Oil extraction in Norway only until 2040? Such predictions are made by Professor Jørgen Randers. If his predictions come true, it will mean the end of work for 170. people employed in the oil industry. He also has a plan to help them find a new job.
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Oil extraction in Norway - the beginning
The production of crude oil in Norway dates back to 1965, when the first round of granting concessions for this raw material was launched. In the summer of 1966, the first exploration drills took place, and a year later - in the summer of 1967 - the first oil deposits were discovered on the Norwegian shelf in the North Sea. This raw material has been mined since the 70s, but initially it did not take place in the first discovered oil field.
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Now
The largest company in the oil industry is Equinor, whose total share in this segment is approx. 70%. At the end of December 2017, production increased to almost 2 million barrels of crude oil, NGL and condensate per day. This amount is to be increased as a result of the opening of the "Johan Svedrup" oil field. According to the company's management board, it is planned that daily production will oscillate around 660 barrels of crude oil.
Jørgen Randers: "Mining only until 2040"
Jørgen Randers is a Norwegian scientist who holds the title of professor in climate strategy at BI of the Norwegian Business School (norw. Business School BI). It says the Norwegian mining industry should reach peak production capacity in 2020 and gradually phase out consumption by 2040. In his opinion, Norway should completely stop extracting oil, gas and coal. He also claims that increasing the environmental awareness of the public will mean that in 2040 oil extraction in Norway will cease to be profitable.
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What to do with employees?
Jørgen Randers also has a plan to allow workers in the oil sector to change industries gradually. To this end, it recommends that the revenues from this industry be allocated for educational purposes. In his opinion, this will allow 10 thousand. people a year to change their profession. It is also supposed to have a positive impact on sectors of the economy in which there is currently a high deficit of employees, in particular: health care, education and tourism.
Ingvil Smines Tybring-Gjedde: "I am amazed"
Ingvil Smines Tybring-Gjedde - Secretary of State at the Ministry of Petroleum and Energy - does not hide his surprise. He points out that the oil industry has brought revenues of over NOK 2002 billion to the state budget since 5000. These revenues are also higher than from other sources, e.g. from taxes.
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He also claims that the extraction of crude oil in Norway is profitable even with low prices of this commodity in world markets. Especially considering that the Johan Svedrup oil field would be profitable even if the price of a barrel fell to $ 20. Additionally, investments of NOK 128 billion are planned in this sector.
Thina Saltvedt: "Oil extraction will be unprofitable"
Nordea's Thina Saltvedt says the Norwegian oil industry's profitability peak will be reached in 2030. At the same time, it echoes Jørgen Randers in saying that the industry will cease to be profitable in 2040. He argues his opinion with the fact that Norwegian crude oil is more expensive than oil extracted in the Middle East. It also anticipates a decline in global demand for this raw material, which in the long term means that the profitability of the oil industry in Norway will decline.
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Jørgen Randers: "Norway will not be smart"
Jørgen Randers adds that he does not believe that the Norwegian government is following his recommendations. He also claims that: “I don't see any chance that Norway will stop looking for new oil fields once the extraction of this raw material is profitable. For this reason, the search for new sources of budget revenues will start in about 10 years, when oil production in Norway will cease to be profitable ”.
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