Plausible futures for the Norwegian Offshore Energy Sector. Business as Usual, Harvest or Rebuild?

Per Espen Stoknes (), Iulie Aslaksen (), Ulrich Goluke (), Jørgen Randers () and Per Arild Garnåsjordet ()
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Per Arild Garnåsjordet: Statistics Norway, https://www.ssb.no/en/forskning/ansatte

Discussion Papers from Statistics Norway, Research Department

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 longterm declining demand, particularly for gas to the EU. What energy policies can assist the 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 sectoreconomic variables. We find that investing moderately in green offshore energy production can 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 of Norway's energy transitioning.

Keywords: Green transition; Energy; Petroleum; Offshore wind (search for similar items in EconPapers)
JEL-codes: Q43 Q54 (search for similar items in EconPapers)
Pages: 44 pages
Date: 2021-08
New Economics Papers: this item is included in nep-ene and nep-env
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