March 14, 2008 / 3:21 PM / 9 years ago

Norway frets over StatoilHydro environmental impact

3 Min Read

<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.Dominic Favre</p>

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.

Canada

But Solheim said the Canadian authorities' plan to force investors to introduce carbon capture technology for their projects was a step in the right direction.

"The main starting point must always that the same environmental standards should be applied abroad as are here. If we develop technologies for high environmental efficiency in the North Sea it should be applied in ... Africa," he said.

Solheim said he was not pleased by StatoilHydro's handling of its environmental problems at Snoehvit, where emissions of carbon dioxide and other gases have surged well beyond planned levels and are expected to stay high at least until 2009, when the group said it would overcome start-up problems.

"They are not happy with (Snoehvit) themselves. They are very unhappy with what has happened and they are just now doing whatever is possible to solve the problem," he said.

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