by Aaron Smith, President and CEO, OMSA
Like most Americans, I spent the Monday following the Super Bowl thinking about the ads. What stuck in my mind was GM’s ad featuring Will Ferrell and the automaker’s response to the lead taken by Norway in its investment in green energy compared with similar investment in the U.S.
It was a great commercial. I like Will Ferrell. I like renewable energy, and I’m even a fan of Norway. I’ve been there and regularly work with many Norwegians who have become friends. However, if we are going to have a conversation about energy policy and Norway, let’s have the full conversation.
Norway invests heavily in green energy. The country’s sovereign wealth fund, sometimes known as its “Oil Fund,” is currently valued at approximately $1.1 trillion. It announced last year that it would be investing $10 billion in unlisted green energy projects. This investment follows a 2019 announcement from the fund, the world’s largest sovereign wealth fund, that it would be increasing its green energy investment from $7 billion to $14 billion.
These investments are sure to help the world’s renewable energy industries.
But we need to have a complete picture of Norway’s energy investments. Specifically, last month Norway announced it had approved 61 new offshore oil and gas licenses. This follows last year’s announcement that the country was providing its oil and gas industry with a tax relief package so large that its domestic producers were able to cut their breakeven price by 40 percent.
These investments make sense for Norway, the oil and gas industry provides for 10 percent of the nation’s GDP and accounts for 200,000 jobs (in a country with less than 5.3 million people, or about the size of South Carolina).
Norway’s support of both renewable energy and domestic oil and gas production stands in stark contrast to the Biden’s Administration’s recent announcement that it was halting new leases and permits for U.S. oil and gas production and curtailing subsidies for these industries. Studies of this policy have estimated it will cause almost one million Americans to lose their jobs in 2022. Additionally, the policy stands to actually harm U.S. renewable energy production.
Similar to Norway’s use of the proceeds from its “Oil Fund,” to fund renewable energy projects, many U.S. businesses are applying the expertise and capital they gain in the offshore oil and gas industry to invest in the equipment necessary to construct and service U.S. offshore wind farms when that industry starts to move forward. Thus, the vessels and mariners necessary to construct tomorrow’s wind projects are the same ones harmed by today’s oil and gas moratorium. If the moratorium continues, these assets won’t be around when the wind industry moves from a goal to a reality.
Considering these facts, I hope that the Biden Administration will follow Will Ferrell’s lead and adopt the Norwegian energy strategy of protecting and promoting its domestic oil and gas industry in order to provide for tomorrow’s offshore renewable energy.