VZCZCXYZ0023
PP RUEHWEB

DE RUEHNY #0342/01 1321355
ZNR UUUUU ZZH
P 121355Z MAY 09
FM AMEMBASSY OSLO
TO RUEHC/SECSTATE WASHDC PRIORITY 7524
INFO RUEHCP/AMEMBASSY COPENHAGEN PRIORITY 2536
RUEHHE/AMEMBASSY HELSINKI PRIORITY 8084
RUEHRK/AMEMBASSY REYKJAVIK PRIORITY 0878
RUEHSM/AMEMBASSY STOCKHOLM PRIORITY 3402
RUCPDOC/DEPT OF COMMERCE WASHINGTON DC PRIORITY
RHMFIUU/DEPT OF ENERGY WASHINGTON DC PRIORITY
RUEATRS/DEPT OF TREASURY WASHINGTON DC PRIORITY

UNCLAS OSLO 000342 
 
SIPDIS 
SENSITIVE 
 
EUR/NB (MMCDOWELL), EEB, OES/EGC, PLEASE PASS TO DEPARTMENT 
OF ENERGY (EROSSI) AND DEPARTMENT OF COMMERCE (JDERSTINE) 
 
E.O. 12958: N/A 
TAGS: ECON ENRG EPET PGOV SENV NO
SUBJECT: NORWAY, NEW ENERGY: CHASING WINDMILLS 
 
¶1. (SBU)  Summary. On May 11, the Embassy co-hosted the 
seminar "New Energy Opportunities: Reality or Smoke and 
Mirrors?"  Event partners were the Norwegian Venture Capital 
Association and Norway's largest bank, DnB NOR.  The seminar 
gathered senior GON officials, including the Deputy Petroleum 
Minister, and high-level private sector leaders.  Ambassador 
Whitney delivered a keynote address, outlining USG 
initiatives and the private sector's key role in developing 
new energy projects. The event revealed uncertainty around 
new energy investments, placed USG new energy policy in a 
positive light, discussed the impact of the global financial 
crisis, questioned biofuel use and revealed doubts about GON 
commitment to carbon capture and storage (CCS) programs. 
Following the event, Ambassador Whitney gave two interviews 
to widely read business newspapers outlining USG policy. 
Capping the day, he hosted a networking reception at his 
residence. End Summary. 
 
An Energetic Mix: Something Old, Something New 
--------------------------------------------- - 
 
¶2. (SBU)  For seminar purposes, new energy had two accepted 
definitions.  The first was new forms of energy--basically 
all renewables, including wind, solar, hydro and biofuels. 
The second definition encompassed new ways of harvesting and 
processing "old energy," namely oil and gas.  Norwegian 
participants stressed strong support of USG new energy 
initiatives.  A leading Norwegian CCS technology 
entrepreneur, lining-up major projects in the US, lauded the 
USG's funding framework. He stated that meeting certain 
project milestones for USG-funded projects brought certainty 
and encouraged innovation.  Alternatively, he critiqued the 
GON approach as being unpredictable and overtly 
political-oriented. 
 
On the Sunny Side of the Street: Obama Administration 
--------------------------------------------- -------- 
 
¶3. (SBU)  GON attendees praised the Embassy for bringing 
together GON officials and Norwegian private sector players. 
The GON sent representatives from the Petroleum, Environment 
and Trade Ministries, in addition to their investment agency, 
Innovation Norway. Several GON representatives thanked the 
USG for bringing different actors together--allowing a unique 
Norwegian forum for sharing private and public viewpoints. 
 
Break the Piggy Bank...Now! 
--------------------------- 
 
¶4. (SBU)  The seminar included a session analyzing financing 
opportunities, with a panel consisting of cutting edge new 
energy entrepreneurs and public/private financiers. 
Panelists noted that new energy investments have been 
curtailed because of the credit crunch.  While capital has 
not dried up, it is slowing.  Future growth areas included 
energy efficiency, offshore wind power, solar and CCS. 
Despite market uncertainty, the panel believed this was the 
ideal investment opportunity for long-term investors. 
 
Biofuel: Fueling More Problems than Answers? 
------------------------------------------- 
 
¶5. (SBU)  Panelists viewed biofuel investments with some 
unease.  Many speakers questioned whether biofuels could 
maintain long-term political support, crucial in making 
biofuels a realistic new energy source.  Concerns were voiced 
that biofuels took important agricultural products off 
markets: necessary foodstuffs would be made unavailable in 
developing countries which frequently face starvation fears. 
 
CCS: Moonlanding, or a Spacey Idea? 
----------------------------------- 
 
¶6. (SBU)  A panel focusing on whether new energy projects 
were fads focused on the role of CCS in Norway. The ruling 
GON left-of-center coalition has made CCS a national 
priority, with PM Stoltenberg calling CCS Norway's 
"moonlanding."  The Mongstad project, a large-scale CCS 
facility, is a jewel in the GON's crown. Panelists questioned 
why the GON simply invests in a project which may use dubious 
technologies, rather than spread out investments among 
competing initiatives and letting the best project win.  The 
latter approach, found in the US, was strongly backed by 
private sector participants. 
 
Is GON Putting Money Where Its Mouth Is? 
---------------------------------------- 
 
¶7. (SBU) Comment: The seminar furthered USG interests, 
creating a unique forum where participants freely discussed 
current USG and GON new energy programs.  The private sector 
actors were candid, challenging GON policy in its singular 
investment of CCS and suggesting that the GON provides only 
lip service to new energy.  Despite new energy as a seeming 
priority in Norway, GON subsidies are practically 
non-existent. To the extent GON funding exists, critics 
charge that kroner are directed to GON-owned companies such 
as Statkraft or StatoilHydro, the world's ninth largest 
energy company.  While the GON has publicly stated new energy 
is indeed an important focus, private sector participants 
suggested that there is no real financial buy-in.  In 
contrast, speakers repeatedly lauded the U.S. 
WHITNEY