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Denmark's dilemma as lucrative North Sea oil tests its green credentials

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Denmark's Prime Minister, Mette Frederiksen speaks during the UN Climate Action Summit on September 23, 2019 at the United Nations Headquaters in New York City.
Denmark's Prime Minister, Mette Frederiksen speaks during the UN Climate Action Summit on September 23, 2019 at the United Nations Headquaters in New York City.   -   Copyright  AFP
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Denmark's green credentials are impressive: it's one of the most cycle-friendly countries in the world, it aims to be carbon neutral by 2050 and has committed to reducing its carbon emissions by 70% within the next decade.

On top of this, the country made international headlines in June when climate minister Dan Jørgensen unveiled plans to build the world's first energy islands, one in the North Sea and the other in the Baltic. The islands, which will act as hubs and allow the connection of several offshore wind farms, are set to provide Denmark and its neighbours with 6 gigawatts of renewable wind power by 2030.

“Denmark must be a green pioneer country, and therefore we stick to the high climate ambitions - even if we are in the middle of a historic [coronavirus] crisis," said Jørgensen.

"With the establishment of the world's first two energy islands, we are embarking on a completely new era in the Danish wind adventure.

"We are increasing the amount of offshore wind massively, and at the same time we want to make it possible to use the green power in the tank of trucks, cargo ships and aircraft."

But there has been less publicity about an issue that has been in Jørgensen's in-tray for nearly a year and which tests the country's green mettle. That is whether to grant a new licence for oil and gas exploration in the Danish sector of the North Sea, which would see activity prolonged there beyond 2046 to 2055. The delay has seen French oil giant Total withdraw its application for an exploration licence.

'We need to start a wave'

"It is about time we realise the oil adventure is over," Peter Møllegaard, head of the Danish Council on Climate Change.

"Denmark has a strong reputation and an ambition to be a frontrunner in the battle against climate change.

"This vision would be much more difficult to communicate if the government went ahead with new licenses in the North Sea."

Danish MP Signe Munk, from the Socialist People’s Party, told Euronews that scrapping the licences is not just about meeting the country's climate targets - it's also about taking a leadership role in the fight against global warming.

"We need some countries to lead the way and assume green leadership in the UN and EU and start a wave of limiting their oil and gas production and leave fossil resources underground," she said. "It would have a huge impact if Denmark was to show green leadership in this regard [stopping the granting of new licences]."

But 250km west of the capital Copenhagen, opinions are different. Esbjerg, on the North Sea coast, is the unofficial capital of the country's oil and gas industry.

"There is no reason to cancel future licences as long as we still need oil in Denmark," said Jesper Frost Rasmussen, mayor of Esbjerg. "We will simply push oil production and exploration abroad. We should not let ourselves be pressured by symbolic politics."

'Green transition must not be too expensive'

A report from Oil and Gas Denmark has questioned the potential climate benefit from halting new licences in the North Sea, stating that the market would simply balance out the lack of Danish oil. The increased production could take place in countries operating less efficiently than the Danish platforms, which in turn could lead to higher global carbon emissions.

Danish state revenues from North Sea oil peaked in 2008 when it raked in nearly €5 billion. But income has dropped to €1.1 billion a decade later.

Another concern is jobs. Recently, Denmark's prime minister, Mette Frederiksen, said the green transition must not become "too expensive".

The dilemma is on the one hand keeping a sector that provides tax revenue and jobs, while on the other hand maintaining ambitions of being a political frontrunner on climate and become carbon neutral by 2050.

In Esbjerg, one in 10 jobs is linked to offshore activities. Some 4,000 people were employed directly or indirectly from offshore activities in 2016.

Mayor Frost Rasmussen wants Copenhagen to finally make a decision on the future for the North Sea.

"With Total’s redrawn application, we have seen implications of political uncertainty," he told Euronews. "We need to have some certainty and stability.

"In this business, it is all about long term investments and strategies, and if there is no certainty, they will simply look elsewhere."

But Mølgaard argues job losses are a natural part of the green transition.

"It would be part of the global transition from fossil energy to renewable energy," he said. "And even though a cancellation could lead to job losses in the offshore industry, it would be balanced out in a natural transition to jobs in the renewable industry when we are planning to build an energy island in the North Sea."

Denmark's climate ministry wants to have negotiations with other political parties to establish a stable framework on oil and gas exploration in the North Sea. It says it wants to look at striking a balance between its climate goals and protecting jobs and investment.

Denmark's green credentials questioned

In August, four activists from Greenpeace Denmark swam across the Dan oil field — located 215km west of Esbjerg — and occupy the Dan Bravo oil rig. They demanded an immediate ban on all further oil and gas exploration in Denmark.

“We are peacefully occupying the Dan Bravo oil rig today to tell leaders that unless they are brave enough to ban the search for new oil and gas in Denmark, they will never be the green frontrunners they claim to be,” said one of the activists, Ida Marie, 21.

”Banning new oil and gas exploration in the middle of the climate crisis as people around the world are battling floods and fires should be a no-brainer, but the Danish government doesn’t seem to get it. Because of my government’s lack of leadership and responsibility, I’m using the privilege of being able to exercise the right to peacefully protest to expose an old fossil fuel-driven world which is getting in the way of the green recovery we need right now.”

The Dan field is where Denmark first began extracting oil in the early 1970s. In 2015, the Danish part of the North Sea had 55 rigs.

Denmark was one of the European Union's largest oil producers in 2018, according to data from Eurostat, but its output is dwarfed by that of the UK and Norway.

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