Providing energy to Europe has been profitable for Norway for a long time – it is the fourth largest exporter of natural gas in the world. They have become downright indecent since Russia, so far a rival in the supply of energy carriers to Europe, swapped pipelines for weapons. As the war and the ensuing energy crisis drag on, the sums flowing north prove embarrassing. A country that cares about creating its own image in the world as a force for good must counter accusations of profiting from the war, writes The Economist.
Norway would have been prosperous even if it had not stumbled upon offshore oil five decades ago. The huge amount of energy Oslo is currently exporting allows a lot. Normally, sales of oil, gas, and electricity generate over $ 50 billion. per year, or 10 thousand. dollars per one Norwegian. This is enough to maintain a welfare state.
The war raised export revenues to over $ 200 billion.
Now thanks to the war Norway’s revenue from energy exports has risen to over $ 200 billion. annually. Were it not for the fact that Norway wisely hides such cash in the sovereign wealth fund, then at these prices, any Norwegian could get an annual check worth around $ 40,000. hole. – roughly equal to the GDP per capita of the European Union. Instead, 5.5 million Norwegian citizens have to settle for wealth worth $ 1.2 trillion, despite the recent decline in investment value, according to the British weekly.
Until recently, Europeans, Norway’s main customers, had no objection. Any non-Russian energy source was welcome, with alternatives mostly in the Middle East and North Africa. For Western politicians, pleading with a Norwegian minister for hydrocarbons is less troublesome than with an authoritarian petropotentate. Norway only demanded that the EU soften the rhetoric about the need to move away from fossil fuels faster. It increased gas production as much as possible, even suppressing union strikes to keep energy flowing. Norway sent money to support Ukraine and joined the sanctions imposed by the EU on Russiaalthough not a member of the community.
The Economist points out that sentiment has deteriorated as the energy crisis deepened. With the bailout of energy companies and consumers, Europe is no longer eager to keep enriching Norway. Tygodnik notes that Poland was the first to raise the problem: in May, its prime minister condemned the “sick” prices of Norwegian gas. Other countries are protesting more discreetly, suggesting that a prudent supplier could cut gas prices, at least for the duration of the war. Norway is of the opinion that prices are regulated by the market, large profits are now needed to finance its ecological transformation.
Norway also has its own problems
According to the weekly, politicians in Oslo have to face their own energy problems. Norway obtains a large amount of its energy from hydropower plants. However, the drought caused many bodies of water to dry up, raising electricity prices in some parts of the country. Some industries, such as fertilizer production and metal smelting, only exist because of cheap energy. Most Norwegians heat their homes with electricity and buy electric cars. Many Norwegians blame the rises on the export of electricity to Europe. The government has responded with generous subsidies and suggests it may limit electricity exports, ostensibly to protect its depleted resources. This has irritated neighbors in the European Union who want energy markets to remain open.
The longer gas prices remain sky-high, the more pressure will be placed on Norway to give up some of its enormous income, concludes The Economist. – Solidarity with Europe is in Norway’s interest, as is good relations with its neighbors – argues Georg Riekeles from the think tank European Policy Center.
There is a chance for a discount?
Granting a gas rebate irritates Norwegian politicians. However, Prime Minister Jonas Gahr Store hinted this week that Norwegian energy companies may agree to long-term contracts that lower current gas prices in exchange for stable gains later.
Norway should also offer participation in EU-implemented assistance programs, for example to help mitigate the effects of Covid-19. Ukraine has found that Europe is willing to help in the misfortune. And countries that receive an unexpected reward should throw some of it into the common pool – believes the weekly