13 ms·

If they want to create a fund to save their future, why are they drilling and pumping their oil like crazy and exchanging it for world's financial junk? They sh

If they want to create a fund to save their future, why are they drilling and pumping their oil like crazy and exchanging it for world's financial junk? They should leave the oil in the earth, it would make much better investment.

adventured 13y ago
That assumes oil remains a top energy source in the future, and that it's still widely accepted / usable in the future (that there are still very large markets for buying, selling, processing, trading, and burning it). If the global economy moves to electric vehicles - which is all but guaranteed at this point - the existing hyper scale market for oil will disappear. Speaking financially, they should drill and sell as much of it as possible as fast as possible, particularly with today's excellent prices. Leaving it in the ground is as good as destroying the wealth it represents here and now. The best conversion they could do is to build the world's best renewable energy infrastructure, and drive it to a large surplus that they can export. Build the best education system, so all of their 5 million people get top notch educations. Build the best commercial infrastructure to keep their economy competitive. Invest into robotics and really any IT and R&D, and perhaps compete in new forms of automation based high value manufacturing.
- e12e 13y ago
  It seems unlikely that oil and gas wouldn't be valued for both use as energy source and for chemical processes in the future as well. With an added benefit of less oil burnt now, might decrease the chances of a cataclysmic climate event in the near future.
  - adventured 13y ago
    It's more likely in environmental regards, that oil and gasoline will be nearly regulated out of use in the future (if they're not simply stamped out by superior energy infrastructure). The death by regulation scenario becomes more likely as the world becomes less dependent on oil / gasoline. That's why the Obama Admin dares to hammer coal now, because natural gas has come online via fracking.
- lafar6502 13y ago
  I don't think today's prices are excellent from them. North sea oil is much more expensive to produce than in Middle East so Norway's income is lower than Kuwait's. The amount of cheaply accessible oil is diminishing so it's inevitable that prices will go up with rising production costs and limited supply. There are no alternatives to oil in current world's economy, so I think we'll burn all of it before we are forced to build a new economy.
tilsammans 13y ago
True in principle, but their oil stock would become so valuable that other countries will just decide to grab it, invade Norway, and plunder the whole lot.
- e12e 13y ago
  Countries could also (I would argue more easily) nationalize the companies the fund has invested in.
  - lmm 13y ago
    There's some safety in being entangled with everyone else. It would be difficult to nationalize just Norway's stake and avoid upsetting other nations.
  - vidarh 13y ago
    The fund does not invest in larger stakes than about 10% per company, I believe, so that would mean pissing off a whole lot of their own citizens too, to obtain amounts adding up to a quite small percentage of their own economy.
    - e12e 13y ago
      There's no reason (once you've decided to nationalize) that you couldn't just nationalize foreign interests (or even interests held by a certain (group of) nations -- such as a nation you're at war with?

adventured 13y ago

That assumes oil remains a top energy source in the future, and that it's still widely accepted / usable in the future (that there are still very large markets for buying, selling, processing, trading, and burning it). If the global economy moves to electric vehicles - which is all but guaranteed at this point - the existing hyper scale market for oil will disappear. Speaking financially, they should drill and sell as much of it as possible as fast as possible, particularly with today's excellent prices. Leaving it in the ground is as good as destroying the wealth it represents here and now. The best conversion they could do is to build the world's best renewable energy infrastructure, and drive it to a large surplus that they can export. Build the best education system, so all of their 5 million people get top notch educations. Build the best commercial infrastructure to keep their economy competitive. Invest into robotics and really any IT and R&D, and perhaps compete in new forms of automation based high value manufacturing.

e12e 13y ago
It seems unlikely that oil and gas wouldn't be valued for both use as energy source and for chemical processes in the future as well. With an added benefit of less oil burnt now, might decrease the chances of a cataclysmic climate event in the near future.
- adventured 13y ago
  It's more likely in environmental regards, that oil and gasoline will be nearly regulated out of use in the future (if they're not simply stamped out by superior energy infrastructure). The death by regulation scenario becomes more likely as the world becomes less dependent on oil / gasoline. That's why the Obama Admin dares to hammer coal now, because natural gas has come online via fracking.
lafar6502 13y ago
I don't think today's prices are excellent from them. North sea oil is much more expensive to produce than in Middle East so Norway's income is lower than Kuwait's. The amount of cheaply accessible oil is diminishing so it's inevitable that prices will go up with rising production costs and limited supply. There are no alternatives to oil in current world's economy, so I think we'll burn all of it before we are forced to build a new economy.

tilsammans 13y ago

True in principle, but their oil stock would become so valuable that other countries will just decide to grab it, invade Norway, and plunder the whole lot.

e12e 13y ago
Countries could also (I would argue more easily) nationalize the companies the fund has invested in.
- lmm 13y ago
  There's some safety in being entangled with everyone else. It would be difficult to nationalize just Norway's stake and avoid upsetting other nations.
- vidarh 13y ago
  The fund does not invest in larger stakes than about 10% per company, I believe, so that would mean pissing off a whole lot of their own citizens too, to obtain amounts adding up to a quite small percentage of their own economy.
  - e12e 13y ago
    There's no reason (once you've decided to nationalize) that you couldn't just nationalize foreign interests (or even interests held by a certain (group of) nations -- such as a nation you're at war with?