You probably don’t include Denmark in your list of oil producing countries, but the country is the largest oil producer in the European Union thanks to the reserves under the North Sea.
So the vote by a majority in the country’s parliament on Thursday is actually a very big deal. Denmark has decided to stop offering new oil and gas leases in the North Sea and to phase out all production there by 2050. That lines up with the European Union’s goal of being carbon neutral by 2050.
And it will leave around 150 million barrels of oil and oil equivalents in the ground.
This last is the oil industry’s nightmare. Not only is oil demand falling as countries move to address global warming, but there’s the likelihood that reaching those national carbon goals will mean leaving some part of discovered reserves of oil and natural gas in the ground. Oil companies are fighting hard to delay carbon-reducing policies so they can pump as much of their reserves as possible, but the deadline for reducing production to meet carbon goals is very real. I don’t know of any oil company that has addressed in its published financials the possibility that some part of its discovered reserves will be “stranded,” that is left in the ground and never produced.
That one country has moved to do exactly that puts this policy into global play.
