Energy Policies of IEA Countries: Norway 2001

International Energy Agency

The International Energy Agency's 2001 review of the energy policies and programmes of Norway. It finds that oil and gas contribute about 40% of Norway’s exports, and up to 16% of GDP, depending on world oil prices. The government used production controls as a means of influencing prices in 1986, in 1998 and again in 2002.

Important changes are occurring in the oil and gas sector. Statoil has been partially privatised, the State Direct Financial Interest in oil and gas developments has been restructured, and the Gas Negotiations Committee is to be abolished. Private marketing of gas should be a guiding principle in future marketing policy, and depletion policy generally should balance the goals of optimising recovery with ensuring competition.

Growth in energy consumption has been limited by government policies, but consumption is rising with strong economic growth. A new agency has been established to promote energy efficiency and new renewables. Norway has the highest per capita electricity consumption in the world. New large-scale hydro is unlikely, and the future of gas-fired power is uncertain. New generating and transmission capacity may be necessary to avoid price instability or even failure of supply in a dry year.

There are limited opportunities for reducing greenhouse gases in the energy sector in Norway because of the extensive use of hydro in electricity generation. The Kyoto flexible mechanisms are therefore particularly important. Decisions on developing new generating capacity will also be influenced by environmental policies.