Holdt innlegg på energikonferanse i Brussel

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• Commissioner, ambassadors, distinguished guests,

 

• I am happy to see you all at this conference on the role of natural gas in transforming European energy systems.

 

• As you are probably all well aware of, EU-Norway energy cooperation is both well-established and well functioning. Through the EEA Agreement, Norway is a full member of the internal energy market. In addition, we established a specific energy dialogue more than ten years ago.

 

• This is, however, the first time we co-organise an energy conference!

 

• It is not a coincidence that gas is the topic of today’s conference. Natural gas production in Norway has grown more or less uninterrupted for 20 years, and we currently produce and export more than 100 bcm annually. Roughly speaking, Norway provides around 20 % of the EU’s gas consumption.

 

• Over the next decade our production will most likely continue to increase. A production level of between 105 and 130 bcm per year by the end of that decade is our best estimate today.

 

• Norway is a long term, stable and secure supplier of natural gas to Europe. And we will continue to be so.

 

• This is good news both for the EU and for Norway. But it is also good news for the climate. Let me explain why.

 

• If we look at the energy revolution in the United States, we see that shale gas replacing coal has lead to reduced emissions. They are investing heavily in modern energy infrastructure. They increase their competitiveness. More jobs are created in energy production and energy related industries.

 

• Furthermore, an energy self-sufficient USA will result in large changes internationally. The US trade deficit will decrease, and the global power balances will be changed. This is good news both for the USA and Europe. But as a result, Europe will probably face harder competition from the USA. To face this challenge, I believe well functioning energy markets in Europe is of crucial importance.
  
  
• We should acknowledge that some fossil fuels are better than others. Being the cleanest of the fossil fuels, natural gas should be considered as part of the solution to our climate challenges, rather than part of the problem. In power production, natural gas emits about 50 per cent less CO2 than coal. From my point of view, gas is therefore not a bridging energy source but a destination energy source.

 

• When we discuss the road towards a sustainable energy future, gas should indeed be a central element of the debate.

 

• As the share of renewable energy rise, gas has important qualities as a reliable and stable back-up for intermittent renewable energy.

 

• Furthermore, and even more importantly, by replacing coal-fired power plants with gas-fired ones significant emission reductions can be made. If Europe switched from coal to gas for its entire electricity production, we could largely meet the 2020 target of 20% CO2 emission reductions – without any subsidies!

 

• Therefore it is a paradox that as we speak, Europe is facing a situation where coal is experiencing a renaissance, to some degree replacing gas. The coal the USA no longer burns, they export to the European market.

 

• The development is accentuated by a carbon market that at present moves in the opposite direction of our climate goals. CO2 prices have plummeted, and accordingly, coal consumption has risen.

 

• This is a worrying development. I strongly believe in a price on emissions and I have seen it work. When the CO2 tax was introduced on the Norwegian Continental Shelf in 1991, this was an incentive for Statoil’s CCS project on Sleipner in the North Sea, and other projects.

 

• A carbon price is the most potent instrument we have. It creates business opportunities and private sector investment.

 

• We therefore strongly support initiatives from the Commission to enhance the functioning of the European carbon market.

 

• When we consider the political climate and energy framework post 2020, we should continue to build on the Emission Trading Scheme as the cornerstone.

 

• In my view, a well functioning carbon market is a better approach than a variety of different support schemes, targets, part-targets and detailed regulations in all areas.

 

• I think that the discussion on how European energy markets should be after 2020 is one of the most important and interesting debate over the next years.

 

• Today, we see some worrying signs: there are many different support schemes for renewables, there are many targets, and regulations to meet them. I think the fundamental questions are: How can we use access to energy as a cornerstone to increase competitiveness and create more jobs? How can we reduce emissions as efficiently as possible? And how can we ensure security of supply and energy efficiency?

 

• How are we going to secure transparent and well-functioning energy markets in Europe? We set the rules, the market delivers the results. We must work together to achieve this.

 

• In a time when we face large challenges in the energy sector, I am a bit concerned that we spend too much time on details. To give you one example: Norway and the EU now spend much time discussing a possible prohibition of electric water heaters. In Norway – where 95 % of our electricity comes from hydropower – such a proposal simply does not make sense.

 

• Norway and the EU are important partners in the energy field – and will continue to be so.

 

• Norway will continue to be a secure and reliable supplier of natural gas for many years to come. Only 25 percent of our expected gas resources have been produced.  We are continuously working to manage and develop the resources on the Norwegian Continental Shelf in a best possible way.

 

• Today, we are focusing on gas. But is should also be noted that our electricity markets are getting more closely connected.

 

• Some have argued that Norway – with all its hydropower – should be a “green battery” for Europe. I would point out that to some degree Norway already is a green battery. We are closely connected to the other Nordic countries through a common and well-functioning electricity market. And there are also considerable power exchange being built to Denmark. We are also planning new inter-connectors to Germany and the UK.

 

• Such interconnectors will be important for energy security and well-functioning markets, and thereby benefit all parties. But we should still be aware of the proportions of the Norwegian “green battery”. Size matters.

 

• Even though Norway has extensive hydropower resources, they are nowhere near sufficient as backup for a country as Germany, let alone the whole of Europe.

 

• Therefore, only a small – but important – proportion of intermittent renewable energy in Europe is likely to be balanced by Norwegian hydropower. Gas power, on the other hand, has the potential to provide the needed balancing services.

 

• To sum up, Norway and the EU are – and will continue to be – close partners in the energy field.

 

• On our way towards a sustainable energy future, a clear and coherent European policy framework is of great importance. We also need to focus on research and development of effective climate technologies, and ensure that appropriate incentives are in place.

 

• And as this seminar contributes to – we need to acknowledge that gas has a crucial role to play!

 

• Thank you for your attention!