Published by Senator Grant Mitchell on 15 November 2011
On November 2, 2011 the Minister of Energy from Norway visited Ottawa on his way to Alberta. He and his officials met with the members of the Senate Energy and Environment Committee. He is a very impressive person in his own right and his country's energy, environmental and "heritage fund" policies are very enlightened and unique.
Norway is a huge energy producer, both oil and gas, most of it offshore. Originally, they spent most of their oil revenues internally in Norway. But, that proved to be a bad idea because it stimulated inflation and hurt other exporting industries. So, they started over and created their equivalent of Alberta's heritage savings fund and restricted how much of it that can be invested or spent in Norway. In fact, they take 4% out of it each year for these purposes and the rest they invest outside of Norway. Today, its total value is $600 billion. They have rigorous ethical investing guidelines on the fund too.
What is very interesting is how much they (government) take out of total oil revenues. They tax companies at 78% and take between 20% and 30% equity positions in each project. The Minister indicated that the public gets around 90% of the profits. Quite a different from the experience here. Interestingly, they reimburse companies with 78% of their capital costs. Interestingly also, they say that there are many companies that are happy to be active in their oil and gas sector despite this royalty structure.
It is also true that they have a very enlightened climate change policy, having had a carbon tax since the early 1990's. They are working rigorously on conservation and alternative energies as well.