Norway frets over StatoilHydro environmental impact

Fri Mar 14, 2008 11:20am EDT
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By Wojciech Moskwa and Alister Doyle

OSLO (Reuters) - Norway's Environment Minister Erik Solheim expressed concern on Friday about the environmental impact of investments by oil group StatoilHydro in countries including Canada and the United States.

Solheim told Reuters that StatoilHydro, which is 62.5 percent state owned, should follow the same environmental standards abroad as it does on Norwegian oil and gas fields -- a move which would boost costs for the $97 billion energy group.

But he made clear the government was "not in a position" to demand specific actions from StatoilHydro when it operated abroad.

StatoilHydro has stirred controversy in environmentally-aware Norway by investing in energy-intensive Canadian oil sands and a pristine area of the Chukchi Sea off Alaska in past months.

Its flagship gas project in the Norwegian far north, the Snoehvit liquefied natural gas (LNG) complex, is also producing much higher emissions of greenhouse gases than originally planned.

"Obviously all these investments are a concern," Solheim said in an interview. "At the moment we are not in a position to set any specific demands, (rather) we advise to apply the high standards available."

Solheim, from the Socialist Left party which is a junior partner in Norway's Labour-led cabinet, said he has expressed "a lot of reluctance" towards StatoilHydro's Canadian oil sands venture.

His party had also opposed the construction of two gas-fired power plants needed for StatoilHydro and other players on the Norwegian shelf to process their gas and oil.   Continued...

<p>Norway's then Minister of International Development Erik Solheim smiles during a news conference in Castle of Bossey in Bogis-Bossy near Geneva February 23, 2006. REUTERS/Dominic Favre</p>