Mikkelsen A., Langhelle O. (eds.) Arctic Oil and Gas. Sustanability at Risk?

216 Ove Heitmann Hansen and Mette Ravn Midtgard

and a defined amount of oil has been found in the field. This is an upswing,

mentally as well as economically. The mental reorientation is expressed by the

report, 2025 Rings in Water, initiated by the NHO,

and by the Soria Moria

Declaration:

The government regards the Northern Areas as Norway’s most important

strategic target area in the years to come. The Northern Areas have gone from

being a deployment area for the security policy to being a power centre for

the energy policy, as well as an area that faces great environmental policy

challenges.

This mental reorientation has led to optimism and the belief that Finnmark, and to

some extent Troms, will be the next growth regions of Norway. Because the Integrated

Management Plan has closed Lofoten/Vesterålen for oil activity until the 2009

national election, Nordland has experienced less activity, optimism and attention.

The construction by Statoil of the Snøhvit LNG plant in Hammerfest has meant

economic revitalization of businesses in the municipalities of Hammerfest,

Kvalsund and Alta. This project has proved that gas activity provides not only

direct profits, but also many unexpected, indirect, spin-off effects. From being a

municipality in decline, Hammerfest is now one of the most prosperous munici-

palities in the North. The remaining parts of Finnmark, except South Varanger

and Alta, have not participated in this development, and therefore its politicians

have raised proposals for how larger areas could benefit from the ongoing and

forthcoming petroleum development. The strong wish for participation in what is

often called ‘the adventure in the North’ can be understood in the light of the

condition of the basic industry along the coast, the fisheries.

The coastal societies in the North have relied heavily upon the fisheries and fish

processing, whose structure and employment were reduced to 6 per cent of the

total workforce in 2006. This is the main reason why people in the North claim,

‘it’s our turn now’: the need for economic revitalization and new employment

opportunities along the coast are essential for their survival and for strengthening

the viability of the industry.

The new significance attributed to Finnmark has also led to a new belief in

the value of the county, thus making the politicians and the whole Northern

population think they have a good basis for negotiation. This is clearly seen in the

local demands; however, the constructors and the operators show less understand-

ing for Finnmark’s viewpoint. Additionally, the former policy instruments have

disappeared, which again may cause difficulties for the expected and long-desired

industrial transformation of the northernmost region of Norway.

Unemployment in the North and shortage in the South

One of the main arguments presented by the Storting for giving Statoil the produc-

tion licence for the Snøhvit field was that the project will have influence on indus-

try and commerce, employment, scope of expertise and so on, regionally and locally

(the Hammerfest area).

The same argument is expressed in the Soria Moria

Declaration: ‘The oil and gas activity will provide more working places and

economic growth in Northern Norway’. Before the 2005 election, the pro-petroleum

parties were using petroleum development as a tool for employment and modern-

ization of the ‘old-fashioned’ industrial structure, while those opposed were using

environmentally based arguments in the political discourse.

Oil and gas activities have positively affected Norway’s employment and econ-

omy: In total, Norway has 3 per cent unemployment on average, while eight

municipalities in Finnmark, all situated along the coast (Statistics Norway, 2006),

have an average of 8 per cent unemployment. The domination of the Northern

coastal communities on the list can have a two-fold explanation: Firstly, the

collapse of the fish-processing industry, and secondly, it is the larger towns that

experience an economic boom – but the coastal municipalities are not part of

these growth centres. These types of events pull the youngsters away. People are

hopeful that petroleum development will lead to more employment, as Finnmark’s

own petroleum strategy states: ‘The petroleum activity in the Barents Sea is prob-

ably the industry that will provide the largest positive effects for both Finnmark

and the region as a whole’.

According to all past experiences, oil and gas activity in a region generates more

jobs and synergy effects for other types of business. In 2005, during the Snøhvit

construction period, the unemployment rate in Hammerfest was low, 3.2 per cent.

However, even more remarkable has been the increased participation of local

women in the workforce. These are women who had fallen out of the employment

statistics, mainly because of long-term unemployment. The construction period

opened a window of opportunity for these women, just as in the Kårstø and

Tjeldbergodden cases (Olsen, 1988; Kotte, 1997; Gvozdic, 2001). The Snøhvit

LNG plant in operation will directly employ 180–200 people, and indirectly another

300 for support services and in public services (Agenda, 2003; Finnmark County

2005). The municipality will receive property taxes from the plant in addition to

increased personal taxes, which will lead to further public spendings. This is good

news for the Hammerfest area (defined as Alta, Kvalsund and Hammerfest), but

almost of no importance to the rest of the county.

Disagreement about the number of jobs

There is some scepticism regarding the estimates of the number of workplaces the

oil and gas industry will generate, and of the basis of Northern Norway’s

optimism. These discussions arose in the autumn of 2005 and involved all

the stakeholders identified: scientists, politicians, the petroleum industry and

environmental organizations.

On behalf of the WWF, the Nordland Research Institute (NRI) worked out a

prognosis regarding employment development and opportunities over the next 35

years in Northern Norway (Bay Larsen, 2005). This report stated an enormous

growth potential in the tourism sector and opportunities for real advances in

the aquaculture industry. The employment numbers in the report for the three

Going North 217

218 Ove Heitmann Hansen and Mette Ravn Midtgard

northernmost counties raised a debate both on radio and in newspapers. The report

was criticized by the International Research Institute of Stavanger (IRIS) for

reasons such as, ‘The note seems to be a systematic unbalanced description ... .

The extent of mistakes and asymmetrical presentation is so wide, that it cannot be

explained by lack of data or uncertain material’.

Some considered that this

process was initiated by the oil industry and that the aim was to show its power:

‘Think about a number; kindergarten places, population numbers or jobs that the

adventure will bring. Everything can be said, every positive argument is bought.

It all increases the euphoria’.

Alternative reports

claimed different numbers.

The importance of these numbers relates to politics and to the present discussions

about opening up the Lofoten, Vesterålen and Barents Sea for petroleum explo-

ration. Petroleum activity will mean a risk of incidents and an oil spill will result in

fishing fields closing down for at least some periods. If the people in the North,

who are sceptical of petroleum development,

are to change their attitude; then

something must be given in return. The answer has been new job opportunities and

economic growth, but most employees in the oil and gas industry in the North will

commute from other places in Norway. A leader of the Labour Youth Party said:

There must be an end to the argument that oil and gas activity shall save

North Norway. People in Stavanger and foreign countries will get most of the

jobs if the Barents Sea and Lofoten area are opened for full activity.

Well-known sceptics, who argue about the number employed by the Snøhvit

gas field (an investment of 56 billion NOK), say that we need to invest 1000

billion NOK and build at least 20 Snøhvit plants to create 8000–10,000 new jobs

in the region. The only fields used for commercial operation are the Snøhvit gas

project and, in 2011, the Goliat oil project in the Barents Sea. A report originat-

ing from the consulting firm, Barlindhaug, in the summer of 2006 calculated that

4000 people would be employed in the petroleum sector by 2020. This report also

states that the future business development in Northern Norway should be based

upon tourism and fisheries.

The choice of an exploitation and production solu-

tion is an important element in these discussions. Many Northern Norwegians

claim that landing the resources will produce the largest benefit. Let us examine

the different positions.

Landing of oil and gas, or ...

ENI Norge will deliver their Plan for Development and Operation (PDO) for the

Goliat oil in 2008. This oil company has met the demand from the local political

authorities to land the oil in Finnmark. The county of Finnmark agreed upon this

statement in 2005: ‘In the case of oil discoveries, the oil shall be transported ashore

in all those cases where it is technically possible’.

The Prime Minister, Jens

Stoltenberg, sounded a similar note when he said: ‘I feel confident that oil- and gas

activity in North Norway will contribute to employment and value creation’.

He continued, ‘we have succeeded in having large land-based facilities. We wish

to explore the possibilities of other land-based terminals’.

Influential Northern

Norwegian actors, such as Johan P. Bardlindhaug

and Arvid Jensen,

have also

expressed clearly that landing is the most favourable solution for the region and its

business life. ENI Norge is considering these questions and has announced three

alternative solutions for development. In debate after debate, ENI Norge claims

that landing the oil does not necessarily create more jobs locally and that other

solutions might benefit Finnmark better. ‘Without regard to a chosen technical

solution, ENI will make sure that the oil activity in the north results in as many

positive spin-offs as possible for the region and for the local community’.

The use of political tools

In the early stages of construction of the Norwegian petroleum manufacturing indus-

try, the oil companies that wanted to position themselves for licences were obliged

to offer some benefits to Norwegian firms and regions. The time for goodwill

contracts and technology deals are formally over, but the oil companies still recog-

nize that they have corporate responsibilities, as indicated above by the ENI

Chairman’s statement. Some conditions do exist, such as when the parliament

accepted Statoil’s application for the Snøhvit production licence. The words of inter-

est in the resolution are: ‘The operator must in the planning and construction of the

processing- and LNG plant arrange for he disposal of gas and cooling water’.

A new industrial structure

The expectations are huge and, for the businesses in Northern Norway, the petro-

leum development is more important than ever before. The possibilities that the

petroleum sector offers regional businesses are based on the condition that the oil

and gas companies are bringing the resources to land. The chairman of the

Finnmark County has said that this must be a premise for the industry and that a

single-point buoy mooring in the Barents Sea (where tankers just have to fetch the

oil) will not be accepted. A member of parliament from the Norwegian Labour

Party, Karl Eirik Schøtt-Pedersen, said: ‘The oil and gas in the Barents Sea must

be pipelined to petroleum installations on land. This is the way we can create jobs

and new regional businesses’.

Finnmark – the most prosperous colony in Norway

There are large expectations in Northern Norway that oil and gas activity will

generate economic growth, extended effects on other industries, new working

places and population growth. Local politicians have several times stressed that

the oil and gas activity must generate working places along the coast. Even local

politicians from the Social Left Party favour increased activity if the development

generates more working places. A local member of the Social Left Party said:

One thing must be clear. If the public and private working places generated

from the oil and gas industry do not appear along the coast of Finnmark,

Going North 219

220 Ove Heitmann Hansen and Mette Ravn Midtgard

I will be against oil and gas exploration and production in the North. We must

get the working places that are generated by the oil and gas activity.

The Troms County Council for Communication (Synnøve Søndergaard) also

supports these statements: ‘we will not be a raw material deliverer’.

The

Northern Norway media, which has been very pro-development, reacted in

several chronicles when the merged StatoilHydro revealed in their organization

plan that the headquarters for the Northern activities were to be located in

Stjørdal, which is not in Northern Norway. The main newspaper, Nordlys, as well

as the right-wing paper, Harstad Tidende, used the words ‘colony’ and ‘colonial-

ism’ about this plan and Northern Norway’s position. Harstad Tidende wrote, ‘it

is a strengthening of Northern Norway’s role as a colony, that’s the hard reality’

(HT, 2007). People in Northern Norway demand petroleum industry onshore in

this part of the country; because they fear that the industry will monitor, control

and manage the petroleum exploration from other places in Norway. Technically,

the development can take place by means of computers in Stavanger, Oslo or

Stjørdal. Accordingly, most politicians in Northern Norway demand that the

government must set out clear guidelines for the oil and gas companies. They

want research, development, production and operation of the oil industry, oil

protection, sea safety and supply services to be present in Northern Norway.

Those environmentalists from Oslo

The environmentalists are the one opponent to the positive atmosphere in the North.

When the Snøhvit gas project was about to get its production licence, a

few environmentalists in Finnmark and Hammerfest attempted a counter-

mobilization. In the debate concerning the Integrated Management Plan for the

Barents Sea, however, there were hardly any local voices heard against petroleum

development. In the debate preceding the approval of the IMP, the leader of the

Nordland Labour Party expressed his opinion: ‘It is not Nordland’s job to be a

nature park for the rest of Norway’,

and this statement pretty much sums up

other expressed opinions. The environmentalists’ argument about climate

change has so far not been adopted; in fact the most frequently expressed view is

‘we like the climate change’ (e.g. the summers have become longer and warmer).

Many stakeholders from Northern Norway trust technology,

or as a bureaucrat

expressed it; ‘they (e.g. the environmental organization) play perhaps too much on

feelings’.

The Northern Norwegian environmentalists have, to a very small extent,

been recognized in this debate, although the counter-forces have been strong.

In a television debate the evening before the IMP was approved, the mayor of

Vesterålen and the chairman of Petro Arctic/leader of the consultancy firm

Bedriftskompetanse, used two main arguments against the four representatives

from the different environmentalist groups. The first argument was that the

environmentalists’ views were based on feelings: ‘...a monopoly on being

environmentally-friendly whilst sitting around coffee tables in Oslo’.

The

second argument was that they were trying to influence development in an area

geographically distant from them. They were attacked for being from the

Southern part of Norway and without real knowledge about Northern Norway:

‘...tired of a play-off with people sitting at Grünerløkka

and having an opinion

about what we here in the North should do for living’.

The following expression is common amongst Northerners, ‘please stay in the

South and let us do what we know is best’. It seems to them that the environmen-

tal organizations have parked themselves in central Oslo and that they lack, at

least, active support from the North and, probably more important, they lack legit-

imacy. The lack of a foothold along the coast is probably connected to their earlier

disapproval of seal and whale hunting, which directly influenced the lives of

people and their economic basis, and that different people see different values in

different regions.

The anxiety of an oil spill

The inhabitants of Northern Norway are full of expectations for the coming oil

and gas development. They demand benefits, which is closely connected to the

risk involved with such activity. The main argument and expressed anxiety are

over the fear of an oil spill. The risk is said to be low,

but people living along

the coast have experienced loss of fishing boats, and in the 1980s, some Russian

ships being towed ended their journey on the seashore. The Northerners, there-

fore, have several experiences of accidents on their coast.

The risk can be lowered by precautions, such as a transport corridor, more

extensive use of pilots and by an improved state of readiness. The distribution

between benefits and burdens is complicated, since the stakeholders involved in

this debate are very diverse. Nature and Youth is of the opinion that landing oil

represents an additional threat to the environment, whilst the coastal politicians,

as the previous chapter described, want the economic benefits connected with a

landing. Bellona is sceptical about the state of readiness. Even though modern

technology can reduce discharge of oil and chemicals from petroleum activity,

there cannot be any guarantees against accidents in connection with oil explo-

ration, oil extraction and transport of oil along the coast. People in Northern

Norway have anxiously followed the development in the oil transportation from

Russia, and the lack of an acute state of readiness has been particularly disquieting

to them. Their argument is also reiterated by the Lofot Council: ‘There is an

immediate need to have in place a tugboat capacity with sufficient strength,

increase the competence against contamination in the coastal area, and upgrade

the oil protection equipment in several coastal municipalities’. Yet governmental

institutions claim that three tug boats and the existing surveillance system are

sufficient, and the Coastguard, for instance, has commented that ‘the state of

readiness is quite good’.

Co-existence is possible

Oil production has been occurring in Norwegian waters for nearly four decades,

and without serious contamination other than the Bravo blow out in the 1970s.

Going North 221

The strong resistance towards oil exploration has been based on the threat to the

fishing industry in the event of an oil spill. Norwegian fish have the image of

being the cleanest fish in the world, and the possibility of this reputation being

harmed is discussed.

The mayors in Northern Norway express it like this: ‘The Barents Sea fish

resources, the inhabitants of the coast and the nation of Norway cannot afford an

environmental catastrophe happening due to lack of professional competence and

insufficient technical equipment’.

The coastal seashore is experiencing a greater

variety of economic interests; although traditionally the fishermen used the sea,

the competition these days is growing more intense and petroleum companies, as

well as fish farms, leisure activities, tourism providers and military activities are

among the commercial users of this area. Gradually the fishermen have no longer

seen these as competitors, and experience has shown their possible co-existence

with other industries. The Norwegian Fishermen Association and the Norwegian

Coastal Fishermen Union are stakeholders that have knowledge and experience,

and the former has expressed this viewpoint: ‘Coexistence is possible; there is

room for everybody. But, there is a need for common rules, which take care of the

environment and what areas that can be explored’.

The demands from the fishermen are based on four basic principles. First,

all activity must be based on zero discharge. Second, the petroleum industry

must not occupy any important fishing areas. Third, the government must have

a close dialogue with the fishing associations when they consider new areas

for oil and gas explorations. And fourth, the state of readiness must be increased

to an acceptable level.

In the official debate, there is much more tension

between environmental organizations and petroleum interests on the conditions

for the fisheries than that raised by the fishermen’s organizations. The Norwegian

Pollution Authority and the Institute of Marine Research have indicated

what fields ought to have severe restrictions, while the fishermen limit

their claims to: ‘We need to respect that some areas are more vulnerable than

others’.

The fishermen’s associations continue to claim that the map data in the area are

not good enough to point out areas of conflict, and the fishermen demand more

focus and more money to do this work. It is particularly important for the fishing

industry to keep the oil and gas transportation at longer distances from the coast

and outside the fishing grounds, which will allow more time and opportunities to

handle potential oil spills.

The fishing industry is afraid of losing employees to the petroleum industry.

They want to focus on educating more people who can serve both sectors, to avoid

strong competition between the two. The Norwegian Fishing Vessel Owners’

Association puts it this way:

It is clear that the oil and gas industry is the biggest competitor when it

comes to the labour market. The fishing industry is totally free of subsidies,

but we have to compete against an industry that is subsidized. We need equal

conditions.

222 Ove Heitmann Hansen and Mette Ravn Midtgard

Going North 223

It’s our right

This section is about the Sámi people (Textbox 9.4) and their reaction to the coming

petroleum industry. Northern Norway has experienced a tremendous upheaval

among the Sámi people during the last decade, and understanding this development

is essential for understanding today’s demand that ‘it’s our right’. It is also essential

to understand that, even though they are said to be one people, the Sámi do not repre-

sent one homogenous opinion, which is also true for the question of petroleum devel-

opment. Some Sámi will claim they have been suppressed and are still colonized,

while others regard themselves as Norwegians with a Sámi ethnic culture.

The Finnmark Act has faced massive criticism, and the main critique from an

indigenous perspective concerns the lack of proper identification and recognition

of Sámi rights to their lands at the individual, community and collective levels.

The importance of the international standard, ILO Convention No. 169, is

stressed, especially in relation to Articles 14 and 15. The Sámi Council empha-

sizes that the Finnmark Act is not a victory for the Sámi people, but it is a

compromise with which the Sámi people can live. They think the Act should have

differentiated between Sámi people and local people when it comes to rights, and

that it should be more compatible with ILO 169.

When evaluating the impact

that activities such as drilling for oil and gas have on Sámi culture, one should

note that CERD

has already underscored the important role of traditional Sámi

Textbox 9.4 The Sámi people

The Sámi are the northernmost indigenous people in Europe, and the only

ones in the Nordic region. The Sámi people span the borders of Sweden,

Norway, Finland and Russia. Approximately 40,000 of the estimated

85,000 Sámi live in Norway. In Norway, the right to keep reindeer also

covers subsidiary rights, such as fishing and hunting rights (the reindeer

husbandry rights are compounded of many rights of use). A section of the

Sámi population in Norway and Russia are coastal: Sámi people who from

time immemorial have been fishing along the Norwegian and Russian coast

and at sea. Both lawyers and the main Sámi organizations have asserted that

certain coastal rights exist for the coastal Sámi population in Norway.

These rights, however, have not been confirmed in legislation. The Sámi

have been given more legal rights, and there are still internal processes

ongoing for establishing cultural, social and political structures, and exter-

nal processes. So far the Finnmark Act has authority over the land, lakes

and rivers of Finnmark, but no jurisdiction of resources below the surface,

or in the fjords and outside the coast.

224 Ove Heitmann Hansen and Mette Ravn Midtgard

livelihoods, such as reindeer husbandry, hunting and fishing, in preserving and

developing the Sámi culture. The Sámi Council’s view is:

Given all people’s equal right to maintain and develop their culture, Norway

must prevent the non-Sámi society from expanding into Sámi territory in a

manner that prevents, or diminishes, the Sámi people’s chances of maintaining

and developing its culture.

A panel led by Professor Carsten Smith gave their opinion in 2007 about the

property rights of the Sámi along the coastal area. The Norwegian Government has

said that they are willing to discuss the matter, but are not prepared to make a deci-

sion on the case. The Sámi parliament hopes that the Norwegian Government is

prepared to accept the resolution from the UN Human Rights Council, which

decided that indigenous people’s rights shall also include resources in and below the

sea. Sámi President, Aili Keskitalo, who belongs to the largest political party in the

Sámi parliament, the National Association of Norwegian Sámi (NSR), claims that

indigenous people have rights when the nation-state collects tax from resources off

the coast of the Sámi’s land. She says:

The international law gives the Sámi people, as an indigenous people, rights

to oil and gas resources in our areas. I am not claiming that we have sole

rights to the petroleum resources in the northern areas, but the Sámi people

do have such rights as an indigenous people.

President Aili Keskitalo’s point of departure is that: ‘Oil, gas, fish and miner-

als in the Sámi area are also Sámi resources. Norway is founded on two people,

and that people must act accordingly’.

The demands from the Sámi parliament

specify, first and foremost, that regulations must be issued to ensure that the Sámi

are always included and that adequate importance is attached to Sámi views.

Secondly, substantive rules must be laid down that recognize and strengthen Sámi

rights and access to resources. Thirdly, regulations must be adopted that guaran-

tee Sámi self- and co-determination with regard to resource management. All in

all, this ‘package’ must be adopted within the parameters of indisputable interna-

tional law. In practical politics, this means that the Sámi parliament should be in

dialogue with the government and governmental institutions operating in their

land. During the process of making the Integrated Management Plan, the Sámi

parliament was regarded only as a receiver of information and not as a body enti-

tled to comment. This changed during the process. President Aili Keskitalo

asserted their right to benefit from the petroleum resources in the Barents Sea,

and their principal starting point is that the Sámi have a right to the petroleum

resources present in Sámi areas, which also includes areas off the coastline. Vice

President of the Sámi parliament, Johan Mikkel Sara, supports this view. He says

that the Sámi parliament does not in principle oppose petroleum production and

development of the Barents Sea, but that certain demands must be fulfilled. Sara

claims that Sámi people should have joint decision-making rights in all parts of

the process, and that the Sámi have rights to the oil and gas, and he insists that an

indigenous dimension must be in place. He also says that the issue has not been

sufficiently elaborated, and that the influence of terminals and plants on the rein-

deer industry, for example, is currently unclear.

But not all stakeholders who have something to say about these matters agree.

The Norwegian Pollution Control Authority (SFT) says:

The Sámi People are not greatly affected by increased oil and gas activity.

This is different from other parts of the Arctic, where much of the petroleum

activity is onshore and has direct consequences for the indigenous people’s

traditional activities. ...The people that perhaps are most affected by

increased oil and gas activity are the coastal fishermen, including Sámi fish-

ermen. Even then, the Sámi fishermen are only fishing inside the boundary

line and not in the open sea.

As the Norwegian Government prepares to open the Arctic areas for oil explo-

ration, some of the country’s indigenous people not only want to protect their

interests, but they also want to receive their fair share of the riches that oil and

gas activity can bring. They seek their share of oil wealth and are trying to team

up with other indigenous groups in the Arctic to create a common platform from

which to negotiate land rights and a share of the profits from the extracted energy

resources. Johan Mikkel Sara has visited communities of indigenous people in

Northern Canada to learn how the local groups manage to negotiate deals with

the national authorities and the oil companies. He says: ‘We can no longer

passively stand by and beg for money. We have to learn from the Canadians and

start thinking in a new way’.

The agreements that Canada’s indigenous people

have negotiated inspire the Sámi people. The indigenous people of Canada have

become a role model when it comes to economic compensation for activity in

indigenous areas. Sara continues:

Why should the Sámi people be left with low-status jobs when industry is

unfolding in their traditional settlement areas? It should not be possible! The

Sámi people undoubtedly have the right to receive parts of the oil and gas

resources as long as it comes from their traditional areas.

But again there are several counter-forces, as reflected by the members of the

Energy and Environmental Committee from the Conservative Party:

All the natural resources in Norway must belong to the whole Norwegian

population, whether we are talking about fish or oil. The oil is a non-renewable

resource, and cannot belong to a single group. I cannot imagine any

geographical area or group of people who should have any special right to the

oil. This is the community’s property.

Both the Sámi and other Norwegians wish to benefit from the economic

stimulus of increased shipping, tourism and oil and gas development in the

Northern waters. Many see the potential for economic development, including

Going North 225

Mikkelsen A., Langhelle O. (eds.) Arctic Oil and Gas. Sustanability at Risk?

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