A Curious Procession of Speculators and Socialists Wanting American Conditions

Joe Biden

Joe Biden has suddenly become the role model of both socialists and international speculators. (Archive photo: Gage Skidmore)

(Commentary) Just as the energy debate was about to move into a somewhat calmer phase, Norwegian socialists throw themselves into the arms of President Joe Biden and wish for American conditions in Norway.

In those same arms, we find Norwegian and foreign investors who want the Norwegian state as an official sponsor for their stock market portfolio.

Difficult to keep up?

Let us start from the beginning.

Greenwashing trumps everything

The major buzzword of the deindustrialization of Norway and other countries is "green". Under this label, we find everything from crypto industries, data storage for social media, mining industries, industrial processes, and you name it. Greenwashing trumps all arguments in the political debate.

In the US, President Joe Biden has launched a gigantic 10-year plan for green investments within both industry and infrastructure. Inflation Reduction Act (IRA) is the name of that plan.

There it shares the space with socialists' continued traditional contempt for American foreign policy.

However, in addition to being green, it is more protectionistic than anything Donald Trump even managed to come up with. It is a revitalization of "America First", triggered by the Ukraine War and the US' tense relationship with China, to put it mildly.

This is the model the Norwegian Socialist Left Party, so far without reservations, wants to copy in Norway. And here they are followed by industrial businesses that are not necessarily Norwegian-owned, but who operate in Norway, and are now fully or partly moving their operations to the US.

Meeting in the scrap heap

The traditional industrial battle for international free trade is moved to the scrap heap. There it shares the space with socialists' continued traditional contempt for American foreign policy. Because the IRA is about American foreign policy, about outperforming Europe by launching major tax reliefs on the other side of the Atlantic Ocean.

As a consequence, a gigantic investment in a battery factory in the High North has for the time being converted into a land purchase in the US. The requirement to continue its initiatives in Norway is that the Norwegian state must be willing to use tax money to finance private investments in the green industry.

Not many years ago, the battery factory Freyr launched with fanfare in Mo i Rana, Northern Norway. It was to employ 2500 employees, in addition to ripple effects that likely lacked comparison in Norwegian industrial history. After some cleanup of the numbers, the number of employees was reduced to 1500.

The fish cannot be moved.

Still, a gigantic initiative in a part of the High North that already has a glaring lack of labor.

In the meantime, the company's shareholders invested in a factory in Finland, before they bought land in the US a few weeks ago to build a new battery factory. The gigantic initiative in Mo i Rana in Northern Norway is for the time being just postponed, according to the company's leadership.

The company's investors demand

Or as CEO of Freyr Tom Einar Jensen explained: We must invest the most and the fastest where the earnings are best. That is what the company's investors demand.

He also let slip that the company's investors, not to mention the lenders, do not want to invest as planned in Norway before the Norwegian state takes a larger part of the bill.

For the sake of balance, he probably should have added that the Norwegian state has already contributed NOK 4 billion in guarantees, in addition to what is a secret, but quite surely lucrative, energy agreement, in a market that screams for green energy.

Since Norway is not a member of the EU, we are also not part of the European organization's so far futile attempts to reach agreements with the US. Agreements that limit the damage of American protectionism on European business. Our outsiderness has already led to Norwegian battery factories starting with an extra cost of 10% on their way to the market.

Dependant on export

What the Socialist Left and part of the business sector forget is that Norway is far more dependent on trade barriers being broken down than built up. Nordland County, where Freyr had its plans for investment, exported for NOK 51,4 billion in 2022, according to Indeks Nordland. That is an increase of 34% from the previous year. The export consists mainly of fish, metals, and petroleum products. This is significant, even in a national context.

The export industry's challenge is the scarcity of energy, the battery factories' most important raw material. 

The other challenge is the market access for a country that stands outside of the EU.

If each country puts its own industries in the center instead of seeing where we can cooperate, of which we see clear tendencies in the EU as well, Norway might become one of the biggest losers in Europe.

Usurp a larger portion of "ordinary people's" incomes

Perhaps public funding of gigantic data storage facilities or battery factories is not the right answer to the development of Norwegian industries. The state risks, as Freyr showcases, that such operations can turn around at any point and move to other countries when the market or subsidies change.

The fish cannot be moved and neither can the raw materials of the industrial processes.

Fires with coal

The argument for establishing a battery factory in Mo i Rana was access to green energy. It is not clear what kind of energy will fire up the battery factory now being built in Georgia, USA, to say the least. A press release from Freyr obscures more than it clears up when it writes about "evaluating clean power supply solutions for Giga America with utility providers in the region, including the potential development of a dedicated solar plus storage facility."

The state of Georgia is a major consumer of what is called natural gas. Most of this is actually the very controversial shale gas. It is so controversial that one of Equinors owners, Storebrand, recently loudly criticized the company for its shale gas production in precisely the US.

The clean energy that Freyr would have to compete for only makes up 12% of Georgia's electricity consumption. 15% comes from the burning of coal and the rest from nuclear power plants.

There are no other ways to read this than that the decision to move to the US, in addition to the tax benefits, is no longer about access to clean energy, but about profits.

That is an honest matter, but it illustrates how the arguments for "green" investments are better fitted for sales pitches with state and municipality, than reality.

Ordinary people

When parts of the Norwegian business sector now demand that we copy American protectionism and tax reliefs, they speak for their own sick mother and forget that the majority of the Norwegian export industry becomes the loser in the face of every protectionistic measure.

When the Socialist Left wants to protect Norwegian battery factories and data storage facilities by copying Joe Biden's tax reliefs, they forget that they are simultaneously risking existing businesses and jobs. Furthermore, the Norwegian state is already heavily involved in the so-called green shift. Not only through state support for battery factories, but also through financial and political support for pouring clean energy into the oil and gas industry.

In other words, it is a curious procession of speculators and socialists standing shoulder to shoulder to usurp a larger portion of "ordinary people's" incomes in the form of taxes and duties, or alternatively receiving more funds from a state pension fund meant for future generations bereft of the income from oil and gas.

Instead of participating in a fundamental debate about how the state's funds and our sought-after green energy are to be spent.

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This commentary was originally published in Norwegian and has been translated by Birgitte Annie Molid Martinussen.