Should green-minded Norway invest in Canadian oil-sands?
Last week, Greenpeace failed in its bid to force Norway's StatoilHydro to
abandon a $2 billion investment in a project that it says produces 10 times
the greenhouse gases as North Sea drilling.
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The effort was led by the environmental group Greenpeace, which bought shares of the oil company to gain voting rights.
The group claims that tar-sand extraction will affect an area the size of Florida, including millions of acres of boreal forest, and will release more than 10 times the greenhouse gases caused by conventional oil drilling.
Although the science behind the environmentalists' claims is contested by the oil industry and some analysts, the central role of oil revenue in the Norwegian economy is much clearer.
Norway invests oil revenues in its government pension fund, also known as the Petroleum Fund, making it one of the largest such funds in the world, with assets worth $14 billion last year.
But the tar-sands investment has provoked environmentalists, who have decried the government's unwillingness to consider what they believe is the particularly severe environmental cost of wrenching oil from sand. The government is a majority shareholder in StatoilHydro, with two-thirds of the stock.
The shareholder motion to disinvest was supported by several Swedish pension funds. It sent other investors in the oil-sands project, including Denmark's Danske Bank, scrambling to consult ethical investment advisers.
"This puts the government in a very strange position now," says Martin Norman, a campaign manager for Greenpeace Nordic.
"On the one hand, they're working very hard to get global commitment to climate-change targets at the Copenhagen climate negotiations this fall. But on the other hand, they have nothing to say about their company's activity in the tar sands."
Not in Norway's backyard?
Like its Nordic neighbors, Norway has long been a proponent of high environmental-protection standards. The country also shares an open electricity market with Sweden, Denmark, and Finland, 50 percent of which is renewable energy, mainly hydroelectric power.
StatoilHydro counters criticism of its tar-sands investment by pointing to its growing portfolio of wind and wave energy projects and its strong environmental record for oil drilling in the North Sea.