Let me first thank PRIO and IDSA for hosting this international seminar on the geopolitics of energy security.
It is a telling sign of expanding bilateral relations that two prestigious organizations – one Norwegian and one Indian – have come together to set the agenda for on one of the key issues of our times.
Energy is indeed at the crossroads of nearly every dimension of globalisation and development – and indeed security.
We need energy to combat poverty, to develop, to improve living conditions and to thrive as societies. This is just as true for a rural community in the south of India as for a district in the north of Norway.
At the same time we now know for certain that the way we approach energy, the way we produce, extract and consume it, will determine the future shape of life on earth.
Climate change is no longer a scenario. It is happening now and we feel the effects – from changes in the weather to rising temperatures and melting glaciers – be they in the Arctic or in the Himalayas.
In short – nowhere can the interdependence of globalisation be better illustrated. We are all of us in the driving seat. It is up to us how we steer the development, and this fact should occupy our attention in every possible setting.
The outlook of global warming is not exciting. But we need not be driven by pessimism.
It will take the ingenuity of the human mind to develop new technologies – and we know this can be done.
It will take our political skills to develop new mechanisms of international cooperation to shoulder equitably the burden of change – we know that this too can be done.
And it will take the acknowledgement of all of us that poor people have a right to develop, and that access to energy is vital for combating poverty.
India and Norway – different in size, history and culture – share the same future. We should set the ambition to shape it together for the benefit of future generations.
All these reasons – and there are plenty more – make India an appropriate venue for addressing the geopolitics of energy security.
The way India develops will have implications far beyond its borders. It is up to India to decide on the energy mix and the choice of technology it will use. But at the same time we – though we live far away – will be strongly affected by these choices.
So we come here to offer cooperation, dialogue and joint exploration of shared opportunities.
India has the right to develop, to serve its people and to lift hundreds of millions out of poverty.
*****
Back in 1987, the World Commission on Environment and Development, chaired by Norwegian Prime Minister Gro Harlem Brundtland, coined the notion of sustainable development. It made the direct link between energy, environment and development.
The Commission made it clear that rich countries have no right to deny developing countries the opportunity to move out of poverty. Today, 20 years later, the message still rings true.
At the same time we now know that we need to pursue new models of development that can spur economies without ruining the environment. We need an emphasis on technological progress and equitable burden sharing that will allow developing countries to leapfrog the traditional dirty steps of development.
India's progress has been impressive. Today, your engineers, scientists and other academics are in demand all over the world. Our companies come here to take part in joint projects – not only to access labour at a competitive price, but also to find advanced technology, innovative industrial processes and creative minds.
But India is facing major challenges as its economy continues to grow. One of them is energy-related.
With increasing oil imports, a heavy reliance on coal, ambitious plans for the use of natural gas and aspirations to expand its nuclear energy, India’s situation is very similar to that of China and other countries in South and East Asia.
*****
And so we come to the geopolitics of energy security.
Oil prices have risen steeply at the same time as concerns about security of supply are growing. Nations are showing renewed interest in nuclear technology, but there is also growing concern over proliferation and a new nuclear arms race. Today, these issues are at the top of most international agendas – in the UN, NATO, the OSCE, the G8 and the EU, as well as the key political forums throughout Asia.
And then – in addition to the global dimension – we have to be acutely aware that our energy decisions will have lasting effects on the global climate and thus the future of coming generations.
The International Energy Agency predicts that between now and 2030, the cumulative global investment needed in the energy sector amounts to a formidable USD 20 trillion.
During the same period, energy demand will rise by 60 per cent. The major part of this demand will be met by fossil fuels, which will account for 90 per cent of the world’s energy use.
As a result, CO2 emissions are expected to increase by 55 per cent. A considerable part of this increase will be from new coal-fired power plants, many of them located here in India and in China.
A smaller number of countries, mainly OPEC members and Russia, will provide an increasing share of the world demand for oil and gas, as production in OECD countries peaks and decreases.
We also know that energy poverty in a number of countries – not least in sub-Saharan Africa – is a serious problem.
I think we can all agree that if the forecasts are correct, we will be facing considerable challenges.
At the same time we should remind ourselves that it is not possible to imagine the future in terms of statistics. If we focus too much on the forecasts themselves, we risk undermining our ability to act, to innovate and to change the course. And we urgently need to do all three.
*****
Ladies and gentlemen,
The million dollar question then is this: What can be done to avoid undesirable – and dramatic – consequences for human beings, the world economy, and for the climate?
Let us agree on this fact: It is quite obvious that these problems cannot be solved at the national or regional level alone. A concerted effort at the global level is needed.
I believe there are four key ingredients that are vital for increasing energy security:
Firstly, we must provide a framework that encourages the development of new oil and gas fields, and at the same time increases the recovery rate of mature fields.
Secondly, we need to increase energy efficiency and the use of renewable energy sources.
Thirdly, we need to maintain strategic stores of oil, and possibly also gas, in order to deal with future disruptions in the markets. This is an area where large consuming countries like India and China could play an important part.
Fourthly and finally, the global community must explore ways to alleviate energy poverty in developing countries. It is a shocking fact that more people are dying from indoor smoke from burning traditional biomass than from malaria.
I would like to add some more comments to my first two points – about bringing new resources into production and securing greater efficiency.
First, massive investments are needed in the energy sector over the next couple of decades. Capital of this magnitude is most likely to materialise in an investment climate marked by political stability and good governance. Predictable and non-discriminatory investment regimes are key elements in this connection.
The same goes for secure and affordable access to energy transport networks. Producers must have full access to the market if secure long-term investments are to be secured.
Transparency is a vital ingredient in well-functioning markets. Several international initiatives have been established with the aim of increasing transparency and reducing corruption.
*****
Norway is today the world’s third largest oil exporter and the third largest gas exporter. We have an annual oil production of 3 million barrels per day and an annual gas production of 85 billion cubic metres. Early in the next decade our gas export will have risen to 130 billion cubic metres. This is equivalent to the volume Russia exports to Europe today.
We engage with our partners as a reliable long term provider of energy that is produced in compliance with the world's most stringent environmental requirements.
We sell our oil and gas on the world market. In this market, sellers and buyers are interdependent. We place great emphasis on the consumer-producer dialogue, and support the concerted efforts that are currently being made under the auspices of the International Energy Forum, where both Norway and India participate actively.
Increased cooperation is also needed to help reduce demand through energy-efficiency measures. Countries, and groups of countries, are gradually starting to respond to this need. Some countries – such as Japan – have taken steps to introduce wide-reaching measures.
At the same time we need a global focus on energy that can combine a variety of measures to address the energy security challenge – and for that matter the climate challenge.
It is vital, for example to promote the use of renewable energy sources. Renewables are presently receiving a lot of attention – in addition to a considerable amount of research funding – in a number of countries.
*****
Then there is the potential of nuclear energy. It is not surprising that nuclear energy is back on the stage in a situation where the world community is seriously concerned about both energy security and CO2 emissions. A debate on the pros and cons is currently taking place in a number of countries – and we should welcome this.
Norway fully recognises the right to the peaceful use of nuclear energy and nuclear technology. This is set out in the Non-Proliferation Treaty (NPT).
And we have a critical institution to secure compliance in the International Atomic Energy Agency. We strongly support the IAEA’s efforts in the field of nuclear safeguards, safety and security. We also continue to put great emphasis on compliance with international non-proliferation commitments.
As a member of the Nuclear Supplier's Group (NSG) Norway is now considering the agreement on civil nuclear cooperation between India and the United states.
Let me reiterate what I said at the outset:
Norway recognises India's right to secure the energy resources needed to support its development. We have confidence in the reliability of India's commitments. And we see how nuclear energy may help to sustain India's growth without putting an extra burden on the climate.
At the same time we have expressed a general concern about any measure that may lead to the weakening or sidelining of the multilateral non-proliferation regime. This regime is a hard won gain. I would welcome the active engagement of India in international efforts to combat proliferation and encourage further steps in nuclear disarmament.
I welcome the steps being taken by India in the field of nuclear non-proliferation and export controls. And let me add that India's signing of the Comprehensive Nuclear Test Ban Treaty would be a significant step.
The NSG has already addressed the matter of the US-India deal. We look forward to further clarification at the next meeting – and I sincerely hope that consensus can be reached among all parties.
*****
Let me conclude with a few remarks specifically on the climate challenge.
Secretary General Kofi Annan emphasised at the Climate Change Conference in Nairobi in November that climate change is not just an environmental problem, but also a health problem, a security problem and an economic problem for all nations.
The recent Stern report highlights the economic aspects of climate change. It argues that the cost of action would be modest, whereas the price of inaction would be enormous.
As a major oil and gas producer, Norway takes the CO2 emissions challenge seriously. We were the first oil producing nation to introduce a CO2 tax on our petroleum production. This has helped significantly to reduce emissions.
Our regulatory framework has spurred technological innovation, and it has helped to make the Norwegian continental shelf the most energy-efficient producing region in the world. CO2 emissions amount to less than one third of the global average per unit produced.
Recently Norway embarked on a potentially giant step forward. We have initiated research and development with a view to building the world’s largest full-scale CO2 capture and storage project in connection with a combined gas-fired heat and power plant d on the west coast of Norway. This is a cooperation project between the Norwegian Government and Statoil, and the plant will be fully operational by 2014.
In a way, this is our version of a “landing-on-the-moon” project. We will develop ground-breaking new technology, which could create a basis for cooperation with a number of countries, including large energy-consuming countries like India.
Given the world’s future dependence on gas and particularly on coal as energy sources, the benefits arising from developing efficient CO2 handling techniques will be considerable.
However, carbon capture and storage is only one of several means of achieving a more sustainable energy future. Energy efficiency and increased use of renewable energy will also be important.
*****
The Norwegian Government has set itself the ambitious goal of becoming a world leader in the development of environmentally sound technology.
A three billion dollar fund has been established to this end. It will be managed by the state-owned company Enova, and will focus on renewable energy and energy efficiency measures.
As a part of our expanding relations with India we have put climate change on our common agenda.
The reasons are simple. If we succeed, India should be able to benefit from these new technologies and these new technological processes. Furthermore, the technology needed will require world class engineers – and India truly has some the best engineers in the world.
In addition, I believe we should engage in discussions about how we can bring the multilateral climate efforts forward. At present, negotiations have stalled. We need debate – between developed and developing nations – not only on what it would take to bring the negotiations forward, but also on how concrete initiatives can help reduce emissions.
Here too, India and Norway can cover important ground together.
We meet regularly in multilateral forums, like the International Energy Forum and the Carbon Sequestration Leadership Forum. Our energy ministers are in close contact and their discussions have been followed up in the Joint Working Group on Hydrocarbons.
I am pleased to see that these contacts are also yielding tangible results. A number of MOUs on strengthening cooperation between companies and research institutions in our two countries have recently been signed.
We have also seen increased contact between Norwegian and Indian oil companies, which has resulted in cooperation in third countries. Cooperation in the hydropower sector, where India and Norway are both major players, has also been established. These are very positive developments.
The International Energy Agency (IEA) believes that much would be accomplished if countries were to implement the plans and regulations that are already in existence.
Further results would be achieved through the use of technologies that are already available or close to commercialisation.
However, in order to make real reductions in CO2 emissions, technological breakthroughs will be necessary.
This is my main message: We need to take bold steps towards more innovative cooperation.
A seminar on the geopolitics of energy security can easily end up focusing on the potential for conflict, rivalry and tension. You are exerts in analysing such effects.
History, even very recent history, provides ample examples of how the search and competition for energy supplies can bring about war and destruction.
As a contrast, we therefore need to maintain a clear vision of what we can achieve if we pool our resources and talent and maximise our common interests in the field of energy and the fight against climate change.
I believe this vision should stir us to act. Future generations will demand nothing less of us.
I wish you all fruitful discussions today on these important matters.
Opening Address by the Norwegian Foreign Minister at the IDSA-PRIO Seminar On Energy Security
Excellencies,
Ladies and gentlemen,
Let me first thank PRIO and IDSA for hosting this international seminar on the geopolitics of energy security.
It is a telling sign of expanding bilateral relations that two prestigious organizations – one Norwegian and one Indian – have come together to set the agenda for on one of the key issues of our times.
Energy is indeed at the crossroads of nearly every dimension of globalisation and development – and indeed security.
We need energy to combat poverty, to develop, to improve living conditions and to thrive as societies. This is just as true for a rural community in the south of India as for a district in the north of Norway.
At the same time we now know for certain that the way we approach energy, the way we produce, extract and consume it, will determine the future shape of life on earth.
Climate change is no longer a scenario. It is happening now and we feel the effects – from changes in the weather to rising temperatures and melting glaciers – be they in the Arctic or in the Himalayas.
In short – nowhere can the interdependence of globalisation be better illustrated. We are all of us in the driving seat. It is up to us how we steer the development, and this fact should occupy our attention in every possible setting.
The outlook of global warming is not exciting. But we need not be driven by pessimism.
It will take the ingenuity of the human mind to develop new technologies – and we know this can be done.
It will take our political skills to develop new mechanisms of international cooperation to shoulder equitably the burden of change – we know that this too can be done.
And it will take the acknowledgement of all of us that poor people have a right to develop, and that access to energy is vital for combating poverty.
India and Norway – different in size, history and culture – share the same future. We should set the ambition to shape it together for the benefit of future generations.
All these reasons – and there are plenty more – make India an appropriate venue for addressing the geopolitics of energy security.
The way India develops will have implications far beyond its borders. It is up to India to decide on the energy mix and the choice of technology it will use. But at the same time we – though we live far away – will be strongly affected by these choices.
So we come here to offer cooperation, dialogue and joint exploration of shared opportunities.
India has the right to develop, to serve its people and to lift hundreds of millions out of poverty.
*****
Back in 1987, the World Commission on Environment and Development, chaired by Norwegian Prime Minister Gro Harlem Brundtland, coined the notion of sustainable development. It made the direct link between energy, environment and development.
The Commission made it clear that rich countries have no right to deny developing countries the opportunity to move out of poverty. Today, 20 years later, the message still rings true.
At the same time we now know that we need to pursue new models of development that can spur economies without ruining the environment. We need an emphasis on technological progress and equitable burden sharing that will allow developing countries to leapfrog the traditional dirty steps of development.
India's progress has been impressive. Today, your engineers, scientists and other academics are in demand all over the world. Our companies come here to take part in joint projects – not only to access labour at a competitive price, but also to find advanced technology, innovative industrial processes and creative minds.
But India is facing major challenges as its economy continues to grow. One of them is energy-related.
With increasing oil imports, a heavy reliance on coal, ambitious plans for the use of natural gas and aspirations to expand its nuclear energy, India’s situation is very similar to that of China and other countries in South and East Asia.
*****
And so we come to the geopolitics of energy security.
Oil prices have risen steeply at the same time as concerns about security of supply are growing. Nations are showing renewed interest in nuclear technology, but there is also growing concern over proliferation and a new nuclear arms race. Today, these issues are at the top of most international agendas – in the UN, NATO, the OSCE, the G8 and the EU, as well as the key political forums throughout Asia.
And then – in addition to the global dimension – we have to be acutely aware that our energy decisions will have lasting effects on the global climate and thus the future of coming generations.
The International Energy Agency predicts that between now and 2030, the cumulative global investment needed in the energy sector amounts to a formidable USD 20 trillion.
During the same period, energy demand will rise by 60 per cent. The major part of this demand will be met by fossil fuels, which will account for 90 per cent of the world’s energy use.
As a result, CO2 emissions are expected to increase by 55 per cent. A considerable part of this increase will be from new coal-fired power plants, many of them located here in India and in China.
A smaller number of countries, mainly OPEC members and Russia, will provide an increasing share of the world demand for oil and gas, as production in OECD countries peaks and decreases.
We also know that energy poverty in a number of countries – not least in sub-Saharan Africa – is a serious problem.
I think we can all agree that if the forecasts are correct, we will be facing considerable challenges.
At the same time we should remind ourselves that it is not possible to imagine the future in terms of statistics. If we focus too much on the forecasts themselves, we risk undermining our ability to act, to innovate and to change the course. And we urgently need to do all three.
*****
Ladies and gentlemen,
The million dollar question then is this: What can be done to avoid undesirable – and dramatic – consequences for human beings, the world economy, and for the climate?
Let us agree on this fact: It is quite obvious that these problems cannot be solved at the national or regional level alone. A concerted effort at the global level is needed.
I believe there are four key ingredients that are vital for increasing energy security:
I would like to add some more comments to my first two points – about bringing new resources into production and securing greater efficiency.
First, massive investments are needed in the energy sector over the next couple of decades. Capital of this magnitude is most likely to materialise in an investment climate marked by political stability and good governance. Predictable and non-discriminatory investment regimes are key elements in this connection.
The same goes for secure and affordable access to energy transport networks. Producers must have full access to the market if secure long-term investments are to be secured.
Transparency is a vital ingredient in well-functioning markets. Several international initiatives have been established with the aim of increasing transparency and reducing corruption.
*****
Norway is today the world’s third largest oil exporter and the third largest gas exporter. We have an annual oil production of 3 million barrels per day and an annual gas production of 85 billion cubic metres. Early in the next decade our gas export will have risen to 130 billion cubic metres. This is equivalent to the volume Russia exports to Europe today.
We engage with our partners as a reliable long term provider of energy that is produced in compliance with the world's most stringent environmental requirements.
We sell our oil and gas on the world market. In this market, sellers and buyers are interdependent. We place great emphasis on the consumer-producer dialogue, and support the concerted efforts that are currently being made under the auspices of the International Energy Forum, where both Norway and India participate actively.
Increased cooperation is also needed to help reduce demand through energy-efficiency measures. Countries, and groups of countries, are gradually starting to respond to this need. Some countries – such as Japan – have taken steps to introduce wide-reaching measures.
At the same time we need a global focus on energy that can combine a variety of measures to address the energy security challenge – and for that matter the climate challenge.
It is vital, for example to promote the use of renewable energy sources. Renewables are presently receiving a lot of attention – in addition to a considerable amount of research funding – in a number of countries.
*****
Then there is the potential of nuclear energy. It is not surprising that nuclear energy is back on the stage in a situation where the world community is seriously concerned about both energy security and CO2 emissions. A debate on the pros and cons is currently taking place in a number of countries – and we should welcome this.
Norway fully recognises the right to the peaceful use of nuclear energy and nuclear technology. This is set out in the Non-Proliferation Treaty (NPT).
And we have a critical institution to secure compliance in the International Atomic Energy Agency. We strongly support the IAEA’s efforts in the field of nuclear safeguards, safety and security. We also continue to put great emphasis on compliance with international non-proliferation commitments.
As a member of the Nuclear Supplier's Group (NSG) Norway is now considering the agreement on civil nuclear cooperation between India and the United states.
Let me reiterate what I said at the outset:
Norway recognises India's right to secure the energy resources needed to support its development. We have confidence in the reliability of India's commitments. And we see how nuclear energy may help to sustain India's growth without putting an extra burden on the climate.
At the same time we have expressed a general concern about any measure that may lead to the weakening or sidelining of the multilateral non-proliferation regime. This regime is a hard won gain. I would welcome the active engagement of India in international efforts to combat proliferation and encourage further steps in nuclear disarmament.
I welcome the steps being taken by India in the field of nuclear non-proliferation and export controls. And let me add that India's signing of the Comprehensive Nuclear Test Ban Treaty would be a significant step.
The NSG has already addressed the matter of the US-India deal. We look forward to further clarification at the next meeting – and I sincerely hope that consensus can be reached among all parties.
*****
Let me conclude with a few remarks specifically on the climate challenge.
Secretary General Kofi Annan emphasised at the Climate Change Conference in Nairobi in November that climate change is not just an environmental problem, but also a health problem, a security problem and an economic problem for all nations.
The recent Stern report highlights the economic aspects of climate change. It argues that the cost of action would be modest, whereas the price of inaction would be enormous.
As a major oil and gas producer, Norway takes the CO2 emissions challenge seriously. We were the first oil producing nation to introduce a CO2 tax on our petroleum production. This has helped significantly to reduce emissions.
Our regulatory framework has spurred technological innovation, and it has helped to make the Norwegian continental shelf the most energy-efficient producing region in the world. CO2 emissions amount to less than one third of the global average per unit produced.
Recently Norway embarked on a potentially giant step forward. We have initiated research and development with a view to building the world’s largest full-scale CO2 capture and storage project in connection with a combined gas-fired heat and power plant d on the west coast of Norway. This is a cooperation project between the Norwegian Government and Statoil, and the plant will be fully operational by 2014.
In a way, this is our version of a “landing-on-the-moon” project. We will develop ground-breaking new technology, which could create a basis for cooperation with a number of countries, including large energy-consuming countries like India.
Given the world’s future dependence on gas and particularly on coal as energy sources, the benefits arising from developing efficient CO2 handling techniques will be considerable.
However, carbon capture and storage is only one of several means of achieving a more sustainable energy future. Energy efficiency and increased use of renewable energy will also be important.
*****
The Norwegian Government has set itself the ambitious goal of becoming a world leader in the development of environmentally sound technology.
A three billion dollar fund has been established to this end. It will be managed by the state-owned company Enova, and will focus on renewable energy and energy efficiency measures.
As a part of our expanding relations with India we have put climate change on our common agenda.
The reasons are simple. If we succeed, India should be able to benefit from these new technologies and these new technological processes. Furthermore, the technology needed will require world class engineers – and India truly has some the best engineers in the world.
In addition, I believe we should engage in discussions about how we can bring the multilateral climate efforts forward. At present, negotiations have stalled. We need debate – between developed and developing nations – not only on what it would take to bring the negotiations forward, but also on how concrete initiatives can help reduce emissions.
Here too, India and Norway can cover important ground together.
We meet regularly in multilateral forums, like the International Energy Forum and the Carbon Sequestration Leadership Forum. Our energy ministers are in close contact and their discussions have been followed up in the Joint Working Group on Hydrocarbons.
I am pleased to see that these contacts are also yielding tangible results. A number of MOUs on strengthening cooperation between companies and research institutions in our two countries have recently been signed.
We have also seen increased contact between Norwegian and Indian oil companies, which has resulted in cooperation in third countries. Cooperation in the hydropower sector, where India and Norway are both major players, has also been established. These are very positive developments.
The International Energy Agency (IEA) believes that much would be accomplished if countries were to implement the plans and regulations that are already in existence.
Further results would be achieved through the use of technologies that are already available or close to commercialisation.
However, in order to make real reductions in CO2 emissions, technological breakthroughs will be necessary.
This is my main message: We need to take bold steps towards more innovative cooperation.
A seminar on the geopolitics of energy security can easily end up focusing on the potential for conflict, rivalry and tension. You are exerts in analysing such effects.
History, even very recent history, provides ample examples of how the search and competition for energy supplies can bring about war and destruction.
As a contrast, we therefore need to maintain a clear vision of what we can achieve if we pool our resources and talent and maximise our common interests in the field of energy and the fight against climate change.
I believe this vision should stir us to act. Future generations will demand nothing less of us.
I wish you all fruitful discussions today on these important matters.