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Norway's largest pension fund KLP exits oil sands companies (reuters.com)
70 points by reddotX 62 days ago | hide | past | web | favorite | 36 comments



Ah, oil sands. I've recently learned about the environmental issues surrounding them, and their existence makes any kind of complaining about dangers of nuclear waste completely ridiculous and/or disingenuous.

Just take a look at e.g. https://energyeducation.ca/encyclopedia/Oil_sands_tailings_p... ; apparently creating city-sized lakes of badly contained, liquid, ridiculously toxic, harmful for thousand years sludge is somewhat unremarkable, whereas replacing some of that demand with nuclear can't happen because of orders of magnitude less volume of much easier to handle (and reprocessable in the future) waste is somehow a show-stopper.


Funny that you use one bad thing to make another bad thing a good thing.


If you view it that way, then remember there's no free lunch; generating any kind of energy is then an exercise of picking the least bad.

A slightly less charitable answer: at these orders of magnitude and potential consequences, it's replacing a bad thing with a "bad thing" in the same way replacing sickness with a vaccine is.


It does if they're alternatives for energy production. A joule is a joule.


No one is using oil sands to generate electricity (Estonia has a large shale oil industry and uses it to generate power, but recently most of their power is coal or cleaner wind and hydro from Finland), so the comparison to nuclear is not warranted.

Oil sands are terribly polluting as mentioned (and energy intensive to extract what oil you can), and are expensive to develop. As the use of oil declines (and the price stays below the floor necessary for oil sand production to break even), its unlikely oil sands will be a meaningful amount of oil production as we look to the future. While a positive gesture, at under $100 million its a small one.


Oil is apparently still 3% of electricity generation as of 2018 (via IEA, [0]). Still, my point really wasn't about nuclear vs. burning oil for energy. My point was about pointing to nuclear waste as an argument against nuclear energy, probably second most common argument (after "but Chernobyl and Fukushima!") and something I see on HN surprisingly often. Nuclear waste is seen as this magical, unique super-dangerous substance that we couldn't possibly handle safely. Whereas pollution from oil sands turns out to be just as dangerous, much worse in handling and containing, and there's a lot more of it, and yet we can handle it (even if poorly) and it doesn't even register with people beyond occasional news about some ecologists whining about the environment.

I'm happy to hear oil use declines (need to check up on that worldwide, that's extremely surprising - do you perchance mean that the growth rate of oil use is going down?).

--

[0] - https://www.iea.org/geco/electricity/


You’re right. It’s growth rate of oil consumption that is stalling, not overall consumption. My mistake!


link seems to be unavailable now


They have an erroneous trailing semicolon. If you remove that, the link works fine.

https://energyeducation.ca/encyclopedia/Oil_sands_tailings_p...


Wow. Growing up in Alberta I heard so much about the tar sands in my mind they were huge. Yet that link shows them to be pretty small and localized to North of Fort Mac.


77 square kilometre for the ponds and 220 square kilometres for the ponds and structures. What would you call big that seems huge to me?


Growing up in Alberta the oil sands were such a big part of everyday life it sounded like half the province was mines. Yet 220km squared is only 20x11km, or 40 average sized farms. Of which there are about 50k farms in Alberta.

Sure its large compared to my house, but my house isn't worth billions nor does my house power a significant portion of the countries energy needs.

Compare that to the metro region of Calgary: 5,110.21 km squared.


Fixed, thanks.


> whereas replacing some of that demand with nuclear can't happen because of orders of magnitude less volume of much easier to handle (and reprocessable in the future) waste is somehow a show-stopper

I don't think the main issue is with the nuclear waste. It's with the fact that even though it's possible to build and operate safe nuclear plants, human nature gets in the way and prevents that from happening.


> It's with the fact that even though it's possible to build and operate safe nuclear plants, human nature gets in the way and prevents that from happening.

People have managed to do that with airliners, even though flying at 30,000 feet in -40F temps, insufficient oxygen, in a tin balloon filled with gas has nothing inherently safe about it. And yet airline travel is incredibly safe.

I.e. since we can make that safe, we can do that with reactors.

(For contrast, ever wonder how the US got the B-17's to England during WW2? The combat crews, as their first job, flew them there across the Atlantic. My dad (B-17 navigator) said more than a few took off from Newfoundland and were never heard from again. After the war they came back on a ship. Lindbergh came back on a ship, too.)


If we compare the year with the worst nuclear accident in history so far to a completely unremarkable year of fossil fuels, nuclear comes out ahead when it comes to safety.


But isn’t this “nuclear’s weakness is humans” argument disproven by history? We humans have been running nuclear plants for a very long time and yet deaths from nuclear power are still lower than all other power sources, and much much much lower of course than fossil sources. So it seems more correct to say, actually we humans are better at running nuclear power safely than any other power source.


Passive safety makes it sure that clueless operator can only result in a safe shutdown of the core and that it is physically impossible to maintain supercriticality in a core, basically by making it melt and separate into several sub-critical components.


It sounds like this measure would have prevented Chernobyl. The problem there wasn't all human operator - cheap graphite tips on the control rods?


It wasn't being cheap, but accepting things that didn't pass Soviet safety rules was one, another was that the process was not followed. Same design RBMK reactors have been operated for years without issue, but the Chernobyl plant did a test in wrong order,meaning that the safety measures that were backups for the tests... Weren't running.

After significant human process training, the rest of Chernobyl NPP operated till around 2005


Instead of us being frightened away from the benefits of nuclear because of the detriment demonstrated by the disaster, we should view Chernobyl as a necessary mistake meant to permanently lock in standards for even the most careless of governments. Even Fukushima comes to mind, even though a larger-than-expected natural disaster was the cause. After parsing the Wiki:

"... the switching stations that sent power from these backup generators to the reactors' cooling systems for Units 1 through 5 were still in the poorly protected turbine buildings..."

Sounds like there was still human engineering negligence. Perhaps that can teach us to restrict new reactors inland.

As some have pointed out in this thread, oil sand waste dumps could ultimately be more harmful than nuclear waste...


KLP (according to Reuters) is the largest pension fund in Norway? Who anyway is KLP?

https://www.google.com/search?client=firefox-b-1-d&q=norway+...

I see: public employees. Public employee pension funds, in the West, are often some of the largest by country.

Norway's actual largest pension fund, the so-called Oil Fund, is, at > $1 trln. in assets, much larger.

https://en.wikipedia.org/wiki/Government_Pension_Fund_of_Nor...

It's the largest sovereign wealth fund in the world and owns 1.5% of the world's "stocks and shares" (as Wikipedia puts it) - it's a behemoth.

And how did Norway accumulate all that wealth? North Sea oil.

Whenever I hear "responsible this and that" from Norway, I chuckle. The ironies are rich. It's all fine and good to be responsible this and that once you're as wealthy as Croesus. With a population of 5.26 mln. people, it's sort of like a reasonably sized global metropolis came into a fortune well in excess of a trillion $. Bring on those Teslas.


Nice derailing there!

The thing about Norway is that they were responsible before they were as wealthy as Croesus.

Where did the UK North Sea oil profits go?

Where do the US oil profits go?

Just what do you think a responsible fund should do, significantly beyond what Norway does?


You are right that Norway has done the best any country could do with oil money.

But it is also time they start planning for future when oil runs out or it is banned. The problem is the Norwegian economy still heavily depends on oil income. Huge number of well paid jobs are because of oil sector. All this party will be over once they are dismantled. Since the oil fund is not allowed to to be spent the economy has to go through a radical change. The biggest industry after oil in Norway is fishing! That says something about the economy in Norway.

The consequences of oil free economy on Norway at least as of today would be dire. Taxes will increase unemployment will increase. They will be forced to use oil fund.


>Where did the UK North Sea oil profits go?

>Where do the US oil profits go?

Norway: 5 million people, and 1 trillion dollars in it's oil fund, most of which was from oil profits.

UK: 66 million people. North Sea profited around 1.1B in 2018. It would take 1000 years of this to match Norway, and 12,000 years to do it at per capita rates.

US: 327 million people. In 2018 [1], total US net oil profits were 28B, which was a good year. To match Norway per capita would take 2200 years of profits.

It's easier to set up a sustainable fund when revenues per capita are orders of magnitude larger.

[1] https://www.eia.gov/todayinenergy/detail.php?id=39413


2018 is at the tail of dwindling UK North Sea revenues. Peak is long past. The UK could have achieved a fund with roughly comparable contributions to Norway, but obviously across a far higher population. UK and Norwegian production across the years of North Sea exploration has stayed pretty close to each other.

In theory with UK production ramping up a little earlier in the seventies than Norway, the same investment choices would have made a UK fund slightly larger than Norway's.

From a national perspective it would have been the much better choice to create a national fund in the sixties or seventies, rather than piss it away on nothing as the government actually did.


>The UK could have achieved a fund with roughly comparable contributions to Norway,

If the state took control of all oil revenues, then perhaps. But historically countries with the govt taking over such production have not done as well as those with private enterprise. Norway did well. Venezuela not so much. Middle East not so much.

>From a national perspective it would have been the much better choice to create a national fund in the sixties or seventies,

How has that action played out across all countries that tried it? Picking one after the fact that did well while ignoring cases where that action didn't do well is not a good way to push future policy.


> If the state took control of all oil revenues

No. Norway's oil fund is the surplus from oil taxes and exploration licences. Doesn't need 100% nationalisation, Venezuela or a command and control Supreme Soviet.

The UK Energy Minister proposed a national fund in the sixties, the Treasury agreed, but he was overruled by Cabinet. The remnants of the British National Oil Corporation that was going to be responsible for licences and supply was sold off at huge discount as BritOil in the depth of a recession (now part of BP).

> Picking one after the fact that did well

Or we could simply look at what the UK actually did with the oil dividend. Then conclude that anything else would have been better for the UK. A national fund with zero growth or investment. A fund that makes a 20% loss every year. Simply spend it all on modernising infrastructure every year. Better still, a national fund with a conservative growth strategy. Ideally split between a global fund (the $1.1tn) and a national fund, as the Norwegians did.

Per capita not nearly as much as Norway's $200k each certainly, but $20k per person is hardly chicken feed. Whatever, we'd be far better placed for what comes after the oil. Or have $1.2tn+ to decarbonise the whole economy. Or take some of the load off funding state pensions into the future, with an ageing society...

The USA could have achieved a phenomenal fund over the far longer period of US extraction - started in what, the 1890s, who knows what absurd valuation could have been achieved by now. Or the benefits that would bring to pensions or infrastructure.


Which, to go back a few levels, is why I wrote "The thing about Norway is that they were responsible before they were as wealthy as Croesus." and why patfla's comments about the ironies seem unjustified.

You touch on some very difficult topics. You are correct that Iran did not do so well after they nationalized their oil production. That's because the UK entered as trade war with Iran, and the US "CIA arranged a military coup to depose the democratically elected Mosaddegh and install a regime more favorable to the UK." https://en.wikipedia.org/wiki/Anglo-Persian_Oil_Company .

Additionally, unlike the UK and Norway, most other oil producing countries were under foreign colonial rule, or recently out of colonial rule.


So they did. Then was then, now is now. The effect of being good and responsible - and thus its importance and the degree to which you want it praised - is proportional to wealth. One change of heart of a fund like this can easily help more than the whole country's worth of individual efforts.


It seems perverse for Norway (pensions or SWF) to invest in fossil fuels of any kind. They have oil, so other investments should be at least diversified away from oil, or optimally with some significant element of renewable energy. In that way, they can stabilize future returns to the whole country and reduce the financial risk of a political escalation against carbon.


Relevant post from a few weeks ago: https://news.ycombinator.com/item?id=20998948


Easy to divest when, right now, all of them look like pretty bad investments.


Once fracking kicked in, oil sands was pretty much dead from a cost perspective. Plus, Canada had a fire that didn't do them any favors.


You want to divest from an investment before it becomes a horrible investment, not after it has lots most of its value.


I get the feeling this comes under "cut your losses".




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