Political keynote at Conference on Gas – The Fuel of the Century. Subsea to Beach Production Systems

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Mesdames et Messieurs,

Le gaz est l’énergie du siècle. Son importance est capitale pour la sécurité énergétique de l’Europe.

Bientôt, le gaz sera extrait de la glaciale mer de Barents – dans un premier temps du gisement Snøhvit dans la partie norvégienne et, dans quelques années, également du gisement Shtockman. Il s’agit là d’une évolution majeure pour la sécurité énergétique du monde. 

Dans ces mêmes zones du Grand Nord, la banquise autour du pôle Nord est en train de fondre. [Illustration 1]. Le climat de notre planète est menacé. Notre génération a donc une grande responsabilité, celle de freiner les émissions de gaz à effet de serre.

Notre dilemme – le dilemme du monde entier – est celui-ci: les besoins en énergie fossile augmentent, alors que la nécessité de réduire les conséquences de notre consommation se fait de plus en plus pressante.

Qu’un ministre des Affaires étrangères soit invité à faire un discours lors d’une conférence sur l’énergie et la technologie est le signe que les temps ont changé.

Il y a quelques années, ce secteur n’était pas du ressort des affaires étrangères. Aujourd’hui par contre, l’énergie, le climat, de même que la technologie associée à ces secteurs, constituent des questions primordiales même en politique étrangère.

Il est particulièrement intéressant pour moi de prendre la parole à l’occasion d’un séminaire sur le gaz – l’énergie du siècle. L’importance du gaz naturel ne cesse en effet de croître, et la production de gaz norvégien augmente.

Le gaz est une matière première intéressante, mais également exigeante, puisque son extraction et son exploitation nécessitent une technologie très avancée. De plus, une connexion physique sous forme de gazoduc est généralement requise entre son lieu d’origine et sa destination finale, ce qui crée des liaisons durables entre vendeur et acheteur.

Même si le développement de la technologie du gaz naturel liquéfié va modifier les perspectives, le gaz naturel restera dans un avenir prévisible l’une des matières premières les plus « stratégiques » du monde.

Vous avez aujourd’hui abordé quelques-uns des défis technologiques que pose l’acheminement du gaz depuis les réservoirs du plateau continental jusqu’à la terre ferme. Je ne suis pas en mesure de contribuer au débat sur ces aspects-là, mais j’aimerais évoquer le contexte politique de cette évolution technologique. Je pense tout particulièrement aux questions de sécurité énergétique et climatique, mais aussi au Grand Nord et aux ressources que nous possédons dans cette région.

Bien que nous soyons à Paris, il me paraît plus adapté à cet auditoire de parler de ces questions en anglais.  

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Dear Friends,

It is a special pleasure for me to discuss energy, climate change and technology here in Paris. It is exactly 30 years ago today that deliveries of natural gas from the Norwegian continental shelf to France started, when the Norpipe gas pipeline to Continental Europe came on stream on 1 October 1977.

The development of the Norwegian continental shelf as a petroleum province in the 1960s and 1970s had a significant French dimension. French companies were among the pioneers on the Norwegian shelf. They contributed to the development of offshore technological expertise in Norway.

Norwegian geologists trained at the Institut français du pétrole. French companies participated in the development of important fields like Ekofisk and the Troll gas field.

Today, French companies are taking part in the Snøhvit LNG development in the Barents Sea, which has just come on stream – LNG production started one week ago.

Snøhvit includes Europe’s largest, and the world’s northernmost, LNG liquefaction facility. It uses cutting edge subsea technology, and it will deliver the first natural gas from the European Arctic to consumers in Europe and the US. So Snøhvit is yet another field where France is exploring new frontiers together with Norway.

Today’s conference highlights this point. Since the first natural gas flowed from Norway to France through Norpipe 30 years ago, enormous amounts of gas have been delivered through an increasingly elaborate pipeline grid.

Norway is currently the largest supplier of natural gas to France. In 2006, France imported 14 billion cubic metres of gas from Norway – 30% of its consumption. This means that every third French meal is cooked using Norwegian gas.

Norwegian production and exports of natural gas are increasing, and will reach 130 billion cubic metres early in the next decade, when Norwegian deliveries to Europe will exceed those from Russia.

Even though Norway is not a member of the EU, we are not a completely “external” partner in the energy field. Norway is an integral part of the EU’s internal energy market – just as we will be an integral part of its internal emissions trading system. This shows how closely Norway is integrated with the rest of Europe, not least where energy is concerned.

Our energy relations with France should be seen both in the European and in the global context. The combination of close industrial and commercial ties and friendly political and cultural relations have helped to create a Norwegian-French partnership that is important not only to us, but also at European and global level.

It is well known that France attaches great importance to developing a broad range of relations once it engages economically with a partner. In Norway, we have seen this in several fields, not least that of energy cooperation. I think time proves France right in this respect. Close contact, frequent communications and mutual insight into one another’s frames of reference are becoming increasingly important, even in the most businesslike of encounters, if I can put it that way.

To acknowledge this at the European level means accepting that these broad approaches to partnership are no less important on a global scale.

This is also reflected in the close cooperation between Norwegian and French companies in the High North – a region where some of the most important global political issues of today converge. It is not just about gas, neither here nor anywhere else.

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The image behind me illustrates my geographical focus: this is the High North seen from above the North Pole – a photograph taken in the summer.

For Norwegians, the High North means the areas of the Arctic that are adjacent to Norway – the northernmost parts of Sweden, Finland and Russia, and the seas to the north of these countries, including the Barents Sea.

Now, let’s change the perspective [illustration 2] – which is always a useful exercise. This is a map of Europe seen from the north. It sets the spotlight on a region that is increasing in importance.

One third of mainland Norway lies north of the Arctic Circle, and the Norwegian mainland reaches far into the Arctic Ocean. In the Northeast Atlantic, Norway has jurisdiction over an area six times the size of mainland Norway.

This is the area where Norway shares a border with Russia. It is an area that has the potential to develop into a new petroleum province.

And it is an area where climate change is happening faster than anywhere else on the globe.

Thus, the key drivers of the Norwegian Government’s policy for the High North are, simply stated: energy, climate change, and Russia – our neighbour.

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So, the High North is where two of the world’s major petroleum suppliers, Norway and Russia, have huge and largely untapped resources. [Illustration 3].

Norway and France both enjoy close relations with Russia. And we both stand to gain from working together to engage Russia in the broadest possible cooperation and integration.  

Norway and Russia share the Barents Sea, and we are facing many of the same sustainability challenges in the High North. We must therefore cooperate in a number of areas: on the harvesting of fish stocks; on exploration, production and technological developments in the petroleum sector; and on the adoption of health, safety and environmental standards in petroleum operations and maritime transport.

President Putin has called for a strategic energy partnership between Norway and Russia in the High North, and successive Norwegian governments have accepted the invitation. For this partnership to materialise, some key criteria must be met: there must be a reasonable level of proven resources, and the investment climate in Russia must become more attractive. This includes access to licences and reserves on terms that are favourable enough to compensate for the technological, financial and political risks taken by foreign investors.

In addition, political agreement between Norway and Russia on a delimitation line in the Barents Sea would release considerable potential for cooperation in the petroleum sector. Today’s area of overlapping claims, which covers a total of 175 000 square kilometres, could then be opened for exploration and production.

The fact that we are close neighbours and have complementary expertise and skills to offer, means that energy cooperation between Norway and Russia could be very successful. Both sides stand to gain from sharing and co-developing skills, specialised offshore technologies, logistical networks and other infrastructure in the High North. 

As you of course know, Gazprom has granted Total a 25% share in the Russian Shtokman development. I would like to congratulate Total on the deal, and I am very pleased that a company of Total’s stature – and one with close relations with Norway and Norwegian companies – will be playing a key role in this project.

We must remember that the Shtokman project is not just an ordinary gas field development. Russia’s decision to develop this field will be important for energy security at both European and global level.

If StatoilHydro is invited to take part in the Shtokman project, Total and StatoilHydro will be able to draw on their considerable experience of working together. Total and Hydro have been producing oil together with a Russian company on the Kharyaga field since 1999. As I have already mentioned, Total is involved in the Snøhvit LNG development in the Norwegian part of the Barents Sea – together with, among others, Statoil and Gaz de France. StatoilHydro and Total. Together they possess the best expertise and the best technology available.

Whether or not Norwegian companies become directly involved in the Shtokman development, we will continue to develop our good relations with Russia – including in the energy dimension.

At the same time, we will maintain a candid dialogue with Russia. We will be clear about Norway’s views on human and political rights – including freedom of opinion and expression - and democracy and the principles of the rule of law.

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Now, ladies and gentlemen, the High North provides early warning of climate change. Snow, ice and permafrost are melting, sea levels are rising, the seawater is becoming less saline and more acidic. [Illustration 1 & 4 – Arctic seen from above].

In 2004, the Arctic Climate Impact Assessment (ACIA) concluded that the Arctic is becoming warmer and wetter. Climate change is happening twice as fast in the Arctic as in other parts of the world.

I recently took my German colleague to the Norwegian archipelago of Svalbard in the Barents Sea to look at the situation we are facing. Svalbard serves as a natural laboratory for research on climate change.

The international community is showing increasing interest in using the scientific infrastructure available in Svalbard. We are pleased to have eminent French researchers from the highly regarded Institut polaire français Paul-Emile Victor, or IPEV, working there. The French presence in Svalbard is an example of the international nature of climate and Arctic research. IPEV operates a research base together with the German Alfred Wegner Institut in the research settlement of Ny-Ålesund, situated at almost 80 degrees north.

The High North offers front-row seats for studying the cumulative effects of greenhouse gases and persistent organic pollutants.

During my most recent visit – five weeks ago - I saw receding glaciers. I learned that the number of polar bears is decreasing. I was told that fish stocks are moving from their original distribution areas. I have no doubt about what the scientists of the IPCC, the ACIA and others are telling us: immediate action is needed. – Action, action, action, as California’s Governor Arnold Swarzenegger put it in his speech to the UN General Assembly last week.

Climate change is the most global challenge there is – one that should compel all countries to act.

Moving beyond the Kyoto Protocol, we need a framework – internationally agreed – within which developing nations can grow, wealthy countries can maintain their standard of living, and the environment can be protected from disaster. Nothing less. The IPCC confirms that this is possible – if we act now.

We also need to draw up the next climate agreement in such a way that it includes the developing world. But in order to do so we – the industrialised countries – need to rise to a double challenge.

We must cut our own emissions and at the same time assist developing countries to cut theirs. We must both pay our own bill and help to pay theirs.

As President Nicolas Sarkozy said in New York last week: “Collective action is imperative. The fate of each is linked with that of all. Solidarity is imperative. The poor would be the first victims of our selfishness”.

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This is why Norway has set itself three ambitious goals:

First, Norway will aim for a 30% reduction of carbon emissions by 2020. Between one half and two thirds of these reductions will take place in Norway.

Second, by 2012 – the end date of the Kyoto commitment period – we intend to reduce our emissions by an additional 10 percentage points on top of our initial Kyoto commitment. Let me explain this: under the Protocol, Norway’s emissions may be 1% higher in 2012 than in 1990. We have now decided to set the unilateral target of reducing our emissions by 9% by 2012.

Third – looking further ahead – our long-term goal is to make Norway carbon neutral by 2050.

What does all this mean? It means that we plan to exceed our obligations under the Kyoto Protocol. This is a signal that we are prepared to stand together with the rest of Europe at the forefront of climate action, and at the same time give the international carbon market a much needed boost.

The growth of greenhouse gas emissions must be stopped over the next 10 years. For this to happen, all major emission countries must be part of a post-Kyoto regime, and the industrialised countries must bear the heaviest financial burden.

The Bali conference in December should establish a negotiation process leading to an agreement in Copenhagen in 2009. Norway, France, the rest of Europe, and other industrialised countries must take the lead and make this happen.

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Norway and France face the same dilemma – the world’s dilemma: energy use is unavoidably increasing, but greenhouse gas emissions must be reduced.

We have followed with keen interest the high priority given by the new French Government to the issue of climate change, as demonstrated by President Sarkozy’s speech immediately upon his election and again in his speech to the UN summit on climate change in New York last week, as mentioned.

On the one hand, as important players in the energy market, Norway and France have an obligation to provide energy security and to combat energy poverty.

On the other hand we have an obligation to provide climate security for future generations.

The area where Norway and France could really make a difference is in technological innovation. Norway sees unique opportunities here, and we intend to take full advantage of them in close cooperation with French and other international partners. I am positive to strengthening French-Norwegian cooperation in this field.

The Norwegian petroleum industry – which was born at the time of the first UN conference on the environment in Stockholm 35 years ago – has been well schooled in sustainable development.

Norway was the first nation to introduce a CO2 tax on petroleum production in the early 1990s. Not surprisingly, the industry objected to the tax. But times have changed. Environmental regulations and taxation have spurred technological innovation and made our industry more – not less – competitive in world markets.

Today, the Norwegian continental shelf is the most energy-efficient petroleum producing region in the world. CO2 emissions from production on the shelf are significantly lower than the global average per unit produced.

Our vision is to move towards “decarbonisation” through CO2 capture and storage, thus enabling continued use of fossil fuels without damage to the atmosphere.

But this will not happen with the help of the “invisible hand”, in other words by self-regulation of the market. As the Stern report comments, climate change may be the worst market failure ever.

To avoid this, we must make wise political decisions and provide incentives to address the problem. As early as 1987, the Brundtland report Our Common Future made it clear that we in the rich part of the world must change our production and consumption patterns.

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Friends,

In the illustration behind me (illustration 5) you can see how CO2 is being reinjected into the Sleipner field in the North Sea.

Since 1996, one million tonnes of CO2 per year have been separated from gas produced from this field and stored 1 000 metres below the seabed.

This method has attracted considerable international attention. The initial scepticism about storing CO2 gas in underground reservoirs seems to be diminishing as we gain more knowledge and experience in this field. Technology is the way forward.

Last autumn, Norway embarked on a major new research, development and demonstration project. Our aim is to build the world’s largest full-scale CO2 capture and storage facility in connection with a combined gas-fired heat and power plant at Mongstad, on the west coast. The carbon capture and storage facility will be fully operational by 2014.

Our ambition is for this full-scale CO2 capture and storage facility to accelerate Norway’s transition to a low-carbon economy.

It is important for Norway to succeed with the Mongstad project. But this success will also be important for the rest of the world if the technology can be applied beyond our borders, including in emerging economies. This would enable others to leapfrog to cleaner and more efficient energy production.

But first we need to remove legal and political barriers and develop further incentives. The EU has an important role to play here, and we hope France will contribute to achieving these goals.

The French Embassy in Oslo has taken the initiative to organise a bilateral conference on Carbon Capture and Storage on 22-23 November. I hope to see my French colleague in Oslo on that occasion.

Just as the conference today is bringing our dialogue on gas technology one step further, I am sure that the conference in Oslo will advance our dialogue on carbon capture and storage. A closer dialogue between Norway and France on this issue will benefit us all and help us to achieve the long-term goal of reducing CO2 emissions from fossil fuels.  

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To sum up: given the global dependence on fossil fuels for the foreseeable future and the rapid development of gas-related technologies, gas will remain the fuel of the century. Norway and France should join forces in efforts to make it accessible, available and affordable.

And we share a global obligation to ensure that the use of natural gas has the least possible impact on the climate.

Getting all of this right – addressing the dual challenge of energy security and climate change – will call for the very best of technology, of democracy, the best of Europe, and – not least – of France, here at the heart of Europe. In short, it will call for the very best of both Norway and France.                        

Thank you.