Plausible futures for the Norwegian offshore energy sector: Business as usual, harvest or rebuild?

Per Espen Stoknes, Iulie Aslaksen, Ulrich Goluke, Jorgen Randers and Per Arild Garnåsjordet

Energy Policy, 2024, vol. 184, issue C

Abstract: The global energy transition from fossil to low-carbon energy challenges the future of the Norwegian petroleum sector, a major factor in the country's economy, now facing financial climate risk and long-term declining demand, particularly for gas to the EU. What energy policies can assist transition into a low-carbon society? We explore three investment scenarios for the Norwegian offshore energy sector from 2020 to 2070: 1) Business as usual, 2) Increasing cash-flow by harvesting existing petroleum fields and cutting investments (Harvest-and-Exit), or 3) Rebuilding with green offshore energy investments. In a new economic model, we compare impacts on key macro- and sector-economic variables. We find that rebuilding by investing moderately in green offshore energy production could reverse the extra job decline that a quicker phase-out of petroleum investments would incur. The impacts on the Norwegian sovereign wealth fund - Government Pension Fund Global - and on gross domestic product (GDP) per capita are insignificant to 2050 and positive by 2070. The simulated investments and economic results can be compared with observations to constitute forward-looking indicators for energy transitioning in producer countries.

Keywords: Green transition; Energy; Petroleum; Offshore wind (search for similar items in EconPapers)
JEL-codes: Q43 Q54 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:enepol:v:184:y:2024:i:c:s030142152300472x

DOI: 10.1016/j.enpol.2023.113887

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