Wednesday

17th Aug 2022

Norway's oil capital braces for change

  • One of Stavanger's nicknames is 'oil capital' and one of its tourism attractions is the Norwegian Oil Museum (Photo: Ben Bodien)

Two worlds exist side by side in Stavanger, Norway's fourth-largest city on the country's south-western coast.

One world is that of the oil and gas industry, which accounted for much of the economic development in the past decades. It has earned Stavanger the nickname 'oil capital' – although the city's government prefers the broader title 'energy capital'.

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The other world is an increased sustainable awareness in the city of around 130,000, where people on bikes are seen perhaps as frequently as drivers of electrical vehicles.

There is a bit of a friendly race going on with the country's capital, Oslo, said Tone Grindland, head of economic development for the Stavanger government.

"They have the highest number of electic cars, but we have it per capita", Grindland told this website. In fact, Norway as a whole is a trend-setter in terms of plug-in electric vehicles, thanks to government tax incentives.

But how long can these two worlds continue to co-exist?

The economic effects of the drop in oil prices, which are now over 50 percent lower than last year, are starting to be felt in the city, as well as in Norway as a whole.

On Wednesday (16 September), Norwegian newspaper Dagens Naeringsliv reported that for the first time in history, the value of the country's gas exports exceeded that of its oil exports.

Over the past 12 months, Norway exported 232 billion krones (around €25 billion) worth of natural gas, against 216 billion krones of oil.

On Tuesday, airline SAS announced it would stop operating direct flights between Stavanger and Houston, another oil hub. The flights were also dubbed the oil route.

"As a consequence of reduced activity in the oil industry, SAS has experienced a severe decrease in demand and thus passenger loads on the Stavanger-Houston route. Hence, SAS no longer has sound commercial grounds for continuing this niche route", the company said in a statement.

Add to that political statements at increasingly high levels calling for an end date for the use of fossil fuels, and you can understand why change is in the air.

Changes afoot

"The key word in Norway nowadays is change", said Stavanger's mayor, Christine Sagen Helgo Thursday (17 September) in a speech.

Sagen Helgo spoke at the Nordic Edge Expo, a conference about smart cities – cities using technology to improve livability and sustainability.

"Business and public sector need to prepare widening the scope of economic development", added the mayor, who represents Norway's centre-right Conservative Party. But change will not come overnight.

"We will continue producing oil for at least fifty years", Sagen Helgo said.

For some of Norway's citizens, that is not fast enough.

Green electoral success

At local elections on Monday (14 September), the Green party did surprisingly well.

Two years ago, it won its first seat in the 169-seat national parliament with 2.8 percent of the votes. This year, the greens did well in several municipalities, most strikingly in Oslo, where they became the third-largest party in Oslo with 8.1 percent of the vote.

The election result was at the forefront of the minds of the Norwegian conference participants.

"The Greens did a very strong election. I think it says something about people's ability to see that the future is a lower carbon future", said Toril Nag of renewable energy company Lyse.

Although Norway is known for its exports of fossil fuels oil and gas, which contribute to possibly catastrophic global warming due to greenhouse gas emissions, Norwegian electricity is very green.

98 percent comes from renewable energy thanks to the massive hydropower capacity. Which means that the electric cars driving around – recognizable by 'EL' on the number plate – are actually almost carbon neutral, unlike electric cars that charge electricity created by coal-fired power plants.

"Even if the power prices are low, I think it appeals to Norwegians to be able to produce our own energy. And it also appeals to our green side to contribute. It is not only our region that is asking the question: what now, Norway?”, noted Nag.

Soul-searching

According to Ivar Rusdal, chairman of the conference, there "has been too little soul-searching" in Norway about the role of fossil fuels.

"The moment the oil prices started to decrease there were cries of crisis, and 'what's going to happen?'. … It is a fact of life that it is a very important sector for the national economy, and will remain so for a long time. You can't disregard it", Rusdal told this website.

But he pointed to the electoral victory of the greens as a sign of a possible change.

"We will have voices much more strongly advocating to make a strategy for closing this business, within, say, twenty years", Rusdal said.

Stavanger city official Tone Grindland denied that there is an identity crisis going on.

"We really need to make sure that we as a city have a high profile in being a smart city, being an innovative city, working as a tech cluster, and having these other profiles. ... It's not a shift of identity, but it's a development", said Grindland.

"The businesses that are here today … they have had one market which is the oil and gas sector. They know that they have technology they can use in other areas. I don't know if it's a shift, but for sure it's a change.”

NB: Lyse invited EUobserver to attend the Nordic Edge Expo and paid for travel and accommodation, but the company had no editorial influence over this article

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