I wrote this speech to Danish Minister for Climate, Energy and Building, Martin Lidegaard to be given at Oil Gas Summit, Oil and Gas Denmark, Copenhagen, September 10, 2013. The speech was published in Vital Speeches International december 2013.
Oil and Gas on the Green Scale
Almost every day I am asked by the media or ordinary citizens: How can Denmark, one of the most ambitious green front runners of the world, at the same time pursue to be an active and ambitious explorer and producer of oil and gas? And let me also start my keynote today by addressing that crucial question.
In Denmark we don’t see the two ambitions as contradicting each other. We see them as preconditions to each other. In Denmark we have broad political backing for using the Danish resources of oil and gas to the largest possible extent. Denmark is an oil and gas producing country and we will use that to benefit the Danish society and the green transition we have begun. Oil and gas are—and will remain for some time—an important part of our energy system. That—and with the plan to launch a research centre for increased production and a new strategy for the sector—the Oil and Gas sector seems to be heading for a promising future.
I am not sorry to say, that the government’s vision of a society based entirely on renewable energy is here to stay. Yet we respect the fact that as long as the demand for oil and gas exists, it will be met by a supply.
In a global world it doesn’t make sense if Denmark was the only country trying to stop the supply of fossil fuels.
- The supply would simply come from elsewhere and the profit would go into other pockets
- The production would likely be less optimal and the environment would suffer more as a result
- The energy used would be less effective and more would be wasted
It is important to know these reasons as they will determine your future working conditions. Denmark is in a green transition as we speak. Europe is moving towards a green economy. The world is increasingly moving away from fossil fuels.
The fossil fuels with the worst environmental impact, the largest emissions and the less effective use of energy, will be hit the hardest. It is our shared task to make that argument ring true. There is no way around the fact that you will be measured on a green scale. That is why it is in the interest of us all, that you work with increasing energy efficiency, that you follow the strictest codes of environmental standards, that you seize the offshore synergy of oil and gas—and wind, that you aim for—simply— NOT to flare, that the safety and environmental performance is second to none.
Many of you are most likely curious about the status of the concrete near future. Let me give you a quick run down of what is to come.The government has conducted a service check on the frameworks for oil and gas extraction. We need to look at harmonizing the tax code for the same rules to apply for all. With a harmonized tax code the service check concluded that the framework conditions for extracting resources from the North Sea are fair. Right now the political negotiations are proceeding with regard to harmonizing the tax code. I cannot say much more about it at this time.
We are also preparing the 7th tender for new licenses for exploration and production of oil and gas in the western part of the North Sea. Some things might change and obstacles might still emerge. Nevertheless, this is the process I hope for.
- In mid-August we announced a strategic environmental assessment of the plan.
- When the environmental assessment process is finalized I will send a report to Parliament.
- That will enable us to open the 7th tender for new licenses at the end of this year, with a deadline in the first half of 2014.
- In turn that will enable us to issue new licenses during 2014.
When we have closed the political negotiations about the tax issue, we will have a good foundation to make a strategy for oil and gas. It is still too early to say anything about the content of the strategy, but I can elaborate on my thoughts at the moment. Infrastructure; we need to look at the old facilities with increasing maintenance in a time of decreasing production. We have to look at energy efficiency. We need to make sure that we focus on technology development to increase the recovery factor of oil and gas. We have to look at the talent pool and how we affect it. It is along these lines that I think the strategy might move. At least, those are my thoughts.
Denmark is in the middle of a green transition, but in the short to medium term, we will still need and support oil and gas. I hope we can count on you. Both when it comes to securing an ambitious level of investments in our field; and when it comes to ensuring the right investments. In new and promising technologies to improve the production. In energy efficiency and good environmental standards. In a future where the two most prominent goals for Danish energy policy can go hand in hand in the decades to come.