Norway Shines a Light We Don't Care to See

Little Norway and it's big sovereign wealth fund, the world's largest, are once again leading the way, this time by plunging into alternative clean energy investment. Not for the first time Norway is demonstrating how screwed up Canadian energy policy has become and will continue to be until we get competent political leadership that, sadly, is nowhere on the horizon.

The first time was when Norway adopted Peter Lougheed's advice on managing fossil energy resources. Norway went by Peter's book. Alberta, they had this guy named Klein with other ideas. The Norse quietly went around gathering their North Sea resource wealth, banking it in their sovereign wealth fund, and ultimately amassed a fortune. Klein, and every incompetent yahoo who followed him plunged his province onto a whipsaw of boom and busts that Albertans periodically celebrate with bumper stickers reading, "Dear God, please give us another oil boom and, this time, we promise we won't just piss it all away."  God must be tired of hearing that.

Part of that Norwegian miracle is not pissing their wealth away. That means they have to find ways to invest their money that will deliver reliable returns and grow their fund ever larger.  And they've chosen to invest in clean, renewable energy.

Norway’s $1tn oil fund, the world’s largest sovereign wealth fund, is to plunge billions of dollars into wind and solar power projects. The decision follows Saudi Arabia’s oil fund selling off its last oil and gas assets. 

Other national funds built up from oil profits are also thought to be ramping up their investments in renewables. The moves show that countries that got rich on fossil fuels are diversifying their investments and seeking future profits in the clean energy needed to combat climate change. Analysts say the investments are likely to power faster growth of green energy. 

Norway’s government gave the go-ahead on Friday for its fund to invest in renewable energy projects that are not listed on stock markets. Unlisted projects make up more than two-thirds of the whole renewable infrastructure market, which is worth trillions of dollars.

You see, Norway has an approach that could be summed up in a word, oh let me see, "responsible." By contrast, Canada's politicians have been as responsible as a crack addict. They're like junkies when it comes to royalties. They'll take whatever pittance the foreign energy giants throw their way. Then, when they do get some money, like their own bumper stickers admit, they just "piss it all away." It's gone, they have nothing to show for it.

The Globe's Gary Mason touched on Alberta's juvenile recklessness in a recent column, "Jim Prentice was Right."

In the run-up to the 2015 election, then-Alberta Premier Jim Prentice was asked by an interviewer about the perilous state of the province’s finances, which had recently taken a nasty negative turn as a result of a precipitous drop in oil prices.

“In terms of who is responsible,” Mr. Prentice said at the time, “we all need to look in the mirror, right. Basically all of us have had the best of everything and have not had to pay for what it costs.”

...And in Alberta, there are many people who can’t handle the truth. 

The fact is, the province’s fiscal situation isn’t much different today than it was for Mr. Prentice, and Alison Redford before him, and Ed Stelmach before her and Ralph Klein before him. You get the idea. Alberta still relies on the vagaries of the oil industry to pay many of its bills, which is as foolish a strategy now as it was when it first began decades ago.

Actually, you could convincingly make the argument it’s an even worse concept in these times, given the increasingly complex, and unpredictable, nature of a global energy market witnessing a world transitioning away from fossil fuels.

Too many in Alberta want to believe that a new pipeline will fix all that ails the province. That’s a fantasy, one that even the political leaders running to govern the province understand (but won’t admit publicly). A new pipeline would provide a temporary fix, and it would stanch, for a few years, the fiscal bleeding that is taking place. But ultimately, all it would do is allow the government to return to using oil revenues to balance the books, allow a province to live beyond its true means for a few more years.

Justin and Rachel and Jason think that British Columbia should bear the environmental risk of their "Piss It All Away" game, that we should give into these thugs and their crack addict mentality. They feel entitled, there's no other word but "entitled" to put our pristine coastal waters at risk of environmental catastrophe so that they can live beyond their means, just a little bit longer.

I know, let's consult the ancient Greek goddess, Themis.

Now, put permanent environmental catastrophe in one pan, we'll call it British Columbia, and in the other you put rapidly evaporating bitumen royalties that we'll call Alberta. As Peter Lougheed so clearly warned, they just evaporate, leaving ruin in their wake.  Wow, the environmental catastrophe hasn't changed but that gotta-have-it cash, it's gone. There's a clear winner - British Columbia.

Look at that. I haven't even mentioned the climate change impacts of high-carbon, pet coke laden dilbit or the quarter trillion dollar cleanup nightmare of the Athabasca Tar Sands tailing ponds. We'll surely get to that another time.

Today this is just about the puerile recklessness of Justin, Rachel and Jason and the thuggery in the way they threaten and imperil my province, British Columbia, and my coast, the Salish Sea.

Meanwhile, In Our Vast, Undefended North...

The latest issue of Foreign Policy magazine is devoted to espionage, spying, and the magazine reports that today's Ground Zero of spying is the Arctic.

For the countries that border the Arctic Ocean—
Russia, the United States, Canada, Norway, and Denmark (through its territory of Greenland)—an accessible ocean means new opportunities. And for the states that have their sights set on the Lomonosov Ridge—possibly all five Arctic Ocean neighbors but the United States—an open ocean means access to much of the North Pole’s largesse. First, though, they must prove to the United Nations that the access is rightfully theirs. Because that process could take years, if not decades, these countries could clash in the meantime, especially as they quietly send in soldiers, spies, and scientists to collect information on one of the planet’s most hostile pieces of real estate.

While the world’s attention today is focused largely on the Middle East and other obvious trouble spots, few people seem to be monitoring what’s happening in the Arctic. Over the past few years, in fact, the Arctic Ocean countries have been busy building up their espionage armories with imaging satellites, reconnaissance drones, eavesdropping bases, spy planes, and stealthy subs. Denmark and Canada have described a clear uptick in Arctic spies operating on their territories, with Canada reporting levels comparable to those at the height of the Cold War. As of October, NATO had recorded a threefold jump in 2014 over the previous year in the number of Russian spy aircraft it had intercepted in the region. Meanwhile, the United States is sending satellites over the icy region about every 30 minutes, averaging more than 17,000 passes every year, and is developing a new generation of unmanned intelligence sensors to monitor everything above, on, and below the ice and water.

If Vienna was the crossroads of human espionage during the Cold War, a hub of safe houses where spies for the East and the West debriefed agents and eyed each other in cafes, it’s fair to say that the Arctic has become the crossroads of technical espionage today. According to an old Inuit proverb, “Only when the ice breaks will you truly know who is your friend and who is your enemy.”

...Canadian Prime Minister Stephen Harper declared that Santa Claus is a Canadian citizen and announced plans to claim ownership of the North Pole. “Canada has a choice when it comes to defending our sovereignty over the Arctic,” Harper had said in a 2007 speech at a naval base outside Victoria, British Columbia. “We either use it or lose it. And make no mistake, this government intends to use it.” The idea, according to Harper’s “Northern Strategy,” is to assert Canadian presence in the Arctic by “putting more boots on the Arctic tundra, more ships in the icy water and a better eye-in-the-sky.”

...Over the past few decades, [Arctic countries] have happily assumed something akin to Arctic squatters’ rights, taking special liberties to explore the ocean’s bounty while simultaneously expanding control, both mechanical and human, as the ice continues to shrink. With or without a U.N. decision, the Arctic countries likely aren’t budging anytime soon.


...Russian President Vladimir Putin views the far north in a vehemently nationalist light. “The Arctic is, unconditionally, an integral part of the Russian Federation that has been under our sovereignty for several centuries,” he said in 2013. To put muscle behind this statement, in March 2015 the Russian military launched a massive five-day show of force in the Arctic involving 38,000 servicemen and special forces troops, more than 50 surface ships and submarines, and 110 aircraft. Two months earlier, the first of about 7,000 Russian troops began arriving at a recently reopened military air base at Alakurtti, north of the Arctic Circle; 3,000 of them will be assigned to an enormous signals intelligence listening post designed to eavesdrop on the West across the frozen ice cap.

Greetings, Comrade!

More than a dozen additional bases are slated for construction. In October 2014, Lt. Gen. Mikhail Mizintsev, head of the National Defense Management Center, told the Russian Defense Ministry’s public council that Moscow plans to build 13 airfields, an air-to-ground firing range, and 10 radar posts. Russian Defense Minister Sergei Shoigu informed the council, “In 2015 we will be almost fully prepared to meet unwelcome guests from east and north.”

...Norway is also becoming nervous about Russia. In March 2015, around the same time that Moscow showed off its 38,000 troops, Norway acted similarly, dragging out 5,000 soldiers and 400 vehicles for its own Arctic military exercise. But rather than spying on Russia with satellites, Norway is putting its spies to sea. In December 2014, Prime Minister Erna Solberg christened the $250 million Marjata. Built for the Norwegian Intelligence Service and expected to become operational in 2016, the vessel will be among the world’s most advanced surveillance ships, according to information released by the Norwegian military.

With 72 subs, the United States has an advantage in numbers over Russia, which has about 60. But Russia is debuting a new generation of vessels that are far quieter and much more difficult for U.S. defense systems to detect. According to an article in the U.S. Naval Institute’s Proceedings magazine, the “alarmingly sophisticated” Russian fleet “will likely dramatically alter the world’s future geopolitical landscape.” The author, veteran submariner Lt. Cmdr. Tom Spahn, said the armament on the Yasen, Russia’s new fast-
attack submarine, includes supercavitating torpedoes that can speed through the water in excess of 200 knots, about the equivalent of 230 miles per hour. This “makes her truly terrifying,” Spahn wrote. The new Russian subs, that is, will be stealthier and far deadlier than any ever known.

One evening in November 2014, U.S. radar operators spotted six Russian aircraft—two Tu-95 “Bear” long-range bombers, two Il-78 refueling tankers, and two MiG-31 fighters—heading toward the Alaskan coast. They had entered a U.S. air defense identification zone, airspace approaching the American border where aircraft must identify themselves, and they were getting closer when two U.S. F-22 fighter jets were dispatched to intercept them. About six hours later, Canada detected two more Russian Bear bombers approaching its Arctic airspace. Like the United States, Canada scrambled two CF-18 fighter jets to divert the bombers within about 40 nautical miles off the Canadian coast.

Although the Bears are designed to drop bombs, they are also used to collect intelligence and eavesdrop on military communications. This was most likely their purpose in flying close to the U.S. and Canadian Arctic coasts. To be clear, Moscow wasn’t doing anything Washington doesn’t do itself: The United States regularly flies its RC-135 aircraft—a variant of a Boeing 707 that sucks signals, from radar beeps to military conversations to civilian email, from the air like a vacuum cleaner—near Russia’s northern territory.

If Harper is planning to blunt Putin's sharp elbows he's going about it in a curious way - defunding the armed forces, degrading the readiness of the navy, air force and army alike.  Canada's military budget has plummeted to just 0.89% of GDP and our 'missions' to the Baltics and the ISIS air war eat up a good chuck of that.

Who?  Harper?  Nyet!

In other words it's Vlad Putin's military muscle versus Harper's hot air. Harper was on the money when he said that we have to exercise our sovereignty in the north or risk losing it.  That, however, was 2007, before the Great Recession. Harper was presiding over a government he inherited from the Libs with a balanced budget and money in the bank.  That was before he began defunding the government and degrading the readiness of all of our military forces - army, navy and air force.  Today his focus is on pipelines and jury-rigging government revenues and expenses to create the illusion of a balanced budget before Canadians choose their next government.

When NATO stages Arctic air exercises and Canada is a "no show", we're running on fumes which is music to the ears of a guy like Putin.

The "Piss Away" Province

The key to understanding the dilemma is to realize that Tar Sand, bitumen, is just a part of Alberta's oil history.  The province has also produced a vast amount of conventional crude oil.  It's actually produced and exported a good deal more conventional crude oil than Norway.  That brings us to the starting point of the conversation.

The CBC today features another one of those awkward, cringe-worthy stories about Alberta and Norway and why Albertans are wallowing in another recession while their Norwegian counterparts are sitting on a mountain of wealth.  The easy answer is that Albertans, while deeply Conservative, simply can't be trusted to handle money.

Norway today sits on top of a $1-trillion Cdn pension fund established in 1990 to invest the returns of oil and gas. The capital has been invested in over 9,000 companies worldwide, including over 200 in Canada. It is now the largest sovereign wealth fund in the world.

By contrast, Alberta’s Heritage Savings Fund, established in 1976 by premier Peter Lougheed, sits at only $17 billion Cdn and has been raided by governments and starved of contributions for years.

“For the last 10 years, when nothing went into the Alberta fund, and we put a lot of money aside, the profit went out of Canada," says Rolf Wiborg, a petroleum engineer who recently retired from Norway’s public service.

Wiborg, who studied at the University of Alberta and worked for a Norwegian oil company before joining Norway’s Petroleum Directorate, says the key to success has been Norway's ethos of sharing and a commitment to never waver from that goal.

“We don’t change our policies in Norway, with changes in the oil price – you can’t do that," he says. “Lougheed’s government in Alberta knew that, they made policies and then they left them behind."

It's one reason why, as a coastal British Columbian, I sense the need to push back hard against the Oil Buffoons from Alberta and Ottawa and their damned pipelines.  You can't trust them. They're idiots and I don't trust the safety of my coast to idiots out to make - and yet again piss away - a quick buck.  It's like letting a chronic drunk drive your kid's school bus.  No, I don't think so.

There's a reason Harper has rendered coastal BC defenceless with his rigged environmental review farce and his extensive stripping of our ecological, fisheries and navigation protections.  Each safeguard he steals from us is money in someone else's pocket, someone else in another province or across a vast ocean in a place like, oh I don't know, Beijing.  And to know that the money they're trying to stuff into their pockets at our endangerment and expense is just going to be pissed away yet again - well it makes the blood boil.

Norway Dumps High Carbon Fossil Fuels. Adios, Athabasca.

It's the largest sovereign wealth fund on the planet; Norway's pride and Canada's shame; and it's divesting, getting out of coal, bitumen, concrete and gold mining.

If Steve Harper and Jim Prentice thought Keystone XL was a headache, this could give them fits.

Norway’s Government Pension Fund Global (GPFG), worth $850bn (£556bn) and founded on the nation’s oil and gas wealth, revealed a total of 114 companies had been dumped on environmental and climate grounds in its first report on responsible investing, released on Thursday. The companies divested also include tar sands producers, cement makers and gold miners.

A series of analyses have shown that only a quarter of known and exploitable fossil fuels can be burned if temperatures are to be kept below 2C, the internationally agreed danger limit. Bank of England governor Mark Carney, World Bank president Jim Yong Kim and others have warned investors that action on climate change would leave many current fossil fuel assets worthless.

“Our risk-based approach means that we exit sectors and areas where we see elevated levels of risk to our investments in the long term,” said Marthe Skaar, spokeswoman for GPFG, which has $40bn invested in fossil fuel companies. “Companies with particularly high greenhouse gas emissions may be exposed to risk from regulatory or other changes leading to a fall in demand.”

Even Norway Gets the Dutch Disease

We sometimes think of Norway as the country where fossil fuel riches are handled responsibly, not like the Alberta and Canadian governments that just piss it all away.  Yes, Norway has amassed an impressive sovereign wealth fund from its Statoil royalties but, beyond that, it has many of the same problems that confront Canada.  Like us, Norway is at serious risk from the Carbon Bubble.   The big difference is they've kept their money and so have resources to deal with it.   From OurWorld2.0:


According to the OECD, the Norwegian economy is projected to expand robustly in 2013 and 2014, mainly due to investments in the petroleum industry as “[n]on-oil exports will remain weak. Strong demand for labour keeps unemployment low and wage growth high”. 
 
Unfortunately for oil-exporting economies like Norway and Saudi Arabia, oil-importing nations such as Sweden, Finland, Denmark and Germany are systematically working to reduce their oil dependency and demand. Meanwhile oil imports by others like France, Italy and Spain are declining as a result of the recession. Even China is trying to control the pace at which the demand for oil imports grows .

Taking a longer-term view, since oil, gas and coal are non-renewable resources, they will eventually come to an end. The most readily accessible and cheap sources go first. Then more expensive and unconventional sources (like tar sands, shale oil and gas) are next in line. Costs, especially external ones, increase for marginal sources, while profit margins decrease. Oil becomes more expensive, while the alternatives become cheaper. The oil sector is therefore a sunset industry, while renewable energy is a sunrise industry.

...It is risky to stand on only one big economic leg while Norwegian companies that could step in are on their way out of the country to places where labour costs are lower. Average hourly salary rates in the main trading partner countries in the EU were US$30 in 2012, while the Norwegian hourly rate was US$61 according to Eurostat. Outsourcing of jobs is inevitable with differences like that, while immigrant labour enters. Hotel and restaurant workers in Norway are now Swedish, construction workers are from Poland and Latvia and taxi drivers are from Pakistan. When the oil adventure ends, most of these workers will leave.

This situation is asymptomatic Dutch disease. But since the economy is doing just fine, what can even the bravest politicians do in circumstances when the patient appears to be well? They have to be really forward-looking and that is not easy in the short-term world of politics. A more responsible policy would be to recognize the vulnerabilities of the contemporary Norwegian economy and reduce the risks, sooner rather than later.

...Since Norwegian politicians seem unable to set limits on the oil industry, oil companies do it themselves. Statoil is responsible for their bottom line, not for what is best for Norway. Avoiding two degrees warming now requires a tremendous global effort.

 ...Statoil might in theory accept that two-thirds of the world’s known oil reserves should be left underground in order to avoid future climate disasters. They also argue that Norwegian oil production is more environmentally friendly than that of other countries. The production technology is top-notch, with well under 10 kg of CO2 emissions per barrel of oil extracted. But if the environmental argument is essential, Saudi Arabia extracts oil at slightly over 6 kg CO2 per barrel. If Statoil wants to be perceived as more environmentally friendly, they should at least get away from unconventional oil sources such as tar sands in Canada, with up to 100 kg of extra fossil CO2 per barrel of oil extracted emitted into the atmosphere.

However, all that said and done, deep inside we know that extraction of oil is not the main issue. The fuel consumption is. Regardless of origin, every barrel of oil burned means 400 extra kilograms of fossil CO2 is added to the atmosphere. Currently, the world burns nearly 90 million barrels of oil every day. 

Accumulation of CO2 in the atmosphere has already reached 400 ppm as of May 2013. If you include the other greenhouse gases we are up to 475 ppm. If we add the extra five percent increase of water vapor in the air that man-made global warming so far has caused, we are fast approaching 500 ppm. Without action, a warming of over three degrees could already be embedded in the system.

In this context, it is clearly irresponsible to continue to let the Norwegian oil pension fund invest in carbon-intensive activities. Norwegians instead must use the fund as a tool for a responsible climate policy, and invest in green technology.


Over the next decade we can expect major shifts as some of the Organisation for Economic Co-operation and Development countries probably will halve their oil imports, renewable energies become cheaper than fossil fuels, and new technologies are introduced like smart grids, improved battery storage, and electric vehicles with longer range. Norway, with its oil dependent economy, risks being left behind. At the same time, we will begin to see clearer signs of climate change and associated social and economic impacts including growing refugee flows.

There are some changes that Norway could make to ensure it is better placed to respond to these challenges and to start reducing the 250,000 vulnerable oil-based jobs in the economy. First, diversify the economy — renewable energy, eco-friendly processing, fisheries, tourism, nanotechnology, robotics, green architecture, self-sufficiency, and information and communication technologies are some of the natural priority areas for Norway. Second, use today’s wealth to make this new economy a reality — stop state guarantees, tax cuts, special arrangements and other incentives for increased oil exploration and production, and redirect those funds to other industrial sectors. Third, elected politicians need to step forward and govern the Norwegian economy and take the reins away from Statoil.

The Norwegian economy and Norwegian society should have more to stand on than a single crumbling petroleum leg.

Those Damned Vikings and Their Carbon Taxes

What's wrong with those backwater pinkos in longboats?   Don't they know that socialism doesn't work?   Can't they get it through their Scandinavian skulls that they're supposed to be dying off prematurely in poverty?

Apparently not.

Not only are the Norse awash in Kroner that they're setting aside for future generations, they're also taking serious action on climate change.   Norway has just announced it will be doubling its carbon tax to $24 Cdn per tonne.

Norway will also plough an extra £1bn (Nkr10bn) into its funds for climate change mitigation, renewable energy, food security in developing countries and conversion to low-carbon energy sources, Environmental Finance reported.

It will step up spending on new projects to combat deforestation in developing countries to £44m, taking up its spending overall on forestry programmes to £327m. Previous forestry projects have involved Brazil, Indonesia and Ethiopia.

The Oslo government is also to spend £69m on buying carbon credits in 2013, to help offset its emissions, force through new building regulations to make all new homes carbon-neutral by 2015 and increase efforts to heavily cut emissions from cars, switching to electric vehicles.

Norway's Grotesque Travesty

He's sane.   He's freely admitted the senseless and brutal murder of 77 people.  He's not raising anything that could remotely be recognized as a defence or mitigation.

Why then is a Norwegian court allowing Anders Breivik's trial to turn into theatre of the absurd, a grotesque travesty?   Providing Breivik a stage for his perverted, murderous narcissism is nothing short of obscene.