Norway’s opposition Labour party, with the largest seating in parliament, has withdrawn its support for oil exploration and drilling in one of the country’s national wonders, the archipelago of Lofoten Islands in the Arctic. Although this area has been off limits for off-shore drilling in the past years through various political deals made by the coalition government, this decision has delivered a significant blow to the country’s oil industry which is currently pumping over 1.6 million barrels daily from all off-shore sites.
The major decision came in just days after the government approved a $1trillion oil fund to be used in investing on renewable energy, wind and solar power projects that are not yet currently listed in the stock market. This indicates the country’s diversion of investments from fossil fuel profits to renewable energies investments.
Equinor ASA, the Norweigan state-controlled, multi-national energy company stated that in order to maintain production levels of fossil fuel – which is the country’s main source of income, it is crucial to gain access for explorative drilling in Lofoten. It is speculated that the archipelago holds about 1 to 3 billion barrels of oil underneath its seabed.
“The whole industry is surprised and disappointed,” Karl Eirik Schjott-Pedersen, head of the Norwegian Oil and Gas Association told Bloomberg. “It does not provide the predictability we depend on.”
This decision has created a rift in the party as its leadership prioritizes all the rising environmental concerns of fossil fuels, as well as supporting all workers’ unions within the oil industry, who are the major backers of the Labour party.
Jonas Gahr Store, the party’s leader, said that opposition Labour would continually support the country’s massive oil industry, as long as all local oil companies fully commit to a deadline of converting all their operations to be emissions free.
In the last month, Norway’s oil fund has announced that they would stop all investments of oil and gas exploration to 134 companies, and would only retain their investments in larger oil firms that already have withstanding renewable energy divisions, such as BP and Shell.
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