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May 28, 2022, 11:22 a.m. EDT

War surges Norway’s oil, gas profit. Now, it’s urged to help

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By Associated Press

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European countries, meanwhile, have helped inflate Norwegian energy prices by scrambling to diversify their supply away from Russia. They have been accused of helping fund the war by continuing to pay for Russian fossil fuels.

That energy reliance “provides Russia with a tool to intimidate and to use against us, and that has been clearly demonstrated now,” NATO Secretary-General Jens Stoltenberg, a former prime minister of Norway, told the World Economic Forum meeting in Davos, Switzerland.

Russia has halted natural gas to Finland, Poland and Bulgaria for refusing a demand to pay in rubles.

The 27-nation European Union is aiming to reduce reliance on Russian natural gas by two-thirds by year’s end through conservation, renewable development and alternative supplies.

Europe is pleading with Norway, along with countries like Qatar and Algeria, for help with the shortfall. Norway delivers 20% to 25% of Europe’s natural gas, vs. Russia’s 40% before the war.

It is important for Norway to “be a stable, long-term provider of oil and gas to the European markets,” Deputy Energy Minister Amund Vik said. But companies are selling on volatile energy markets, and “with the high oil and gas prices seen since last fall, the companies have daily produced near maximum of what their fields can deliver,” he said.

Even so, Oslo has responded to European calls for more gas by providing permits to operators to produce more this year. Tax incentives mean the companies are investing in new offshore projects, with a new pipeline to Poland opening this fall.

“We are doing whatever we can to be a reliable supplier of gas and energy to Europe in difficult times. It was a tight market last fall and is even more pressing now,” said Ola Morten Aanestad, a Equinor spokesman.

The situation is a far cry from June 2020, when prices crashed in the wake of the COVID-19 pandemic and Norway’s previous government issued tax incentives for oil companies to spur investment and protect jobs.

Combined with high energy prices, the incentives that run out at the end of the year have prompted companies in Norway to issue a slew of development plans for new oil and gas projects.

Yet those projects will not produce oil and gas until later this decade or even further in the future, when the political situation may be different and many European countries are hoping to have shifted most of their energy use to renewables.

By then, Norway is likely to face the more familiar criticism — that it is contributing to climate change.

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