History is repeating itself. A new industrial revolution based on coal and oil is bringing millions of people out of poverty. Countries that were previously major recipients of aid are being transformed into attractive work and investment markets. But this development is entirely dependent on more energy.

Population increase and growing prosperity will boost demand for energy in coming years. Many developing countries are making rapid economic progress, not least those in parts of Asia and the Middle East. This trend will continue.

The Earth may be home to more than nine billion people by 2050. Access to energy is essential for economic development. More than 1.5 billion people currently have no electricity supply, and their expectations for better living standards are entirely legitimate.

Despite the effects of the recent economic downturn, forecasts from the world's leading economic and environmental analysts point to a potential for a 40-50% increase in energy consumption in the period leading up to 2030.

No quick fixes

Carbon emissions are an unwanted but unavoidable consequence of this growth. The fundamental dilemma now facing the world is therefore how to secure sufficient energy for continued economic growth while reducing global greenhouse gas emissions.

The job of securing enough energy for a growing and more prosperous population is huge, and calls for a number of sources to be exploited. At present, the world cannot choose between fossil fuels or renewables. It needs both.

Hydrocarbons will continue to dominate the energy mix, and population growth and increased prosperity will continue to increase the demand for energy.

With the energy sources currently available, more consumption unfortunately means bigger greenhouse gas emissions. The challenge in phasing out fossil fuels relates fundamentally to the fact that this form of energy provides the basis for modern civilisation.

Renewables will play an important role in the longer term, but technological breakthroughs cannot be legislated for. These are still young industries which will need major investment and much scientific progress to become efficient and competitive. That will take time.

Bridging the gap with gas

Given the climate challenge, natural gas can function as a bridge towards a less carbon-intensive society because burning it releases far less greenhouse gases than either coal or oil. Where gas-fired power stations replace older coal-fired capacity, carbon emissions can be reduced by up to 70%.

Europe still uses more coal than gas to generate electricity. Gas from the Norwegian continental shelf with low greenhouse emissions — and close to the market — represents an attractive energy source from a climate perspective.

People who claim that the oil and gas industry is a passive player on climate issues are more concerned with rhetoric than realities. In Statoil, we acknowledge that our business is at the core of the climate challenge. We are working energetically in several areas.

Our actions

Firstly, we are seeking to ensure the lowest possible carbon emissions from our offshore installations and land-based plants. Partly as a result of an active collaboration between government, the industry and researchers, emissions per barrel produced on the NCS are 60% below the world average.

Secondly, we are actively pursuing carbon capture and storage (CCS). Algeria's In Salah and Norway's Sleipner and Snøhvit fields are equipped with carbon capture technology capable of removing up to three million tonnes of carbon dioxide per year.

The next generation of CCS technology for flue gases from power stations is also being developed at our Mongstad facility in partnership with the Norwegian government. A difficult job that presents major challenges, this project represents a long-term development effort with the goal of creating solutions able to find international application. This would be a major contribution since coal power represents approximately half of the world's electricity production and is expected to increase in the years to come.

Thirdly, we are gradually building up our commitment to new energy, especially in offshore wind. The first investment decisions have been taken. Together with Statkraft, we will be spending more than NOK 10 billion over the next few years on an offshore wind farm able to power 220,000 British homes. And in the Forewind consortium, we are explorinng the possibilities for a giant 9GW wind development on the Dogger Bank off the UK coast.

The need for a political lead

The world recognises today that there are no easy solutions for reducing future carbon emissions. Global political leadership is needed, which accepts responsibility and does not underestimate its actual room for manoeuvre.

Establishing a worldwide, predictable and long-term framework for dealing with carbon dioxide represents the most important contribution the politicians can make. If the global price of carbon emissions is set sufficiently high, companies will be encouraged to develop technology and major contributions to reducing the problem will be obtained.

Crossing energy frontiers

We believe that the solutions will call for realism and pragmatism. And that new frontiers will need to be crossed — not only geographical, but technological and human as well.

As an energy company, we find ourselves at the crossroads between the apparently irreconcilable challenges of the energy crisis and the climate crisis. Both these challenges need to be resolved, simultaneously. We believe it would be wrong to solve one at the expense of the other.