Equinor Autumn conference

Check against delivery

Thank you, Mishal, for that kind introduction.

Ladies and gentlemen,

Thank you so much for giving me the opportunity to open your Autumn conference.

Energy policies are of key importance in responding to the challenge of climate change.

I am therefore particularly pleased to be addressing this conference just two weeks before the Katowice Climate Change Conference. I am also delighted that Patricia Espinosa, Head of the UN Climate Convention, has joined us here in Oslo.

Today, I would like to talk about how climate change is affecting the transformation of Norwegian business, and in particular the energy industry.

First, I will speak about what the Paris Agreement requires us to do.

Secondly, I will discuss how the Norwegian energy sector is adapting to this challenge.

And finally, I will talk about how Norway is seeking to be part of the solution to the challenges we face.

In Paris three years ago, we – the international community – set an ambitious aim, namely:

‘to strengthen the global response to the threat of climate change by keeping a global temperature rise this century well below 2 degrees Celsius above pre-industrial levels and to pursue efforts to limit the temperature increase even further to 1.5 degrees Celsius’.

The recent IPCC report provides compelling evidence of why these targets are important.

The Paris Agreement is central to our efforts. We need to see action in all countries. We need rules for implementing the Agreement. And Katowice must deliver on the Paris rulebook.

In addition, we need to focus on raising the domestic ambitions of countries around the world.

All parties to the Paris Agreement are to communicate new or updated targets in 2020. We must all do so if the long-term goal is to be within reach.

In political terms, climate change represents a formidable challenge. We need to see dramatic and rapid changes across industries. At the same time, we need to feed a growing world population and improve the standard of living of billions of people globally.

Reaching the Paris targets is both technically and physically possible. That is encouraging.

At the same time, meeting the targets will require a faster pace of transformation than we have ever seen.

What is perhaps even more challenging, is that all parts of the world need to make this rapid transformation together.

To achieve this, we need international cooperation. Cooperation that is closer and more binding than ever before.

That is what the conference in Katowice is all about, and why it is so important.

Patricia has the full support of my Government. Norway will do its utmost to push for a successful outcome in Katowice.

Norwegian businesses, including oil companies operating on our continental shelf, have to adapt to the new situation.

Our main policy tool for achieving adaptation is carbon pricing, which gives businesses continual incentives for reducing their emissions.

Our oil and gas resources belong to the Norwegian people. In order to maximise the value of these resources for Norway, our main policy aim is to provide a framework for the profitable production of oil and gas in the long term.

The following three aspects are vital:

1. A stable and predictable framework for the industry;
2. Licensing of acreage to support further exploration;
3. Support for R&D to improve safety, reduce greenhouse gas emissions, and increase efficiency.

By pursuing this policy aim, we will be able to create value for all Norwegians, as well as further developing our largest and most important industry, and supplying Europe with oil and gas for the long term.

In most countries, oil and gas are used for domestic energy supplies. This is not the case in Norway. The oil and gas industry, and its associated supply and service industry, are our most important export industries.

We are a significant oil and gas producer. And of course, the burning of fossil fuels is one of the main causes of climate change. But shutting down our production is not a viable option, given the economic and climate-related challenges facing the world today.

Dr Birol will shortly present the World Energy Outlook report for this year. His projections will show that, based on the IEA’s Sustainable Development Scenario, total demand for oil will be 70 million barrels per day in 2040.

This means that oil consumption will remain significant for the foreseeable future.

We therefore expect to see the oil and gas industry make investments in new fields globally.

I also know that this year, the IEA World Energy Outlook report has, for the first time, made a comprehensive study of emissions related to the production, refining and transport of oil and gas.   

The result is clear: the global industry can do more.

A great deal can be done by applying technology and policies that are already in place, or that have already been developed on the Norwegian continental shelf.

The ban on flaring of gas, which was introduced here back in the 1970s, is a good example.

We have technology that is part of Norway’s legacy as one of the first countries in the world to introduce a carbon tax – a price on carbon.

As a consequence, the total price of greenhouse gas emissions on the Norwegian continental shelf is far higher than in any other petroleum-producing country in the world.

This has resulted in Norwegian petroleum activity having significantly lower emissions than the world average.

Through the European emissions trading system, oil companies on the Norwegian continental shelf are playing their part in reducing the emissions covered by the system by 43 % from 2005 to 2030.

In the light of what I have just said, my Government is committed to maintaining a stable framework that contributes to both profitable and sustainable production on the Norwegian continental shelf.

This brings me to how Norway is seeking to be part of the solution.

We have to reduce global emissions dramatically, while at the same time securing jobs and fostering new businesses.

This is why my Government is investing so much in innovation and research.

This year, for the first time, we are spending more than 2 % of our gross domestic product on research.

At the same time, we have improved the incentives for business and industry to invest in research and innovation.  

The Norwegian energy industry is part of this and will need to continue its drive for transformation.

First, Norwegian gas can contribute to lowering emissions. The world will be better off if fossil fuel consumption is in the form of gas rather than coal. Using Norwegian gas as a replacement for coal is a quick and cost-effective way of cutting emissions.

Europe is currently undergoing an energy transition, with the aim of delivering cuts in emissions. In order to achieve the ambitions, we need to choose the most efficient measures available.

Due to the large increase in the use of wind and solar power, the energy system will need more flexibility. 

One thing we can say with complete certainty is that the sun doesn’t shine at night.

But we don’t know exactly when the wind will blow.

And we don’t know if tomorrow will bring rain or shine.

However, we do know that there is a growing need for accessible and flexible energy that can be used to stabilise fluctuations in supply.

Several hundred million Europeans depend on gas every day. Norway has the resources to be a reliable supplier of natural gas to Europe for decades.

Natural gas is easily accessible and easily stored, it responds quickly and adapts well to seasonal variations. This means that natural gas fits well with renewables like wind and solar power.

As energy systems become more weather-dependent, the need for flexibility increases – and hydropower is the only renewable form of power that provides this flexibility. And it provides both long- and short-term flexibility.

Statkraft – Norway’s largest energy producer – is the largest producer of renewable energy in Europe. It has nearly a quarter of Europe’s total reservoir capacity.

These are key points for my Government to convey to our political partners in Europe.

We should be prepared to take innovation and transformation even further. In the longer term, as we approach 2050, conversion of natural gas to hydrogen, combined with carbon capture and storage (CCS), could be one way of developing a zero-emission energy sector. The massive infrastructure that makes up the natural gas pipeline grid in Europe could be part of that future.

The development of offshore wind power is another exciting area when it comes to expanding our current energy industry.

Norwegian industry was badly hit by the fall in oil prices, and has since shown innovation, grit and determination to cut costs and increase competitiveness.

The Norwegian energy industry is also moving beyond oil and gas.

The oil and gas industry has given Norway tremendous revenues, and will continue to do so for decades. It has provided us with jobs and welfare.

At the same time, our oil and gas activities have taught us skills, and have led to the development of technology and knowledge that can be applied in new fields. The world market for low- and zero-emission solutions is growing rapidly. In many areas, Norway is at the forefront.

I spent this Saturday in Gudvangen, where I christened the new electric sightseeing vessel, Vision of the Fjords. This is a zero-emission ship sailing the beautiful fjords of western Norway.

This is just one example of how Norway is at the forefront of developing electric technology for maritime transport.

Yara and Kongsberg Maritime recently developed the world’s first autonomous and fully electric container ship, the Yara Birkeland. The ship will cut emissions by the equivalent of 40 000 truck trips every year.

I told Arnold Schwartzenegger about the ship, and his tweeted response was that he was ‘all pumped up about electric container ships’.  Who would have thought it!

These new green technologies are not just helping us to cut emissions here in Norway. They can also provide the basis for global emission reductions if they are adapted to the needs of other countries. In that way, they can also provide us with new jobs and competitive businesses.

Let me return to the Katowice Conference and the need for international cooperation if we are to limit the global temperature rise.

Norway and the EU are both committed to the Paris Agreement.

We both see the benefits of cooperation and are in a dialogue about joint fulfilment of our 2030 targets. We hope to have an agreement ready before the end of the year.

This will raise the level of ambition both in EU countries and in Norway. I see that as one of the important benefits of working together.

I would like to close by thanking Equinor for the good news this morning.  Norway’s single most important mitigation measure is the International Climate and Forest Initiative.

Like the Norwegian Government, Equinor will make voluntary payments to countries for verified reductions in deforestation. The intention is to contribute to the development of a robust carbon market for forests, with the highest standards for environmental and social integrity. I commend you for this initiative, and I hope other companies will follow your lead.

We all need to step up our climate action if we are to reach the Paris targets.