Fossil Fuels Built the World's Biggest Sovereign Wealth Fund. Now Norway Wants to Ditch Fossils.

When it comes to fossil energy, Canadian politicians have been - well - f#@kups.  That's doubly true for those idiots in Alberta.

Way back when there was a Wild Rose premier who understood what Alberta had, how to realize the benefit of it and how to avoid the built-in perils. That gentleman was Peter Lougheed.

Lougheed knew that oil wealth was volatile. It was a boom and bust commodity that could, in cycles, overheat an economy and then collapse it. He advocated for slow, controlled development and for setting the riches aside to avoid overheating the economy.

After Lougheed left his successors followed their own path, let' er rip. And all the misery and woes that Lougheed had warned them about came to pass - again and again and again.

Across the Atlantic, the Viking crowd had heard Lougheed's words and took them to heart.  Norway began to manage its North Sea oil reserves according to Lougheed's formula. They treated their oil bounty for what it was, a windfall that belonged to all Norse, today and into the future. And so little Norway came to own the world's largest sovereign wealth fund, today in excess of a trillion dollars.

Now, seeking to safeguard that mountain of cash, Norway's sovereign wealth fund is moving to divest many billions in oil and gas stocks. Norway, it seems, realizes this Carbon Bubble is going to burst and doesn't want to be around for the big pop.

Wow, first it was the Saudis who announced plans to sell off Aramco and now Norway wants out.

Norway, which relies on oil and gas for about a fifth of economic output, would be less vulnerable to declining crude prices without its fund investing in the industry, the central bank said Thursday. The divestment would mark the second major step in scrubbing the world's biggest wealth fund of climate risk, after it sold most of its coal stocks.

"Our perspective here is to spread the risks for the state's wealth," Egil Matsen, the deputy central bank governor overseeing the fund, said in an interview in Oslo. "We can do that better by not adding oil-price risk."

Imagine if we could write the next two paragraphs about Ottawa and Alberta:

Built on the income that western Europe's largest energy supplier has generated for more than 20 years, the fund's investment decisions are guided by ethical rules encompassing human rights, some weapons production, the environment and tobacco. Norway's fossil-fuel investments are coming under increasing scrutiny from a public that aims to be a climate leader without jeopardizing one of the world's highest standards of living.

The fund has doubled in value over the past five years and was just given the go-ahead to boost its stock holdings to 70 per cent of its portfolio from 60 per cent to help drive returns. The government, which also controls Statoil ASA and offshore oil and gas fields, was forced to withdrew cash from the fund for the first time last year to meet spending commitments after oil prices dropped.

If only but, of course, we can't. Alberta took the Mardi Gras route and now faces the very real risk of bitumen becoming a stranded asset leaving the provincial and federal governments holding the bag for the costs of cleaning up the environmental devastation known as Athabasca.