Norwegian workers along the coast have skipped their holidays this summer to satisfy the European thirst for gas. The “red-hot” activity has in turn raised questions about whether there is still enough labor for the new offshore wind venture outside Bergen. Now people in Europe are asking for additional handshakes. The background is the galloping gas price, which passed 290 euros per megawatt hour on Monday. This is a new record and six times higher than a year ago. At the same time, the drought and empty rivers mean that the Germans are struggling to transport coal to their coal-fired power plants. In an appeal to “democratic, friendly and reliable Norway”, the British newspaper Financial Times writes that Norwegian authorities now have strategic as well as moral reasons to come to Europe’s aid. In the first instance by introducing a price ceiling on gas. From a legal point of view, a maximum price between Norwegian and European governing powers would involve an interference in the market, to which there is limited access through the EEA. The European Commission has nevertheless been commissioned to examine the possibilities for looking at measures to curb energy prices, “including looking at the possibilities for intermediate price ceilings”. And earlier this summer, Brussels accepted for the first time that member states intervened directly in the energy market. It happened when Spain and Portugal were allowed to subsidize gas. State Secretary Andreas Bjelland Eriksen (Ap) in the Ministry of Oil and Energy, said in Politisk Kvarter on Wednesday that the Norwegian gas revenues in 2022 could be 1,500 billion. – The war income makes many Norwegians uncomfortable On Friday it was known that the Norwegian state burned NOK 634 billion in the second quarter. It is more than something. An article in Time claims that the “war income” makes many Norwegians “uncomfortable”. A round of calls to the Storting shows that support for the maximum price is greatest with MDG and Raudt (see below). – It is not Norway’s responsibility to subsidize gas Paal Frisvold, head of MDG’s international committee – Norway must enter into dialogue and cooperation with the EU’s governing powers in order to ensure that the price ceiling benefits European households. If we set a unilateral ceiling, it will be eaten up by importers and distributors. The EU countries have already set up a “Gas coordination group”, but it will take time to work out the legal details of how this can be done. But if the government expresses its interest, we have a greater chance of achieving an arrangement that we ourselves agree to. Marius Arion Nilsen, parliamentary representative for Frp – It is not Norway’s responsibility to subsidize gas to land. Especially not to countries that have shut down and shut down well-functioning power generation in their own countries. That Putin uses energy power as a means of pressure should not surprise anyone. At the same time, it can be imagined that there are some tools that allow companies on the shelf to offer fixed price agreements to a limited extent. In any case, it must be up to the company itself. Ove Trellevik, spokesperson for petroleum policy in Høgre – If the price is to go down, it will affect the work and the incentive to work to obtain more alternative energy. It will also have a negative effect on the amount of energy because you will not have the same incentive to save gas. In addition, there will be a demarcation problem. Who will get cheaper gas? Should there be different prices for Germany and Ukraine? When it comes to morals, it is possible that we could stand in the way of an international aid fund for rebuilding Ukraine. They are the ones who primarily need help now. Lars Haltbrekken, parliamentary representative for SV – When Europe is experiencing the driest summer in 500 years and experiencing the climate crisis up close, we cannot make fossil energy cheaper. But the large revenues oblige Norway to stand up for Europe and Ukraine, and for other and poorer parts of the world that feel the dramatic consequences of increased fuel and food prices. Ola Elvestuen, parliamentary representative for the Liberal Party – Gas prices are high for a reason, and are helping to accelerate the transition away from the use of Russian gas in Europe. We must contribute with as high a gas export as possible, while at the same time we continue the energy cooperation with exchange cables for electricity to Europe. – This is an acutely dramatic situation and I don’t think we in Norway are close to understanding that the income is our neighbours’ expenditure, says Paal J. Frisvold (MDG). In a written question to Oil and Energy Minister Terje Aasland (Ap), Sofie Marhaug (R) asks whether the minister will consider a maximum price to “show solidarity with Europe”. Corresponding appeals come from the Christian newspaper Vårt Land and from Cecilie Hellestveit at the Folkerettsinstituttet. – To be a war profiteer or not, that is the question. I support a price cap on gas to Europe, she wrote on Facebook. The Rhine and other empty rivers mean that Germany struggles to transport coal to its coal-fired power plants. Photo: INA FASSBENDER / AFP The ministry and Equinor have not considered a price cap Oil and Energy Minister Terje Aasland (Ap) tells news that the ministry has not considered introducing a price cap on gas as of today (full answer below). Oil and Energy Minister Terje Aasland (Ap) answers – Today’s high gas prices have arisen due to scarcity and bottlenecks in the infrastructure in the countries to which we export. The price mechanism is an effective way of balancing supply and demand: It gives producers an interest in delivering more to the area with the highest prices; he stimulates the removal of bottlenecks in the gas transport system globally, regionally and nationally; and he helped limit consumption. A price cap on the gas supplied by producers on the Norwegian continental shelf is therefore not something the ministry has considered. Although much needs to be done for the EU to intervene directly in the energy market, Equinor and others who sell gas are free to enter into long-term agreements at prices they define themselves. Equinor’s spokesperson, Magnus Frantzen Eidsvold, tells news that they are still reasoning as they did in July. He then stated that their priority was “well-functioning markets and free price formation”. Equinor answers Magnus Frantzen Eidsvold, Equinor – Equinor is concerned with well-functioning markets and works actively to secure gas deliveries to Europe. As a responsible supplier, we are also concerned that governing authorities have the necessary information about our operations. The way the supply situation looks, LNG will be the price-setter in Europe this winter, and we observe that the Commission and the member states have a strong focus on increasing availability. Equinor is concerned with well-functioning markets and free price formation. Market prices are an expression of the relationship between supply and demand, and thus form part of the basis for measures on both the demand and supply side in the short, medium and long term. A price ceiling can increase the imbalances in the energy market Line Voldstad, partner in DLA Piper Norway – A maximum price for sale of an energy source from one country (Norway) will not solve the problem anyway. The governing authorities are generally skeptical of price regulation, precisely because it is rarely a competitively good solution, neither in the short nor the long term. That makes it less interesting to solve the fundamental problem: Lack of power. Ellen Bakken, chief economist at Offshore Noreg – There are now major imbalances in the energy markets, and one of the main reasons for that is Putin’s war in Ukraine. The prices become extreme because the demand for energy in Europe is greater than the supply. A price cap could reinforce the imbalances in the energy markets in the future as well. Gas is produced on the NCS close to maximum capacity, and a price ceiling will not solve the main challenge, namely securing more energy for Europe. If we are to solve the main challenge, arrangements must be made so that we can produce more energy, then, among other things, access to attractive land must be ensured, both for oil, gas and offshore wind. Figures from Gassco, which transports gas from the continental shelf to Europe, show that Norway exported gas power equivalent to 1,246 TWh in 2021. Graphic: Norsk Petroleum – Imbalances in the energy markets may become larger During Arendal Week, Equinor CEO Anders Opedal stated that he is critical of “solutions that coming into place on Twitter, so to speak”. It was not immediately clear whether these “Twitter solutions” included the maximum price for gas. Ellen Bakken, chief economist at Offshore Norway, tells news that a price cap “will not solve the main challenge, namely securing more energy for Europe”. – There are now major imbalances in the energy markets, and one of the main reasons for this is Putin’s war in Ukraine. The prices become extreme because the demand for energy in Europe is greater than the supply. A price cap can weaken the incentive to invest, something that can reinforce the imbalances in the energy markets.
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Empty rivers create pressure on more “solidarity gas prices” – news Vestland
