Norway, now Europe’s largest gas supplier, is accused of profiting from the Ukraine war

Sheep run along the coast at the Gasco Gas Processing Plant scene near Stavanger, Norway.  Multiple pipelines connect the region with the countries of the European continent.
Sheep run along the coast at the Gasco Gas Processing Plant scene near Stavanger, Norway. Multiple pipelines connect the region with the countries of the European continent. (Adrian Ohren Johansen/For The Washington Post)

Stavanger, Norway – With natural gas scarce and pipelines at risk, Europe rarely needs Norway more. Or very upset with him.

After more than seven months of war in Ukraine, the Scandinavian country has become increasingly central to Europe’s energy security. Norway, not Russia, is now the main supplier of natural gas in the European Union. The explosions that devastated Russia Nord Stream pipelines It did not lead to a supply crisis because the European Union reduced its dependence on Russian gas and was celebrating new pipeline From Norway to Poland in the same week.

Countries depend on Norwegian fuel to get them through the winter months – and to help fill their stocks for years to come.

But even with the increase in Oslo’s exports to Europe, the home of good in Nobel Peace Prize He faces stinging criticism from the continent, including accusations that its windfall oil and gas revenues amount to war profiteering.

There is no doubt that the fallout from the war is making Norway richer. The state is a major player in the oil and gas industry. Finally, Oslo expects to achieve this 109 billion dollars From the petroleum sector this year – $82 billion more than in 2021. Much of that will go to the country’s sovereign wealth fund, a national egg worth more than 1 trillion dollars.

Critics describe the energy income as obscene. Poland’s prime minister urged Norway to share its “massive excess” profits with Ukraine, accusing Oslo of indirectly “exploiting” the conflict.

American companies, too, have being criticized To make huge profits from sales of natural gas to Europe. But the Norwegian government’s deep involvement in the oil and gas industry – and the fact that they are in close proximity – makes Norway’s situation even more dire.

Norwegian officials dismissed the allegations of profiteering. They described the high prices as an inevitable consequence of the scarcity of the market. They point to the country EU sanctions supportthat it military aid As for Ukraine and its efforts to get what European countries desperately need: gas.

At the heart of the debate are questions about what it means to be “good” in energy – in the midst of war, inflation and the climate crisis.

Those issues were a priority last week, as Norwegian Prime Minister Jonas Gahr Store joined European leaders for an informal summit in Prague, with the focus on Russia’s war in Ukraine and the European response. Brussels and Oslo said on Thursday they had done so agreed For the “co-development of tools” to stabilize energy markets and “reduce excessively high prices in a meaningful way” – but he did not say what that might involve.

Months ago, a small group of Norwegian lawmakers called for more-than-expected oil profits for 2022 to be put into a “solidarity fund,” arguing that it would be unfair – and unwise – to stray too far while Ukrainians languished, European economies teetered on the brink of recession, and the developing world hit Rising commodity prices.

“It is not our fault that Putin is waging this energy war on Europe,” said Lan Marie Nguyen Berg, a member of parliament for the Norwegian Green Party. “But we can decide what we want to do with what we gain from this.”

The European Union has separately approved an unexpected tax on some energy producers and a “solidarity contribution” from fossil fuel companies, money that will be used to mitigate the impact of higher electricity prices on consumers within the European Union Some hope Norway, which is not an EU member, will decide The European Union will join the bloc or work with it on other measures, such as capping the price of gas.

The Norwegian government has shown little enthusiasm on both fronts. Ask the officials about the high prices and they say this is a question for the industry; Ask the industry, they’ll say it matters to the officials – despite the fact that the state owns a large part of the sector.

Andreas Peland Eriksen, Minister of State at the Ministry of Energy and Petroleum, denied that Norway is benefiting from the war unnecessarily, stressing that high energy prices “are also hurting Norway,” noting that gas exports to Europe rose 8 percent year-on-year. “Europe sees that, and it sees that we are a good partner,” he said.

“There wasn’t a lot of question about whether it was fair to take advantage of this situation,” said Karen S Thorburn, professor of finance at the Norwegian School of Economics. “People say, ‘We’re just price takers.'”

Many Norwegians say they are green and energetic because they use clean energy to heat their homes and drive electric cars, and sell fossil fuels to others to burn. “It’s very pervasive here, the idea that the bad guys are burning fossil fuels,” Thorburn said. They say: they will burn it anyway. They were buying it from someone else. “

Meanwhile, people in the Norwegian oil and gas industry look like lottery winners who are fed up with calls from their distant cousins ​​who, frankly, had to bail them out. Some wonder why reasonable Norway should bail out countries like Germany, which have grown rich by relying on cheap and abundant Russian gas and oil.

Germany under fire as EU leaders gather to discuss energy crisis

In private, EU officials and diplomats admit that it is inappropriate for the union to spend 2021 Norway told not to drill in the Arctic due to climate change, only to spend 2022 chasing them for discounts on fossil fuels. An EU official, who spoke on the condition of anonymity to discuss private talks, said the war changed the game. Describing Norway, which promotes peace and provides aid, as a war exploiter “punches them where it hurts.”

In Stavanger, the heart of Norway’s oil and gas sector, the fallout from the Russian war in Ukraine brought a change in fortunes.

The discovery of offshore oil in the late 1960s transformed this stretch of coast from a fishing village into a kind of place stop Elon Musk Keyword, making Norway rich all the way. But concerns about climate change have put a question mark over the city’s future – even war.

“We’ve gone from zero to champion in no time,” said Kolbjorn Andreassen, director of communications for Offshore Norge, a Stavanger-based industry association.

People are not paying attention to our role in energy security. “They considered us just emitters,” he said. “Europe now realizes how much it really needs us,” he added.

Rising need and declining supply have led to astronomical prices, a dynamic that he and others in the Norwegian oil and gas sector see as a neutral, natural fact of life.

“I’ve seen low prices and high prices for decades,” said Frode Leversund, CEO of Gasco, the Norwegian pipeline operator that sends gas to Europe. For now, Leversonde said, he’s focused on delivering gas.

“The EU and the Commission are complaining about the price, but this is a market-dependent price,” said Bjorn Vidar Leroen, an industry expert and author of a book on the history of the Troll gas field. “That’s the price you have to pay today.”

The book published in the 1990s, It tells the story of “bold minds” who discovered one of Norway’s major gas fields and decided to develop it reasonably, putting most of the profits into a sovereign wealth fund.

A foreword by NATO Secretary General Jens Stoltenberg, then Norway’s Minister of Industry and Energy, predicted that strong and binding relationships between buyers and sellers would keep gas flowing to Europe from Norway “for generations to come”.

But for the past twenty years, Europe liberated gas marketsMoving from long-term contracts between buyers and sellers to spot pricing. The war in Ukraine led to a spike in spot prices, which led to the current crisis.

Lerwin does not sympathize with European buyers. “If they had just committed to long-term contracts, the price would have been lower,” he said.

He said Europe was in no rush to help Norway in 2014, when low oil prices led to job losses and labor unrest. Who said in Brussels, ‘What can we do to help Norway? “”

Some Norwegians would like to help now, too.

The conversation revolves around war profiteering in parallel with the debate over the role of the sovereign wealth fund and what policymakers owe to Norwegian citizens.

The government has allocated $2.3 billion to reduce electricity prices, according to A Appreciation by Bruegela Brussels-based think-tank, pays 90 per cent of bills above a certain price limit, among other measures.

But on the coast from Stavanger, not far from where pipelines carry gas to Europe, Ingunn Johannessen, a fifth-generation shopkeeper, is unplugging the freezers and worrying about the coming winter.

Since 1851, the Johansen family has run a small general store selling food, fishing gear and fishing gear for villages along the fjord. Johansen survived the ups and downs on thin margins and managed to weather the pandemic. But the combination of rising food and electricity prices is insane.

“I’m really angry about the electric bill,” she said.

She said that, like everyone else, she is watching the war in Ukraine with concern but also wondering if the conflict alone is responsible for the damage to her business. “People can increase the cost of everything and say it’s Putin’s fault,” she said.

She said the local government makes a lot of money from the nearby Gasco processing plant, and can help businesses that keep the community going. And she wants the Norwegian government to do more with her windfall.

The money “should go to the people who need it,” she said.

Appealing to Norway’s sense of its own good appears to have had an effect, prompting the government to work more closely with Europe, said Ingrid Leland, deputy leader of Norway’s Green Party.

It also predicted that Norwegian companies will seek long-term contracts, which will give companies a predictable revenue stream while allowing committed clients to lock in prices below current rates. Britain It said Explore the idea.

However, long-term contracts could harm Norway’s climate goals. Leland said she hoped the government would show solidarity with Europe without sacrificing its climate goals. “We have a history where Norway has played an important active role in dealing with the conflict,” she said. “We can take the role again.”

The war in Ukraine: what you need to know

Last: Russian President Vladimir Putin signed decrees Friday to The annexation of four occupied regions of Ukraine, after interim referendums were widely denounced as illegal. Follow us Live updates here.

the answer: The Biden administration announced on Friday a New round of sanctions against RussiaIn response to the annexations, it targeted Russian and Belarusian government officials, family members, military officials, and defense procurement networks. As President Volodymyr Zelensky said Friday, so is Ukraine Apply for a “quick ascent” to NATOIn clear response to the annexations.

In Russia: Putin announced military mobilization On September 21 to call up to 300,000 reserve soldiers In a dramatic attempt to reverse the setbacks in his war on Ukraine. advertising led to exodus From More than 180,000 peopleespecially The men who were subject to serviceAnd the Renewed protests and other acts of defiance against the war.

Fighting: Ukraine launched successful counterattack who – which Russia forced a major withdrawal in the northeastern Kharkiv region In early September, when the troops fled the cities and villages they had occupied since the early days of the war and Abandoned large amounts of military equipment.

Pictures: Washington Post photographers have been on the ground since the start of the war. Here are some of their most powerful works.

How you can help: Here are some of the ways they can do it in the United States Support the Ukrainian people Beside What people donate around the world.

Read our full coverage of Russia and Ukraine war. Are you on Telegram? Subscribe to our channel For updates and exclusive video.

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