Norway Greens: Statoil shouldn’t make the same mistakes / News / The Foreigner

Norway Greens: Statoil shouldn’t make the same mistakes. As Statoil’s Board searches for Helge Lund’s successor, environmentalists greet company executives’ comments about its climate policy with caution and optimism. London-based EVP Global Strategy and Business Development, John Knight, thinks that Statoil would probably have thought twice about embarking on its Canadian tar sands venture “if we had known what we know today.” “We knew it would be challenging because producing it is energy-intensive. That’s why we set ourselves ambitious goals of reducing emissions at the production phase. The potential climate effect of the tar sands project is much clearer now then it was when we went into it in 2007,” he tells Norwegian business daily Dagens Næringsliv, Tuesday.

statoil, tarsands, oil, arctic, canada, gas, paywall



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Norway Greens: Statoil shouldn’t make the same mistakes

Published on Tuesday, 20th January, 2015 at 20:49 under the news category, by Michael Sandelson   .
Last Updated on 20th January 2015 at 21:15.

As Statoil’s Board searches for Helge Lund’s successor, environmentalists greet company executives’ comments about its climate policy with caution and optimism.

New Identity, Statoil
New Identity, Statoil
Photo: Øyvind Hagen/Statoil


London-based EVP Global Strategy and Business Development, John Knight, thinks that Statoil would probably have thought twice about embarking on its Canadian tar sands venture “if we had known what we know today.”

“We knew it would be challenging because producing it is energy-intensive. That’s why we set ourselves ambitious goals of reducing emissions at the production phase. The potential climate effect of the tar sands project is much clearer now then it was when we went into it in 2007,” he tells Norwegian business daily Dagens Næringsliv, Tuesday.

Then Statoil CEO and President Helge Lund announced in October last year that he was stepping down from his position in order to head Britain’s BG Group. Statoil has also postponed development of the Corner field project in Alberta’s Kai Kos Dehseh.

“Interesting”

The oil price has dropped against a backdrop of increased costs, Norway’s Central Bank has lowered the basic rate of interest, and oil service companies have also announced more redundancies.

Truls Gulowsen at Statoil's 2013 AGM
Truls Gulowsen at Statoil's 2013 AGM
©2013 Michael Sandelson/The Foreigner
A Danish head hunter has picked four candidates for interview to become Statoil’s new CEO and President. John Knight is one of those names.

What do you think of timing of Mr Knight’s statement?

“It’s interesting, and can be seen as part of his campaign to become the new head of Statoil. Positioning the company as being more climate-friendly is seen as an asset,” Greenpeace Norway leader Truls Gulowsen tells The Foreigner.

“But we need to see more than rhetoric; we need to see top management taking the climate seriously. This is long overdue.”

Silje Lundberg, petroleum advisor at environmental foundation Bellona thinks Mr Knight understands “that Statoil can’t conduct their business in the same ignorant way they did with Helge Lund.”

New strategy needed

Why do you think he says “the potential climate effect of the tar sands project”?

“There is no doubt that the climate effects from tar sands are huge. Neither was there any doubt in 2007 when Statoil made these investments. 70 per cent of Statoil's emissions come from tar sands and shale gas. They know this very well. The only thing that has Arctic icebergs
Arctic icebergs
Polar Cruises/Flickr
changed since 2007 is the economic outcome, which isn’t what Statoil hoped for. There is also a capacity problem, and President Barack Obama has signalled that he will veto the Keystone pipeline from Alberta to Texas,” Ms Lundberg says.

“It’s a very strange formulation”, adds Truls Gulowsen, “because everyone knew that climate change is serious, both in 2007 and 10 years previous to that.”

He calls for Statoil to adopt a new strategy that avoids repeating previous mistakes. The company has spent enormous amounts of money on the Arctic Shelves.

“To be positive, I choose to see it [John Knight’s formulation] as an acknowledgment that it has been more difficult to produce oil from tar sands in a less energy intensive way than Statoil said,” Mr Gulowsen remarks.

Unwilling

The Norwegian energy giant has been involved in the offshore wind market for a long time. An example of this is the Sheringham Shoal Wind Farm off the eastern coast of England near North Norfolk.

Hywind on location
Hywind on location
Trude Refsahl/Statoil
While Statoil wants to consider other renewable energy carriers such as solar energy, contemplating is not the same as investing in these, according to Mr Knight.

What change do you think that there will be, then?

“Statoil have sold off all of their renewable energy projects in Norway. They built the first offshore floating wind turbine (Hywind), but they then proceeded to starve their offshore wind programme budgets,” explains Bellona’s Silje Lundberg.

“I don’t believe that Statoil will go over to renewable energy willingly and actually start investing in it before the Norwegian government forces their hand. At the same time, Statoil is in a position to make an actual difference through large-scale development of renewable energy as a large, highly-skilled international actor with high expertise. However, that kind of decision might be equally motivated by economic concerns and not climate ones, primarily, given the high cost of oil extraction and the low oil price.”

“An incomplete plan”

John Knight has told the Board of five areas that he believes the company needs to focus on. These follow several months of John Knight, EVP Global Strategy
John Knight, EVP Global Strategy
Trond Isaksen - Statoil ASA
consultations with climate experts and activists.

Dagens Næringsliv reports that these are:

  • Climate work beyond the company’s own value chain
  • Tougher integration of the climate into its own portfolio
  • New technology and seed capital as a form of investment
  • Backing renewable energy sources
  • Leadership

What do you think of his five-point plan?

“It’s interesting, but I think it’s missing points regarding which direction Statoil should take. For example, it omits the point that steers Statoil away from future failures such as the tar sands,” Greenpeace’s Truls Gulowsen comments to The Foreigner.

“This is because Statoil’s tar sands and Arctic strategies are based on continued demand for fossil fuels and an underlying assumption that the world is not going to attain the two-degree target.”

Hot air?

“There’s no space for the most expensive and polluting fossil fuels in a two-degree climate, and Statoil needs to take this into account in its strategic planning,” says Mr Gulowsen.

Silje Lundberg
Silje Lundberg
Maya B. Vedeld/Bellona
He also thinks that John Knight’s rhetoric differs quite a lot from that of Helge Lund’s “on a rhetorical level”.

“It contains more talk about the possibilities of what Statoil could be doing, while Mr Lund was focused on oil and gas as the company’s core business. But it remains to be seen if it’s anything other than hot air.”

“Helge Lund would never have admitted that investing in tar sands was a bad judgement call,” remarks Bellona’s Silje Lundberg. “But at the same time, he also tried to make the public believe that Statoil was in it for the sake of the environment, and that's simply not true.”

“So the change in rhetoric is one thing, but I doubt we'll see a completely new Statoil,” she concludes.



Published on Tuesday, 20th January, 2015 at 20:49 under the news category, by Michael Sandelson   .
Last updated on 20th January 2015 at 21:15.

This post has the following tags: statoil, tarsands, oil, arctic, canada, gas, paywall.





  
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