Norway's Supreme Court Rules in Favor of Arctic Drilling

In a much-anticipated decision, Norway's Supreme Court ruled Tuesday that the Norwegian government is not liable for carbon emissions created by the combustion of oil exported overseas, and that Norway's drilling leases in Arctic waters are compatible with the Norwegian Constitution.

The lawsuit, brought against the Norwegian government by Greenpeace and by Norwegian NGO Nature and Youth, objected to a licensing round conducted in 2015-16 that awarded 10 E&P leases in the Barents Sea. The groups argued that by facilitating more carbon emissions, the government was failing in its constitutional obligation to protect the environment for the benefit of its citizens.

Article 112 of Norway's constitution requires the government to ensure citizens' right to a "natural environment whose productivity and diversity are maintained." Further, Norway is a signatory to the COP21 Paris climate accord and has committed to reducing its overall CO2 footprint; the NGOs argued that Arctic drilling licenses are inconsistent with this goal. 

Two lower courts rejected this argument. The Oslo District Court found in early 2018 that the government's decision to issue offshore E&P licenses was not in conflict with the constitutional right to a healthy environment. The Norwegian Court of Appeals concurred in January 2020, and Greenpeace appealed to the Supreme Court. In an 11-4 decision rendered Tuesday, the Supreme Court sided with the lower courts.

“The court has let the government off the hook at this time, but leaves the door open for an assessment on climate impacts, including emissions after export, at the later production stage. This should be a warning to the oil industry. At this moment in history, no oil producing country holds a credible position on climate without ending exploration for new oil and setting a plan for retiring the industry,” said Frode Pleym, head of Greenpeace Norway.

Greenpeace noted that the four dissenting Supreme Court judges in the case believed that the oil licenses in question should be invalidated due to procedural errors. They argued that future global emissions of greenhouse gases should have been considered in the environmental impact assessment for the licensing round. 

Norway is the biggest oil and gas producer in Europe with an output of about four million boepd, virtually all from offshore fields. That prolific energy production has yielded tremendous profits for the Norwegian state, which possesses a $1 trillion sovereign wealth fund - the largest in the world. It also supports about 140,000 jobs in Norway, roughly equal to five percent of all employment.