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

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

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.

Suggested Citation

  • Stoknes, Per Espen & Aslaksen, Iulie & Goluke, Ulrich & Randers, Jorgen & Garnåsjordet, Per Arild, 2024. "Plausible futures for the Norwegian offshore energy sector: Business as usual, harvest or rebuild?," Energy Policy, Elsevier, vol. 184(C).
    • Handle: RePEc:eee:enepol:v:184:y:2024:i:c:s030142152300472x
    DOI: 10.1016/j.enpol.2023.113887
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    References listed on IDEAS

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    1. Deegan Jason & Asheim Bjørn Terje & Haus-Reve Silje & Afewerki Samson & Blomgren Atle & Landazuri-Tveteraas Ursula, 2025. "The oil and gas industry – a key to a successful, sustainable transition in Norway? Barriers and challenges to knowledge transfer to offshore wind and aquaculture," ZFW – Advances in Economic Geography, De Gruyter, vol. 69(2-3), pages 150-163.

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    JEL classification:

    • Q43 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy and the Macroeconomy
    • Q54 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Climate; Natural Disasters and their Management; Global Warming

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