North Sea Oil​—Blessing or Nightmare for Norway?

By “Awake!” correspondent in Norway

IF YOU owned your own home and considerable land and then suddenly discovered oil and gas on your property, how would you feel? One thing is certain​—you would be better off financially after that find. But, on account of resultant pollution, you might have to move to another place.

Norway is in a somewhat similar position. This country is relatively well off​—a welfare state with no slums, no illiteracy and with one of the lowest infant mortality rates in the world. In 1969, large deposits of oil and gas were discovered on its North Sea continental shelf. Since then, more deposits have been uncovered, among them the largest offshore oil field ever found. Offshore production of oil and gas is on, with more drilling and increased production to follow.

The four million Norwegians are keenly aware that their fishing banks and shores are in danger of being polluted. They cannot move away from their mountainous land, of which less than 3 percent is arable. The Norwegians must stay where they are, endeavoring to keep operations in the North Sea as safe as possible.

It Came Suddenly

The oil era came rather suddenly on Norway. In 1959, gas was discovered off Holland, and at the start of the 1960’s the North Sea states drew up borders among themselves according to a midline principle. In 1965, the first licenses for drilling were given for the Norwegian continental shelf, and the initial well was drilled by the Esso organization in 1966.

The first sign of hydrocarbons was found in 1968. Not until late December of 1969, however, was a large oil discovery made by the Phillipps Petroleum Company. This was in the southernmost part of the Norwegian continental shelf, in what is now called the Ekofisk field. Gas also was found there.

It was not until 1976 that Norway was able to make money by the exporting of oil. The annual Norwegian consumption of about nine million tons of oil was then exceeded by about 4.6 million tons.

How Well Off?

From being probably Europe’s poorest country at the turn of the century, by 1970 Norway had reached ninth place among the nations of the world in terms of gross national product (GNP) per capita. This was before any oil had been pumped out of the North Sea.

There were several reasons for the nation’s wealth. One was the traditional role of trade and shipping (responsible for about 28 percent of the GNP). Another was the development of a strong industry (25 percent of the GNP). Agriculture, forestry and fisheries were once the most important sources of income but now trail behind with a combined sum of just 6.5 percent of the gross national product.

Then, oil came into the economic picture. The Norwegian Minister of Industry, Mr. Bjartmar Gjerde, has estimated that production of oil and gas around 1980 will have an annual value of 35 to 40 billion Norwegian kroner (6.4 to 7.3 billion dollars), and that the government’s portion from these revenues will amount to about 20 billion kroner ($3.6 billion) annually.

On the strength of the coming oil revenues, Norway has borrowed heavily abroad. This has been done to stimulate the national economy and to avoid its being affected too strongly by international depression. The Norwegian Storting (Parliament) authorized the borrowing of amounts equivalent to five billion kroner (a little less than a billion dollars), and most of this amount has been borrowed on favorable terms.

On the other hand, investments on the Norwegian shelf undoubtedly will prove much larger than the government originally thought. Costs for the Statfjord field initially were set at 18 billion kroner. In the fall of 1976, this was increased to 32 billion. But current estimates run around 60 billion, and some pessimistic observers predict that the entire field will cost more than 100 billion before it is fully developed. So the income from the oil and gas fields may not be as great as some Norwegians have envisioned.

How large are the offshore oil fields? An exact answer cannot be given. Proven recoverable reserves today total about 1,200 million tons of oil equivalents. Production forecasts for the early 1980’s indicate that Norway may produce 75 million tons annually from the existing fields, exporting 60 to 65 million tons of oil and gas. This means that a little less than 10 percent of the current consumption of western Europe could be covered by Norwegian production.

The Threat of Pollution

Ever since drilling began in the North Sea, Norwegians have lived in dread of an environmental accident. These fears seemingly materialized when, on April 22, 1977, oil spewed out from a blown-out well in the Ekofisk field. The blowout was covered extensively by television, radio and newspapers during the week it lasted, and people around the North Sea feared that the 15,000 to 21,000 tons of oil spewed out would destroy their shores in the weeks to follow.

In spite of deficient antipollution equipment at the site, the 6,000-square-kilometer (2,317-square-mile) oil slick was soon broken down, and after some weeks was not to be seen anymore. Norwegian marine scientists reported that there seemed to be no short-term or long-term danger to marine life.

The man primarily responsible for stopping the blowout, Texan Paul “Red” Adair, testifying at a Congressional hearing in Washington, D.C., pointed out that the oil spills from such offshore accidents were not as dangerous and extensive as other forms of oil pollution. “Offshore blowout has been blown out of all proportions,” he told the Congressional committee, adding that pollution from tankers was a much greater problem.

In an attempt to estimate the possible danger of various types of blowout, a Shell-sponsored analysis had been performed not long before the mishap in the North Sea. In what would be viewed as an extreme case​—a Statfjord blowout releasing 5.5 million barrels of oil—​not more than 100,000 barrels were expected to reach the Norwegian coast. In general, only about 5 percent of the oil that gushed out would reach the shores. Normally this oil would not arrive there until two or three weeks after the accident, giving ample time for antipollution measures to be undertaken.

National Debate and Goals

Norwegians are not at all in agreement as to ways and means of handling the riches below the continental shelf. A controversy continues regarding the dangers to marine life and the environment in general. Another issue centers around the threat of future blowouts. General safety is discussed in the Storting (Parliament) and among scientists. Politicians are trying to decide whether exploratory drilling should be started north of 62 degrees northern latitude. The increasingly more powerful state oil company Statoil is the subject of still another controversy. Then there is a general question on the future of Norwegian industry in an oil nation.

It is little wonder that Norwegians are discussing such matters and arguing about them among themselves. An oil industry is something new to Norway, and Norwegians are eager to understand the impact it will have on their society.

Goals set before the nation by its politicians, independent of the oil era, are strongly influencing the various issues that have been raised. These goals include raising the standard of living and improving the quality of life​—the environment and working conditions. Political groups are almost unanimous in wanting to further international solidarity and the betterment of conditions in developing countries. Some even have proposed that the major part of the wealth gained from oil be set aside for aid to developing lands.

So, will North Sea oil and gas prove to be a blessing for the people of Norway and other nations? Or, will it end up being a nightmare to Norwegians interested in improving the quality of life as well as their standard of living? Only time will tell.