Norwegian Supreme Court: Okay to Explore for New Oil. Producing It Is Another Matter

In a decision that disappointed climate advocates while offering little comfort to oil producers or investors, the Norwegian Supreme Court today upheld the government's 2011 and 2013 grants of exploration licenses in the Arctic but put a big question mark on whether any oil discovered could actually be produced.

Today's decision culminates four years of litigation in a landmark case brought by Greenpeace Nordic, Nature and Youth, and other organizations arguing that the grant of exploration licenses in the Barents Sea violated the right to a healthy environment enshrined in the Norwegian constitution.

In a decision narrow in its legal holdings but broad in its risks for the industry, the Court upheld a lower court's ruling that the Norwegian constitution protects citizens from environmental harms, including the climate harms created by burning exported oil, but declined to enforce that right against an oil exploration licensing scheme expressly authorized by Parliament.

While the Court considered future emissions from exported oil too uncertain to bar the granting of the petroleum exploration licenses at issue in the case, it held that these emissions would have "great weight" in any future decision regarding the production of any oil discovered. The court observed that even significant investments in exploration did not entitle companies to extract any fossil fuels that might be found, stating that the authorities will have the "right and duty" to deny production licenses if granting them would violate the constitutional right to a healthy environment.

"The Court's decision shifts the legal burden back to the government to seriously address the climate impacts of oil exports in any future production licensing," said CIEL President Carroll Muffett. "And by delaying those decisions even as the climate crisis accelerates, the Court has dramatically increased the risk that costly investments in oil exploration will add more unexploitable and worthless reserves to companies' mounting piles of stranded assets."

Today's judgment will also increase pressure for Norway's leadership to listen to their citizens, heed the overwhelming science, and join Denmark and others in halting new oil and gas production.