page_title: Energy in Norway
section_title: Fossil fuels
hierarchical_section_title: Energy in Norway / Fossil fuels
context_page_description: Norway is a large energy producer, and one of the world's largest exporters of oil.
  Most of the electricity in the country is produced by hydroelectricity.
  Norway is one of the leading countries in the electrification of its transport sector, with the largest fleet of electric vehicles per capita in the world.
  Since the discovery of North Sea oil in Norwegian waters during the late 1960s, exports of oil and gas have become very important elements of the economy of Norway.
  With North Sea oil production having peaked, disagreements over exploration for oil in the Barents Sea, the prospect of exploration in the Arctic, as well as growing international concern over global warming, energy in Norway is currently receiving close attention.
context_section_description: In 2011, Norway was the eighth largest crude oil exporter in the world (at 78Mt), and the 9th largest exporter of refined oil (at 86Mt). It was also the world's third largest natural gas exporter (at 99bcm), having significant gas reserves in the North Sea. Norway also possesses some of the world's largest potentially exploitable coal reserves (located under the Norwegian continental shelf) on earth.
  Norway's abundant energy resources represent a significant source of national revenue. Crude oil and natural gas accounted for 40% of the country's total export value in 2015. As a share of GDP, the export of oil and natural gas is approximately 17%. As a means to ensure security and mitigate against the “Dutch disease” characterized by fluctuations in the price of oil, the Norwegian government funnels a portion of this export revenue into a pension fund, the Government Pension Fund Global (GPFG). The Norwegian government receives these funds from their market shares within oil industries, such as their two-thirds share of Statoil, and allocates it through their government controlled domestic economy. This combination allows the government to distribute the natural resource wealth into welfare investments for the mainland. Tying this fiscal policy to the oil market for equity concerns creates a cost-benefit economic solution towards a public access good problem in which a select few are able to reap the direct benefits of a public good. Domestically, Norway has addressed the complications that occur with oil industry markets in protecting the mainland economy and government intervention in distributing its revenue to combat balance-of-payment shocks and to address energy security.
  The externalities engendered from Norway’s activities on the environment, pose another concern apart from its domestic economic implications. Most of Norwegian gas is exported to European countries, 20% of European gas consumption is from Norway, and Norwegian oil supplies 2% of the global consumption of oil. Considering that three million barrels of oil adds 1.3 Mt of CO2 per day to the atmosphere as it is consumed, 474 Mt/year, the global CO2 impact of Norway’s natural resource supply is significant. Despite that Norway exports eight times the amount of energy consumed domestically, most of Norway’s carbon emissions are from its oil and gas industry at 30% and from road traffic at 23%. To address the problem of CO2 emissions, the Norwegian government has adopted different measures, including signing multilateral and bilateral treaties to cut its emissions in lieu of rising global environmental concerns.
  Norway can serve as a role model for many countries in terms of petroleum resource management. In Norway, good institutions and open and dynamic public debate involving a whole variety of civil society actors are key factors for successful petroleum governance.
caption: Countries by natural gas proven reserves, 2014