Norway must do more to prepare for the decline of its dominant oil and gas industry in coming decades as other countries begin to break free from oil dependence, says the International Energy Agency (IEA) in a new report.
Western Europe’s largest oil and gas producer pumps more than four million barrels of oil equivalent per day, but in the longer term its production is expected to decline as the Norwegian continental shelf is considered a mature oil basin and global demand is shifting away from fossil fuels.
“Beyond 2025, the level of future investment in Norwegian oilfields remains uncertain,” the Paris-based IEA said in a report on Norway’s energy policy, released on Wednesday.
The agency said resource-rich Norway is “particularly well placed for the energy transition“, but considerable work remains to be done to meet its ambitious targets of reducing greenhouse gas emissions by 90%. to 95% of 1990 levels by 2050.
Renewables account for 98% of Norway’s electricity generation and at 50% of total final consumption, the country has the highest electrification share among IEA member countries, meaning that good many of the easy wins for reducing emissions have already been achieved.
“The remaining reductions will be more complex, difficult and costly, especially in transport and industry,” the IEA said.
The agency has recommended Norway launch clean technologies such as hydrogen, green shipping, carbon capture and storage and offshore wind, with the IEA urging rapid adoption of a regulatory framework for the latter.
Last year, the IEA effectively called on global investors to stop funding new fossil fuel projects, a move that also sparked public debate in Norway, where oil and gas are expected to generate around 28% of proceeds. gross domestic this year and more than 40% of government revenue.
Although Norway is confident that its oil and gas can be competitive in a declining market, it should still plan for a scenario in which demand falls faster than expected due to many countries setting production targets. net zero emissions by 2050, the IEA said.
(Reuters – Reporting by Nora Buli in Oslo; Editing by Susan Fenton)