Norway's Labor Party rises against oil exploration in Arctic's Lofoten islands

By Mikael Holter on 4/7/2019
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Photo: Jonas Gahr Støre, leader of the Labor Party and Leader of the Opposition, Norway.

OSLO (Bloomberg) -- Norway's opposition Labor Party, the country’s biggest force in Parliament and a long-time backer of the industry, decided on Saturday to stop pushing for oil exploration offshore the sensitive Lofoten islands in Norway’s Arctic. The move makes oil production in the area even more unlikely than it already is, and adds uncertainty about how much support the industry can expect from Norwegian politicians in the future.

Labor’s shift, announced by party leader Jonas Gahr Store at a press conference on Saturday, illustrates an internal rift between a rising climate wing and the country’s biggest worker union, a key backer of the party.

The move makes sure there’s a solid majority in parliament to keep Lofoten off limits, like it has been for years through political horse-trading. But the oil industry also fears that Labor now could be willing -- or forced -- to compromise on other issues the next time it takes the reins of government, such as petroleum taxes or the award of exploration licenses in the Barents Sea further north in Norway’s Arctic.

Store said Labor will continue to be a supporter of the oil industry, but acknowledged that there was now a majority within the party for a shift in its stance. The party will continue to back the existing tax system for the industry, which includes exploration refunds, he said.

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With rising concern over climate change, the oil industry in Norway is facing lower public support, potential electoral gains by oil opponents and legal threats mounted by environmental groups. Those challenges come on top of a dearth of large projects from the beginning of next decade.

Store earlier this week also said that he wants oil companies in Norway to commit to a deadline for making operations completely emissions free, an ambition the country’s top oil lobbyist called “very demanding.”

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