How Norway has avoided the 'curse of oil'

http://www.bbc.com/news/business-28882312

by diminish • 12 years ago

271 133 12 years ago

The story of how Norway's oil industry started is pretty interesting http://www.ft.com/intl/cms/s/0/99680a04-92a0-11de-b63b-00144...

zhte415• 12 years ago

As is the movie Pioneer. Quite horrific experiences. In Norwegian and English, about former fishermen who laid the first North Sea oil pipe.

https://en.wikipedia.org/wiki/Pioneer_%28film%29

60+ reported to have died, and diving at that depth has since been disallowed.

bgdam• 12 years ago

Non paywalled link: https://www.google.co.in/url?sa=t&rct=j&q=&esrc=s&source=web...

elchief• 12 years ago

C'mon man. Norway's the #1 importer of Teslas [1]

Otherwise, man I wish Canada would manage our oil money like Norway. But we burned that bridge a long time ago.

[1] look it up

seszett• 12 years ago

Well, it's not really Canada that has oil, it's more like just Alberta isn't it? Norway is a unitary state while Canada is very federal.

fleitz• 12 years ago

Alberta has almost as much oil as Saudi Arabia, but the rest of Canada has more moderate reserves similar to those in the US.

There's also the Hibernia field with the largest oil platform in the world.

_delirium• 12 years ago

Mostly Alberta, but also other places, especially given that many provinces have smallish populations, so it doesn't take a lot of oil to be a large part of the economy. British Columbia, for example, has 4.6 million people and produces 20k barrels/day of oil, which is more per capita than Texas (even after the recent jump in Texas's production). But it's not as economy-dominating as in Alaska, Norway, or Alberta.

Expez• 12 years ago

The Tesla isn't priced as a luxury car in Norway. Electric vehicles are exempt from taxes and fees, which is mostly where the money goes when you buy a more traditional vehicle. They also don't pay anything when passing toll booths, IIRC. Where I grew up, people now pay ~$10 just to pass toll booths to and from work every day.

There are other benefits as well, like free parking, Tesla's free charging station--and most importantly for many--you get to drive in the lane reserved for buses and taxis instead of dealing with traffic to and from work.

calibwam• 12 years ago

The last benefit actually is starting to become a problem, since so many people have gotten Teslas. There's a lot of traffic in the bus lane, as electric cars, buses and taxis fight for the same spaces.

Veinlash2• 12 years ago

All of this is indeed correct. People here don't buy Teslas or other electronic cars because of the environment. Most do it for the economical reasons listed above [1]. However there has been a lot of discussion recently about whether these economical advantages are here to stay. Currently the electric cars are clogging up the bus/taxi lanes and the government is losing money as a result of the electric car boom we've seen here recently [2]. It will certainly be interesting to see what removing the advantages will do to the electric car market in Norway.

[1] https://translate.google.com/translate?sl=no&tl=en&js=y&prev...

[2] https://translate.google.com/translate?hl=no&sl=no&tl=en&u=h...

mjevans• 12 years ago

With incentives like /that/ I too would buy a Tesla.

varjag3• 12 years ago

True, it's an economy car for well-off people here really. In Bergen it's now easier to spot Tesla than a Ford Focus.

BorisMelnik• 12 years ago

relevant:

http://en.wikipedia.org/wiki/Resource_curse

prawn3• 12 years ago

Statoil and how Norway essentially protected its future is a lot like how Australia should have dealt with the so-called mining boom.

Named and outlined better, our "mining tax" could have been this. It could have protected against capital flight and essentially built national strength for all at the expense of those (especially foreign interests) looking to dig up serious swathes of our ground.

Instead, we had a predictable response from the mining magnates and Coalition, an easily duped and panicked public, and a flailing government at the time who named the concept terribly and defended it poorly. And when challenged on the whole "it's barely made any money" front, caved instead of noting that it'd been potentially hampered for political reasons.

What's an easier sell to the public? "Mining tax" or "Future Fund; funded by giant, mostly foreign mining companies."

Look at the Coalition's "$20b" medical research fund. So many people think that's a current $20b fund, rather than a far smaller fund to be built up to $20b over a number of years, and then to fund research only from the earnings of the fund and not from the fund's base value. Labor should have framed the MRRT much more like this and it would've made for a better sell. Avoid the word tax, outline the goal with a specific value range and target date, and name the beneficiaries of the earnings - technology research, medical research, etc.

I can't see how this wasn't a big missed opportunity for Australia.

chii2• 12 years ago

as an australian, i m sadden by this. Why isn't there public outrage and change? =(

prawn3• 12 years ago

Because the mining industry is powerful (major share of our exports) and big business dominates the media. They get the public fearful about the loss of jobs.

Further, Labor's infighting put off a lot of people while the Coalition were consistent with their message in opposition.

nl• 12 years ago

There was even discussion around this prior to the disastrous introduction of the mining tax[1][2]. Interestingly there was at least some support on both sides of politics for it.

[1] http://www.smh.com.au/federal-politics/political-opinion/a-n...

[2] http://www.afr.com/p/national/gillard_rejects_call_for_wealt...

prawn3• 12 years ago

Didn't see that at the time. This could have been a defining, legacy-creating decision for the leader of the time.

I hope the opportunity to capitalise isn't completely lost.

cylinder2• 12 years ago

Australia is basically like many African nations, where foreigners run the resources sector and the locals hope to get a piece of the pie through employment/wages.

However, Norway's resources are completely different to Australia's. Norway knows where the oil is, they just have to dig it up. So, they can just have a state-owned company pump it out of the sea and keep the profits for themselves.

OTOH Australia's minerals are hidden across a barren landscape the size of the continental USA. Projects are very speculative and require huge investments. New discoveries are being made every year all across the continent.

Hancock Prospecting (company now owned heiress Gina Reinhart, one of the richest women in the world) was created when its founder crashed a personal plane somewhere in the outback and discovered resources in the dirt (or something like that).

Even when you do know where the stuff is, tens of billions often need to be invested before anything is produced, like the new LNG wave.

There is no way the 23 million Australian citizens could invest this kind of capital into speculative projects. One failed project would bankrupt the nation. So, foreign investment is required.

But, even with minimal resource taxation/royalties, Australia is becoming uncompetitive for many resource investments, with the AUD and commodity prices where they are. Iron ore at its current price is now unprofitable, basically. As well all know, corporations require a certain ROE to do anything. Nobody is going to risk $10 billion for a possible 1% return. Massive LNG projects are getting shelved left and right.

There's oil hidden all across Australia and her waters, too, but there is very little infrastructure in place such as pipelines to transport the product to terminals/refineries, like there is in the US. If Australia was to nationalize its oil industry, would its people be willing to shell out tens of billions of their own tax dollars to build this infrastructure? All speculatively, knowing that their type of oil production is not profitable at all if oil once again goes below $70 a barrel, which could happen overnight (see Sept-Nov 2008)?

While I could see some sectors of the resource industry being nationalized, broadly it's just not sustainable. With costs where they are, there isn't a ton of room for more royalties.

Best thing would be for policymakers to just move on from relying on mining and start focusing on educating the population and competing where it counts on the global stage.

throwaway283719• 12 years ago

All speculatively, knowing that their type of oil production is not profitable at all if oil once again goes below $70 a barrel, which could happen overnight (see Sept-Nov 2008)?

Is there an obvious reason they couldn't sell their oil forward (or just sell futures)? You can sell oil forward three years for around $89 a barrel at the moment, as opposed to around $93 a barrel for delivery next month.

That's for WTI, and Brent is currently even more (in fact the Brent curve is in contango at the moment). I don't know what grade Australian oil would be, but I wouldn't be surprised if it's closer to Brent than to WTI.

lilsunnybee2• 12 years ago

How can prospecting and extraction be both simultaneously unprofitable and also creating incredibly wealthy heiresses? If resource extraction and profit-sharing in Australia is most closely compared to that of African nations, it doesn't seem like the public is benefiting much from allowing their natural resources to be appropriated and sold by multinationals.

aragot• 12 years ago

Having lived in Australia for 3 years, I've been surprised their 3 major areas were mining, tourism and international education. Even Syndey's next big bet is to build a huge casino. They sound ephemeral, like just taking the money where it is. Of course they're richer than Europe, but isn't it better to build industrial sectors (I mean transformation industries with know-how) and research?

valgaze• 12 years ago

The rise of these sovereign wealth funds has been pretty extraordinary- if corruption is kept under control those resources are politically "out of bounds" for spending.

This list ranks SWFs by size- notice there are several US states on the list: www.swfinstitute.org/fund-rankings/

phaemon• 12 years ago

The steps of building infrastructure and investing outside the country, are pretty much exactly the same as was suggested for Scotland in the McCrone report in 1974.

Unfortunately, that report was classified as "secret" at the time, as it was felt the conclusions would boost support for Scottish independence. It wasn't released until 2005.

Link: http://www.oilofscotland.org/mccronereport.pdf

praptak• 12 years ago

I am jealous of Norway. Social relations in most other countries, even the "first world" ones, seem uncivilized by comparison. I always wonder how they arrived at this point - this looks like they have some magic ingredient that made their Prisoner's Dilemma converge on 'cooperate'. It must be the fjords.

bigpeopleareold• 12 years ago

Simple. I grew up in the US, but am in Norway now. I have Norwegian ancestry that comes from my grandparents. Doesn't matter whether here or there. Mix Lutheran-piety (even if Norway is quite secular) and a bit of boredom does help in the cooperation department. I am not applying this to everyone, but that is how it is.

None of this is a culture shock for me. Probably someone else has something deeper to say about it, but I knew what I was coming to when moving to Norway, in this regard.

jskonhovd• 12 years ago

I have Norwegian ancestry as well. I would love to visit, but I don't think I could live there. Also, The language looks absolutely terrifying.

parsnips• 12 years ago

Look at Norway's demographics and immigration policy for a clue or two.

jokoon5• 12 years ago

i want to go there so bad :(

CalRobert5• 12 years ago

Well, make it happen. University is one option:

http://www.studyinnorway.no/Tuition-Scholarships

I say this not to be glib, but as someone who yearned to move abroad and found out that it wasn't as hard as I thought.

jokoon5• 12 years ago

"However, you should take into consideration that living expenses in Norway are higher than in many other countries."

I don't have a job right now, no savings, 29 years old, and paperwork bore me. There are dozens of those "programs", and I don't want to spend one entire week sorting it out to discover I can't afford to just live over there.

I want to go there no question asked, to work, not to study.

malvim• 12 years ago

This. Brazilian here, lived in Californa for a year, and could have stayed longer with relative ease at the time. There's really NOTHING stopping you from living somewhere else if you really wanted.

Well, apart from paperwork, study of the country/state/city you want to go to. If that's too boring and you want the "no questions asked, come work here" treatment, I guess there is something stopping you after all.

cel1ne• 12 years ago

Since we're talking about how awesome Norway is, this [0] should be mentioned.

[0] https://en.wikipedia.org/wiki/Freedom_to_roam#Norway

arethuza2• 12 years ago

Scotland also has similar "right to roam" legislation (as listed on that page you linked to) - which given the ways that large landowners often acquired land here seems rather just to me.

sharpneli• 12 years ago

It's an awesome right.

As a Finn I always find it really weird when visiting places outside Nordic Countries that for them most of the country is unaccessible.

k__2• 12 years ago

In Germany we don't got this right, but seldom I have been prohibited from "roaming" the landside. But we aren't allowed to put a tent anywhere and sleep in it, which is rather sad.

A friend of mine went on a hiking holiday in Scotland and he told me, he just walked till he was tired, put his tent up on the next green spot and slept there.

jakobsen2• 12 years ago

Only 7% of the land in Finland and Sweden is Agricultural land, compared to 70% in the UK, so it's no wonder that the countryside is much more inaccessible.

That being said, there's a lot more that could be done, such as allowing kayaks into rivers and lakes without so many unreasonable limitations and/or paperwork.

Shivetya• 12 years ago

Yeah, so awesome. 729 whales so far, tell me again how awesome they are.

http://www.independent.co.uk/news/world/europe/norway-kills-...

wjk2• 12 years ago

That's just sensationalist clickbait. The whale species hunted are not endangered and there is no ban on hunting these whales. There are many species of creatures which actually are and which you should spend more time caring about though. These whales are not among them.

sleepyhead2• 12 years ago

What is the problem? These whales are not near extinction like some whales outside Japan. The allowed quota for whales each year is strictly regulated by Norway which is one of the most environmental states in the world (yes we have lots of oil feel free to point out the double standard there). The killing itself is in most cases instant. If you care about how animals are treated you should be much more disgusted at how chicken are raised and their living conditions. The whale lives a happy life until it is killed.

Oh and whale meat is delicious.

jkmcf• 12 years ago

Driving across the US west, you can’t help but notice how every bit of land is cordoned off with barbed wire or fences. Doesn’t matter if it’s in the middle of emply plains or uninhabited mountains. "Private property" and "no trespassing" signs abound.

chiph• 12 years ago

You do have to ask permission of the landowner to hike/camp on their property. But with the size of some of the cattle on the land (I'm thinking of Texas Longhorns) and the presence of common predators/pests like feral hogs and coyotes, it's not always safe to just wander around.

There's also the water issue. If you run out of water in the west while on your hike/tramp, you're in life-threatening trouble. And there's often no cellular service.

Thrymr• 12 years ago

Hardly "every bit". The federal government owns more than half of the land west of the Rockies [0], and most of that (e.g. US Forest Service and BLM land) is free to roam over. Much of it you can camp anywhere you want, too.

[0] http://www.washingtonpost.com/blogs/govbeat/wp/2013/10/15/al...

netcan2• 12 years ago

The economics of mining are complicated, but there are some similarities to the startup/VC complex. A big part of developing mines is exploration. Finding minerals can be hard, especially in the north sea. The oceans are big. The difficulty is why there are still new deposits being discovered.

Exploration usually happens when the company doing it can hope to make money off of a successful discovery. They might even pay for the privilege. Imagine a scenario where a company finds a motherload of oil after a low probability exploration. Their exploration contracts (being signed before the deposits were known) guarantees them a huge profit. Unseemly, even. They are earning that because they took a risk. Now they get their 100X. Try explaining that in an election year.

New technologies are constantly being invented that improve exploration, surveying & mining. This means that there are new possibilities every year impacting which mine/well is profitable (minerals can be extracted at a profit. These all change underlying economic realities. A $1bn per year mine can only make a slim profit in years where commodity prices are high. It employs many people. The next year commodity prices change or some new mining or processing technique (fracking is a huge gamechanger) mean that some complicated contract is now worth a whole lot of money. The $1bn goes from a 2% margin ($20m) to a 30% margin ($300m) and everyone want a piece of it.

Meanwhile government departments, unions, armies, etc are salivating over the prospect of this wealth. The National University's long impoverished Oceanography faculty has their eye on a fleet of research vessels. Academics are starting companies offering to do (mandated) environmental impact studies. There is a lot of pressure for money now, from industry, politicians, constituents.

Politicians definitely don't want to be investing during their term for the benefit of politicians 10 years from now. The world can be cynical, but not always.

Norway has done well. I'm not sure if any one thing can be learned from them. Have smart people running things. Meanwhile Norway have their own political traditions, values, and probably pathologies.

chii2• 12 years ago

Politicians definitely don't want to be investing during their term for the benefit of politicians 10 years from now.

you've hit the nail - short term gains vs long term losses. What you need is some mechanism to make it so that the long term benefits align with the benefits of the politician - for example, the project(s) you start stays with you, even after you're term is over.

netcan2• 12 years ago

One nail perhaps.

There are a lot of forces at play and real-politic cynicism is one of them, not always one of the biggest.

dharma13• 12 years ago

Probably one of the best examples of how natural resource wealth has been preserved and invested for the whole nation, instead of being lost to the pockets of few through privatisation, corruption or mismanagement of funds.

I think the magic ingredients (aside from being lucky with natural resources in the first place) are egalitarian society, high level of trust, very low level of corruption, a functioning democratic government and highly skilled fund managers.

thomasfl• 12 years ago

Another Norwegian here. I think you are right. The high level of education also helps. But it was actually an Iraqian immigrant named Farouk al-Kasim that proposed the laws to protect Norways natural oil and gas resources.

Further reading: http://www.ft.com/cms/s/0/99680a04-92a0-11de-b63b-00144feabd...

dharma13• 12 years ago

Finnish, not Norwegian - I think you guys have done great.

Read the story of Farouk al-Kasim a few months ago, fascinating. It does seem like a stroke of luck that the right people were there in the beginning. His nationality is both ironic and sad considering where Iraq is today

VMG• 12 years ago

Further listening: NPR Planet Money Podcast: "Norway Has Advice For Libya"

http://www.npr.org/blogs/money/2011/08/26/139972557/the-frid...

fnordsensei2• 12 years ago

This must really be upsetting for the extreme liberals of the country.

"Public resources being invested sensibly! Horrifying! You can tell that this is an awful idea by looking at how miserable the people of Norway are, and how badly their businesses are doing.

You should liberate yourselves by giving all of it to private interests. That's the definition of freedom!" /end sarcasm

sanoli3• 12 years ago

I think you were downvoted because in the U.S. the term 'liberal' has a different meaning than in different parts of the world.

nly2• 12 years ago

'Liberal' parties in much of Europe lean toward socialism, pushing for higher taxes and better public services. Over here, the people you describe as liberals would be considered extremist conservative.

maaaats2• 12 years ago

Kinda ironic having the picture of the current finance minister, Siv Jensen, there, as she is so opposed to us saving this money. She is mainly elected on promises on lower immigration, cheaper alcohol, cheaper fuel and lower taxes. Planning to achieve that by using the fund's money.

varjag3• 12 years ago

Were she around in 60s/70s, she'd likely have banned al-Kasim, the geologist who discovered Norwegian oil, from moving in.

sleepyhead2• 12 years ago

Oh look at the socialist everybody. I don't vote for FrP (party of the finance minister) but these tabloid political personal views doesn't bring anything to this discussion. But yes she does want to increase spending from the "oil fund".

jensen123• 12 years ago

Bergen is not the center of Norway's oil and gas industries. Stavanger is.

http://en.wikipedia.org/wiki/Stavanger

Swannie• 12 years ago

That's what I thought too... But I'm biased, because I've only been to Stavanger and not Bergen.

The reason I assumed for not having super cars around there is because it gets too damn cold. Now the number of high end 4x4's I saw there... that's another story :-)

noir_lord3• 12 years ago

I've often said the Nordic countries in general are as close to a Star Trek style civilisation as we've ever gotten.

As someone who lives in America Lite (the UK) your policies on just about everything strike me as insanely reasonable.

I pretty much feel shame whenever I think about our last two governments.

rmc• 12 years ago

Who knows, Scotland might be able to follow that model soon?

varjag3• 12 years ago

If it's of any consolation, your healthcare is still better.

noir_lord3• 12 years ago

For now.

The current government seems determined to paint the NHS as failing in a pretty blatant attempt to privatise large chunks of it, the bastards.

I used to be pretty neutral towards the major parties, tending to look at what they did rather than what they said but quite frankly the conservatives can go and fuck themselves.

cylinder2• 12 years ago

Is there freedom of movement for UK citizens into Nordic countries? If not, is the migration process hard or easy?

If it's simple, why not move there yourself?

surfmike• 12 years ago

Yee, the proces is very simple. You can simply arrive and you have six months to look for work. Once you get a job you just need to register with the police (you make an appt a couple months in advance and then he visit takes 5 min) and get your tax card (same visit, takes another minute). AFAIK all EU citizens can do this, no special work visa required.

noir_lord3• 12 years ago

I've considered it a few times but there where and are reasons why for now I need to stay in the UK (til recently partner with health problems) and my mother is ill.

It's something at the back of my mind for one day though.

makmanalp• 12 years ago

There is also the related concept of "Dutch Disease" (http://en.wikipedia.org/wiki/Dutch_disease) which is what I expected this would be about. The idea is that once a country discovers it has reserves of a valuable natural resource, it tends to exploit and build its economy around that resource, at the expense of its more complex sectors like manufacturing. Norway seems to have handled that decently well so far, and part of the lack of spending probably comes from the fact that they realize their oil's a short term freebie boost not an economic strategy.

adventured6• 12 years ago

I know a lot of people talk up Norway, but I'm not aware of anything that Norway does economically that matters outside of energy production.

What great technology, companies, etc. have they produced in the last 40 years? What big innovations come out of Norway? Do they have the top universities in the world?

They've only won two nobel prizes since oil became the center of their economy, and they became rich. They won four in the 1920s, and four between 1968 and 1973. The oil wealth sure doesn't seem to have spurred great knowledge acquisition.

cgh• 12 years ago

The country only has 4.5 million people. It's like saying that greater Phoenix doesn't matter because it's only produced two Nobel winners.

pi-rat2• 12 years ago

The Cheese Slicer and Black Metal ofc! :)

On a more serious note, we're only like 5 mill people, and while we don't rock the nobel prices I think the oil has pushed us more towards engineering than theoretical research (for better or worse..). Agree our Universities should be better than they are - it's apparently hard to get funding for something that isn't directly applicable to oil, subsea or salmon.

But you probably use lots of stuff designed/invented in Norway without knowing. Example: Do you use a GSM phone? GSM was invented at a Norwegian University.

Lots of research for subsea-technology, oh, and we're pretty good at ship design stuff - dating back from the viking age until now (x-bow). Techy stuff: Energy Micro, Nordic Semiconductors, some parts of Atmel, Opera, FAST, etc.

Most of the oil welfare fund is invested abroad - all over the world (reduces risk and avoids inflation), these days heavily geared towards green technologies / energy.

flurdy• 12 years ago

Norway do suffer from a mild form of Dutch disease unfortunately.

The oil industry dominate new investment. Although a lot of that is high tech solutions and can probably be used in other sectors, especially in related areas such as marine and shipping solutions, but they do not invest very well in any other area.

Some new companies are successful (Fast,Trolltech,Kongsberg,etc) but it is more in spite of the investment available. The VC, general investment and interest is barren if you compare the buoyant start up market in Denmark, Sweden and Finland.

I am worried about the state of affairs in 20-30 years if they not e.g. follow Finland's post Nokia incubation assistance etc. (IMHO as a Norwegian living in the UK).

gabriel34• 12 years ago

Norway could have let its own citizens decide how to spend their share of the money. That would probably result in some spending more than others, resulting in inequality and an overall worse quality of life, even for the wealthier.

Instead they decided on a mandatory saving of the money. This might have been good for them, but it creates a giant State which wouldn't fly in other cultures.

tormeh3• 12 years ago

Not really. It's a bunch of traders sitting in an office. They don't really make the state any bigger.

Gravityloss• 12 years ago

I think the key is that Norway was organized, coherent and educated before they discovered oil.

timdierks• 12 years ago

It seems to me that the high levels of trust necessary for this to work also imply a high level of social cohesion (possibly homogeneity). In a society with less internal agreement, I don't see how you could get this much alignment over what is the right management strategy, let alone trust that it's being followed.

larsiusprime• 12 years ago

Don't forget SIZE. Norway is a tiny country, and so the distance between people and government is small.

Norway's success is a strong case for localism.

zanny• 12 years ago

Reading this, I realize that almost everything is a case for localism, since we now have nuclear weapons and international instantaneous communications that mean trying to invade a small country is much less reasonable (unless you are Russia).

I mean, that is (in part) why the Greek model failed. Small countries are vulnerable to conquest. But today that is not much of a problem, so I hope the natural social pressure to minimize can overcome the entrenched imperialistic powers that hold a lot of the larger nations together. It just makes more sense to me to, say, have 50 countries and a EU in the US instead of one massively overbearing federal that has authority over a land area competing with continental Europe.

Millennium• 12 years ago

They say as much in the article. This just plain wouldn't work for a society that cannot describe itself as homogeneous, as Norway can and does.

known• 12 years ago

And https://en.m.wikipedia.org/wiki/There_Will_Be_Blood

adventured6• 12 years ago

The oil curse is a silly notion. The US and Canada have both avoided any 'curse.' China is the world's 5th largest oil producer, it too is certainly not cursed by oil.

Norway however has a huge problem coming, soon. Their oil production is running out rapidly: http://i.imgur.com/UlR1B0a.jpg

It has fallen about 40% in a decade +/-.

Even with their large sovereign fund, they will exhaust that quickly if the oil production doesn't stop falling soon. At the rate it's falling, in another decade Norway is going to be in the midst of a crisis economically.

I know some people in Norway are paying attention to this and trying to think ahead. Being conservative about the sovereign fund certainly seems like the very wise thing to do.

angersock• 12 years ago

The US and Canada have both avoided any 'curse'.

Erm, consider the massive amount of environmental and policy issues that we've had due specifically to oil. Had we not had so much of it in the early 20th century, we probably wouldn't have had the automobile boom of today and the long-term sabotage of public transportation.

There's a curse, all right.

adventured6• 12 years ago

Perhaps, but then again America would not have participated very fully in the industrial revolution if not for oil, and would not have fielded a strong military during WW2 without oil.

It's likely America would have not have been able to afford a vast, high quality public transportation system had the economic foundations not been built up in the first place. Especially considering the spread out population base, and geographic size of the country.

saryant• 12 years ago

The US and Canada didn't fall prey to the oil curse because neither nation had an entire economy built on oil production. Both were well diversified long before Colonel Drake poked a straw in the ground in Pennsylvania.

lepht• 12 years ago

Fascinating contrast to this Backstory Podcast episode about America's relationship with oil: http://backstoryradio.org/shows/black-gold-2/

jonifico2• 12 years ago

I'm from Latin America and many countries here have more-than-decent resources to make things happen, but the difference between us and Norwegians is trust, and that changes it all. Take a look at Brazil, for example. There were over 20 megaconstructions planned for the World Cup and one one of them was completed, the Maracana stadium. That's just an insane amount of corruption. So, what happens? Well, since everyone's stealing, I might as well try to get my piece of the cake, and that's when people start to become selfish A-holes for lack generation after generation. We need a new mindset, better governments and trust. Lots of trust.

adventured6• 12 years ago

Venezuela is the great example in South America.

They're, in theory, sitting on the world's largest oil reserves. Meanwhile their production has been falling for 15 years because the government, under Chavez and now, has squandered the opportunity.

They have somewhere between $10 trillion and $30 trillion in proven oil reserves, depending on who you believe (either way it's immense). They should be one of the wealthiest countries in history, right now. That's despite the challenges around extraction and the quality of their heavy oil.

jonifico2• 12 years ago

That's a great example, as well. Although it gets even worse when you realize what kind of government they're under. I mean, it's almost a dictatorship. It's all just a big pitty over another.

nwah123• 12 years ago

Common resources should be treated as public assets. There's multiple ways you could accomplish that, besides just nationalizing oil fields.

Land value taxation and severance taxes can help recapture the value of our Commons, and allow us to reduce taxes on labor or investment.

Kiro• 12 years ago

So are they saving because they're afraid of overheating the economy or that they will run out of oil?

suprgeek• 12 years ago

TL;DR "Fairly homogenous country of 5 Million people total" coupled with some good decision making.

For reference NY alone has a population of about 8 Million.

How Norway has avoided the 'curse of oil'

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