The Norwegian Petroleum Fund: Savings for Future Generations?

Abstract

The Norwegian state-owned Petroleum Fund’s market value is more than one trillion US dollars, and the Norwegian state has become one of the world’s largest stockowners. The Fund was established in 1990 and in 2006 and renamed the ‘Government Pension Fund Global’, as savings for future generations. What kind of values form the basis for describing the Petroleum Fund in this way? This article shows that the idea that present generations should not empty the North Sea of oil and gas without saving something for future generations has been stable since the 1970s. However, over time, the understanding of how to save has changed. More specifically experts, bureaucrats and politicians have shifted their arguments during four phases: moderation in oil extraction (1974–1983); introduction of the national wealth model (1984–1990); a financial fund for the present and the future (1991–2006); and increased income and new protests (2007–2019). These four periods show that over time the idea of weak sustainability and value commensurability have increasingly come to dominate the argumentation in public documents about the Petroleum Fund.

The Norwegian sustainability paradox: leader abroad, laggard at home

“…To make possible this comprehensive approach to social policy, the massive revenues from the oil and gas sector is inevitably highly attractive. For the past 30 years this fortune has given Norwegian decision makers the fiscal room for manoeuvre politicians in other countries can only dream of (Takle, 2021). The idea of setting an end date for the phasing out of Norwegian petroleum extraction has, therefore, proven unattractive to all Norwegian governments to date and a serious, high-level discussion about the short-and long-term implications of different choices in this regard has until recently been largely missing in the Norwegian political discourse.…”

Generational Tensions and Solidarity Within Advanced Welfare States

“…The country's most important industry, petroleum activities, is set against one of the most important environmental challenges the world is facing: climate change. The Norwegian case also represents an interesting paradox -the country takes leadership in addressing the global climate emergency but is simultaneously one of the world's largest exporters of oil and natural gas (Takle, 2020;UN General Assembly, 2020, p. 8). The combined value of oil and gas represents almost half of the total value of national exports.…”

“…According to the Supreme Court, this is outside the scope of what it could rule on. This means it is up to the elected politicians in the Storting to decide what today's generations should do with petroleum production, and thereby ensure how future generations have their needs and capabilities covered (Takle, 2020).…”