Oil is something that is very salient in the minds of Norwegians, and it is oftentimes something that can literally dominate the Norwegian landscape.* I’ve seen more than my fair share of Statoil offices.
Yet Norway has a convoluted relationship with oil. This makes sense when you consider that Norway is one of the countries at the forefront of encouraging environmental change; yet it is a country that has nearly a fifth of its gross domestic product (GDP) based on the offshore oil and gas industry. Oil is the resource that propelled this once cash strapped nation into spectacular wealth. A fact that Norwegians are acutely aware of.
Oil was originally discovered in Norway in 1969, and the government has taken great care to manage this resource and the resulting wealth ever since. Norway’s oil wealth was originally used to develop Norway’s poor infrastructure and was then used to pay off the country’s debt. Once this was completed in 1995, the Norwegian Petroleum Fund was established. The fund was created to invest in the wellbeing of future Norwegians and to help support the country’s aging population. Considering the objective of the fund, its name was later changed to the Government Pension Fund.
The fund itself has its own fascinating restrictions. Fund managers are only allowed to invest the fund in businesses outside of Norway in order to safeguard the local economy. Furthermore, funds can only be invested in ethical companies and countries. For example, companies that have a poor environmental track record or countries that have human rights violations cannot be invested in. A portion of Norway’s annual budget can come from the Government Pension Fund, but this portion caps out at a measly four percent. Granted four percent of a $845 billion is still pretty sizable (Reuters).
The fund is one of the things that very clearly demonstrates the long term view that Norwegians have adopted towards oil. Aware that their oil supply is finite, Norwegians are stockpiling their wealth in preparation for the day when their oil runs out. In the meantime, they have adopted a responsible approach towards trying to create a more responsible and ethical world, even as they harm the environment through the oil industry. Everyone is aware of the irony.
Outside of oil, Norway is committed to combating climate change. In 2007, Norway pledged to become carbon neutral and have zero greenhouse gas emissions by 2050. Although Norway has fallen in Yale’s Environmental Performance Index,** it is still doing quite well and was ranked 10 out of 178 countries in the 2014 rankings (the United States was 33 in case you were wondering). Almost none of Norway’s energy comes from fossil fuels. An impressive 56% comes from renewable energy sources and about 99% of its total power production is hydroelectric (intpow). Norway has even figured out how to burn trash to create energy (BBC).
Working at NTNU this past semester has also shown me that a significant percentage of my generation is dedicated to working in alternative energy. In my course, Academic Writing and Communication for Engineers, a significant number of my approximately 110 person class was writing their engineering theses on alternative energy. In their weekly writing, many of them would write about the importance of finding an alternative to oil. Most of these engineers were focused on hydropower or wind power, but there were also a few working on solar power. Even my students who were planning on going into the oil industry spent some time writing about reducing the environmental impact of oil.
So while Norway is committed to weaning itself off of oil, it is definitely still a process. The recent fall in oil prices has left its mark on Norway, and an estimated 40,000 jobs are on the chopping block as many oil companies cut back their operations and shut down projects (Bloomberg). The road ahead may be rocky, from what I can see, it looks like Norway is doing a great job of trying to navigate it.
*Random aside: I would say that an industry equally important to the Norwegian psyche would probably be fishing, specifically cod. I cannot emphasize enough the Norwegian obsession with cod. Cod liver oil is the equivalent of the Norwegian fountain of youth and considered a cure all for basically everything. Many Norwegians have a tablespoon of cod liver oil every day, and it’s not uncommon to see or hear the phrase “In Cod We Trust” (as opposed to “In God We Trust”).
**At this point even my competitive Harvard spirit admits that Fale manages to get things right every once in a blue moon.