Norway has a sovereign wealth fund (valuation: 1.4T in USD) that is setup specifically for this eventuality.

Many large oil exporting countries know the good times won't last, and are planning for it.

> Norway has a sovereign wealth fund (valuation: 1.4T in USD) that is setup specifically for this eventuality.

That's not much - $25K per person over 10 years, and with an average income of $70K per person, and something like half of their economy is energy (most if not all social programs are funded from energy production).

If oil were to stop tomorrow, they'd have around 10 years before the money runs out. (Maybe a bit longer since kids don't earn money.) And if they have to replace all the social funding, they'd have even less time.

Norway is relying on slow reduction in demand, and time to transition their economy. Will they have it? It's far from certain. I feel like Norwegians rely too much on this fund to save themselves, rather than transitioning away from oil now.

There are lots of pushes to move the fund into carbon-neutral or negative investments, which would likely grow as the fossil fuel economy swan song starts.

However, I find it a bit disingenuous to chide Norway which is doing far better than much larger countries like the UK, US or Germany in transitioning to renewables.

I am not worried for Norway (though when the North Atlantic jetbtream shifts they will likely suffer) - I'm far more worried for the poor and marginalized peoples - they will suffer far more.

It's no surprise that thought leaders are worried about climate change impacts. Some will perversely benefit (politicians who are anti-immigration will gain populartiy because climate migrations are clearly defined by US defense dept as a likely result from climate change). Others may benefit by providing mitigating solutions to climate change itself that alter economies.

Its an endowment, they should be only spending a portion of the earnings not the principle. That way it will last in perpetuity instead of 10 years.

Do the math. That's enough for 5K/person/year.

You really think that's enough to replace the oil sector?

The income from the wealth fund doesn't need to replace oil income forever, it should be used to invest in growing other parts of their economy. For example, Equinor is getting into offshore wind and carbon sequestration both of which use similar competencies to oil production.

Anyway, they are still extracting oil and probably will continue to do so for a couple decades. That gives them time to grow their wealth fund and gradually transition their economy. They are at a huge advantage compared to other oil exporters.

A comment above says that only 14% of GDP is oil dependent. That does look apocalyptic even if by magic oil demand drops to 0 tomorrow.

14% of GDP - but a MUCH larger percent of exports. Also a quite large percent is indirectly from oil, i.e. oil related services.

Additionally social funding in Norway comes from oil - without that funding taxes would have to go up a lot.

it’s actually $250k per person

It's $25K "over 10 years" - they are not going to spend all of it in a single year because then there would be nothing left.

As I see it, Kodak saw the writing on the wall pretty early, started R&D for digital camera ahead of the pack, and actually built the first working digital camera we know of. But it failed to put as much weight behind the new product line as it did on the money making ones.

That's basically a text book example of the "strategy tax", which isn't about stopping profit from existing products, but to let new concepts cannibalise legacy products.

In which way do you see Norway hitting the brakes on new technology and future trends to protect the oil business ?

How large is the Oil Fund these days (after Corona spending) 1 trillion USD or something like that - you'll be fine

> How large is the Oil Fund these days

They got a "live" counter here[1], so yeah around 1.3 trillion USD give or take. Estimates for corona spending is around 80 billion USD[2].

[1]: https://www.nbim.no/en/

[2]: https://www.nettavisen.no/okonomi/regjeringen-advarer-oljefo...

Geezus, must be nice to have that kind of rainy day fund. Grossly over-simplifed: "Shut down the economy? Oh well, here's 80 billion dollars to keep everyone fed and warm."

A country can't sustain itself on cash alone. Human capital and infrastructure is vital.

For a few years. But divide that fund by the population and it suddenly doesn't seem as much.

Human capital is far more valuable, but most of the industrial knowledge of Norway is in energy production.

Energy production isn't going to go away.

If the world remains able and willing to pay it back. It's mostly invested abroad.