Monthly Highlights from the Russian Arctic, October 2024
In this news digest, we monitor events that impact the environment in the Russian Arctic. Our focus lies in identifying the factors that contribute to pollution and climate change.
News
Publish date: April 11, 2016
Written by: Bellona
News
BRUSSELS – Norway had record gas production in 2015 – supplying 25 percent of Europe’s consumption, with 115 billion cubic meters (Bcm). In Brussels, Norway and its national oil and gas giant Statoil have gone to great lengths to make European technocrats and planners think of Norwegian gas as reliable, friendly and not at all like that supplied by Russian, the major supplier of gas to Europe – with a snarl of political strings attached.
Brussels airport is emblazoned with Statoil advertisements brightly trumpeting phrases like “secure supply” and “low carbon.” Indeed, Norwegian gas exports in 2015 resulted in CO2 emissions about equivalent to the entire Spanish economy of 46 million people.
On investigation Norwegian claims that it is a secure long-term gas supplier to Europe look unfounded. Mammoth investments of the last oil boom in 2008 to2012), 160 billion NOK ($19.5 billion) in exploration and 308 exploration wells have resulted in very few notable discoveries.
Those discoveries that have been made are small and expensive. The Barents Sea has proven to be remote, expensive and certainly no renaissance of Norwegian gas exploration success. Now, massive cuts to exploration investments will accelerate the paucity of new production additions to replace retiring fields.
Jonathan Stern, analyst at the Oxford Institute for Energy Studies, said “We [the OEIS] are very unconfident about Norway’s production.” In June 2015, Statoil’s Vice President, Eirik Wærness, said “It would be a huge challenge to deliver enough oil and gas in the two degrees’ scenario.”
For Norway he may be right. Analysts rightly question Norway’s production outlook after 2020. If Norway cannot supply sufficient natural gas then it cannot market itself as “Europe’s friendly supplier” – all the more so if its cost is far above that of the competition.
Norwegian gas has now among the highest production cost in the world. The production cost is over twice that of Russia, at around $1.04 per million British Thermal Units (MMBtu) compared to Gazprom of just $0.40/MMBtu in 2015. And that is with a 30 percent devaluation in the Norwegian krone in the last two years. It is clear who the affordable supplier to Europe will be.
Back in Brussels, the Norwegian message is singular: Invest in gas to meet climate targets and do so in confidence as that gas will come from friendly Norway. Many are happy to cheer the perception of secure Norwegian gas; GasNaturally, a lobby group operating in Brussels whose members produce in Norway and Russia are pushing for more pipelines, interconnectors and increased use of gas in electricity generation. If the strong Norwegian lobbying in Brussels results in a gas consumption renaissance in Europe, for reasons of both price and production – those gas needs will be met by Russia.
So the billboards in Brussels airport are a sight to behold for Gazprom and and Russian President Vladimir Putin. As Ukraine is experiencing, that can come at a disastrous price. Bellona will hold a low carbon economy event in Kiev, Ukraine this Thursday. Ukraine needs an economy fit for the 2050s, and so does Europe.
Norwegians should not stand by while their government and companies set us on all a path for more CO2 intensive gas – politically charged Russian gas at that.
In this news digest, we monitor events that impact the environment in the Russian Arctic. Our focus lies in identifying the factors that contribute to pollution and climate change.
A survey of events in the field of nuclear and radiation safety relating to Russia and Ukraine.
A visit last week by Vladimir Putin and a Kremlin entourage to Astana, Kazakhstan sought in part to put Rosatom, Russia’s state nuclear corporation, on good footing with local officials.
Russia is formally withdrawing from a landmark environmental agreement that channeled billions in international funding to secure the Soviet nuclear legacy, leaving undone some of the most radioactively dangerous projects and burning one more bridge of potential cooperation with the West.