October 25, 2011 / 5:31 PM / in 6 years

UK and Norway sign energy pact to develop resources

LONDON (Reuters) - Britain and Norway signed an energy pact on Tuesday aimed at expanding ties in renewable and fossil fuel energy sources, including carbon capture and storage (CCS) technologies under threat after the UK government scrapped a flagship project last week.

UK Energy Secretary Chris Huhne and Norwegian counterpart Ola Borten Moe signed the cooperation agreement in London, according to a joint ministerial statement, to support industry in developing North Sea oil and gas resources using emissions-mitigating technologies.

“Our energy security is enhanced by close links with Scandinavia and Europe,” UK Energy Minister Charles Hendry said.

“As North Sea neighbors, the UK has long enjoyed close and beneficial ties with Norway based on the development of oil and gas. And as renewables and CCS develop further, it is increasingly vital that we work closely in these areas too,” Hendry said.

As part of the deal, Britain and Norway plan to coordinate long-term energy policies out to 2015 in a bid to meet ambitious emissions reduction targets, both sides said.

Both sides reiterated that Norwegian gas will underpin UK power generation for years to come, saying its use into the 2020s is consistent with UK emissions targets as CCS is rolled out.

Further points included the joint development of fields along the line separating the UK and Norwegian Continental Shelf, while accelerating development of resources and working to extend the lifespan of mature North Sea fields.

It promised to put power interconnectors between the UK and Norway back on the drawing board, further integrating the energy networks of the UK and its biggest foreign gas supplier.

The two countries have long-standing energy ties dating back decades as Norway supplies much of Britain’s primary energy needs.

Norway, Europe‘s-second biggest gas supplier behind Russia, meets more than a third of Britain’s gas needs via two dedicated subsea pipelines. It also ships liquefied natural gas (LNG) to the UK, Europe, North America and Asia from its Snoehvit production plant in the Barents Sea.

Turning to new technologies, both sides pledged to work together to develop CCS demonstration projects and drive forward renewable policies domestically.

The commitment to develop CCS follows a week in which its future was thrown into doubt after the British government last week canceled plans to fund a demonstration project in Longannet in Scotland.

Industry insiders said the scrapping of the scheme signaled the technology remains too costly, undermining Britain’s ambition to become a clean technology leader.

CCS is a commercially unproven technology but is widely seen as a key mechanism to fight climate change by trapping and burying greenhouse gas emissions, while maintaining stable energy supply.

Reporting by Oleg Vukmanovic; editing by Jane Baird

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