oil and gas

Norway’s national wealth fund

Norway sets aside proceeds from oil and gas production and now has an investment fund worth 8,140 billion NOK, which is about $1.3 trillion Canadian. Given the present population, that’s more than $250,000 for every man, woman and child. The fund describes itself:

The Government Pension Fund Global is saving for future generations in Norway. One day the oil will run out, but the return on the fund will continue to benefit the Norwegian population.

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Norway reports about 30,000 people directly employed in oil and gas extraction.

Statistics Canada reports 50,000 are directly employed extracting oil and gas in Alberta. The number is only 2,000 in British Columbia.

Of course, BC has no equivalent to Norway’s fund. Despite the fantastical Liberal promise of a $100 billion Prosperity Fund, there will be no contributions to it from oil and gas companies in the forseeable future. Producers now pay little or nothing to BC for gas rights and royalties.

Despite an oil and gas industry larger in Alberta than in Norway, the Canadian province’s Heritage Fund held assets worth $17.5 billion at the end of 2017. That’s up 2% from $17.1 billion five years before.

However, in the last three fiscal years, Alberta budgeted for deficits totalling over $25 billion, substantially more than the Heritage Fund. Even though the province now ranks second to BC in provincial economic growth, it currently forecasts an annual deficit of $10 billion.

It’s a hard reality but a government that wants to provide services to people has to collect taxes sufficient to fund programs or it must borrow money. Rachel Notley’s government chooses to accumulate debt. They’re not brave enough to raise taxes sharply or demand a share of oil and gas production in the manner of Norway.

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The Tweets above resulted in a message to me from @BrettdrC. He said:

I was just in Norway. I snapped these pictures from the Oil museum in Stavanger.

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1 Norway 450

2 Norway 450

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Clearly, the interests of oil barons in Alberta are stronger than the public interest, a fact deeply entrenched in the province’s culture. It’s continuance is guaranteed because of what the Polaris Institute called, “Big Oil’s Oily Grasp.”

Former Norwegian Prime Minister Jens Stoltenberg spoke at Harvard in 2013. He provides information on how that country developed policies for managing oil revenues.

Categories: oil and gas

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6 replies »

  1. Exactly! The Kinder Morgan pipeline is all about profits for Americans in Texas, made easy by the Canadian political Judas’s, who have sold their souls to the almighty American dollar.

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  2. Stoltenberg says European politicians struggle to explain why they’re spending money they don’t have, while Norwegian politicians must explain why they aren’t spending money they do have.

    Meanwhile our politicians have been so busy taking campaign money from CAPP et al to assure their future, they’ve neglected ours.

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  3. Maybe now Alberta and Ottawa should be constantly reminded about the mis-management of the resourse industry. “Yes, I agree Ms. Notley, the Government of Alberta should finance the building of that pipeline and as a matter of fact the money should come from the Alberta Heritage Fund.” “What’s that you say Ms. Notley?” “Speak louder, we can’t hear you.”

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  4. So we had a stake in our own resources with Petro Canada. Then they sold that for some reason right before the biggest oil boom in history and we got peanuts. Now on the down turn the Federal government is talking about paying an American company my tax dollars for something that same company and its investors say is not worth their money ? And we get a carbon tax…. you know for the planet. Why can Quebec shut down energy east (17billion) with one word but when we say …hey we want to make sure we are protecting our coast it’s … we might send in the army , we are going to cut off your gas ,and we are going to cut off federal transfers. Nice bullying neighbours…

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  5. The NEB is corrupt. Imagine not considering there are no herring still after the Exon Valdez spill in Alaska of the 1980’s in places. Deepwater Horizon.
    Ask the people about their fisheries in the Gulf Coast.
    Imagine not studying knocking out the bottom of the food chain in the Salish Sea, and then ignoring native treaties.
    Politicians are in collusion with a corporation from Texas to subvert the laws of Canada. This is the court challenge I’d like to see; the prosecution of the NEB for collusion with politicians to circumvent the laws of Canada.
    I love my taxes to go into that one.
    Alberta made their bed and now will pay the price..Too bad for the people when they read about Norway.
    Stinko!
    Corruption is something a social democracy can ill afford.

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  6. To hear a rational, inspired voice about resource extraction economics is a treat, and done with a passion by Norway’s Prime Minister shows there the politics still work.
    Thanks Norm.

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