in Canada. The world needs energy, with renewables still not providing the stability or viability to national power grids, despite years of development and deployment, so essentially, we are condemning the world to even higher emissions as they source natural gas from other jurisdictions that likely do not have our ESG standards.

Given our nation was founded on its great natural resources, why is there such hostility to the energy resources we actually already have? It may be difficult to imagine the role that oil and gas companies can play in this energy evolution, but while renewable technology has made great strides in recent years, oil and gas are expected to stay in the picture for decades to come, particularly in developing countries. We need to find that middle-ground that has allowed Norway to prosper. Governments and industry need to get together to figure out how to ensure a profitable oil and gas sector while also being emissions conscious and addressing stakeholder’s sustainability concerns. Given our vast oil and gas reserves, we have the most to win – or the most to lose. Let’s pick win.

Ken From retired as SaskEnergy president and CEO in 2022. Prior to that he held similar positions with the Petroleum Technology Research Centre, Technical Safety Authority of Saskatchewan, Raven Oil Corp. and Prairie Hunter Energy Corp. 

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Ken From: Climate change – a “super wicked” problem

Ken From: The “energy transition” is discussed without much thought. This recently retired CEO of SaskEnergy thinks about it a lot