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Should Norway trade fjords for oil?

Potential riches offshore have turned this tranquil archipelago into a battleground for the future of Norway's oil wealth.

Lofoten islands norway oil electionsEnlarge
There are few more scenic places in the world to cast a ballot than the Lofoten Islands. But potential riches offshore have turned this tranquil archipelago into a battleground for the future of Norway's oil wealth. (DANIEL SANNUM LAUTEN/AFP/Getty Images)

OSLO, Norway — There are few more scenic places in the world to cast a ballot than the Lofoten Islands. Wooden fishing huts painted a deep red hue hug a coastline of crystal blue fjords, which reflect the rocky peaks reaching up into the pale Arctic sky.

But potential riches offshore have turned this tranquil archipelago into a battleground for the future of Norway's oil wealth.

Billions of barrels of oil could be sitting untapped in fields out at sea, reserves which the leading political parties say must be explored to maintain the high living standards to which Norwegians are accustomed.

Opponents, however, say the environmental cost is too high, and the country needs to start looking beyond its scramble for oil and start building a more sustainable future.

After years of deadlock and debate, elections on Monday could decide the fate of the Lofoten Islands. A Conservative-led coalition which favors exploration is forecast to win, paving the way for an impact assessment that could lead to drilling in Norway's Arctic within two decades.

“It is important to open these areas so we can uphold the production,” said Roger Pedersen, communications manager the Norwegian Oil and Gas Association. Pedersen argues that Norway's welfare system depends on the money generated by fossil fuels.

Oil and gas reserves discovered in Norway's waters in the 1960s have transformed the Scandinavian nation into one of the richest in the world, with low unemployment rates and high standards of living. The oil has funded the world's largest sovereign wealth fund, with about $750 billion currently invested worldwide for the nation's future.

But Norway's North Sea reserves are dwindling. Production of crude oil has been falling for the last 13 years, with output down 68 percent compared to 2000. Gas production is also expected to start dramatically declining by 2025, Pedersen said.

As in many other oil producing nations, dwindling reserves are leading to calls from the industry to open up areas once considered untouchable. These include Lofoten, a pristine protected area in Norway's far north, home to a delicate ecosystem and some of world's largest remaining cod stocks.

But many Norwegians, especially among the younger generation, envisage a different future for their country.

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“If we keep going the way we are, there will be nothing left when we grow up,” Prableen Kaur, a 20-year-old candidate for the Labour Party youth wing, the AUF, told GlobalPost. “We have to start thinking about new ways of living. One day the oil will stop and there won't be any more left, and we have to start thinking about this day. When it stops, the country can't stop that day.”

The issue is so divisive in Norway that it has split the ruling Labour Party: its young members in the AUF openly campaign against exploration, even though Labour Prime Minister Jens Stoltenberg has backed an impact assessment in the area, the first step in the process that would lead to drilling.

His efforts to launch a study were blocked by coalition partners, but Norway's political landscape is expected to shift to the right after Monday's vote. Despite overseeing economic growth during Stoltenberg’s two terms in power, voters are fed up with eight years of Labour. Pollsters predict that the Conservatives and another right-wing party — both in favor of drilling in Lofoten — will form a coalition, meaning parliament could pass a motion to begin the impact study.

This is what the industry has been waiting for. Ørjan Heradstveit, a spokesman for the state oil company Statoil, says the decline in production in Norway's existing fields means it is essential to start looking at alternatives as soon as possible. “With up to 10-15 years from exploration to production, a political decision on an impact assessment for this area is crucial,” he said.

For environmental activists, however, there are too many risks of spills, pollution or disruption to maritime spawning grounds to justify moving the rigs into one of the last untouched areas in the world. They are urging the government to instead focus on renewable energy and other green alternatives for when the oil fields finally run dry.

“This is the area where we have the largest remaining cod stocks in the world, we also have the world's largest cold water coral reef, and northern Europe’s largest collection of sea birds,” said Nina Jensen, head of the World Wide Fund for Nature-Norway. Drilling in the areas, she says, is “simply not a risk that we should be willing to take.”

Public opinion in Norway and Lofoten itself remains divided. While fishermen worry about the potential impact on cod stocks and those in the tourism industry want to keep the area pristine, other residents are enticed by the prospect of jobs and a boost to the economy.

But when the 50,000 residents of northern Norway head to their scenic polling booths on Monday, it is not only oil that will be on their minds. Brigt Dale of the Nordland Research Institute, a private organization, says most voters will probably cast their ballots based on issues that will affect them in the next few years, not decades.

“It's interesting that people don't really vote based on their perception of this issue, because it [is] of major importance for the future of the region,”  said Dale, who lives in Lofoten.

But, he added, “There are other issues that people are more concerned about in the short term.”

http://www.globalpost.com/dispatch/news/regions/europe/130906/norway-oil-drilling-elections-fjords