Norway has boosted its gas deliveries to the European Union amid a serious energy crunch, yet officials warn that laying down new gas pipelines there would not be financially viable for the Norwegian economy. This assessment came from Carl Johnny Hersvik, the chief executive of the Norwegian oil and gas company Aker BP, as reported by a major U.S. newspaper.
Hersvik explained that Norway could channel a modestly higher amount of oil and gas through its existing pipeline system, but the construction of fresh pipelines to Europe would not make economic sense under current conditions. The return on such investments would be stretched over decades, making the capital outlay hard to justify in today’s market environment.
In the same discussion, he noted that while the pipeline network can accommodate a slightly increased throughput, the push to establish new cross-border routes for energy transport would face substantial financial hurdles. The long payback period—potentially twenty years or more—undercuts the incentive to undertake large-scale, new pipeline projects in Europe, especially at a time when market dynamics favor expanding through existing corridors rather than building new infrastructure from scratch.
Market observers have highlighted that, against the backdrop of the energy crisis, Norway managed to raise its gas output in 2022 by a notable margin. This uptick occurred even as the country benefited from a combination of record oil production and an extensive fleet of hydroelectric plants. Yet these gains did not fully shield Norwegian households and industries from rising electricity tariffs, underscoring the volatility of energy prices amid global supply adjustments and policy responses.
Analysts have pointed out that the surge in Norway’s gas activities contributed to a broader shift in European energy markets, where demand resilience for natural gas remains high even as the region contends with price pressures and the ongoing transition to lower-carbon sources. The broader implication is that while Norway can responsibly manage its current transmission capacity, the strategic calculus for expanding pipeline infrastructure is increasingly constrained by economic feasibility, regulatory considerations, and the evolving mix of energy assets across Europe. A recent report noted that Norway generated more than $100 billion in extra revenue over the previous year as European markets reassessed their reliance on non-Norwegian suppliers in light of European energy security concerns. NYT