Green & Black: An analysis of environmental policy in two petrostates.


Credit: norskpetroelum.no

Essay written by Joseph Sullivan, submitted to the University of Greenwich (March, 2022)


Policymakers face an array of challenges and paradoxes that make the formation of robust, popular, and enforceable environmental policies a difficult political endeavour. Environmental policy is a broad term, which Caney (2019, pp. 284-285) notes could cover nuclear energy, resource use and climate change, to loss of biodiversity and pollution issues. Given this breadth of issues, the author seeks to address the topic through a specific lens, examining how the use of oil and gas resources have shaped approaches to environmental policy in two petroleum-producing nations, Norway and Nigeria.


Both countries have distinctly different histories, including in the development of these vital industries. For instance, should one consider Norway’s status as one of the freest democracies in the world? (Freedom House, 2021). Alternatively, we might consider Norway and Nigeria’s position in performance indices, such as Yale University’s Environmental Performance Index (2020), where each country ranked 9th and 151st respectively.


Since joining in 1971, what impact has Nigeria’s membership of OPEC had on environmental policy? (Nigerian National Petroleum Corporation, 2021). Indeed, one might consider each country’s history related to the legacy of colonialism, and has this shaped their contemporary environmental politics? By considering these questions the author seeks to present a comparative analysis communicating the differences in the approaches to the development of environmental policy in Oslo and Abuja.


A brief history of Norway’s oil & gas journey


Norway is one of the wealthiest countries on earth, and topped the UN’s Human Development Index for 2020 (United Nations, 2020). This prosperity can be largely attributed to the development of a major oil and gas industry, though this was not always the case.


During the 1950s, Norway’s fossil fuel prospects were gloomy, with the Geological Survey of Norway informing the Ministry of Foreign Affairs in 1958 that hopes of discovering oil on its continental shelf could be dismissed (Norsk Petroleum, 2021). However, discoveries in the Netherlands generated renewed optimism (Norsk Petroleum, 2021), and by the early 1960’s it was established that vast reserves of hydrocarbons might be found beneath the waves of the North Sea (Ryggvik, 2015). In 1969, the discovery of oil and gas reserves in the Ekofisk field set the course for decades of exploration and subsequent discoveries (Government.no, 2021).


Today, the majority of oil and gas extracted from the Norwegian shelf is exported (Norsk Petroleum, 2021), and in 2020 alone these commodities amounted to over 40% of Norway’s total export value (Handeland and Langhalle, 2021). Norway supplies the EU with as much as 25% of its gas (Grytten and Hunnes, 2021), and the Norwegian Ministry of Petroleum and Energy (2022) cites the country as the world’s third-largest exporter of natural gas, trailing only Russia and Qatar.


Norway’s paradox


Norway faces an uncomfortable paradox between matters of environment and economy. It differs from many petroleum-producing states in receiving international acclaim for an ambitious approach to environmental and climate change policies (Handeland and Langhalle, 2021), demonstrated by its progress in the renewables space where domestic electricity production is almost entirely based on sources such as hydropower (Statistics Norway, 2022).


Despite such green credentials, the exploitation of Norway’s tremendous oil and gas reserves have transformed Norwegian society. This is demonstrated through its “oil fund” or Government Pension Fund – Global (Lahn, 2019), established in 1990 to protect Norway’s economy from market volatility, and a long-term savings plan for current and future generations to benefit from the country’s oil wealth (Norges Bank, 2019). Today, the fund is overseen by the Norwegian Central Bank, with an estimated value exceeding NOK 10.6 trillion (USD1.15 trillion), making it the largest sovereign wealth fund in the world (Bhopal, 2021). Further illustrating the importance of the oil and gas industry is the active role played by the Norwegian state, which maintains a 67% share in Equinor, (formerly Statoil), administered by the Ministry of Trade, Industry and Fisheries (Equinor, 2022).


Environmental policy in the Norwegian Petrostate


Following the Ekofisk discovery, the Norwegian government was proactive in establishing a set of principles that would underpin the new oil and gas industry, with a 1971 white paper establishing what became known as the ‘10 Oil Commandments’ (Bhopal, 2021). From this early stage, the challenge of balancing economic prosperity with environmental safety was acknowledged, with Commandment 4 stipulating that the “development of an oil industry must take necessary account of existing industrial activities and the protection of nature and the environment” (Government.no, 2011). However, at this early stage, policymakers' primary concerns related to the potential for environmental damage whilst transporting oil from offshore installations to land (Hunnes and Grytten, 2021).


In the years following, Norway continued to demonstrate an environmental consciousness, becoming the first country to establish a governmental Ministry of Environment in 1972 (Hunnes and Grytten, 2021). By the 1980s, climate change was introduced to Norway’s political discourse, amidst a decade of increased environmental awareness described as the “greening” of Norwegian politics (Lahn, 2019). Norway championed policies of sustainable development after prime minister Gro Harlem Brundtland chaired the World Commission on Environment and Development in 1987 (Lafferty et al., 2007), and by 1989, environmental issues were a political priority ahead of the country’s general election (Andresen and Butenschøn, 2001).


Amid public enthusiasm for environmental issues, Norway became the first country to announce a CO₂ stabilisation target in 1989 (Handeland and Langhalle, 2021). By the early ’90s, the Storting had introduced a carbon tax on petroleum activities on its continental shelf (Andresen and Butenschøn, 2001) via ‘Act 21 December 1990 no 72’ (Norwegian Petroleum Directorate, 2021). However, the ’90s heralded changes in Norway’s environmental outlook. Andresen and Butenschøn (2021) note that the domestic approach adopted in 1989 faced scrutiny from various influential actors, including the oil and gas industry and policymakers. This change in mood was demonstrated following the introduction of the carbon tax, which faced significant protest due to concerns over the potential economic costs (Boasson and Lahn, 2016).


Since the mid-’90s, Norwegian governments have favoured flexible, international solutions through commitments including emissions trading systems and global cost-efficiency policies (Bang and Lahn, 2019). This approach has been prominent since the signing of the Kyoto Protocol in 1997, which enabled Norway to meet emissions targets whilst simultaneously developing its oil and gas production, with the treaty placing the burden of responsibility for fossil fuel consumption on the demand side, as opposed to the producers (Bang & Lahn, 2019).


The country's petroleum policy enjoys support from the largest parties on either side of the left-right cleavage (Handeland and Lufthalle, 2021), and their approach to climate change policy has persisted with successive governments since the 1990s. However, Lahn (2019) identifies differences between the larger Labour, Conservative and Progress parties, traditionally supportive of oil and gas development and advocates of a global approach to climate policy. A smaller group of parties, including the Socialist Left, Liberal, Christian Democrats and Centre parties favour a tougher domestic approach to reducing emissions and remain critical of further exploration, especially in environmentally sensitive areas and Arctic territories (Lahn, 2019).


Norway continues to demonstrate an international approach to climate mitigation. Since the 2007 COP 13 meeting in Bali, it has been a significant contributor to UN climate change initiatives, and today Norway remains the largest donor to the UN’s framework to reduce emissions from deforestation and forest degradation in developing countries (REDD+) (Boasson and Lahn, 2017). Furthermore, Norway’s commitment to the Paris Climate Agreement in 2015, led to its Climate Change Act coming into force in 2018, which seeks to promote climate targets as part of a “transformation to a low-emission society by 2050” (Government.no, 2017). This includes ambitious targets for reductions in greenhouse gas emissions, with Section 4 calling for a 90-95% reduction by 2050 vs 1990 levels (Lovdata.no, 2021).


Nigeria’s fossil fuel journey


Norway’s economic fortunes were transformed by the discovery of oil during the 20th century, but it was by no means alone. In Nigeria, oil exploration commenced in 1903 during Britain’s colonial rule of the country (Steyn, 2009), but it took over half a century of exploration before vast quantities of crude oil were discovered in the Oloibiri district of the Niger Delta region in 1956 (Omofonmwan & Odoa, 2009). Nigeria established itself as a commercial oil producer in 1958 (Nigerian National Petroleum Corporation, 2021) and joined the Organisation of Petroleum Exporting Countries (OPEC) in 1971. Later, it established the state-owned Nigerian National Petroleum Corporation in 1977 (NNPC, 2022).


Today, the federal government in Abuja, via the NNPC maintains majority stakes in joint ventures with foreign oil companies (Egbejule, 2021). Nigeria’s resources are vast, with a maximum crude oil production capacity of 2.5 million barrels per day, making it Africa’s largest oil producer (NNPC, 2021). In addition, Nigeria holds Africa’s largest natural gas reserves and is the world’s 5th largest producer of liquified natural gas (EIA, 2020). The Nigerian economy is thus heavily dependent on these reserves, which account for between 85-90% of the nation’s revenues (Elenwo and Akankali, 2014, Nwaichi and Oshuoha, 2021).


Black gold: A blessing or curse?


In Nigeria, oil and gas operations largely take place within the Niger Delta (Elenwo and Akankali, 2014), described as the breadbasket of Nigeria and home to some 31 million people (Nwaichi and Osuoha, 2021). An ethnically diverse region where livelihoods have traditionally been based on agriculture and fishing (Effiong, 2010), the area is also considered one of the ten most important wetland and marine ecosystems in the world, consisting of distinct ecological zones including mangroves, rainforests, and freshwater habitats (Kadafa, 2012).


However, hydrocarbon operations have seen this ecologically sensitive region blighted by major environmental issues. This includes appallingly numerous occurrences of oil spills, which the Niger Delta Environmental Survey in 1997 suggested could be attributed to the poor management, a lack of regular inspections and the ageing network of oil installations and pipelines (Emoyan et al., 2008). Dire estimates suggest between 9-13 million tonnes of crude oil were spilt into over 50 years, approximately 50x the volume spilt during the Exxon Valdez disaster (Kadafa, 2012). The impact has been catastrophic, with the resultant environmental degradation decimating the agricultural and fisheries-based livelihoods of local communities, casting many further into abject poverty (Nwaichi and Oshuoha, 2021).


Compounding these problems, gas flaring, which is the burning of associated gasses produced during oil extraction (World Bank, 2022) poses a significant challenge. Most of Nigeria’s natural gas reserves are a by-product of crude oil (Elenwo and Akankali, 2014), including significant quantities of methane (Ejiogu, 2013). Whilst Ejiogu (2013) notes that oil producers can capture and process these gasses, many of the Delta’s oilfields lack the required infrastructure to do so (Elenwo and Akankali, 2014). Whilst flaring is employed as a safe and effective method of disposing of unwanted gases (Christiansen and Haugland, 2001, cited in Ejiogu, 2013), it is difficult to disagree with the World Bank’s (2022) assessment of the practice as a waste of a valuable natural resource.


Whilst the economic cost of flaring is significant, the environmental impact across the Delta is even more troubling. For instance, multiple studies have established a correlation between gas flaring and increases in acid rainfall, as well as concentrations of heavy metals in surface and groundwater (Ejiogu, 2013). In addition, flaring vast quantities of gas have resulted in endemic thermal pollution across the Niger Delta (Ejiogu, 2013) with devastating effects on local flora and fauna (Emoyan et al., 2008).


Nigeria’s toothless environmental policies?


The author's research revealed an array of legislation, policy instruments and enforcement agencies introduced at various points to address environmental issues. Indeed, environmental protections are enshrined in Nigeria’s constitution, adopted in 1999, section 20 of which stipulates “the state shall protect and improve the environment and safeguard the water, air and land, forest and wildlife of Nigeria” (Ejiogu, 2013).


Sustainable development and the management of both renewable and non-renewable resources are described as the fundamental principles of Nigeria’s environmental policy (Elenwo & Akankali, 2014), however despite the multitude of policy instruments introduced, many express doubts over their effectiveness, criticising the Nigerian federal government for its apparent reluctance to implement policies in a meaningful way (Ugboma, 2015, cited in Nwaichi & Oshuoha, 2021).


A good example of this problem can be found in the legislation introduced via the Associated Gas Re-Injection Act 1979, which stipulated oil and gas companies must submit plans to utilize excess associated gasses by way of re-injection or commercial uses by the 1st of June 1980 (Effiong, 2010; Ejiogu, 2013). Perhaps more importantly, the act formally outlawed flaring as of January 1st, 1984, without the written consent of the Minister of Petroleum Resources in certain specific circumstances (Effiong, 2010).


This legislation ultimately proved hollow, undermined by amendments allowing the practice to continue and multiple target dates to end flaring in Nigeria to be missed (Effiong, 2010). This is a stark contrast with Norway’s success in eliminating the practice, where a ban on the routine flaring of associated gas has been in place since 1971 through the Petroleum Activities Act (Mohammed, 2016). This stringent legislation permits only occasional flaring for safety reasons, and significantly reduces wastage, with most of Norway’s gas processed and exported commercially or reinjected (Kamel, 2016).


Local communities have persistently raised concerns over the environmental degradation caused by drilling and flaring (Nwuke, 2021). Decades of neglect and impoverishment are increasingly met with frustration and anger (Ejiogu, 2013) as local groups campaign for a more equal distribution of Nigeria’s oil wealth and improved environmental protections. Sadly, a shift from peaceful protest to violence emerged following the execution of prominent environmentalist and President of the Movement of the Survival of Ogoni People, Ken Saro-wiwa, along with eight fellow activists by the Nigerian federal government in 1995 (Ebeku, 2008). Ejiogu (2013) notes the increasing involvement of criminal gangs in the region resorting to tactics of kidnapping foreign nationals, sabotage, oil theft and violent attacks.


The formation of environmental policy is complicated, and governments must strive to strike a balance between economic growth, environmental health and social welfare. This balance might be encapsulated by the UN’s 1987 Our Common Future Report’s (Brundtland Report) definition of sustainable development, as the desire to “meet the needs of the present without compromising the ability of future generations to meet their own needs”.

Despite Norway’s role as a petroleum producer, it appears progressive in its approach to environmental policy and employs stringent, effective regulations domestically, as demonstrated by strict legislation around harmful practices such as gas flaring. Indeed, Norway is largely in alignment with the European Union, with many aspects of environmental legislation applying through the terms of the European Economic Area agreement (European External Action Service, 2021). Its pragmatic approach towards managing its oil and gas resources have benefited Norwegian society tremendously, with marketing campaigns keen to remind Norwegians that “It is not just oil and gas being extracted from the bottom of the sea: It is health care, education, pensions, childcare, research funding and jobs” (Lahn, 2019).


However, Norway will continue to face tough questions over its green credentials going forward. In 2021, the incoming coalition government dismissed speculation over a potential scaling down of its petroleum industry, committing to further exploration (Klesty, 2021). This commitment has unsurprisingly drawn ire from climate activists and NGOs, who have attempted to take the Norwegian state to the European Court of Human Rights over planned exploration and drilling in the Arctic (Henley, 2021).


In Nigeria, the contrast is stark. Serious environmental challenges persist related to the country's oil and gas industry, despite attempts to address these problems via multiple rounds of policy and legislation. Furthermore, unlike the widespread benefits generated by Norway’s approach to oil wealth management, World Bank (2021) statistics illustrate how unevenly spread Nigeria’s oil and gas wealth remains, with 40% of Nigerians (approximately 83 million people) living below the poverty line in 2018. This grim figure is expected to rise by a further 12 million people between 2019-2023 (World Bank, 2021).


However, signs of progress are emerging, including a steady decline in the percentage of gas flared in Nigeria between 2002 and 2018 (PricewaterhouseCoopers Ltd, 2019). Efforts to reform Nigeria’s petroleum industry continues, with new legislation introduced through President Buhari’s Petroleum Industry Act in 2021 in a bid to address the concerns of local communities (Nwuke, 2021). Only time will tell whether the optimism is warranted, or whether this too will lack substance.


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