Norway Debates the Promise, Costs of New Drilling

By Juliet Eilperin
Washington Post Staff Writer
Tuesday, August 21, 2007

TROMSO, Norway This small country, which has a vast treasure of undersea oil and an intense civic concern about global warming, is struggling with a dilemma -- but it is one that most nations would envy.

In little more than two generations, oil and gas have transformed Norway from a country recovering from World War II occupation into an economic powerhouse. But now its citizens and politicians are debating whether it should take advantage of Earth's warming to drill for more oil above the Arctic Circle, knowing that consumption of that oil will accelerate climate change.

Energy experts estimate that as much as 73 billion barrels of oil and natural gas could be trapped in a 1,220-mile-long stretch of the Arctic seabed. Complicating the argument further, those resources would be easier to tap in a warmer environment.

Given the value of Norway's existing oil and gas -- the country ranks as the world's third biggest gas exporter and fifth largest oil exporter, and petroleum accounted for 36 percent of the government's revenue last year -- its political and business leaders are increasingly focused on the opportunities in what they call "the High North." They know that if Norway holds back, Russia, Denmark, Canada and other countries with Arctic claims could well vie to exploit these resources. (This month, a Russian mini-submarine planted the Russian flag, encased in a titanium capsule, on the seabed at the North Pole in a symbolic gesture to underscore its claims to the Arctic's underwater resources.)

This has left policymakers and scientists pondering a difficult question: What should Norway do about the fact that global warming will make their climate more hospitable and enhance their financial situation, even as it inflicts damage on other parts of the world?

"The paradox is this part of the world is the most fortunate when it comes to climate change," said Jan-Gunnar Winther, who directs the Norwegian Polar Institute in the Arctic city of Tromso. "It's very challenging for a very wealthy nation, knowing this will be a positive change, to then take a very responsible action."

At Statoil, the Norwegian oil company whose majority owner is the government, Trude Sundset, senior vice president for the environment, said its officials view global warming as a problem, but they also feel a need to supply international markets.

This fall Statoil will begin production in the Barents Sea, where the Norwegian Petroleum Directorate estimates that 8 billion barrels of oil and gas lie.

"As long as the world wants to have oil and gas, you need to go where the oil and gas exists," Sundset said.

Government officials say they are committed to reducing Norway's greenhouse gas emissions, both at home and by purchasing carbon offsets abroad. The country is on track to reduce its emissions to 10 percent below 1990 levels by 2012, despite the fact that it was allotted a slight increase under the Kyoto Protocol, the 1997 treaty that seeks to curb global warming.

In late June, the government announced a further plan to cut emissions by 30 percent by 2020 and to make the entire economy carbon neutral in 2050, though it did not detail how it would do so.

Jonas Gahr Store, the minister of foreign affairs, said that while changing climate conditions will make it easier to extract oil and gas from beneath the Barents Sea, his country is pioneering carbon-capture and storage technologies that will help mitigate its emissions.

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