Norwegian vote may kill oilsands stake
Statoil's Alberta role an issue in election
By Shaun Polczer, Calgary Herald
September 12, 2009
T he fate of Statoil- Hydro's oilsands investments in Canada could hinge on the outcome of Norway's general election Monday.
The presence of Norway's state-owned oil producer in northeast Alberta has emerged as a contentious issue in the country's bitterly contested vote, which some are saying is too close to call.
The debate heated up on Aug. 30, when the country's main daily newspaper, Aftenposten, wrote that Statoil must share partial responsibility for Canada's inability to meet emissions reduction targets in accordance with the Kyoto protocol. In the absence of international mechanisms to hold Canada accountable, Statoil ought to withdraw from the Leismer pilot project scheduled to begin producing 20,000 barrels a day starting in 2010.
The editorial prompted StatoilHydro CEO Helge Lund to fire back with a sharply worded op-ed piece that was published in Aftenposten and posted on the company's website.
"Oilsand is a young industry which will be continually improved through technology development and increased know-how," he wrote. "We believe that we can play a positive role in Canada with our experience and drive for developing technology.
"The connection between population growth, higher standards of living, energy demand and climate change are challenging dilemmas in the debate and they form the energy realities on which StatoilHydro's involvement in Canada's oilsands is based."
Norway has a proportional representation system that makes it virtually impossible for one party to govern without forming a coalition.
StatoilHydro has a reputation for being one of the most environmentally responsible oil companies in the world, and it operates three of the planet's four commercial carbon capture and sequestration projects. Many in the Scandinavian nation see environmental protection as a moral issue and believe the government should force the company to meet Norway's tough environmental standards overseas.
Of seven major political parties, only two support StatoilHydro's presence in Canada. The debate was further stoked after Norwegian Prime Minister Jens Stoltenberg told Norwegian media that responsibility for reducing Canada's emissions is this country's responsibility.
Statoil fired back Friday at the criticism by announcing a pilot project in partnership with the Saskatchewan-based Petroleum Technology Research Centre (PTRC) to reduce carbon dioxide emissions from thermal oil production. In a news release, Statoil said the goal is to commercialize the new proprietary technology to reduce water use and CO2 emissions from conventional steam-assisted gravity drainage (SAGD) operations dubbed Solve--or "steam-solvent co-injection."
The project received $6 million in funding from Sustainable Development Technology Canada on Sept. 10 to help develop and deploy the technology and lessen the environmental impacts of in situ oilsands extraction.
"We're pleased to partner with PTRC on this innovative pilot project," Age Kristensen, vice-president for Statoil-Hydro's Canadian heavy oil research department, said in a statement. "The technology enhances the existing SAGD process because it can potentially reduce steam-to-oil ratio while increasing bitumen recovery."
But the announcement and Lund's editorial piece have done little to quell the ongoing controversy, prompting several members of the ruling Labour Party to break with the government on the issue of oilsands development.
In a recent poll commissioned by Greenpeace Nordic, more than two-thirds of all Norwegians who had an opinion about oilsands were opposed to them. In a news release, Greenpeace said the poll numbers are supported by the fact that all opposition parties except for one are calling for StatoilHydro to pull out of the oilsands.
"We are very glad to see that members of the governing party are starting to get the message and saying no to the growing environmental and human rights price tag associated with tarsands extraction," Martin Norman, a climate and energy campaigner with Greenpeace in Norway, said in an e-mail.
"Leaders in Norway and elsewhere can no longer masquerade as 'green' leaders at home while exporting the climate crisis to Canada and elsewhere."
Representatives from the Norwegian consulate in Calgary declined to comment. Officials from the Canadian Association of Petroleum Producers deferred to Statoil-Hydro Canada representatives who were not immediately available to discuss the election campaign.
Speaking in Calgary this week, Premier Ed Stelmach said he wasn't aware of any plans by Statoil to pull out of Alberta and told reporters that foreigners still see Alberta "as a great place to invest."
SPOLCZER@THEHERALD. CANWEST.COM
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