6 - Resources for the future
The NCS is well positioned to meet the climate challenge and the increased economic risk that this imposes.
At the same time, the challenge opens opportunities for innovation and new commercial activity in such areas as CO2 storage and exploration for and exploitation of seabed minerals.
The climate challenge
Since petroleum activities began on the NCS, stricter requirements have gradually been introduced for prudent operations in environmental and safety terms. The authorities have utilised a number of instruments and regulatory measures to reduce emissions from oil production, including a ban on flaring. It has been the driving force, while the industry has adapted to the requirements. New technology has been developed and adopted to meet the challenges.
Along with international aviation, petroleum is the sector which pays the highest price for CO2 emissions (figure 6.1 ). The combination of CO2 tax and emission allowances means that the overall cost of CO2 emissions for companies on the NCS in 2020 is NOK 700-800 per tonne.
That is significantly higher than in any other country with petroleum operations. The high cost of emitting greenhouse gases (GHG) has helped to give Norwegian oil and gas production a low carbon footprint in a global context (figure 6.2 ).
Figure 6.1 Price (tax/allowances) of GHG emissions in Norway. Source: Ministry of Finance (2019)
Through the Paris agreement, virtually all the world’s nations – Norway included – have undertaken to reduce GHG emissions so that the rise in the average global temperature remains well below 2°C compared with the pre-industrial level. They must also strive to limit the increase to 1.5°C. The agreement requires all the parties to submit new or updated national commitments every fifth year.
Norway and Iceland have entered into an agreement with the EU on reducing GHG emissions by at least 40 per cent from the 1990 level up to 2030. Tougher Norwegian targets have been reported under the Paris agreement, with emissions cut by at least 50 per cent and towards 55 per cent in 2030 compared with the 1990 level.
Norway wants to meet the stricter target jointly with the EU, and is working to persuade the latter to raise its goal for 2030 to 55 per cent. The European Commission recently proposed such an increase for consideration by the Council and Parliament.
Measures by the EU to reach its climate goals include a big commitment in recent years to forms of renewable energy, such as wind and solar power. That has made a positive contribution to reducing CO2 emissions, but also presents some challenges since this type of energy supply is variable. As the share of renewables rises, the need grows for energy sources which can interact with variable supplies. Gas and regulatable hydropower are very suitable candidates because they can easily swing up and down to match fluctuations in solar and wind power – unlike, for instance, nuclear energy.
The combination of gas-fired and wind power both on land and offshore, a high CO2 price, and energy efficiency improvements have led to a substantial fall in the use of coal-fired electricity in the UK and a decline in CO2 emissions. As Britain’s largest gas supplier (figure 6.3 ), Norway has made an important contribution here. Norwegian gas deliveries to the UK have a lower climate footprint per unit than any other sources (figure 6.4 ).
Replacing coal with gas and renewables in the power sector generally represents an efficient way of achieving large, fast and reasonably priced emission cuts, since gas releases up to 50 per cent less CO2 than coal when burnt. Facilitating continued gas exports to Europe and the world is an important part of Norwegian petroleum policy. Big undiscovered gas resources exist on the NCS (see chapter 3).
Figure 6.2 Upstream CO2 emissions for the 10 largest oil and gas producing nations in 2018. Source: Rystad Energy (2020).
Figure 6.3 Britain’s most important import sources – natural gas, 2018. Source: gov.uk (2020). Belgium is a transit country, mainly for Russian gas.
Figure 6.4 Emission intensity for natural gas deliveries to the UK. Source: OGA (2020).
Renewable energy and seabed minerals
Increasing the generation and use of renewables in order to reduce consumption of fossil fuels is important for reaching the Paris agreement’s goals. This energy transformation will call for a substantial commitment to new technology. That primarily involves renewable sources (hydro, wind and solar), improved energy storage and reduced losses (batteries and transmission), less use of fossil fuels (electric vehicles, lighter materials), and advanced and intelligent technical solutions. Most of these areas are mineral-intensive. In the long term, it will be possible to meet a significant part of this demand through recycling.
However, population growth and rising prosperity mean a continued expansion in resource consumption which cannot be met immediately from recycled materials. In particular, demand will increase for selected elements such as lithium, cobalt, nickel and manganese as well as certain rare earth elements (REEs).
These materials partly occur as accumulations on the ocean floor along the Mid-Atlantic Ridge (MAR). In Norway’s exclusive economic zone, they are found in sulphide ore accumulations and manganese crusts. The potential for exploiting and creating value from such possible resources is high, since the Norwegian oil industry is a world leader in marine technology.
Scenarios from both the UN intergovernmental panel on climate change and the IEA estimate that significant carbon capture and storage (CCS) will be needed to reach the Paris agreement’s goals. This involves capturing, transporting and storing CO2 from such sources as power generation or industrial processes. The purpose of such management is to limit emissions to the air by capturing CO2 and then storing it safely in deep geological formations.
A growing demand for such storage, including in Europe, may offer new opportunities for value creation on the NCS. CO2 management could also strengthen the competitiveness of natural gas in relation to other energy forms, and thereby enhance the value of Norwegian gas resource in the long term. In addition, cost-effective CCS could increase the value of gas hydrates, which may exist in large quantities on the NCS .
From gas to hydrogen
Hydrogen is an energy bearer with the potential to store large quantities of energy. It is currently produced primarily from fossil fuels such as coal, oil and gas, which liberates CO2, and is then termed “grey” hydrogen. With CCS, gas can be converted to almost emission-free “blue” hydrogen. Hydrogen can thereby be produced with very low GHG emissions and burnt with none. It can also be produced as “green” hydrogen using renewable energy (fact box 6.1).
The industry is an active driving force for achieving such low-emission solutions on the NCS, where offshore wind power, gas, CCS and hydrogen are important elements (fact box 6.2). Britain has developed a vision for integrating the various energy activities on the UK continental shelf (figure 6.5 ). This envisages extensive collaboration and coordination to ensure cost-effective and competitive solutions.
If these initiatives help to develop a value chain for emission-free hydrogen, demand for natural gas as feedstock in such production could increase. The combination of CCS infrastructure and big gas resources means that Norway is well placed in a potential market for hydrogen.
Figure 6.5 Vision for integrating various energy activities, UK. Modified from the OGA (2019)
Carbon storage on the NCS
First licence awarded for CO2 storage
Equinor was awarded the very first exploitation licence (EL 001) for CO2 injection and storage on the NCS in January 2019 (figure 6.7).
Figure 6.7 Exploitation licence EL 001
Drilling began in December 2019 to identify reservoirs which could provide suitable CO2 storage. Completed in February 2020, this well 31/5-7 confirmed the presence of a sandstone reservoirs with properties which make it well-suited for CO2 storage. The reservoir is water-filled, and no oil or gas has ever been produced from these formations in this area.
The Northern Lights project covers CO2 transport, reception and permanent storage in EL 001 in the northern part of the North Sea. It is being pursued jointly by Equinor, Shell and Total, and is receiving government funding. In May 2020, Equinor unveiled a plan for development and operation (PDO) on behalf of the Northern Lights partnership for CO2 transport and storage on the NCS. This was submitted to the MPE, and the NPD gave their recommendations in accordance with the CO2 storage regulations.
Figure 6.8 Longship – a full-scale CCS project
The government presented Report no 33 (2019-2020) to the Storting (parliament) in September 2020. This sought approval for Longship, a Norwegian demonstration project on full-scale CO2 management covering capture, transport and storage. Norcem is proposed as the first CO2 capture project, followed by Fortum Oslo Varme on condition that the latter secures sufficient funding from its own resources and from the EU and other sources.
Captured CO2 from Norcem will be liquefied and sent to Brevik in the port of Grenland for intermediate storage. From there, it will be shipped to a new terminal at Kollsnes outside Bergen before being piped roughly 100 kilometres through a seabed pipeline and injected into a reservoir about 2 600 metres beneath the North Sea for permanent storage (figure 6.8). Northern Lights is the transport and storage part of the Longship project.
Permanent sub-surface storage
Plans call for CO2 to be stored in the Cook and Johansen Formations south-west of the Troll field. A staged development involves a first phase with a planned CO2 capacity of 1.5 million tonnes per annum. However, flexibility to expand this will be built in, and the ability to offer CO2 storage to other European countries is an important goal. The project aims to demonstrate that the gas can be stored securely and to help reduce the cost of future projects. Government support is a precondition.
Norway has long experience with and good expertise on secure CO2 storage beneath the seabed. Around a million tonnes captured from Sleipner West gas has been injected annually in the North Sea’s Utsira formation since 1996. Roughly 700 000 tonnes per annum has also been stored since 2008 near the Snøhvit field in the Barents Sea. This CO2 is removed from natural gas at the Melkøya liquefaction plant and piped back to a reservoir around 140 kilometres from land.
Regular surveys are conducted to monitor how injected CO2 is migrating through the storages. This is important to ensure that the gas remains in place, as planned and modelled. Such monitoring primarily utilises seismic survey methods and pressure measurements in the well.
The climate challenge and the digital transformation have increased demand for certain elements, such as lithium, cobalt, nickel and manganese as well as some REEs. These materials occur partly as accumulations on the seabed. In Norway’s exclusive economic zone, they are found in massive sulphide ore accumulations and in manganese crusts. The government has decided to begin a process to open the NCS for mineral activities.
Seabed minerals on the NCS
contain elements which will be important
for the energy and digital transitions
Substantial resources on the NCS
Sulphide ores primarily contain lead, zinc, barium, copper, cobalt, gold and silver, and are linked to hot springs (black smokers) on volcanic spreading ridges. They also occur in collapsed vents forming mounds on the seabed, which are thought to contain the bulk of the sulphide ore resources. Manganese crusts consist mostly of manganese and iron, plus small quantities of cobalt, nickel, titanium and other less common metals. They grow as laminated accumulations on bare bedrock exposed at the seabed.
No mineral resources are produced from the seabed in any part of Norway’s exclusive economic zone, but a number of accumulations have been identified and sampled along the volcanic Mohn Ridge between Jan Mayen and Bear Island. Clear indications of such resources also exist northwards along the Knipovich Ridge (figure 6.13).
Figure 6.11 Inactive sulphide accumulations with collapsed vents. Taken by the K G Jebsen centre for deep sea research at the University of Bergen during the NPD’s deepwater expedition, summer 2019.
Volcanic activity and heat flows are high along the central axis of the Mid-Atlantic Ridge (MAR). Much of the heat is released through volcanic action, but also comes from hydrothermal areas. These have been stationary for several thousand years, with a stable level of activity where water is heated in the sub-surface and channelled to hot springs on the seabed. This creates a large-scale circulation of seawater through sub-surface rocks along the axis of the spreading ridges.
The heated water leaches out metals in the rocks and carries them up to the hot springs on the seabed, where they precipitate as sulphides in the cold water and build up black smokers. A hydrothermal area is active for 10-100 thousand years before expiring and leaving mounds of sulphide ores (figure 6.11). These form the individual accumulations.
The seabed spreads very slowly in this part of the Atlantic, at less than a centimetre per annum on either side of the axis. Over a million years, a sulphide deposit formed in a hydrothermal area will have moved about 10 kilometres from the axis and been gradually covered by sediments. After roughly two million years, the sulphides will generally be so deeply buried that they are difficult to find with current technology. This means that interesting ore accumulations will initially be found in a belt 30-40 kilometres wide along the MAR axis.
Figure 6.12 Manganese crusts. a) Typical location for sampling crusts. b) Close-up of the sampling site taken by the K G Jebsen centre for deep sea research at the University of Bergen during the NPD’s deepwater expedition to the seamounts east of the Mohn Ridge, summer 2019.
Manganese crusts grow on bare rock on subsea ridges and seamounts in most of the deepwater areas of the NCS. The seamounts comprise the wedge-sharped tops of extinct volcanoes which range 500-1 500 metres above the seabed in a zone 200-300 kilometres wide on the flanks of the spreading ridge.
Manganese crusts are also found on the Vøring Spur and the Jan Mayen Ridge. Cold seawater contains dissolved metal compounds originating at hot springs and in runoff from land. Manganese crusts are precipitated directly as thin laminates on the rock. These build up very slowly, at about 0.1 to one centimetre per million years (figure 6.12).
Exploring for seabed minerals on the NCS
Systematic mapping and exploration of the MAR north of Iceland was initiated by the University of Bergen (UiB) in the late 1990s (figure 6.13). Several active, inactive and extinct hydrothermal areas have subsequently been documented on the NCS.
The first hydrothermal sulphide accumulations were identified in 2005 immediately north of Jan Mayen, on the southernmost part of the Mohn Ridge. This part of the ridge system is shallower (around 1 000 metres) and more magmatically productive than further north. This shallow and hydrothermal area contains both active and inactive sub-areas.
Figure 6.13 Overview of exploration for seabed minerals in the deep NCS by academics and the NPD. Red and green dots show sulphide accumulations associated with currently active and inactive hot springs respectively. Yellow dots show hot water from possible active springs. The pink rectangles show the area discovered by the NPD in 2019 with both active and inactive sub-areas. Yellow stars mark where manganese crusts have been sampled.
The UiB first discovered black smokers further north along the Mohn Ridge more than a decade ago, with Loke Castle as the first (figure 6.13). Drawing partly on the NPD’s big multibeam bathymetric dataset in the Norwegian Sea (acquired for boundary mapping), the UiB identified several sulphide accumulations along the volcanic Mohn Ridge between Jan Mayen and Bear Island, and further north along the Knipovich Ridge.
A multiyear research collaboration was established by the UiB and the NPD in 2010 to map and investigate the seabed in the deeper parts of the Norwegian Sea. On the annual research expeditions, the UiB has concentrated on the spreading ridges and the volcanic processes which deposit sulphides.
At the NPD, this work has become part of the general mapping of NCS resources in recent years. It primarily uses the expeditions together with the UiB to investigate manganese crusts.
This collaboration has identified accumulations of the latter, and almost 100 samples have so far been collected. Their thickness ranges from a few millimetres to almost 20 centimetres, and their value varies in line with their content of metals in addition to manganese and iron. In parts of the Pacific, it is the presence of cobalt which makes the crusts economically interesting.
Crustal accumulations found so far on the NCS do not contain much cobalt, but they could be economically interesting because of unusually high concentrations of scandium and lithium and a fairly high content of REEs. Analyses show that the crust samples fall into two groups: one with almost twice the amount of REEs as in the Pacific, and the other with a rather lower content of these, particularly lanthanides.
As part of the NPD’s mapping of possible mineral resources, it conducted its own expeditions in 2018, 2019 and 2020 to investigate massive sulphide ores from hydrothermal systems on the Mohn Ridge. In the first two years, autonomous underwater vehicles (AUVs) equipped with various geochemical and geophysical measuring devices were utilised. Ship-borne bathymetric (echo sounder) findings were used as background input for the AUVs, which acquired data about 50 metres above the seabed.
A previously unknown area of sulphide deposition, with both active and inactive sub-areas, was discovered in 2018 ¬– initially through geochemical and geophysical measurements by AUV. Visual inspection and confirmation was then carried out using a remotely operated vehicle (ROV) controlled from a mother ship. Named “Fåvne”, this area is located in about 3 000 metres of water.
Sulphide samples show a generally high content of copper and zinc, and one with high values for cobalt was also taken. In 2019, the NPD mapped the seabed using three AUVs simultaneously – the first time this had been done in the search for seabed minerals. Most of the geophysical and geochemical instruments used the year before were deployed again. A new inactive sulphide area was identified south-west of Fåvne by measuring the self potential (SP) field, and has been named “Gnitahei”.
Further north on the Mohn Ridge, magnetic data indicated three different inactive sulphide areas – Mohnsskatten 1, 2 and 3 (MS1, MS2 and MS3). ROV excursions were conducted on all three, but materials were only retrieved from MS2. MS3 proved to be entirely covered by sediments. About 100 kilograms of samples, both volcanic rocks and sulphide ores, were collected during the 2019 expedition. Preliminary analyses of Gnitahei have so far identified mostly iron sulphide (pyrites) and smaller quantities of copper, zinc and cobalt.
More detailed analyses will be carried out in 2020. Work continued in 2020 to investigate the thickness of the sulphide accumulations on the Mohn Ridge with a new expedition. Cores were drilled with the first use of coiled tubing in such water depths. In addition, substantial material in the form of rock and sulphide samples was taken from the seabed. This will provide better understanding of volumes and changes in metal composition further down in the sub-surface.