Norway stands by as StatoilHydro pushes on with tar sands move

The Norwegian government may have secured environmental plaudits for its pledge to become one of the world's first carbon-neutral countries. But that has not stopped it angering green groups this week, after it refused to condemn a Canadian tar sands investment by Norwegian oil firm StatoilHydro, in spite of pleas for it to intervene and use its two-thirds ownership of the firm to block the move.

Deputy petroleum and energy minister Robin Kaass told Reuters journalists that it would not be appropriate to overrule a decision by the company's board to begin exploring oil operations in the controversial Albertan tar sands region. The company has been looking for additional oil sources to buoy up production from its North Sea oilfields as yields from the area continue to gradually decline.

StatoilHydro purchased the North American Oil Sands Corporation in Canada, concluding the transaction in 2007. The company has downplayed opposition from environmental groups, arguing that the deposits on its 257,000-acre site in Canada lie so deep underground that they would be recovered by drilling, which would reduce the environmental impact on the area.

However, groups such as Greenpeace worried about the impact of processing the heavy oil extracted from the area, which requires significantly higher levels of energy when compared to conventional oil to convert the bitumen into synthetic crude oil.

The Co-operative Bank in the UK has already taken a tough stance against companies investing in the tar sands. It published a report with the WWF-UK last year highlighting the environmental cost, and the risk to investors, and has also tightened lending criteria to avoid giving money to tar sands-friendly companies.

Meanwhile, there are signs that growing numbers of investors are willing to oppose tar sands investments after a shareholder resolution calling on oil giant ConocoPhillips to account for the environmental impact of its tar sands operations this week secured more votes than it received last year.

The resolution, which was tabled by sustainable investment specialists Trillium Asset Management Corporation and Green Century Capital Management, secured votes from more than 30 per cent of the company's shareholders, compared to 27.5 per cent last year.