Category Archive

    It sucks when your government is an entity devoid of anything resembling a spine. *sigh*

The Alberta government is so deeply in bed with big oil its shite and piss are black.  So, rather than looking at an example of how to screw your citizens over, take a look at a country that got it, and continues to get it right; Norway.   It makes me spitting mad that we couldn’t even get a fractional raise in revenue for the people of Alberta (The Royalty Review), all the while Norway has 165,000 thousand dollars socked away per person for its retiring population.  You fucking old people (and you fucking young greedy capitalists) who can’t vote anything other than Tory in Alberta, enjoy working past 65 and as an extra sweet bonus we’ll save you a spot working at McDonald’s until your body and mind are well and truly done.  Savour the sweet capitalist freedom to work yourself to death, I know I will.

My bitter vitriol aside, onward to the article that got this party started:

“Like parts of Canada and the United States, Norway has a very lucrative oil and gas industry. But unlike Alberta and Alaska, Norway chose not to use its resource wealth immediately to pay for hefty tax cuts or social programs. Instead, the Scandinavian country squirrelled its money away in a fund for future generations, a decision that is paying enormous social dividends.

Today, less than 25 years since its inception, that nest egg has grown into the world’s most valuable sovereign wealth fund, worth about $850 billion – more than $165,000 per Norwegian citizen, according to an SWF Institute report. It is the envy of the world, funding initiatives ranging from infrastructure improvements and green energy projects to public pensions.

Meanwhile, the Alberta Heritage Fund, which is 14 years older, is worth about $17 billion. The Alaska Permanent Fund sits at $50 billion. Even combined, they represent a fraction of the wealth Norway has amassed, and which it will be able to draw on long after its oilfields run dry.

Farouk al-Kasim on Norway’s Oil Policy and Wealth.:

“They did not have a clear enough policy for how to manage petroleum resources when they were starting out,” he said. “Norway concluded that if you don’t have a policy up front, and if you don’t have a consensus on that policy, that human nature would tend to favour individual interests rather than coherent national interests.” 

In 1971, shortly after the Ekofisk discovery, the Norwegian parliament drafted legislation that came to be known as the country’s “10 Oil Commandments.”

“These 10 Oil Commandments form the basic policy on which Norway has managed its petroleum resources ever since,” al-Kasim said. “And the politicians not only agreed on this document, but they agreed not to debate it in elections and the third miracle … that they kept their promise.”

He was an instrumental force behind the Norwegian government’s decision to establish a national oil company, StatOil, and an independent industry regulator. 

The government also legislated that Norway’s participation, through Statoil, in all future discoveries should be no less than 50 per cent. Al-Kasim says that stipulation was actually welcomed by international oil companies, who remained keen to partner with Statoil. 

“They were guaranteed recovery of their investment,” he explained. “And on top of that, they received a very reasonable interest on their investment …. There was virtually no risk at all, so the oil companies were quite happy going along with this formula.” (Source CBC.ca)

Gaa!  It’s so awesome my province is so frakking high on capitalism.  I found the 10 Oil Commandments from the Norwegian Governments website.  So get a pencil and paper you feckless-amoral-conservative-corporate-bootlicking-lickspittles and look at how you establish resource policy that benefits the people of nation and not just corporate coffers.

The standing committee on industry in the Storting (parliament) produced what has since been known as the “10 oil commandments” in 1971. These principles have subsequently been significant for the direction and shape of Norwegian petroleum policy. Veteran industry observer Bjørn Vidar Lerøen checks out their impact.

The committee framed its commandments in keeping with a government desire to develop an oil policy which ensured that the natural resources on the NCS benefited the whole community.

First commandment

National supervision and control must be ensured for all operations on the NCS.

Coment

This principle can be regarded as fulfilled. The government wanted to manage and control the business. When creating Statoil and the NPD in 1972, the Storting established a tripartite model comprising central management, administrative and commercial functions.

These three instruments of this model were the Ministry of Industry – replaced by the Ministry of Petroleum and Energy in 1978 – the NPD and Statoil respectively.

In 1984, the Storting resolved to split Statoil’s cash flow through the creation of the state’s direct financial interest (SDFI) in the petroleum industry. The company kept the job of managing the state’s licence holdings and selling its oil and gas.

Two new state-owned companies were founded when Statoil was listed in 2001 – Petoro to manage the SDFI portfolio and Gassco to operate the gas transport network from fields on the NCS. Statoil is the main technical service provider to the latter.

Changes have also happened to the NPD, with the Storting voting in 2004 to separate off the safety department as the Petroleum Safety Authority Norway (PSA).

The audits conducted by this agency take full care of the desire for national management and control of all operations on the NCS.

Second commandment

Petroleum discoveries must be exploited in a way which makes Norway as independent as possible of others for its supplies of crude oil.

Coment

When Ekofisk was discovered in late 1969, most Norwegians thought it would make them selfsufficient in oil for 15-20 years. But it soon became apparent that resources on the NCS far exceeded Norway’s own needs.

The country accordingly became a major exporter of crude oil, and is now in the process of becoming an even bigger source of gas exports. Norway will be independent of oil imports for the foreseeable future.

Third commandment

New industry will be developed on the basis of petroleum.

Coment

Offshore operations on the NCS have led to the development of a large and strong Norwegian petroleum industry, which currently employs some 200 000 people.

Norway has secured a position among the world leaders in important technologies such as drilling, major offshore projects, subsea solutions and multiphase flow in pipelines.

Norwegian oil and gas technology has also become a substantial export commodity.

Fourth commandment

The development of an oil industry must take necessary account of existing industrial activities and the protection of nature and the environment.

Coment

Oil and gas have made Norway one of the world’s richest countries. This wealth has been counterbalanced by a high level of domestic costs. Through 40 years as an oil nation, its industrial structure has also undergone profound changes.

Petroleum revenues have allowed Norway at times to pursue a counter-cyclical economic policy which has made the country unique in relation to comparable nations.

Reserves of more than NOK 3 000 billion have been accumulated in the government pension fund – global, and Norway has also been able to respond to the recent world financial crisis with measures which have ensured low unemployment and reasonable income growth.

During Norway’s years as a petroleum producer, climate and the environment have come to attract much greater attention. Being a major oil and gas nation while also seeking to lead work on improving climate and the environment has often proved a demanding combination.

On the other hand, Norwegian petroleum production can be described as among the cleanest in a global context.

Fifth commandment

Flaring of exploitable gas on the NCS must not be accepted except during brief periods of testing.

Coment

This principle has been indicative for resource management, and complying with it has meant that environmental concerns are met while creating substantial value.

Sixth commandment

Petroleum from the NCS must as a general rule be landed in Norway, except in those cases where socio-political considerations dictate a different solution.

Coment

This proved a difficult commandment to fulfil. The oil and gas pipelines for first two developments on the NCS, Ekofisk and Frigg, had to go to Germany and the UK, with landfalls at Emden, Teesside and St Fergus.

This was because the deepwater Norwegian Trench lies between the fields and mainland Norway. So crossing this feature in 360 metres of water with the Statpipe gas line during the early 1980s marked a major breakthrough.

That installation went to Kårstø north of Stavanger. Later gas pipelines have come ashore at Kollsnes, Nyhamna, Tjeldbergodden and Melkøya, while oil lines run to Sture and Mongstad.

A network more than 7 000 kilometres long gives Norway the world’s largest underwater gas transport system.

Seventh commandment

The state must become involved at all appropriate levels and contribute to a coordination of Norwegian interests in Norway’s petroleum industry as well as the creation of an integrated oil community which sets its sights both nationally and internationally.

Coment

This principle is perhaps the one which has been most fully implemented, as confirmed by Norway’s role as a leading oil and gas nation. (See under the first commandment above.)

Eighth commandment

A state oil company will be established which can look after the government’s commercial interests and pursue appropriate collaboration with domestic and foreign oil interests.

Coment

This commandment was complied with immediately through the creation of Statoil, which became an important element in the Norwegian model of oil industry governance. However, major revisions have occurred along the way (see under the first commandment above).

Unlike a number of other oil nations, Norway was never tempted to pure nationalisation. Competition on the NCS ensured the participation of the world’s leading technology specialists.

Ninth commandment

A pattern of activities must be selected north of the 62nd parallel which reflects the special socio-political conditions prevailing in that part of the country.

Coment

“Special socio-political conditions” were interpreted as both domestic and foreign policy concerns. From the start, Norwegian politicians appreciated that petroleum operations in the far north could be sensitive, primarily in relation to Russia.

A number of commentators argued that the far northern NCS should be reserved for Norwegian oil companies.

After four decades of negotiation, the biggest issue – the boundary between Norway and Russia in the Barents Sea – is now heading for a resolution.

The domestic policy dimension related to the desire that northern Norway should share in the value creation provided by its own resources. Development of the Snøhvit gas field with a pipeline to Melkøya outside Hammerfest represents a paradigm shift for the region.

Debate on opening areas of the Norwegian Sea off Lofoten and Vesterålen to oil activity has exposed something of the vulnerability of these northern waters to pollution threats.

The environmental movement has warned of a tougher fight against petroleum operations in these areas than they pursued earlier over the activities further south on the NCS.

Tenth commandment

Large Norwegian petroleum discoveries could present new tasks for Norway’s foreign policy.

Coment

Former foreign minister Thorvald Stoltenberg – father of current premier Jens Stoltenberg – once formulated the challenge as follows: “We must ensure that oil policy is given a foreign policy dimension, and [vice versa].”

That might sound like something which goes without saying, but nevertheless represented an important acknowledgement of the position.