Texans helped make Norway one of the world’s wealthiest nations, and now Norwegians can help Texas develop new energy resources.
Oil and natural gas inextricably link Texas and Norway, and the relationship proves how international cooperation, free trade and innovation sharing can enrich everyone involved.
Norwegians had no experience in oil and natural gas before Phillips Petroleum applied for a license in 1962 to explore Norway’s North Sea continental shelf. The Norwegian parliament didn’t pass any laws regulating oil and gas exploration or claim the sea’s mineral rights until 1965.
Phillips, Exxon and other firms conducted seismic mapping of the Norwegian offshore while lawmakers deliberated. Exxon and Phillips saw enough potential to create local subsidiaries and, in 1966, hired Houston-based Baker Hughes and Halliburton to begin exploratory drilling.
Exxon, then called Esso, discovered oil in the Balder Field in 1967, but not yet enough to warrant a commercial well. After three years and 29 wells, Phillips found significant oil in the Ekofisk field in 1969, helping Norway produce its first commercial barrels in 1971.
Norway established a national oil company, now called Equinor, the following year. Ekofisk is still producing 50 years later, and Norway’s 5.5 million citizens have the world’s 11th highest income. Norway’s Sovereign Wealth Fund, created from oil taxes, is worth $1.2 trillion and recently generated more money from its investments than from the oil fields.
“We grew up with oil in Norway, and of course, it was discovered by someone from Houston,” Norway’s Ambassador to the United States, Anniken Ramberg Krutnes, said during a recent visit. “We have both benefited from that.”
Oil and gas remain Norway’s largest industrial sector, but the country exports 90 percent of what it produces, the International Energy Agency reports. Norwegians, though, know the oil will not flow forever.
Climate change is wreaking havoc. Record-high temperatures in the Arctic Circle are causing ecological problems for Norway, while polar vortexes are simultaneously freezing Texans. The world is focused on new ways to generate and store energy without worsening global warming.
Here is where the Norwegians can teach the Texans a thing or two.
Nearly half of Norway’s energy needs are met with electricity, the highest percentage among wealthy countries, the IEA says. The nation generates 92 percent of its electricity from hydropower and relies on wind and solar for the rest.
Norwegians are buying electric cars and switching from fossil fuels to electricity faster than other countries, quickly hitting up against the most challenging industries to decarbonize. But, rather than giving up, Norway invests in advanced renewable energy and storage technologies.
Long a leader in offshore oil drilling, Equinor helped pioneer wind turbines planted in the seabed. In November, Equinor began producing electricity from the world’s largest floating offshore wind project, Hywind Tampen. The turbines will provide electricity to offshore oil and gas facilities.
The company has started bringing that technology to the United States. Last year, it led a consortium that won a lease to build a wind project off New York that will generate 3,300 megawatts. One megawatt can power 200 homes.
Last month, Equinor won a lease to build a floating offshore wind project that will generate 2,200 megawatts for California. This year, it is expected to bid on leases in the Gulf of Mexico that will generate electricity for 3 million homes in Texas and Louisiana.
Norwegian companies are also developing exciting technologies to capture and store carbon dioxide and generate clean hydrogen, ammonia and solar power. Texas companies are behind in developing the same technologies, so it makes perfect sense to team up with the Norwegians again.
The biggest obstacle is President Joe Biden’s Inflation Reduction Act.
The IRA is not only the most significant climate bill in U.S. history but also established a Made-in-USA industrial policy. The act uses tax credits to encourage domestic production of raw materials and manufacturing, which punishes companies that import components from overseas or cooperate with foreign firms.
The European Union says $207 billion of the U.S. subsidies potentially violate World Trade Organization rules. The EU, South Korea and other clean technology leaders want exemptions like those for Canada and Mexico under the USMCA.
Failing that, the EU could retaliate with Buy European tax laws that benefit local companies while punishing American firms. Such trade barriers are bad for everyone, even if economic retaliation makes politicians and voters feel vindicated.
The White House should grant exemptions to every friendly nation that trades fairly. When the Norwegians wanted to look for oil, they welcomed Texans with expertise, and it paid off for everybody.
