Norway and the Age of Energy

The speech as delivered (checked against delivery)

Introduction

Madam President (Armstrong), thank you so much for this invitation. It really makes me humble.

When I got the invitation, I thought; what will be the subject? Am I invited to Columbia to explain to you why Norway in May – together with Spain – decided to recognize a Palestinian state? Would that be the theme? I would be happy to come and talk about that, because it's a major theme of our times. It's a major theme of the conflict in the Middle East and at the UN right now, I can tell you.

But I was invited to talk about Norway and the Age of Energy, and that's a privilege to share with you. – First, can I ask, any Norwegian students here? There – yes, great to see.

The title is important, Professor (Bordoff), and thank you for being with me today. – Because somebody asked me; Norway, are you living in the oil age? And the point is that no, we live in the energy age. All civilizations have always been depending on energy. It started with fire, and it has moved on. And oil is a transitionary source. We are transitioning out of oil, out of gas, out of fossil, and now into a new chapter. I emphasize transitioning, because this is complex; when energy sources shift, power shifts and politics shifts.

Norway’s geography

So, you see on this map (slide: map of Europe, the Atlantic Ocean, North America), the big map, you have the United States, America, and Norway. We have left out the rest of the world. You see Norway there on the side?

A few things on geography. This is Norway with its boundaries, continental shelf, and seabed (slide: map of Norway, the North Sea, the Barents Sea, maritime boundaries). We are five and a half million people. That is smaller than New York in terms of population. We are 360,000 square kilometers land. If you take land and sea and seabed, we are the 17th largest country in the world. – Because Norway has seven times more sea and seabed than land.

I was in China two weeks ago, and you need some big figures to impress the Chinese when you come from a small country. First, you need a joke. And the joke is to stand next to President Xi, and say, Mr. President, when you and I stand together, we represent 1/5 of the world population! – That’s funny, isn't it? You laugh. – But he didn't laugh, because it was simply a fact. Now, what I told him is that Norway has the world's second longest coastline, longer than China, if you take coasts and islands all together.

This is part of Norway's story, because we have always depended on the sea, seabed, the resources in the sea, and recently under the seabed. We have drawn all the lines and the limitation lines according to the Law of the Sea. You learn about the Convention of the Law of the Sea here at Columbia, I know.

We have drawn all our borders. And I can tell you, as Foreign Minister of Norway in 2010, I agreed with the foreign minister of Russia; the line you see up there in the Arctic, which is stretching the Arctic and the Barents Sea between Norway and Russia, a 50/50 border, because we had a disputed border. So, according to the principles of the Law of the Sea, we now have borders all around.

Norway’s energy story

So, what about energy and Norway? What about this beautiful picture? (Slide: photo of Blåsjø reservoir, Ryfylke, Norway). Next year, friends, there will be 200 years since the first Norwegians emigrated to the US, a century of emigration. When I meet students, I often ask the question; how could it be that people left Norway, a country that had oil and gas, a country that had waterfalls that could produce hydro-electricity, a country that had fjords made for fish farming?

The answer is pretty easy. They didn't know. It hadn't been discovered. In 1814, Norway had 18 students. Today, we have 300 000, and a few of them are here.

This is Norway's primary energy source: This is water stored up in the mountains that we tap and create electricity. Norway, the third largest exporter of gas in the world, does not use any gas in its economy. 80 % of our electricity comes from these big water reservoirs. You see (in the photo) there are arrangements at the sites, and we can regulate it in order to produce electricity safely. 

Oil and gas

Then in the 1950s, the Norwegian government asked the Geological Survey; can there be found hydrocarbons on the seabed of the Norwegian continental shelf? In 1958, the leading experts came back and said, and I quote; "It can be excluded that there are hydrocarbons on the Norwegian continental shelf." – Again, knowledge. That was the knowledge.

Then, in 1969, a discovery was made. There was oil on the Norwegian continental shelf. So, then started another chapter of our energy history. The importance of taming these water resources at the end of the 19th century, in the 1880s-1890s, that was the first chapter of the story. Then came oil. Then came gas. And now we are transitioning onwards.

Export to Europe

What you see here (slide: map of Norway, Europe, energy supply, pipelines) is modern Norwegian infrastructure. Norway has three major land installations on shore, 95 offshore installations, and 9 000 kilometers of pipelines, connecting Norway, Europe, and the United Kingdom, transporting gas.

Again, the height of oil was reached around year 2000. This is transitioning down. We are today providing one third of Europe's gas. It says 30 %. It's actually 34 % right now. And one third of UK's gas coming from Norway. And you see that also the US with LNG has a chunk.

It means that for Europe, Norway's provision of gas is key for the European economy (slide: illustration of the gas suppliers to the EU). When the war in Ukraine erupted, there was a dire crisis in Europe because gas was lacking. The storage of gas was so low that big economies like Germany and others were really in danger of having to close down.

At that moment, my government was able to tell the companies: Put everything aside and see what you can do to increase your gas exports right now. And we were able to increase the gas export by around 10 %. And for that reason, Germany was able to fill its storage and keep continuity and be able to get through that crisis. So, this is the reality as it is today.

Norway’s Pension Fund Global

How do we manage this source? There has been income to Norway. So, after a couple of decades of investments, and when you run deficits, then we started to run surplus. And by the end of the 1990s, we created the Norwegian sovereign wealth fund. And it starts there at the left (slide: illustration of the Pension Fund Global’s market value development). And you can see it is increasing, gradually, as it goes, starting in 1998. And we are now at $1,668,067 billion.

So, we are translating the source of this energy into financial assets in a pension fund, which is going to last for eternity. We have created a law which makes it prohibited for any politician to stick the hand into that fund and say we will use it for this, that, and the other. We can use up to 3 % of the interests of the fund in our regular budgets.

And right now, as we are transitioning, the revenues of this fund come more from its financial investments than it does from oil and gas, because we are transitioning out of oil and gas.

Cut emissions

Then the question is, but why don't we close down? – Listen to the IPCC. It is over with fossil fuels. And that's what we will be discussing, Professor.

My point is that we have to transition out of this. And that is why, as we move out, Norway is saying; we are going to reach our Paris obligations. The world is emitting about 50 billion tons of CO2 a year, Norway a bit less than 50 million. If we reach our climate targets, which is to cut by 55 % in 2030, it will not make a difference in the world.

But what I'm telling my friends in Norway is that the way we cut our emissions may matter. And that’s why we, for example, have cut emissions on the continental shelf. You can see here (slide: illustration of the world’s largest emitters) the cumulative emissions since 1990 in tons of countries emitting from energy activity. We are extremely low. We are expecting from our industry to cut emissions by 50 % by 2030.

Carbon capture and storage

In addition, we have been leading on this very crucial technology, carbon capture and storage (CCS), which means taking CO2 out of the gas and then depositing it down under the seabed 2,000 meters on the continental shelf.

When Al Gore won the Nobel Peace Prize for his work on climate, he came to Oslo and he asked me; I fear this technology because it may leak. And that's a decent question. But we have done it for 30 years. And we know it doesn't leak. It can be done.

Norway has on its continental shelf probably enough space to store all of Europe's CO2 for many decades. We have created a complete value chain where we can take CO2 from waste plants, from gas, from hard to abate industries, such as cement; take the CO2, transport it out at the plant by the coast, and then by a pipeline to the seabed and 2,000 meters down. It will kind of metamorphose into volcanic structures and it will stay.

Friends, the world will never reach the climate targets if we don't succeed in a transitional period with carbon capture and storage because there's going to be gas around for quite some time. But the main emphasis of my government, what we work on now, is to create new renewable energy. Because as you have said – Professor, I've read your articles – the challenge is that we will need to cut emissions while getting more energy. – How do we square that circle?

Renewable energy

We are now – with our long coastline – venturing into offshore wind. Norwegian companies are going to build offshore wind off New York, and we're going to do it along our coast. We're venturing into floating offshore wind, which is technologically a big, complicated task.

I'll finish on this one because this is a global issue. So, let me say this. Our energy history has chapters. And we are now moving into the chapter which is about renewable energy from offshore wind, onshore wind, solar – you can even get energy from sun in Norway because we have radiation, which is very favorable for sun – and hydrogen. We have a big fertilizer company in Norway. If they exchange gas with hydrogen, they can cut a million ton of CO2.

All these steps we have to go through. New car sales in Norway this year is 90 % electric. And by 2025, we will have a law prohibiting the sale of fossil fuel cars. So, we are pushing on this to enter into that new chapter. The new chapter will be about renewables.

Lack of electricity

Now, this should worry us: There are 700 million people in the world without any electricity. Don't ask them to make an effort for climate change. There are hundreds of thousands and even millions of – especially women, in third world countries, who get sick because they cook from fuels that are polluting their bodies, indoor air pollution, because they don't have proper electricity.

So, I am engaging, in addition to being Prime Minister, with a group which is now supporting the World Bank and the African Development Bank with something that's called “Mission 300”. The target is to provide 300 million Africans with electricity by 2030. It is absolutely feasible. It's possible to do it. Is it costly? No, not very costly. But it needs organization. It needs cooperation. It needs partnerships. And that is why it is so important, that we can get this opportunity. Because everything that can be electrified will be electrified.

Let me share with you a final figure, and then I'll finish. My Minister for digitalization, she told me the other day; Jonas, when you make a Google search – as we all do, several times a day – you spend 0.5 unit of electricity. If you do an AI search, you use 15 units.

So, this just underlines for us that we are venturing into a future of energy chapters all over the world, which is going to demand enormous amounts of energy. So, the question is to our civilization: What kind of energy?

There will be some nuclear. There will still be some oil and gas. But the big chapter now is about how we venture into renewable energy. My ambition is that the people who started in 1970 to build those platforms at the Norwegian continental shelf; their knowledge, I want to take maximum advantage of their knowledge into the new chapter. And when I meet people of my generation who took on that work-life to build platforms and build pipelines, and I see them now working on how to design big offshore windmills, I think we are on the right track; we are really in transition.

Thank you for your attention.

 

• See the video: Prime Minister Jonas Gahr Støre of the Kingdom of Norway | World Leaders Forum (columbia.edu)