Pareto-konferansen

Ladies and gentlemen,

Dear friends,

Thank you so much for your introduction!

It is my pleasure to address you here at the Pareto Securities’ Power and Renewable Energy Conference.

I was invited here as Norway’s Minister of Petroleum and Energy.

Now, I stand before you as Norway’s Minister of Energy.

 Petroleum will remain an important part of the world’s energy mix in the years to come.

On the other hand, the energy crisis has clearly shown how connected our energy system is.

We need renewable energy; we need oil and gas, and we need low-emission technologies such as hydrogen and CCS.

There are no longer separate sectors, but one energy sector.

 

We need this broad approach if we look at the challenging year we have put behind us.

Geopolitical tensions.

Unstable energy markets.

And we see the impact of climate change at an even higher rate.

2022 was a record year for greenhouse gas emissions.

Although we see more stability in the energy markets than a year ago, there are still many hurdles to cross.

 

The biggest obstacle is solving the energy trilemma:

How to provide energy security to a growing world population.
How to do so in a sustainable manner, also in terms of costs.And how to make energy affordable for all, secure industrial investments and save jobs.

In order to succeed, we must deliver on all three criteria – at the same time.

This, dear friends, is at the core of the energy transition.
However, the transition is not going fast enough.

Globally, the investments we need to succeed in reaching our common climate goals are not sufficient. 

In Norway, Pareto estimates that 400 billion Norwegian Kroner is required in investments by 2030 in green sectors, such as hydrogen, wind, solar power and CCS.

Let me also stress the following: Pareto also estimates all of these sectors will face enormous growth possibilities.

In other words: In solving the challenges ahead, there are also vast opportunities.

 

In this room, with industry leaders and investors, let me highlight the important role of our industries and businesses.

Who see opportunities - when markets seek green and sustainable solutions.

I was so proud to see around 140 Norwegian companies represented at the COP28 in Dubai a month ago.

Companies helping to drive the energy transition forward and take a strong position the global market.

History has given us the opportunities.

Nature has given us the opportunities.

Politicians have provided long-term and stable policies.

And not least, the industries and its employees have provided know how and investments.

For more than a century we have developed hydropower.

In half a century we have become experts in offshore operations.

This has given us specialised skills, coping with deep water, strong currents and heavy wind.

These skills have proved useful when we have moved into new areas.

Skills which also will come into good use in solving the challenges ahead.

 

We, as politicians, have a role to play by providing policies and frameworks.

We need to adapt for the future and make political decisions that will lead us to a net zero emission society, and not least, making it worth it to invest in energy.

Let me share some of Norway’s approach to a clean and renewable future.

Norway, as the only net-exporter of oil and gas in Europe, will contribute to European energy security also going forward.

We will keep on delivering oil and gas produced efficiently with low emissions.

To do so, we need to, and will continue exploration and investment in production on our continental shelf. Then we expect to be able to maintain high production over the next decade, before natural decline starts.

Of course, we do not distance ourselves from the ongoing, and necessary debate, about the future of fossil energy.

However, with a growing global population, the demand for energy in the world is huge, both now and in the years to come. A large part of the demand is still covered by fossil fuels.

Use of coal is increasing. The growth in world oil use in 2023 is bigger than the entire Norwegian production.

In this picture, what would happen if we cut the supply of fossil fuels?

A strengthened energy crisis?

Higher, more volatile prices?

It is at least very likely that the demand for energy would not be properly met. This would likely push up the supply of fossil fuels - and we’re back to where we started.

 

Another argument for a continued and long-term perspective on oil and gas are the investments in CCS, hydrogen and offshore wind.

With many years of experience from our continental shelf, Norwegian companies and their partners are at the forefront in the development of these technologies.

CCS is a necessary climate measure to ensure just transition to net zero.

It is a proven technology where we have demonstrated safe storage of CO2 on the Norwegian continental shelf for many decades.

Our full-scale project, Longship, will be the first to integrate a complete chain of CO2 providers, a flexible cross-border solution and an open-access storage infrastructure.

However, for CCS to become an effective climate tool, we need more countries and companies to invest in and develop CCS solutions, which is something we work for every day.

As for hydrogen, Norway wants to develop a value chain for hydrogen produced with low or no emissions. In this respect, “blue hydrogen”, natural gas with CCS, will play a crucial part, especially at the beginning, to secure scale of production.

On offshore wind, our ambitions are clear. The Norwegian government has a goal to award areas with the potential for 30 gigawatts offshore wind production on the Norwegian continental shelf by 2040.

We are currently processing the applications for Sørlige Nordsjø II. I truly hope there will be an auction on Sørlige Nordsjø II.

It is, however, no secret that these are trying times for offshore wind. Rising interest rates, increasing inflation and bottle necks in the supply chain have created challenges hard to foresee just a year or two ago.

But we are working together with the companies and with our international partners to find solutions.

Continuing to seabed minerals.

Last week the Norwegian Parliament gave its green light for a gradual and responsible development for mineral activities on the Norwegian Continental Shelf.

The geopolitical development underlines the importance of securing the supply of important minerals and metals from multiple sources, and from countries with stable and democratic governance, with proper rights and safety for workers.

So, we are adopting a gradual, knowledge-based approach where environmental considerations are heavily weighed. 

These are indeed exiting times for our offshore industry, though I must stress that an opening initially means that industrial players can be awarded licenses to map and search for minerals in a limited area, not to extract.

And finally, the renewable sector.

Historically the main driving force for the industrialization of this country. Today and forward - a key to employment, industrial opportunities and reduced emissions.

The government's goal is that we should have ample access to clean and affordable energy throughout the country, and that there should not be large and long-lasting price differences between different parts of the country.

Short term measures mitigating the effects of high electricity prices are already in place, such as subsidies for households and making it easier for businesses to enter into fixed price agreements.

However, in the long term, the only thing that works is more renewable power, more grid and more energy efficiency.

This year we will continue our increased efforts.

First, to make better use of the existing grid and to build a new grid to reduce the bottlenecks in the current power system.

Second, to facilitate the long-term development of profitable solar, hydro and wind power.

When it comes to onshore wind, Norway's wind resources are among the best in Europe, and onshore wind power is currently the technology with the lowest average development cost and can be established faster than some other technologies.

I am very pleased we have resumed the licensing process for wind power after it had been put on hold since 2019.

We are learning from the previous government's mistakes and will do this in a different way, especially listening to local interest.

 

So, dear friends.

To wrap up, let me try to answer the question: Why invest in Norway’s energy sector?

The return on investment is there.

The growth possibilities are enormous.

Norway’s energy sector is full of opportunities.

Investing in it, is investing in the future.

Because capital and investments will continue to play a crucial role in developing this energy nation for the times ahead.

We will do our part: To strengthen what we already have, through stable and predictable investment conditions combined with a competent administration.

The Government will not lose sight of the need for energy security, both at home and abroad. We will make sure that Norway remains a reliable provider of energy to Europe.
Our petroleum sector is not only providing energy security today. It is crucial in developing the technologies for tomorrow.

This is why the Government will continue to develop the Norwegian petroleum sector, and to build on its competence to develop solutions for the future.    
We must succeed at cutting emissions and transition to a net zero energy system in 2050.

The knowledge and competence you represent will be instrumental.

If we are to reach our goals, we need the expertise, experience, and commitment of our energy industries, whether it’s renewables, petroleum or a bit of both.

The approaches are many, but there is one energy sector to contribute a single and common goal: A sound energy transition.

Thank you for your attention!