Balancing Green Goals and Economic Growth requires pragmatism not net-zero dogma

Examining Norway and the UK – who both saw developments in their energy transition journeys through January 2025 – provides valuable insights into the complexities of balancing green ambitions, economic realities, and the ongoing role of oil and gas.

Norway

Norway presents a paradox: a leader in green initiatives like the adoption of electric vehicles and renewables, yet also a major oil and gas producer. The recent award of 53 new oil and gas production licenses (APA 2024) offshore indicated a recognition that oil and gas will remain crucial for both energy security and revenue generation, and to power its green agenda. Norway is taking a long-term view, leveraging its hydrocarbon resources to strengthen its economy while simultaneously driving innovation in renewables and clean energy systems. Recognising that the energy transition is a multi-decade endeavour, where the energy mix will trend away from hydrocarbons, but only as new energy technologies and systems take their place to meet demand.

The Norwegian government’s recent hostility to exporting electricity to the EU via undersea interconnectors underscores the complex challenges of the energy transition. As the EU strives for an integrated energy market, in particular Germany’s growing reliance on renewables creates price spikes in both Germany and Norway when wind power generation is low, and Germany needs to import electricity. This situation exposes the tension between national energy security and affordability and broader European decarbonisation objectives.

The UK

The UK’s pursuit of decarbonisation and economic growth is hampered by conflicting political priorities and a lack of a cohesive energy policy. While the UK, like Norway, have emerged as leaders in renewables (offshore wind in the case of the UK, hydropower in Norway), their approaches to managing their oil and gas resources differ significantly.

Norway continues to invest in its domestic oil and gas sector for the long-term, while the UK has pursued policies that discourage such investment (principally the windfall Energy Profits Levy that has continued long after prices spiked in 2022). The result is the near to irreversible dismantling of the oil and gas industry and loss of a worldclass supply chain crucial for a successful energy transition. This short-sighted approach increases reliance on costlier, higher emission imported gas (via pipeline including from Norway, and LNG from Qatar and others), effectively locking in the offshoring of emissions while hindering domestic economic growth through increased energy costs.

The recent court ruling against the Rosebank and Jackdaw oil and gas fields on the UKCS exemplifies the challenges facing the UK. While the ruling mandates a reassessment of the projects’ downstream emissions, the political pressure to prioritise energy security and economic growth remains intense. The UK’s ambitious net-zero targets are increasingly at odds with the realities of energy affordability and security, and the need for economic growth to achieve a successful energy transition. A coherent and consistent energy policy requires a pragmatic approach: utilising oil and gas in the near-to-medium term while investing in the energy systems of the future.

Renewable roll out benefits from O&G industry support

In both Norway and the UK, the oil and gas supply chain has played a key role in the growth of renewables. The offshore wind sector in particular has benefited enormously from the North Sea oil and gas industry with its wealth of experience and capability to deliver large complex offshore energy projects. The construction of massive offshore wind turbines relies on technologies developed for oil and gas, and companies within this supply chain are also pioneering advancements in carbon capture, storage, and geothermal energy.

The Path Forward

As 2025 unfolds, energy transition demands pragmatism. Norway’s balanced long-term investment in both fossil fuels and green technologies contrasts with the UK’s struggle to reconcile climate ambitions with economic and energy security realities. Successfully navigating this complex landscape requires a nuanced approach that balances national interests with international collaboration, addressing both immediate energy needs and long-term sustainability. Pragmatism and long-term thinking, not a dogmatic net-zero pursuit, is key to an effective and equitable transition. Ignoring economic realities risks eroding public support and hindering the very industries crucial for transitioning to a decarbonised energy future.