Norway's Energy Strategy with Torgeir Stordal

This transcript is from a CSIS podcast published on March 26, 2025. Listen to the podcast here.

Torgeir Stordal: Hearing the discussion here at CERAWeek is of course quite interesting. Everybody's talking about AI this year. The new insights on the power needs going forward is quite daunting and the expectations that we hear, that energy consumption will go up quite significantly going forward.

Quill Robinson: Welcome to Power Map, the CSIS Energy Security and Climate Change Program podcast where we explore the forces reshaping the global energy system. I'm Quill Robinson.

Joseph Majkut: And I'm Joseph Majkut.

Quill Robinson: So Joseph, this week we spoke to Torgeir Stordal, who is the Director General of Norwegian Offshore Directorate. Previously, Torgeir was working in Shell's upstream business for more than two decades, so he's someone who's been in the private sector for a long time. He got a degree in geosciences and has a really good sense of energy markets, the business, and understands the policy — how policy has evolved in Norway over the past five, six decades since the beginning of the boom. What were your impressions from the conversation that we had with Torgeir?

Joseph Majkut: Oh, I learned a lot. He runs roughly the equivalent of the Bureau of Ocean and Energy Management in the United States for Norway.

Quill Robinson: Plus, BLM in a way, given that it's a lot of the resources are offshore, right?

Joseph Majkut: Yeah, yeah. Where all the resources are offshore, and so it's sort of a very important role for managing what is a very valuable resource to the Norwegian economy and to the global economy. Also, we've recorded it, while Torgeir and I were both at CERAWeek, so I was swimming in signals about the future of the energy industry, the energy transition, and I thought our conversation with Torgeir was so fascinating because it's rare you find someone whose job is shepherding resources, talking about doing that responsibly on behalf of the, sort of, Norwegian nation, and at the same time is very cognizant of global energy transition and the need to use the proceeds of that energy development toward transition. I mean, it's just very mature, nuanced conversation. We don't always get that here in the United States, as you know.

Quill Robinson: Yeah. Norway's approach to energy and climate is quite sober and, you know, one of the things that I mentioned during the podcast is I'd gone back and watched a video that his directorate had released. It was kind of the 2024 wrap up for the Offshore Directorate, and it sounded like Torgeir, the CEO, was talking to his shareholders, the Norwegian people, about how they're simultaneously developing their energy resources but also pursuing decarbonization. Now this brings up some interesting pieces as we think of the changing policies and changing approach in the U.S. right now.

Joseph Majkut: Absolutely. The very same day that we spoke to Torgeir, Secretary Burgum spoke at CERAWeek and he talked about the notion of adding all of the natural resource wealth of the United States to the balance sheet of our country. I mean there are states like Norway where that is actually part of the project, and in the U.S. I'm not sure exactly what Secretary Burgum meant — we can talk about that in future episodes or in research or with him — but you could kind of sense from the Secretary a desire to manage natural resources maybe a little bit more like Norway does. I'm not sure what that looks like. It raises all sorts of political challenges, but it was interesting to then talk to Torgeir later in the day, a person deeply involved in actually doing that, right, where the state, private companies work really closely together in a way that really does benefit Norway, provides energy around the world, is a very different model from what we have in the U.S.

Quill Robinson: Certainly, and this is something that came up in our conversation with Premier Daniel Smith, the sort of pendulum swing that happens in the United States when it comes to energy policy, from "drill, baby drill" to decarbonization and back. There is a case to be made that having a bit more continuity in policy in the way that Norway has would be pretty attractive.

Joseph Majkut: I think. So we talked a lot with Torgeir about the Northern Lights Project, this sort of nascent but about to be activated project, which is going to take CO2 from several different sources and deposit it in reservoirs.

Quill Robinson: Offshore reservoirs, right?

Joseph Majkut: Offshore reservoirs, that's right. And it's sort of running the machine backwards, and there's no way we achieve a transition or a net zero economy without a lot of carbon management. And so to see a country like Norway, which has high technical capacity, some room to spend some money on what is today an expensive technology, thinking about how do you create value for the world using pore space is really interesting. And that model, for a variety of technical reasons in terms of knowledge sharing, I think is really, really, really valuable that they're working on that. So it's great to hear from him about progress that's been made and the outlook that that project has.

Quill Robinson: In so far as it's possible. Norway seems to be a country that can walk and chew gum at the same time when it comes to decarbonization and energy security.

Joseph Majkut: Yeah, perhaps, I don't know if they chew gum in Norway. We should have asked him that.

Quill Robinson: Should have asked him. Good question. Alright Joseph, let's dive in. So today on Power Map we have the Director General of the Norwegian Offshore Directorate, Torgeir Stordal. Welcome to Power Map. Good to have you.

Torgeir Stordal: Thank you. Thanks for having me here.

Joseph Majkut: Oh, it's such a pleasure. Can you help us understand a little bit about the Offshore Directorate?

Torgeir Stordal: Okay. The Offshore Directorate is an agency under the Ministry of Energy providing advice to the Ministry on everything from opening up new areas for activity, licensing, approval of development plans for developers to go forward, as well as for data management on the shelf. We organize all the data management on the shelf, so in area management as well.

Quill Robinson: Torgeir, you've been in this position for a number of years, but I actually want to rewind a couple of decades. When you went to the University of Bergen in the 1980s, I'm curious, what was it about the oil and gas industry, the upstream industry, that was exciting for you and what was the conversation about that industry at that time?

Torgeir Stordal: Well, actually my plan was to become a science teacher, studied master physics, and I ended up having a master's degree in geosciences. And it was the opening of that world of geosciences which attracted me to the industry, but I was the only person at the time I could actually work as geoscientist. But I mean notably, many of my student colleagues, they all wanted to go into the oil industry long before I thought about it because it wasn't an industry that was growing and that was offering attractive jobs. But I mean haven't regretted a second when it's been a true pleasure to work through that. It's been so interesting, so developing from a technical perspective, from a professional perspective, a personal perspective, that the industry has so much to offer. But in terms of technical depth and breadth, but also the exposure you get to the commercial, to the politics and the whole spectrum. And so that brought me through a more than 25 year career with Shell.

Quill Robinson: You have a long view of this industry in Norway's relationship with the oil and gas industry. I'm curious how that relationship has evolved. It was the late sixties, early seventies I believe, when the industry started to take off and Norway. How have you seen Norwegian's relationship with this vast abundant resource evolve over your decades, both in the private sector but also in government now?

Torgeir Stordal: Well, and if you go back to the seventies, very few people knew what this could bring. So the first thing people saw was it brought jobs, yeah? It brought jobs from — Norway used to be a great nation at sea and a lot of the people working in the maritime industry moved over to the rigs. Then of course into the eighties you got more of these fixed platforms that again offered lots of attractive jobs to people. So I think in the early days it was a lot about having jobs and secure and interesting jobs. Then later on, obviously, we've seen an enormous income to the site, partly because of the way the framework has been set up. The principle is that the resources are owned by the people, or by the state, if you like. So that a lot of the wealth should go back to the people.

Today we have a pretty decisive sovereign wealth fund. We sort of started off in the nineties and only after 2000 I would say, after the oil price picked up after 2006, 2007, this fund has been — so people now see this as of course as a huge asset as well. I think also over time, obviously awareness about the fund, but also about the climate is playing a bigger role. Of course, we've seen oil and gas is providing security to Europe. I think people appreciate that it's important and there's a lot of pride that it can actually help Europe, the energy.

Joseph Majkut: Secretary Burgum — we're recording at CERAWeek and you're here being part of this conference today, and I gave his picture of the Trump administration's view on energy. You can kind of see the U.S., I would say politically trying to mature as a large energy producer and now exporter. He talked about adding our natural resources to the national balance sheet. He talked about sovereign wealth funds. When you hear that, do you hear echoes of former days in Norway?

Torgeir Stordal: Well, I think a part of the job for us in our agency is to map the resources on the shelf. So every year we have to make a resource budget and we make a production forecast for Norway, and course the Minister of Finance can value onto it if they like. They can put, sort of, what does this mean for the perspectives for the national budget for the next 10, 30 years. So in some way this is recognized as an asset in Norway already, but it was an interesting perspective that you provided.

Joseph Majkut: Yeah, yeah. I mean this is kind of new language for us here in the United States. So it's interesting to hear the Norwegian perspective. It's like watching a toddler learn how to walk.

Quill Robinson: Joseph, to that point, I mean there has been some discussion of a sovereign wealth fund. I don't know how serious that discussion is in the U.S. It seems unlikely that the U.S. government would take a majority share in a major oil company, as is the case with the Norwegian government and Equinor. I'm curious, what are some of the policy decisions that you think are applicable to the U.S. context that have worked well in Norwegian context and have put your country in such an enviable position today when it comes to energy security and the development of this resource?

Torgeir Stordal: I said a few things earlier about how do politicians see this is benefit to society as a whole. That's been a key principle. And the other key principle is the long-term use. The preferable policy of today is to ensure a long-term development of the resources on the shelf. That has been fundamental I think, and part of the role that we have played and of course the ministry has played based on our advice has of course been to provide some coordination to the development. It hasn't been — it hasn't, for example, opened up all the shelf at once, selected industry just to go about it. There's been a coordinated effort then and a stepwise development of the shelf. And for example, when a big discovery was made, it wasn't a development because it was only going to benefit that discovery or that field. It was a development which took a broader perspective: How can we develop hub, which other can be tied into, can we move this into a land plan which benefits the longer term? So it's pretty coordinated effort, which I think we see the results of now because the country now has an incredible infrastructure both on land, in the ocean, but also towards Europe in terms of gas export. And that has been results of a concerted effort, and a coordinated effort and a joint development between authorities and industry.

Joseph Majkut: You mentioned earlier the fact that you worked for the Norwegian Offshore Directorate, previously the Norwegian Petroleum Directorate. How much diversification are you looking at? I'm assuming this means offshore wind, maybe it means minerals, maybe it means gas. What does it mean to change the name of the program?

Torgeir Stordal: We have seen that there are interest to do different things on the shelf, and one of the things that started off let's say a decade ago was the interest for storing CO2. So that's very closely linked to looking at hydrocarbons because you need to have a reservoir subsurface, not filled with oil and gas, but ideally water filled because then you can inject CO2 into that reservoir. So that's in our remit.

U.S. minerals. Part of the work that we did when we mapped the entire shelf, so there's been a program in the UN called CLCS to look at extended continental shelves of all the countries in the world and we started that work very early, and during that work we started to map the deeper waters. We have some really deep waters, like three to 5,000 meters. And in that effort we discovered that we have mineral deposits.

Over the recent years, the government has basically, there's a law now for how to manage deep sea minerals. It's a legal framework and last year the shelf was opened up for mineral activity. And this is governed by the Ministry of Energy, but we are actually executing the work. So we were doing all the deep sea mapping, we're doing the resource estimates, and we will do the licensing when that starts. So those are the three main activities: Oil and gas, CO2 storage and deep sea minerals. And then with respect to ocean wind, we have a role in mapping the seabed, ensuring that there's a good quality stable seabed and we understand the risks and uncertainties with locating the installations. But we have a different agency which looks after the electricity part of it and, of course, the concessions are given by the Ministry.

Joseph Majkut: Two years ago, the Northern Lights Project appeared on our podcast at CSIS for the first time as an example of really smart integration and coordination from government, the private sector, when it comes to a technology that has been difficult to deploy. Can you remind us a little bit about the Northern Lights Project? It falls into your remit, and how the status of that project is today?

Torgeir Stordal: The Northern Lights Project, it was basically created a revelation that the government should contribute to developing a full scale value chain for CO2 capture and storage. Part of that vision was that, because there was significant investment in mind, that could not be justified on storing that volume of CO2 alone. The rationale was that, well, if we can develop a project, develop technology, develop a practice, develop a framework and provide all that learning to the rest of the world, we will do it. That was the backdrop to it. And then over the years the project has been matured. A lot of cooperation of course between the companies involved and the authorities.

Now we are very close to operations. The plant was finished the last autumn and the wells are ready. There will be a ship to transport and the first ship has arrived in Norway, the second was one is en route to Norway, and the third one is the [unintelligible] in the far East. So in, the concept has been that there are two [unintelligible] plants, one waste plant and one cement factory, which will capture CO2 in Norway and that'll be transported by ships to this Northern Lights plant. And then from there it'll go by pipeline offshore and be injected in the reservoir. So that project will be operational in the summer of this year.

Joseph Majkut: How curious are your peers around the world about how this project is perceived?

Torgeir Stordal: No, very much so. I mean, I was actually in a panel today and there was a lot of interest and there has been a lot of interest and after the commitment that the companies had to do was that we had to share the logs and there's a lot of that going on in conferences and seminars around the world. But there's also a visitor center at the plant. I think there are tens of thousands of visitors over the last few years coming to this center. So to share, a lot of interest globally for this. In the future we can hope that this will be a business, but it will be a low-margin business clearly and at the moment, I don' think anybody has been able to, sort of, create a full scale value chain, at least commercial. Of course the [unintelligible] Northern Lights will be the sort of first example, and we have licensed a lot of acreage for exploration. We think we have 13 licenses, beyond Northern Lights, so there's a lot of companies trying to map out and find good reservoirs to store CO2. In parallel, they're working with the value chains, all of them coming from Europe.

Joseph Majkut: It's an incredible model. I mean so much of the challenge of building this sort of carbon value chain is coordinating the storage task with the companies that are moving CO2 with the capture, and then the role of the government ensuring that all of this is above board, that accounting procedures are correct, and eventually somebody holds the long-term liability for storing that CO2.

Torgeir Stordal: Clearly when that final investment decision was made, that caused much interest because now people see it actually is possible. And this plant where you can actually visit, you can touch the steel, it can see it's been built, and that helps a lot. And I think where the production is starting later this year, we'll see that that also catch lot of interest.

Joseph Majkut: Well, I hope to count myself amongst the visitors sooner rather than later.

Quill Robinson: Certainly. I mean, I'm also wondering about, as you see a potential stagnation or even regression in terms of regulatory frameworks and carbon pricing — obviously Norway is not shy when it comes to carbon pricing —but looking globally, I think the market logic is something that I'll be paying attention to as well when it comes to the viability of these carbon capture projects.

I want to turn now to Europe. Obviously Norway, along with the U.S., played a very important role in filling the gap in 2022 and subsequent years after Russia's invasion of Ukraine. Europe is also the region of the world that has been most aggressive in terms of the energy transition and trying to shift away from oil and gas. I'm curious, what does the relationship look like going forward between Norway, the major supplier of gas to Europe? How would Norway like that relationship to look?

Torgeir Stordal: Well, in many ways it is a relationship between the gas sellers that the gas buyers, because we have an infrastructure in place, we have 9,000 kilometers of pipeline between Norway and Europe, UK; some goes to UK, some goes to Europe. But of course, there's a lot of focus from the nations around as well to ensure that we continue delivering gas at the levels we do. And clearly we were able to increase our production during 2022 and beyond to make up for some of the shortfall after the closure of the Russian gas import. And obviously together with the LNG from the U.S., we have been able to supply adequate gas to Europe since then.

Longer term we see of course that the domestic production in Europe is going down. I mean Cologne is almost done, Germany's done, the UK has a little bit left, but of course the domestic production is declining rapidly, and even if the demand goes down somewhat, we believe that the resources from Norway — we are basically resource constrained, not market constrained because our production is currently at plateau, as I mentioned, but we expect that production will start to decline basically from now on.

Joseph Majkut: How do you fit that into the sort of resource management task that you described earlier, long-term sort of financial and otherwise sustainable management of the resources?

Torgeir Stordal: Our end is to maximize the value oil and gas products from the Norwegian Shelf to society. We work to ensure that is optimized, and of course going forward with production coming down, especially after the mid thirties, you will have to adapt the infrastructure to make sure that the unit cost is maintained at the acceptable level. And that's something that we will take part in. Of course, we took part in looking at coordination of the development on the shelf, and of course we will also take part in that phase that will come one day when we have to consolidate the infrastructure.

Quill Robinson: I get the sense from a resource mix perspective, but also in terms of Norway's energy strategy, your country was much better prepared for what happened over the last couple of years geopolitically, in terms of energy markets. But there's been a lot of talk in the U.S. and Europe about a return to energy realism. I mean, has there been any shift in the way that you are thinking about the energy trilemma, how to balance sustainability, affordability, that sort of thing? It seems like there's been a major shift in many other countries.

Torgeir Stordal: That's true. I think until the Ukraine war, I think energy security was a novelist mind in the West and certainly Northern Europe because we're used to switching on the light switch, we're used to opening the gas and it was always there. So any security wasn't on people's mind until then in this part of the world. Affordability is not so much either because as the gas prices in Europe are not that high. From a sustainability perspective, Norwegian gas has one of the lowest emissions in the production phase to other gas in the world. The average emission for Norwegian oil and gas is probably the lowest there is. So in terms of providing low-carbon oil and gas to Europe, we are really well positioned. Of course, we recognize that electric security is now moving up front for everyone. Overall, it doesn't change very much for us because we are delivering gas as much as we can. We will continue to do so for as long as we can.

Joseph Majkut: You mentioned low lifecycle intensity of Norwegian produced gas. What kind of activities are going on in the industry and how do you manage and ensure that the production is ever cleaner or as clean as possible? Is that a matter of policy? Is it a matter of technology improvement? What's the mix?

Torgeir Stordal: It is a matter of policy as well because we have a CO2 tax, and that CO2 tax inspires the industry to reduce emissions, either it being [unintelligible] or being more efficient. But the main ingredient there is that we power the installations with electric power offshore. Being a country which produces a lot of hydroelectric power, clean power, we have I think something like 90% plus of our electricity consumption is delivered by hydroelectric power. This power is now transmitted to the offshore installations and that has caused a big part in why the production emissions are as low as they are.

Joseph Majkut: Interesting.

Quill Robinson: There is this very live conversation right now about long-term gas demand and mid-term gas demand around the world, particularly being driven by East and Southeast Asia. I realized that that region is not your primary customer, Europe is the main customer here, but I'm really interested given your perspective and experience in this field, how you see that discussion playing out and evolving and if you have any particular perspectives on mid and long-term global gas demand.

Torgeir Stordal: It's been a lot of discussions here with CERAWeek. In terms of our role, we don't really look at the markets. The markets is handled by the Ministry. So as such, I don't have a particular view of the markets, but as far as I'm concerned, for our resources we are not going to worry about the markets because we are resource constrained. But hearing the discussion here at CERAWeek is of course quite interesting because — I was there two years ago as well, there was nobody talked about AI. Quite a lot of people talked about AI last year and everybody's talking about AI this year.

Joseph Majkut: You can hardly escape it. Yeah.

Torgeir Stordal: So of course the new insights on the power needs going forward is quite daunting and the expectations that we hear here is that the energy consumption will go up quite significantly going forward. If you look at developing nations as well, of course we contribute to that no doubt.

Joseph Majkut: Rapid potential demand growth. So then how do you think about that as a public servant and what are the thoughts that Norway answers? Long-term strategic management of this resource? And then how does diversification play a role going forward?

Torgeir Stordal: There's a recognition amongst politicians. They know that the oil and gas industry will come through in the end eventually and the production will go down and that will obviously impact the income, although we have a pretty significant sovereign wealth fund. There is a lot of effort into looking at what is going to come after. And we are a strong energy country, as you know, and strong power. There's a lot of discussion these days about needing more power and how can we do that. The ocean vein is certainly on the table, although of course the cost increases and inflation has given it a bit of a setback for the short-term.

Joseph Majkut: Look at the picture in the U.S.

Torgeir Stordal: Indeed. But the long-term view is of course that we can be a good host for developers of ocean wind. There's a lot of wind there and we have a big ocean. And the floating wind may be especially a very attractive option for the future depending on how the cost to develop, depending on how the markets develop, that is one that the government is pursuing. We know onshore it's a bit more challenged in terms of the hydroelectric also has been developed over the last 100 years. A lot of the areas have been developed. There is some efficiency development made, more efficient plants going on, but we will always be a strong energy nation.

Quill Robinson: Torgeir, I had a chance to watch your report that you put out last year, your 2024 state of the Norwegian Continental Shelf video. And it sounded like you were sort of a CEO in front of your board, but the board was the Norwegian people, and you were very frank about the developments that have happened over the last year and challenges and opportunities. I'm curious, as you are quite transparent, and you've talked about this over the course of this discussion about there is a gradual transition that will happen. This is how we will develop the resources in the next decade, next two decades. So I'm curious what the known, unknowns, challenges are that you can't you foresee right now that worry you on that path that you have described to the Norwegian people and also to us today?

Torgeir Stordal: I think the most significant challenge obviously is that we have been used to having a lot of large fields. Some of them have been really fantastic producers. We've developed more fields, more smaller accumulations, more complex accumulations. But more challenging, there will be probably higher operating costs. In some cases there will be more challenging reservoirs. Will the industry be able to develop those or will that be stranded? There will have to be a significant continued development of technology to realize some of this. That's going to be the main work going forward to be able to work on those more challenging prospects. At the moment, we have quite the significant exploration activities in the number of wells, but it's all concentrated around the infrastructure and if you want to find something bigger, you have to go outside. And at the moment there's a bit of a risk aversion among the companies to do that. That's some of the challenges we are putting forward as well.

It'll be a more challenging future, but for people who work in the industry, it'll be a more interesting future because if you are a technical nerd, you want to have challenges. It's going to be difficult, more challenging, but certainly more interesting as well. Over time, of course, there will be likely more focus on providing CCS portfolio, so people who work in the industry will be able to work on both harder carbons and CCS. And if you look at the engineering portfolio, they will — some of the people who developed the fields in the nineties and after that they are now building ocean wind installation. So opportunities in the industries is almost endless in terms of what excitement you could work on. So I think there's a bright future for people working in the industry. It'll be challenging, difficult, but also usually interesting.

Quill Robinson: I want to close by asking you a question that we've asked our previous guests. Since you were at the University of Bergen studying geoscience. How has your framework changed when it comes to thinking about energy and environmental protection and the geopolitics? Have you shifted on anything? Has your view evolved?

Torgeir Stordal: Well, I think when I was a student, I was about 25 years old. Of course, between now and then you learn a lot about the world. When you come out of a little bubble at university and into the industry. And I've been fortunate also to work with projects internationally. And of course you get a completely different view of what the world looks like. This was the time the Berlin wall fell and now we are a little bit back to that. So there's been a lot of things happening.

And if you look at the global oil producers have also changed. I mean it used to be Middle East. I was here in Houston in 2000 and somebody from the gas association said in 2010 there would be no more gas produced in the U.S. or [unintelligible] be. So now, you used to be the biggest import and now you are the biggest exporter. So there's a lot of change geopolitically, but also in the energy world. And I think I'm learning something every day and a lot just this week. It's getting more and more complex, intertwined, but usually interesting. But certainly the mind has broadened a lot since I was 25. But it's a huge interesting industry and I'm so extremely privileged to have worked and still work in the energy industry. There's no better place to be.

Joseph Majkut: We are very privileged to have had you on the podcast. Thank you so much for this discussion.

Torgeir Stordal: Thank you so much.

Quill Robinson: Thank you so much for listening to Power Map. Please make sure to subscribe and to review wherever you listen to podcasts. We'll see you next episode.

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