Norwegian companies submit record $20.5 billion fossil fuel investment plans amid Russia-Ukraine war

“The scope of the development plans we are submitting to the Minister of Petroleum and Energy is a manifestation of our ambition to create the oil and gas company of the future – with low costs, low emissions, profitable growth, and attractive returns,” said in a statement Karl Johnny Hersvik, CEO of Aker BP. 

Positioned for significant growth, but at what cost?

“We are uniquely positioned for profitable growth, not least through our role as operator for several of the major field developments on the Norwegian shelf in the years ahead. This gives us a great opportunity to lead the way in transforming the oil and gas industry, in close cooperation with our license partners, our alliance partners, and other strategic partners.”

Terje Aaslan, Norway’s Minister of Petroleum and Energy, added: “It’s always a good day at work when I get to receive new development plans. What is happening today is overwhelming. The companies have taken the government at its word – they are further developing the Norwegian shelf.”

This development does not bode well for renewables which were on a good path in Europe up until the war. In January of 2021, an annual report from Ember and Agora Energiewende found that renewables produced 38 percent of the European electricity mix in 2020, compared to 37 percent by fossil fuels.

The landmark moment had come following the rise of wind and solar power in Europe, with both sources nearly doubling numbers since 2015.

Staying below the 1.5C threshold

Meanwhile, a study published on May 2020 revealed that nearly half of all existing fossil fuel production sites need to be closed down if global warming is to stay below the 1.5C threshold, the internationally agreed-upon target for avoiding a climate disaster. The research indicates that just halting the construction of new fossil fuel infrastructure is simply not enough.

What Aker BP’s new plans for oil and gas mean for the nation’s emissions and climate impacts has yet to be discussed. The only thing that can be determined is that renewables will have to take a back seat as these new projects emerge.

The question then becomes: can Europe and the world afford to make investments in oil and gas? What environmental price will it pay to meet its energy needs?