Environmental Regulations and Measures on the Norwegian Continental Shelf

Abstract

Abstract The Norwegian authorities aim to help Norway combine her role as a major petroleum producer with the role of being a leader in environmental protection. This paper evaluates whether or not the Norwegian upstream sector has achieved this ambitious environmental goal. Regulations, emission reducing technologies, emissions trends and international comparisons are described. The paper also evaluates how the attractiveness of the Norwegian shelf, as part of the global oil-and gas market, is affected by these environmental regulations. 1. Introduction Norway ranks as the third largest oil exporter in the world. Average oil production in 2000 was 3,1 mill barrels per day. In addition, the Norwegian gas export to Europe in 2000 was approx. 50 billion Sm3, which covers roughly 10% of the west European gas consumption. As shown in fig. 1, the peak petroleum production from the Norwegian sector is not yet reached. In addition, the figure illustrates that Norway gradually is changing from a major oil producer to become a major gas producer. Fuel switch from coal and oil to gas is an important environmental measure in the European Community. In this picture, Norway emitsCO2 from production and transportation of gas to Europe. Electricity consumption in Norway is covered mainly by emissions free hydropower. Production and transportation of oil and gas on the installations offshore are therefore major contributors to the total emissions to air in Norway. The upstream petroleum activities counted for 24 percent of the national CO2-emissions in 2000 (fig. 2). The focus on emission reducing measures in the Norwegian petroleum sector is therefore strong. In 1991, a CO2 -tax was introduced on the upstream activities in Norway. In addition, a restricted policy on gas flaring and venting has always been present in Norway. This paper evaluates the effect on emissions and technical solutions from these regulations. International trends are shown to compare the emission level on the Norwegian shelf with other European offshore provinces. Emission of oil vapour, or volatile organic compounds (VOC), and nitrogen oxides (NOx) contribute to trans-boundary regional environmental problems such as acid rain, over-fertilization and ground level ozone. In December 1999 Norway, together with other European countries, USA and Canada, signed a new protocol (the Gothenburg protocol) which seeks to solve the environmental problems that these components represent. Under the protocol Norway has committed to reduce its emissions of NOx and VOC by 29 and 35 % in 2010 compared to the level in 1990. In addition Norway struggle to keep within existing obligations on these components. The upstream sector counts for a large number of the Norwegian emissions of VOC and NOx, and the government focuses on limiting these emissions by introducing different regulations. A NOx emissions trading scheme on the Norwegian shelf is considered, a tool in which the emissions are regulated in a cost-effective way. The paper presents these regulations and their likely effect on the emissions and technology implementation. 2. CO2-emissions - the global environmental challenge 2.1 The offshore CO2 taxThe Norwegian authorities have traditionally relied on a command and control system with permits to keep flaring and cold venting at a low level in the upstream sector, implicitly also reducing emission of greenhouse gases. The Petroleum Act state: "burning of petroleum in excess of the quantities needed for normal operational safety is not allowed unless approved by the Ministry". 2.1 The offshore CO2 tax The Norwegian authorities have traditionally relied on a command and control system with permits to keep flaring and cold venting at a low level in the upstream sector, implicitly also reducing emission of greenhouse gases. The Petroleum Act state: "burning of petroleum in excess of the quantities needed for normal operational safety is not allowed unless approved by the Ministry".