Remarks by the Prime Minister at Oslo Energy Forum

As delivered (transcribed from audio recording)

Good morning,

I have two assignments this morning. I'm speaking to you and I’m looking forward to that, as every year. And then I will go to what most Norwegians here will know as ‘Katta’. It's a high school in Oslo, well renowned, to talk to students over lunch. I think the themes actually connect, because they both deal with what is lying ahead. What are we in the middle of? And what will it really require in terms of decisions? I hope I haven’t switched texts, but I'll try to do it in sequence.

Norway – a major energy country

I think I'd like to first thank Oslo Energy Forum for setting the tone every year. I mean, it used to be at Sanderstølen. It is now at Holmenkollen. And thinking, that these conferences started in the 1970s and if we go back and think about what was really the geopolitical complexity then, it must have been dramatic.

Now, we know it as history. We know what followed in the years that came afterwards. But there were years of oil crisis. There was a significant war in the Middle East, the Yom Kippur war. Norway had, for its part, the first decision to turn down at the referendum to join the European Union, talking about our country. Nixon going to China, the opening. And also, the beginning of the Norwegian energy chapter.

And some of my friends will know that I never talk about Norway living in ‘the oil age’. We live in ‘the energy age’, and it is very long. We have to go back to the late 19th century, to see how we contained the waterfalls. And then many, many years passed and we had oil and gas. And now we are venturing into new energy sources. So, this is a long trend. So that's why it's good to have forums – so we can from time to time take stock.

So, if we jump to today, I think you covered that yesterday and with the speakers, with Ulf (Sverdrup) and Stian (Jenssen) and others, and I think they could do that better than most. But I mean, the most dramatic part for us Europeans is that we have a full-scale war going on in Europe, which I think is worthwhile also talking to young people like today – we cannot simply overestimate how dramatic that is in terms of destructions, where it is happening, but also what is happening around. We have the Middle East in full tension. – So many different dimensions of that region still on the verge of becoming extremely serious.

Then there is the US-China relationship still hanging in the balance. And we are all trying to decode the new president in Washington. What will the next week be? We have had three weeks. It means that we have 48 more weeks this year, and then three more years. So, you know, the coding system really has to work to make sense of this. I'm now really acting as a diplomat.

I was in touch with colleagues and friends in Washington D.C., in USAID. They are now packing and going home. I think it's both heartbreaking and will probably have implications far beyond what we see right now.

There is fracturing of global trade. I was global trade minister as Foreign Minister in 2005, when we tried to forge this big global trade deal, we were almost there in Hong Kong at that meeting in 2005 – and until 2008, where we're recopying the word of Dean Acheson, the Secretary of the United States, who had been present at the creation of the UN system after World War II.

But there, I remember in Geneva in 2007-8, we felt that we were present at the destruction, because the global system, in a way, broke down. Still, there are global deals. And WTO should not be underestimated. They do valuable work, but not as – or with – the global perspective.

Then, Norway today is a major energy nation, providing one third of Europe's gas, 40% of Poland's gas, 40% of UK gas. It is a role that we take seriously.

When I was in Hammerfest a couple of weeks ago, observing Melkøya and the LNG plant; that was the plant that provided the extra 8% of Norwegian gas to Europe when the war broke out, coming from the northernmost part of Norway. This was in the days when the European Parliament voted against taking in any energy from the Arctic. I had to talk to the European Parliament to say – well, then we have to stop the trade of LNG from Melkøya, because Melkøya, Hammerfest, probably is in the Arctic. So, we are learning about geography. 

We are still struggling to keep pace with Paris. And we are in this extraordinary energy transition, as Anders (Opedal) just mentioned.

And last point, talking about sites; I was not at the World Economic Forum this year, but I saw in their rating of issues and challenges that they have among business leaders globally every year, that this year's main challenge was misinformation and fake news. So, all of that feeding into it this – of course, a big thing.

So, now speaking as a Norwegian prime minister, what is the outlook here? We talk, and I stand here in a country which is probably the world's most open economy, among the most digitalized economies, with the world's second longest coastline. We are an ocean state facing the ocean. We are now an energy exporter of major strategic importance, and we are managing this world's sovereign wealth fund, the largest, with a responsible long life.

Security, defense and resilience

So, then, what is on our agenda? And we have, of course, to start with the connotation of energy today, which is linked to security.

Security is our front thoughts. That's why I am proud and I'm comforted by the fact that all parties in Parliament have voted the Defense Plan for the next 12 years, which is a major revamp of all sectors of our defense. It could be done with a smaller majority, and I know that there are, you know, on the outskirts of our political spectrums, probably different perspectives on what it will mean, but still, it is a major good starting point that all government alternatives, all potential future prime ministers are bound by this vision of building and strengthening the defense sector. We have to do that.

And now, in a much closer coordination with our Nordic neighbors, we are going to deliver on the NATO regional plans, which, in addition to our national plans, will have to make sense.

And let me just put it this way; in this world, where we are trying to decode what's happening in Washington D.C., the European dimension of NATO will be extremely important. I don't see this primarily as an EU matter. I see it as a NATO matter, and I think European NATO states have to work very closely together to see what it really will mean to live up to these regional plans.

We are part of this Joint Expeditionary Force, which is the UK, Netherlands, Baltics, and Nordics. I have invited all those leaders to Norway in May. We have a NATO summit in June. But there is now, in my ears, in politics, a much stronger coordination that we have ever seen among Nordics and Baltics and the Northern Europeans to make sense of what does it really mean to have that regional responsibility. So, this is key.

The second dimension of that is the general resilience that we have to explain to our citizens; that we have to be ready as an individual, as a business leader, as a union leader, to face risks from extreme weather to security threats, and if the worst were to happen – a war situation.

In a way, building ships and commissioning submarines is expensive, but it is, you know, we have done it before. It is something we know from the textbook. But the resilience part is here and here, among people.

So, you know, if you run a business, you ask yourself – well, I ask, when travel around; are you attending to the business area? Can anybody enter? Who is looking into your production line? What are your scenarios if electricity were to be broke for time to come?

We have to manage security first, our relationships, and that is, for us, security-wise with the U.S., across the Atlantic, our intelligence cooperation in the North, making sense of that with the new administration. We have been managing different administrations. This one is partly known, partly new, and we are doing what we can to link up.

Our links with Europe, extremely important; more than 80% of our export goes there, 65% to the EU, 20% to UK. So, our European Economic Area Agreement is of fundamental importance, of such importance that, for me, it was worthwhile making this shift in government to make no doubt that this is our real link, and there can be no question about it. And to our Norwegian friends; this was not really – this was not really deep down about three directives. It was about the impression of who are we and what are we doing, and there can be no doubt about that.

Key energy policy issues

Then, of course, we are still in the big energy transition, which is followed with a lot of interest, excitement, but also instabilities. And what are, then, the key issues seen from our side, Norway?

First of all, maintaining the Norwegian continental shelf as an attractive energy sector. This is a long line, and that means a sector in development, in transition, with new requirements, new exciting opportunities from the south up to the north. There will be attractive conditions. They will be stable and predictable. We do see interest in licenses being put out.

We also put clear targets on technological transition, cutting emissions. So, this will be a sector for the future that can be there to say now when we move towards the low-emission economy. And I believe that the gas to be sold 10, 20, 30 years ahead has to be the gas with the lowest emission. There we have the collaboration and the partnership with industry, which I value, and I think this is an important one of working hand-in-hand on that.

Offshore wind

Then, Norway, as all countries, will need more electric power, we will need more grid, and more energy efficiency. So, we move psychologically out of a phase where Norwegians have thought that we have abundance and we have surplus, to something which will be more narrowly, and perhaps if we don't really do things well, we may run into deficit. That's why this is a big task for us as we move ahead.

We are starting to explore offshore wind – and it is complex, as you all know. Now, when two-thirds of world population live by the coast, so I cannot see how humanity will not – during this century – be able to harvest the wind potential from these shores.

But as any new technology, it is a hard start. And we all see that the key components all of a sudden become very expensive. There are bottlenecks in the value chains. There are concession rounds which are late. But I still think this is something we just have to live with, and we have to have patience, and we have to find a way around it. At least that is our approach.

We are moving forward with the first project in Sørlige Nordsjø, which may provide 6 to 7 terawatt hours, coming a few years ahead. This will be important for our economy. We are moving forward with the floating offshore wind auction later this year, in 2025.

And we are assuming onshore wind licenses, which are complicated, as we know, in municipalities around. But there have to be incentives. There has to be collaboration with industry and risk-taking also by industry for developing this in the right way. And we have put substantial money available for energy efficiency, supporting buildings, generally throughout industry also with support.

Carbon capture and storage

We are moving ahead with carbon capture and storage. And I remember from the time when we focused on carbon capture and storage, and Jens Stoltenberg called that as Prime Minister, our ‘moon landing’, and he was a bit ridiculed by that at that time. I'm thinking – that shows that, you know, sometimes leadership has to say that this is the way to go. And what we managed in that period was really to capture. We managed technology to capture the CO2.

So, at Mongstad, which did cost a lot of money, we proved with international companies from around the world that we could capture it. And Statoil demonstrated that we could store. And it was possible to take the CO2 and pump it up.

Now, it has been merged with Northern Lights, with Equinor and other partners, and Øygarden is ready to go online this year. I think it is an immense success of technology and cooperation with companies, but also of political perseverance.

And now, I have been going through years talking to European partners, to the EU, where CCS has been seen just as a kind of a ‘show’ to take attention away from transition. Now, it is at the forefront. There is no way we can reach the Paris targets without CCS. Both to deal with the hard to abate sectors, cement and others, but also because we can prolong gas as a source for power generation and for industry if we succeed.

Electrification

We are moving forward with electrification. And let me say, because I think I am one of the few people in Norwegian politics who say this very loud, the Melkøya project at Hammerfest is a key industrial entrepreneurial project that we will stand by.

Electrifying Melkøya will cut up to a billion tons, a million tons of CO2 necessary for the big equation. It will prolong Melkøya as an industrial site, and it will bring industry to Finnmark. It will bring the big industrial developers to this part of Norway where we need activity and investment and grid.

If you want to open industrial activity in Eastern Finnmark today, and we want that to happen, because we want people to live close to that border. When I was in the Navy – 40 years ago – there were 70,000 people living in Finnmark. And that was of security importance for NATO. We should not have an empty Finnmark next to the Soviet Union. And God knows it is as important today.

But if you want to start industrial activity in Sør-Varanger kommune today, you are turned down because there is nothing; there is not enough power and electricity to run. So, we need a grid, and we need to develop that source. And we can do that in harmony, I believe, with indigenous people. Finnmark is large. We can do it in a harmonious way. And we have to go down that road. In that sense, I think Melkøya is of extreme importance – of obviously importance.

Then just one little chapter on this; Norway, as an energy exporter to Europe, sometimes has to be understood in the following way. When we are in the EEA, and 27 countries in Europe agree on directives, our Nordic neighbors, those directives are normally okay. No problem. We just take them.

So, where does Norway differ? Well, we differ sometimes on geography, and we differ sometimes on energy, because our energy is different. Imagine, we are a large gas exporter, but we consume none of that gas ourselves. Our economy, if you go, I asked ChatGPT the other day, how is the Norwegian energy systems fueled? – 80% by hydro power. And ambassador, how is the Swedish economy fueled? 40% by hydro power – water. And then there is nuclear and other sources. So, our system is different, and Norwegians heat up their houses with electricity.

That's why this is a sensitive issue. And that's why all those of you who follow us on this – on, I must say, sometimes insular energy debate that we have these days, and which really weighs on me – is that the credibility of the system; that people accept the way it works, means that for them, that it is really in there on the kitchen table.

Very unstable bills coming in for their electricity is bad for their economic stability in the private economy, but it is also bad for the credibility and legitimacy of how we run our economy. That is why we put emphasis on providing support to stable prices, and still, we will manage, I can tell you, sufficient incentives that we will focus also on energy efficiency.

Artificial intelligence, China and the U.S.

I'll try to wrap up now, because I've spent a bit more time on that one. Now, looking ahead, just a few issues, which I really think will be important for us and the rest of you.

One, how to understand the rise and voyage of China ahead, the risks and opportunities, the AI competition between US and China. When I was in China back in September, I coordinated with my Spanish and Finnish colleagues, we were there at the same time. I think we said we are all modern economies, we will all apply AI as far as we can, but we can't do that on our own. There are only two countries who can really do that. It's you, Mr. Xi, and it is the president on the other side of the Atlantic. It doesn't look very good in terms of finding rules and regulations to travel safely along AI, but I think it is the big thing.

Second dimension looking ahead is to decode and understand the roads to be traveled by the United States. I think this is among the first times where we need to learn a new administration, we always do. But the questions which are being asked now are more profound, more linked to some fundamental issues about security and what it will mean. And in only three weeks, I think those questions have been – and I know that there will be a lot of talks with the US and European administrations at the Conference in Munich in a few days. So, I'm sending my people, I'm sending my finance minister, and I'm sending my foreign minister and my defense minister and my development minister and I'm going myself, because we have to talk to people now. We need to understand what is going on. So, Jens does not get to run the Munich conference yet, but he will be there as a ‘participant’.

Energy and development

Then I think, finally, the weight of the green transition, and you mentioned, Anders, it is on an uneven pace. And on energy and development, I think we have to bring back focus on that because it is still the main challenge out there is that there are a couple of billion people without electricity. We talk about how to balance our sources.

That's why I'm proud that I'm still cooperating and participating in this great adventure called the GEAPP, the Global Energy Alliance for People and Planet, where we are trying to bring together technology, investments and support for emerging economies that they do travel down the renewable path and not go into the fossil. I use the example of Vietnam. Should they go for 50 more coal-fired plants? Technology is there, they have the coal. Or should they do solar or wind, which is cheaper and they know how to do it, but they don't have the grid and they don't have the storage capacity.

And that's why GEAPP is a major undertaking to help that particular phase; doing a battery search so that the green premium they are paying comes down because these batteries are cheaper. The big industrial batteries are cheaper in Europe than they are in the countries that really need to use them. And we have agreed with the World Bank and all the key partners on the Mission 300, which is about providing electricity to 300 million people in Africa by 2030, which is highly feasible. And in a way, it is a bit like with vaccines that we used to work on from this government, which is really not high-tech, it is basically low-tech. It's about organization and mobilizing sources.

And I am happy to see that GEAPP was able, together with partners, the World Bank especially, to mobilize $50 billion in January at a big session in Tanzania. President of Tanzania was here last year. She's a partner in this. The IEA is a partner in this. And I believe as we work on our energy issues and our energy security issues, we have to keep this dimension in place. So, there's the whole agenda. And I'm happy that the Oslo Energy Forum is focusing on all that, making sense of it. So, thank you very much.

 

More info on the conference:

• Oslo Forum – energy transition in the new risk reality