Country briefing – U.S. Ambassador to Norway Barry White
House designed by niece of Mr. Nobel; public house, at time of purchase most expensive real
estate purchased by U.S. for this purpose; art in house part of Art in Embassy program –
borrowed, chosen by Mrs. White
Once a week, bring in country team (heads of agencies here) to report on what they’re doing –
this is similar to that meeting
Ambassador, deputy chief, heads of agencies
 Public affairs
 Political and economic relationships
 Attaché – two Navy, one Air Force, one Army
 Science, technology, innovation
 Commercial section – promote US interests, connect Norway business to US
Building relationships (in the Arctic)
Arctic – facilitate Arctic Council activities
 High North low level tension – not one of conflict, but of cooperation; disputes that do
exist are able to be addressed by existing laws/forums
 Science cooperation is a priority; climate, fisheries, energy research
 Search and rescue protocols established; now moving into disaster preparedness,
especially in response to resource development
 Oil spills – research harsh conditions, bacteria in water
 *How do you surge resources into remote area? Port facilities/hotel rooms, etc.
 Black carbon, ecosystem based management
Search and rescue
 Arctic Zephyr – hosted by European Command, which has inherited this issue
 Series of conferences that could turn into international exercise
 *Alaska National Guard participated – showed the rest of the world how to do it
(including how to cooperate with Russia, because they’ve already done it)
Effort to avoid militarization of Arctic Council – move beyond military stakeholders to training,
changing environment, fisheries, natural resource management, UNCLOS, search and rescue,
shipping efforts, oceanography (multi-disciplinary)
UNCLOS – US only major nation not a member of it; all defense agencies would like US to join;
difficult to explain to Norwegian counterparts reasons we’re not; losing out on benefits of
ratification
Public affairs – focused on connecting citizens and public groups to one another between
countries – use press, education, sports, cultural exchange
Norway is a country that is plugged in to media networks – typically read three newspapers a
day. Country is very wired (wireless) country as well.
*Need to get more Norwegians studying in US (which has always been high); and Americans
studying in Norway – this builds relationships
 Fullbright scholarships – two-thirds of which covered by Norwegian government
Sports exchange – international language – teams back and forth; grants to support this
(soccer/football among other things)
Culture – 100 year anniversary of this building, use that to share with
Politics/economics
 Norway has great economy both long-term and short-term
 Direct exposure to international crises very low
 Long-term savings based on resource wealth
 Major national oil company – Statoil – global offshore expertise
 Petroleum – quarter of GDP; half of exports; third of government revenue
 Oil and gas not in terminal phase, bright future
North Sea well-developed; Barents to some extent; middle area in between may have deposits –
major fishing area/environmentally sensitive – but makes sense to connect north and south via
pipeline/natural gas development
*Withdraw 4% of value of Government Pension Fund to support government – right long-term
fiscal policy
Red/Green coalition right now in government – labor/environment
Interesting politics – all seven parties would be considered left/progressive in the US
Minority politicians in parliament feel like they have less influence; change in coalition
government vs. coalition agreement on issues
Commercial
Exports key driver of US economic growth; though only 1% of US companies export; half to
only one country (Mexico/Canada)
$16 billion Norway trade – $11B in goods, $5B in services
Support national innovation strategy; plus doubling of exports goal
Ambassador active in promoting business – visited all 19 Norwegian counties in first year
*Host promotional events – including CEO roundtable discussions once a month to hear about
issues
Other
Tragedy of July 22 huge impact; also coming up on 10th anniversary of 9/11
 Maintain democracy and freedom but increased security discussion
Q&A
How to be sensitive to this tragedy? What should we know about? Discussion in Norway has
focused on this as a Norwegian issue to be addressed internally – security measures, response,
immigration and integration of diversity – “everyone is equal” law (Yanto?) rights,
responsibilities, general welfare and public support. Offering of condolences but people may not
want to talk about it right now.
Norwegians work to live; rather than living to work. People are productive but want to enjoy life.
Do US Ambassadors communicate regularly, including on issues like Law of the Sea? Yes, stay
in communication but not their role to actively advocate for this kind of issue.
Balance of trade between US and Norway? Current deficit in oil and gas; service more balanced
Education? 10% of adults can’t read “real well;” people complain but really it’s very good.
Support remote communities; free education; international students come here; joint research
between countries. Education is no barrier to growth here. Keeping boys in the system has been a
challenge. Male/female balance hard to achieve. Students go through middle and high school;
depending on your grades you can get into first choice school (mostly urban/Oslo). Not
streaming like Germany has. Private sector companies may not be providing enough
apprenticeship opportunities; though this should be promoted/supported by government.
Discussion around whether students are competitive enough.
Comment on state investment in energy development – does the government assist in exploration
and development? Absolutely – government ownership stake in companies. Vis a vis Iceland,
which is almost entirely driven by the private sector. The Norwegian government is on all sides
of the table – regulator, owner, service, safety and taxation – people move between these sectors.
There is no “leakage” between these. Norway invests heavily up front (78%) and costs
independent explorers very little; then get bought up by larger companies.
Large oil companies have good relationship with government and Statoil; don’t have anything
bad to say about that process. Government does well to assure their active participation. Phillips
drilled 38 wells, almost pulled out, government paid for two more and was successful.
Fundamentally different – government support – at all sides of the table but it’s a reasonable
table with reasonable discussions and decisions. Look at world differently.
Please expand on the Norwegian Sea tension between development and fishing/coastal
sensitivity. It’s a discussion that’s being ignored right now. With elections coming up, it has been
decided (by labor party, current majority) not to address it right now and will wait until after
elections to discuss/debate. People in the area are interested in development; people in
Oslo/urban interested in locking it up; fishing interests open to discussion/mutual benefit;
environmentalists committed to no development.
Government Pension Fund – infrastructure projects vs. individual residents – is that a discussion
being held right now? Name a misnomer – will be used in future to continue support of citizens.
Very conservative about how they spend their money. Don’t plow streets (often/well) as an
example. No one is advocating for paying it out to people; some might be talking about spending
it more on fixing things up. Right wing conservative party is actually interested in spending more
(they are the populist party).
Social welfare - free education (all the way through PhD), free healthcare (unsure of quality),
retirement, maternity leave (women get year at full pay; men 12 weeks paternity leave).
Speak to oil export vs. internal costs of energy. Unsure of policy, but make sure pricing is the
same all over country – everyone entitled to electricity (98% of electricity hydropower). It’s a
part of the social contract – the government/people support the right to live in remote
communities and maintains those benefits/rights.
Is there much of a rural/urban divide – central issues and how are they addressed? Money levels
the playing field – funding supports people’s ability to live in either. Most people have a country
cabin/hut; most have “rural” connection. Hospital consolidation is a big question though.
Transportation is excellent. Two air companies compete; very little private aviation.
People are happy/content. We have to change our mindsets to accommodate a different way of
looking at things. (Fun fact - kids up to 12 years old not allowed to keep track of score in football
games).
Competitiveness – are there one or two areas we should be paying special attention? US not
losing competitiveness. Norway worried about competitiveness post-oil. Some lessons in social
welfare, perhaps.
Shouldn’t begrudge people working together to solve problems. Promote this approach. This
includes the importance of a trip like this, where people come together from different
backgrounds and learn new approaches while building strong relationships with one another.
Ministry of Foreign Affairs – Norway’s representative to the Arctic Council
Oslo same latitude as Juneau; Hammerfest same as Barrow; Gulf stream warms it up
Arctic – huge area, almost 30 million square kilometers; 4 million people; huge natural
resources, most of which belong to Russia. When continental shelves are claimed, 90% of
resources will have been claimed by nations
Climate change results in a more accessible Arctic. 80% of Arctic is accessible this year.
Substantial consequences as this continues. Access to oil, gas and mineral resources; fishing –
though no current stocks exist; shipping; and research.
There will be no “race to resources.”
Arctic “ocean surrounded by land,” which means it falls under national jurisdictions. Even that
part not claimed will be under jurisdiction of International Seabed Authority, based in Kingston,
Jamaica.
No need for new treaties; though possibility of new rules and regulations.
Arctic Council a consensus body that specifically addresses arctic issues; members cover much
of the world and account for much of the global economy.
Traditionally, Council not a political decision-making body but has been a decision-shaping
organization. Produces recommendations for eight Arctic nations to act upon.
New direction to make more binding agreements in the future. Search and rescue; Secretariat in
Tromso. Process for allowing new observers established.
Arctic belongs first and foremost to Arctic states; fully capable of handling issues. At the same
time, other countries may/do have legitimate interests.
Russia has as much icebreaker capacity in the Arctic as the rest of the world combined (China is
building seven new icebreakers). Russia will have half continental shelf, more than half the
resources. They have also committed to following existing treaties and international law; which
means that competing claims are settled reasonably [through bi- (tri-, multi-) lateral
negotiations].
*Russia recently hosted tour of Northern Sea Route on Yamal (75,000 hp), the world’s largest
icebreaker. It was completely ice-free. Mapping was fantastic of route; navigation systems top of
the line (GPS and Glosnost). All vessels must have icebreaker assistance, oftentimes tied to back
of icebreaker (at 20 knots). Russia is strongly promoting use of this route (implications for
Bering Strait and Alaska coastal zones).
Q&A
Possibilities for taking oil/gas from Prudhoe Bay? Certainly possible, though US regulations may
not allow, may have to go through Russia waters. Would also need icebreaker, which Russia
would be happy to rent.
Fisheries? Research currently suggests it
Arctic Council may become decision-making – other examples in world? It will never take a role
held by national governments (would need a convention voted on by US Congress). The Council
facilitates agreement between coastal states on soft, non-binding issues.
How does Canada view Northwest Passage? Canada will use national and international
regulations to ensure very strict rules for its usage. Route much more complicated
Are there any benefits to a country’s Chairmanship of the Council? Not really benefits, only
obligations. Permanent Secretariat will alleviate some of this extra work.
Will there be any economic opportunities for small communities along shipping routes?
*Opportunities will be very limited, except for search and rescue infrastructure. Russia is
building eight search and rescue stations to place along route.
Kristian Jervell – Arctic Maritime Delimitation
Coastal State jurisdiction –
 start with base point, final point of land where it meets the sea; straight baselines mean
full jurisdiction
 territorial jurisdiction
 continental shelf (200 nautical miles, maybe 250, other considerations – must submit to)
– 1945 – Truman declared all resources on natural prolongation part of national territory
– living resources, free navigation international waters
 exclusive economic zone (200 nautical miles) – distinguish between sovereignty and
sovereign rights (extended into zone)
In the 1960’s Norway settled negotiations with Denmark, UK over territory lines – equidistant
Began negotiations with Russia on continental shelf – 40 years of negotiations
 Norwegian claim – median line
 Russian claim – sector line
Continental shelf made things more complicated legally
Development moratorium in disputed areas since 1980s
Final agreement reached in 2010
 Agreement has provisions regarding fisheries and hydrocarbon resources
 Continuation of cooperation
 Possible hydrocarbon deposits – utilized as a unit
Ole Anders Lindseth – Director General - Ministry of Petroleum and Energy
Petroleum activity not mentioned in press except in pejorative context; environmentally
contentious and urban sensitivity; not recognized as key factor of Norway economy/success.
Export value of goods and services of petroleum support sector is second to actual development
of those resources.
If you’re going to develop, make sure you can stand the quality test of international measures.
Norway is a petroleum nation – only half developed. Politicians have done a good job of not
using this resource immediately, and limiting themselves.
Early doubts about expanding exploration in Barents Sea. It is possible to have sustainable
petroleum development. Continued belief in this has meant large recent find. Norway has
reserved some areas as environmentally sensitive areas.
Stable and long-term production expected and planned for. Third largest exporter of oil; second
largest exporter of gas. Contributing heavily to security of supply.
Incredible network of seabed gas pipelines. As long as from Oslo to Anchorage.
*Good governance – some countries where contact between industry and government is
forbidder, others where it’s more mingled. In Norway, commercial activities respond to policy,
legislation and administration. But Norwegian politicians understand what make commercial
activities tick.
The global need for energy continues to rise – fossil fuels remain dominant in the energy mix. A
renewable world is not just a few easy political decisions away.
Need to have more than one strategy:
 Produce and consume fossil fuels in more environmentally friendly way
o One barrel of oil developed in Norway has half as much pollution as the world
average
 Too little emphasis has been placed on energy conservation and efficiency (should
include energy development as corresponding community development)
 Increase renewable energy development – must stand test of life-cycle analysis
The Arctic presents an important part of the future. Politically stable. Increasingly accessible.
Coastal states agree that the area governed by Law of the Sea. No need for new treaties.
Absolutely no reason to lock it up as common heritage/protected environment site.
30% of world’s undiscovered natural gas and 13% of its oil are in the Arctic – to support Arctic
peoples.
Not “can we go ahead with this?” Rather, on what terms?
Aim for Norway is sustainable development – don’t confuse it for conservation or preservation.
Development requires economic activities in order to address social dimension, while also taking
care of environment. Implies taking risk – must also ask about probability and possible damage.
You need a good cost/benefit analysis – that examines both, rather than focusing on one.
How do you fight emotionally charged conversations? With facts.
We know that oil and gas is in the ground now, and that there is a commercial demand, so
develop, but don’t spend the money on this generation.
States should make sure they get the value from the resource, rather than trying to get it all right
at once. Many places don’t have the capacity/knowledge to do it all.
Industry will always think that taxes are too high; made a strong push years ago to reduce and
Norway said no. Exploration covered by big incentives. Did not result in decreased production.
28% company tax, 50% tax on production. Deductions available.
Introduced royalty system before CDFI. Dropped royalty in favor of system that focuses on raw
income. CDFI is investment fund – renders larger revenue to the government.
Didn’t want Statoil to be too big; cut in half. Government investment limits too big a company.
Rebuilding Norway after war done with state funding, state owned companies. Same approach to
Statoil at that time.
*Look at gross vs. net, does royalty result in investment?
*Explore option of government investment, as silent partner.
No property taxes on oil and gas facilities.
Not everything owned by government, state invests 46% in pipeline facilities. 7% return.
Transportation not supposed to be a high profit enterprise – public utility. Many oil companies
selling to equity investors as good long term rate of return.
100% of development costs are deductible.
Do you compare tax system to other states? Don’t spend time looking at other countries to
compare – if it’s working here then no need.
Would companies change their global budgets based on Alaska’s tax situation? Or are there other
factors? Don’t overdo the political risk, but still it has to be profitable. If you have investment,
then don’t change things. If you don’t…
Norway doesn’t have auctions, or signature bonuses. No advantage to being Norwegian – each
deal is negotiated. Can’t discriminate based on nationality – illegal under European law. You
want the best. They’re there to perform resource management – How good are you? How
extensive is your knowledge? How competitive are you in this area?
Six years to fulfill work quote – drill or drop deal (two or three years). If you don’t perform,
licenses are automatically relinquished. Area “smashing” is not allowed, not in our interest.
What are the criteria/priorities in license given? Basics - qualifications, skills, knowledge, an
actual oil company. How do you compare/compete? Very individualized.
Not really any contingency plans – cumulative effect of many Plan As – find new fields and
increase recovery rate (58%).
Import workers – encourage to bring families; balance to find in economy/community of scale.
Support education, university attendance – work to get students to go back to
Only 3 of 440 communities are not affected by the oil sector.
Norway has done its share with renewables – 95% hydro. Focus on efficiency.