Europe’s Energy Mix and Norway’s Role

Check against delivery.

The Foreign Minister based his address on these main points:

 

Slide: Introduction (title and map).

Excellencies, ladies and gentlemen,

·         An honour to be invited to take part in the German–Norwegian workshop on energy in Bonn. Thank you – my good colleague, Foreign Minister Westerwelle – for taking this initiative. Good idea to meet here, in your home area/constituency. Yesterday, I spent the whole day in Bergen, on the west coast of Norway, one of cities in Norway that has been most influenced by German business and culture, due to the historic Hanseatic connections (since Mediaeval times). Thus, a suitable bridge for moving on to Germany today. And my route south this morning followed the pipelines...

·         First, just to state the obvious, our foundation and joint platform: Germany has been, is and will continue to be, a very important ally and partner for Norway. In all areas: politics, culture, science, education, economic relations, even in sports.

·         Close contact: the EU/the European Economic Area (EEA), in NATO, the UN, and other international forums. Today’s workshop, followed by our political consultations, will continue to strengthen our relations. Look forward to that.

·         Energy is foreign policy. As any other important natural resource we share. Foreign policy implications. Room for cooperation (or – in other parts of the world – for conflicts). And therefore: two foreign ministers here to open this workshop.

·         We will focus on a topic of great importance to both of us:

• Energy is a key political priority for both Norway and Germany.
• So is climate change and the two are very closely linked.

·         Now, I’ll start in the Arctic. The Norwegian Government’s High North strategy, where these two dimensions – energy and climate – come together. Energy is a main pillar of this strategy. Germany has been a central partner ever since we started work on the strategy. We both agree that the many challenges and opportunities in the High North and Arctic should be viewed in a European context. Now, we need a map, let’s turn north.

 

Slide: Map, High North/Arctic (the green & blue map).

·         The High North and the Arctic. The Norwegian Government’s number one foreign policy priority. My point of departure today: The three “driving forces”:

• climate change,
• resources (oil, gas, fisheries),
• and Norway’s relations with Russia.

·         An area of:

• rapid change,
• where we have salient interests to safeguard,
• and where Norway has both a responsibility and the ability to make a difference. 

·         First. Climate change: the retreating sea ice, caused by man-made climate change. Most visible in the Arctic. Global implications. Also: new opportunities and challenges are arising in the Arctic. Landscape is changing. (Apropos of changes: Nansen’s expedition 1893-96, now Børge Ousland’s expedition, our images and pictures of Arctic and ice are also changing.)

 

Slide: Map Arctic, North-East Passage, photo of ship. 

·         Second. Resources: we see an increase in activity levels. New opportunities in various sectors: research, tourism, maritime transport, fisheries and oil and gas.

·         Example, see map: first Norwegian commercial ship with iron ore sailed earlier this month from Kirkenes (mine closed in the late 1990s, now opened again) to China through the North-East Passage. This hit the headlines in the Hong Kong press. The growth in Asia. Horizon: East. Changing powers, globally.

·         The journey from Shanghai to Hamburg via the Northern Sea Route is 6 400 kilometres (40%) shorter than the route via the Strait of Malacca and the Suez Canal. Saves time, fuel and money. Reduces emissions.

 

Slide: Two maps, maritime boundary, Norway/Russia. 

·         Third. Norway and Russia: very long history of peaceful cooperation in the High North. The treaty on maritime delimitation and cooperation in the Barents Sea and the Arctic Ocean. Signed in Murmansk 15 September 2010. Historic milestone. The treaty will enhance predictability, stability and activity in the area. Strengthen bilateral relations.

·         The treaty: establishes the maritime boundary between Norway and Russia (in the Barents Sea and the Arctic Ocean). The disputed area of 175 000 square kilometres has been divided into two parts of (approximately) the same size.

·         Sends a strong signal to the world that the Arctic is a peaceful region where issues are resolved in accordance with international maritime law. Paves the way for new petroleum activity in the area if found to be viable and sustainable.

·         Expect this is of interest to the German companies already active on the Norwegian continental shelf.

 

Slide: Statfjord platform, produced oil and gas for European markets since the 1980s.

·         Now, returning to the core topic of today’s workshop: the interdependence between Norway and Germany in the energy field is strong. Some figures (well known to some of you): 

• Norway has exported gas to Germany for more than 30 years.

 

Slide: Germany’s energy mix/Norway’s share. Graph.

 

• In 2009, Norwegian gas deliveries to Germany reached 26.5 billion cubic metres (bcm) – one third of German gas consumption. Only Russia exports more gas to Germany than Norway. 
• The figures for January to June 2010 show an increase in the Norwegian gas export to Germany of 8.4%. 
• Norway is the second largest supplier of gas to the European market. 
• Thus: Norway is a major contributor to the European security of gas supply. A fundamental priority for Norway to remain a stable and secure supplier of gas to Europe.

 

·         Natural gas has a key role to play in reducing CO2 emissions - and as a bridge to a low carbon energy future. 

·         And I believe that gas will have a prominent place in the German energy mix for many decades to come. 

·         Gas from Norway is readily available, stable, reliable, competitive and relatively clean. 

·         Renewable energy sources are vital for a sustainable future, but upscaling takes time. (Gas also has a key role to play in balancing the welcome – but inherently more unstable – contributions to the German grid from windmills and other renewable energy sources.)

 

Slide: Renewable energy. Windmills. 

·         Now, a few more words on renewable energy (production and transmission). 

·         A point of departure: energy will be at the core of our efforts to address climate change. 

·         Norway:

• the world’s 6th largest producer of hydropower
• 60% of Norway’s total energy consumption is already based on renewable energy. 

·         The German Energy Concept: encouraging, from a climate policy point of view, to study the process and final result. Has demonstrated to the world that you intend to take concerted action on emission reductions. Present context: regrettable absence of progress in global climate negotiations. 

·         You mention Norway as an important factor in your promotion of renewable energy throughout Germany and Europe. This is promising from our point of view. 

·         Transmission: enhanced cooperation - through the construction of electric cables to facilitate power exchanges - could benefit both countries and reduce power sector emissions significantly. I believe that the North Sea Countries’ Offshore Grid Initiative, which Norway has joined, can be one of several helpful instruments in this regard. 

·         You will be discussing these things today, and I look forward to your conclusions regarding the opportunities and climate benefits, as well as the challenges (including possible bottlenecks). The NIMBY phenomenon is present in both our countries, with strong public resistance to windmills, transmission lines and perceived price increases, due to international power market integration. 

·         Important issues to discuss, lessons to learn; we will study your proposals and the Energy Concept more thoroughly and broadly. Industry stakeholders on both sides have started to discuss these issues already. The Norwegian Government will consider carefully what could become a significant new dimension of sustainable German–Norwegian energy cooperation.

 

Slide: CCS. (Injection of CO2 from Sleipner. Graphics: Statoil). 

·         Now, my final point, on the significance of CCS: 

·         Reducing fossil fuel emissions:

• vital for combating climate change and
• vital for securing a sustainable future energy supply. 
• The IEA sees CCS as a key, even the key emission reduction technology towards 2050, complementing energy efficiency and renewable energy efforts. CCS represents an option for using fossil fuels both during and after the transition to a low-emission economy. 

·         To move forward in the CCS field, we need to start implementing CCS technologies on a large scale. 

·         Initial financing important: CCS should not be delayed by the fiscal belt-tightening we are seeing in the wake of the financial crisis. The EU is a frontrunner in this respect and has provided substantial financing through the Emissions Trading System and the Recovery Plan. 

·         Norway is also contributing to this effort. Under the new EEA and Norway Grants agreement, around EUR 160 million will be made available to develop and promote CCS in the EEA beneficiary states. 

·         The Norwegian Government will spend around EUR 331 million (NOK 2.7 billion) on CCS activities in 2011. These include: project planning and investments in Norway, RD&D (research, development and deployment), activities at all stages of the CCS chain, as well as international activities. 

·         Norway and the EU cooperate closely on CCS matters within Europe, but also globally. The EU–China Near Zero Emissions Coal project is one example. Nowhere is CCS more important than in China. Extensive technology transfer and international cooperation is a prerequisite for global deployment of CCS. 

·         I know there are discussions in Germany, and that you have developed CCS demonstration projects. Also note the sceptical voices and criticism of CCS as a major climate change option. This is an important debate. We need transparency and to consider all views on how to move forward. Look forward to hearing from your debate on CCS later.

 

Slide: Title slide (same as the first one).

·         Conclusion: Wish you a fruitful, efficient and dynamic day. Again, my thanks to Foreign Minister Westerwelle and his team for inviting us. Important meeting place for energy companies, government representatives and politicians. Increases our knowledge, facilitates networking and strengthens our cooperation. Again: energy issues are important for foreign policy relations.