Norwegians Turn Ambivalent on Their Economic Bedrock

OSLO — This has not been a particularly good year for Statoil, the huge state-controlled oil company that has had a commanding presence in Norway’s economy and society for more than four decades.

In the spring, Statoil cut 1,000 jobs, or 4 percent of its work force. In September, it postponed a much-criticized project in the Canadian tar sands for at least three years. On Oct. 29, reflecting collapsing oil prices and a steep tumble of its stock, it reported its first quarterly loss since 2001. And in November, it announced disappointing results from the year’s program of drilling for new oil and gas in the Norwegian Arctic.

But it is not just the vicissitudes of oil markets and exploratory wells that are causing difficulties for Statoil. In an era of climate change, the company — and by extension Norway’s entire oil and gas industry, which accounts for nearly a quarter of the country’s gross domestic product and contributes to greenhouse gas emissions worldwide — is coming under increasing pressure from within its own borders.

The activism goes beyond conventional environmental concerns to issues of the company’s pervasive presence in Norwegian life.

At the University of Bergen and other schools, for instance, professors and students have protested Statoil’s financing of academic research, worth about $12 million annually. And musicians and artists have campaigned against the company’s widespread sponsorship of cultural events and organizations, which has included cash awards to performers whom Statoil calls “Heroes of Tomorrow.”

“Basically, you’re a billboard for an oil company,” Martin Hagfors, a musician, said in an interview in his studio in Oslo’s lively Gronland district. “And if you have any sense that we need to change direction, you can’t be a billboard for an oil company.”

The tensions are playing out in Parliament, too. In June, majority and opposition parties pressured Statoil to agree to provide electricity to several North Sea oil fields from land, using clean hydroelectricity delivered by cable rather than greenhouse-gas-emitting gas generators offshore.

“There’s a growing concern that Norway is basing its welfare to such a large extent on something that is increasing global warming,” said Rasmus Hansson, who last year became the first member of the Green Party to be elected to Parliament. “It’s a moral issue.”

Statoil, which was concerned about costs and delays, fought back, and a compromise was eventually reached that will cut emissions by up to 23 million tons of carbon dioxide over the lifetime of the fields. The episode was seen as a milestone for Parliament, which normally rubber-stamps most Statoil projects.

“It was a very important thing to do at the time we did it,” said Terje Aasland, a member of Parliament with the Labor Party, the largest opposition party.

“Climate change is coming closer and closer every day,” he added. “I think people are more concerned about the future.”

Some Norwegians are even starting to discuss the idea of an eventual transition from oil and gas, an idea that would have been a nonstarter just a few years ago.

But there are conflicting impulses. This month, the government announced a huge increase, to $250 million, in the money it was giving to the United Nations to help poorer countries fight the effects of climate change. But just a few days before that, a Finance Ministry panel recommended that Norway’s giant sovereign wealth fund, which invests the proceeds from the petroleum riches, not divest itself of its holdings in oil and coal companies, despite pressure from the opposition party.

How Norway wrestles with these and other issues may provide a preview of what is to come in other oil-rich countries, including the United States.

Criticism of Statoil does not come easily, for the company has long been a source of affluence as well as national pride. Since it was founded in 1972 to exploit the extensive hydrocarbon deposits in the Norwegian continental shelf, Statoil, which is two-thirds owned by the government, has pumped hundreds of billions of dollars into federal coffers, including the wealth fund. Oil and gas exports have helped make Norway, which has a population of five million, one of the wealthiest nations in the world, with a median household income of more than $62,000.

Even some of its fiercest critics acknowledge that Statoil has a special status among Norwegians.

“We’re very proud of Statoil,” said Truls Gulowsen, head of the Norwegian chapter of Greenpeace, which is fighting the company’s plans in the Arctic, Canada and elsewhere. “It’s also ours. Therefore we should have a say in which projects and which strategic direction our company that we all love is going to take.”

Among the world’s oil giants, Statoil’s environmental reputation is better than most. The company supports a carbon tax. It has been a leader in developing ways to store carbon dioxide underground to keep it out of the atmosphere. And its per-barrel emissions from producing oil in the North Sea are among the lowest anywhere.

“People tend to think we’re very good at what we do,” said Hege Marie Norheim, Statoil’s senior vice president for sustainability.

But as production has fallen in old North Sea fields, Statoil has looked elsewhere for oil and gas, including Canada — where production of tar sands oil has a much higher carbon footprint — and environmentally sensitive areas in the Arctic.

That has environmentalists and others fuming. “Statoil, the cleanest oil company, our Norwegian pride, why are you getting yourself involved in really dirty business?” said Mr. Gulowsen of Greenpeace.

Most of Statoil’s oil and gas, including the 30 percent that comes from outside Norway, is burned in other countries. So while Norway itself is greener than many other countries — almost all of its electricity, for example, comes from hydropower — it is indirectly responsible for a disproportionate share of the world’s carbon dioxide emissions.

If and when governments around the world put stricter limits on emissions, Statoil could be forced to leave some of its oil and gas in the ground. Market factors — a long period of depressed oil prices, for instance — could have the same result. Either way, the impact on Statoil, and on Norway’s economy, could be severe.

So it makes sense, critics say, for Statoil and other Norwegian companies to begin planning for an era of less or even no oil. Mr. Aasland, the Labor politician, argues that Statoil could use its offshore expertise to develop more wind power or other alternative energy sources.

“We can use the knowledge and people in the oil industry,” Mr. Aasland said. “There’s a big opportunity over time to diverge from oil and gas to a more green economy.”

Statoil, not surprisingly, does not think it should be the one to leave any oil and gas behind.

“We think that’s not part of our contribution,” Ms. Norheim said. “On the contrary, the oil that should be produced from now to the end should, to a very large extent, come from Norway, because it’s good oil. It’s safe and secure and delivered from us with low carbon emissions.”

As for transforming the company into one with more of a focus on renewable energy, Ms. Norheim said that was unrealistic. “We are good at what we do, but we’re not good at everything,” she said.

So for now, despite the depressed oil market and talk of more emissions limits, Statoil is still very much an oil and gas company.

In November, in the middle of the more sobering news, Statoil announced that a new field, the Johan Sverdrup — one of the biggest North Sea discoveries in recent years and the crucial field in the electrification dispute with Parliament — could produce as much as $200 billion in revenue over the next 50 years.

“Make no mistake, the oil and gas sector is still pushing on,” Mr. Hansson, of the Green Party, said. “The practical policy is to make Norway even more dependent on oil and gas.”

And no one is quite certain what Norway’s future would look like if that were to change.

“It’s really hard for people to see a society without the oil industry,” said Ingrid Skjoldvaer, deputy chairwoman of the environmental group Nature and Youth. “How is that going to work? What are we going to live off then?”

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