Speech/statement | Date: 12/09/2019 | Ministry of Petroleum and Energy
State Secretary Rikard G. Knutsen held this speech at the DNV Global Transition Conference in Høvik on September 12th 2019.
Sjekkes mot fremføring.
Ladies and gentlemen,
Thank you so much for inviting me to share my reflections on the global energy outlook.
Predicting the future is a difficult task. It is not easy to get it right when we try to look 30 years into the future. Therefore, it is valuable that different stakeholders and organisations contribute to the global dialog on how to reach the UN Sustainable Goals, including on global warming.
Your report gives a comprehensive global outlook, and shines light upon the broad set of challenges faced by different regions and countries of a world with a growing population.
Different approaches and solutions are necessary depending on geography, economic development and resources. It points at fundamental transitions that are necessary in both production and consumption of energy as we go forward.
My reflections here today will focus on the political implications of your new Outlook.
The Outlook emphasises one of the fundamental dilemmas the world is facing.
We need to feed a growing world population and improve the standard of living for billions of people globally. At the same time, we need to reduce the global greenhouse gas emissions. These challenges must be solved in parallel.
Meeting these sustainability goals will require a faster pace of transformation than we have ever seen in the history of mankind. A faster pace will reduce global warming compared to business as usual, and at the same time improve living standard for a growing population.
The Outlook indicated that in the future, it will be possible to continue economic growth without increasing our energy consumption. That is a very different path than we have seen historically. Step changes in efficiency and new, cleaner technologies can deliver this. That is encouraging.
For me, an important takeaway is the prediction that the world will still need a lot of oil and gas for many decades to come.
In fact, we just heard that DNV GL, as most other analysis, indicate that more gas will be used in 2050 than what the World is using today.
I think this illustrates a basic reality that should be recognised in the public debate here in Norway.
Sometimes I get the question; is the Norwegian petroleum production part of the problem?
My clear response is: Clearly not, and shutting down our production is not a viable option!
To the contrary, I think our achievements on the NCS is very much part of the solution.
Because, an essential part of Norwegian oil and gas policies have always been to encourage production with the smallest possible footprint.
And our policies work! In 1991, Norway was one of the first countries in the world to introduce a carbon tax – a price on carbon. Thus, our upstream sector has for nearly 30 years paid a high price for emissions.
And since 2008 Norwegian oil and gas production has been part of the EU's carbon trading system ETS. Contributing to reducing emissions within the system by more than 40 percent before 2030.
In addition, flaring of associated gas has never been an acceptable practice on the NCS.
As a consequence, the total price of greenhouse gas emissions on the Norwegian continental shelf is far higher than in any other petroleum-producing country in the world. This has resulted in Norwegian petroleum activity having approximately half the greenhouse gas emissions compared to the world average.
The Outlook also points at renewable energy and electrifications as two important elements of the energy transition. Norway is in a good position when it comes to both renewable energy and electrification. We have a power sector that is almost completely renewable, and we use electricity in many areas.
For more than 100 years, hydropower has supplied Norway with clean and renewable energy. Recently, wind power has also seen an increase. Today, 70 per cent of Norway's total energy consumption is renewable, and this is one of the World's highest shares.
Our geography provides us with unique storage capacity for hydropower. As the Outlook points out: This storage capacity shields us from the challenge of intermittency that comes with increased share of renewables.
Furthermore, the Nordic power market is well integrated, and the addition of two new interconnectors to UK and Germany can provide new business opportunities for our hydropower with storage reservoirs. Moreover, I see these storage capacities and Norway's natural gas exports as two excellent solutions for balancing power systems with a strong influx of intermittent energy sources like wind and solar PV.
Let me also mention that we will continue our strong focus on R&D in the energy sectors to make these even more efficient and climate friendly. In addition, CCS is a key priority for this Government.
These are just a few examples of how Norway has been able to develop policies and technologies that can help to address global challenges.
Because, our efforts are not just helping us to cut emissions here in Norway. They can also provide the basis for global emission reductions if they are adapted to the needs of other countries. In that way, Norwegian technology and innovation can also provide us with new jobs and competitive businesses.