Equinor ASA (EQNR) Earnings Call Transcript & Summary

Ladies and gentlemen, good morning, and welcome to the Autumn Conference 2020. My name is Reidar Gjaerum. I'm heading up Corporate Communication in Equinor. On behalf of Equinor, the Norwegian Ministry of Petroleum and Energy and the International Energy Agency, IEA, it's my pleasure to open the conference. This year, we are hosting it from Equinor's office in Fornebu and unfortunately, not from the Norske theater. But since we can't gather a physical audience, we're happy to be joined by an even larger group than we normally have through this streaming. During today's broadcast, you will meet the Executive Director of IEA, Dr. Fatih Birol, presenting this year's version of the World Energy Outlook. Following Dr. Birol, you will meet the Norwegian Minister of Petroleum and Energy, Tina Bru, making her first appearance at the conference. And then also on stage here for the first time, you will, of course, meet Equinor's new CEO, Anders Opedal. Anders, just 3 weeks into his tenure, will elaborate around his and the company's ambition of being a leader in the energy transition and becoming a net zero company by 2050. 2020 has been an unprecedented year in so many dimensions. COVID-19, yes, for sure. But in addition, let's not forget the war for market share on oil that led to a price collapse and the geopolitical tensions creating rivalry and uncertainty. In combination, it has reset the foundation for future investments and the direction of the energy markets. So what will 2021 bring, besides a new president in the White House, the 26th Conference of the Parties, hopefully taking place, as planned for, in Glasgow and the fight against greenhouse gas emissions becoming ever more forceful. All of this and more we will discuss during the next hour or so. And to lead us through, another newcomer for the conference but not to the industry, please welcome author and CEO of Progressing Minds, Nashater Deu Solheim.

Thank you, Reidar. It's great to be joining you here in Oslo at this year's autumn conference. And let me welcome our speakers and you, the audience, to the conference this year on the theme of leadership in the transition to low carbon. 2020 will forever be a special year in the history books for the entire planet, from the rise and impact of COVID-19, which by all accounts will leave scars that will last for many years to come. To what extent the crisis has ultimately given an unexpected helping hand or indeed hindered efforts to accelerate clean energy transitions and reach climate goals, well, ultimately depends on leadership of businesses and governments and their response to today's challenges. Whilst there is wide consensus that reaching the ambition of net zero will require efforts beyond anything we've seen before, critics states that those pledges are strong in the what needs to happen, but they remain [ scamped ] in the details of how. The autumn conference is an opportunity always to take stock, take a broad look at energy and climate and to bring together those who can tell us what the forecast shows as well as illustrating the reality of what is happening now. And as you heard, we have an exciting program today as we are joined by Norway's Minister of Petroleum and Energy, Tina Bru; the recently appointed CEO of Equinor, Anders Opedal; and Executive Director of the International Energy Agency, Dr. Fatih Birol. Whilst many things about this year's conference are different, one cornerstone remains in place. We will be focusing on the energy outlook and transition with an even greater focus on the low-carbon future and exploring that dual challenge of delivering the energy the world needs and doing so responsibly with minimal emissions. Indeed, net zero by 2050, if we are to meet the IPCC's challenge of keeping the temperature rise to below 1.5 degrees. And as the UN Climate Summit stated, it's not too late. Every ton of saved emissions means human lives are saved. So what will it take? With the urgency now upon the industry and governments, what actions must be taken today? What will the energy mix look like in 2050 if we succeed? And well, who will be held responsible for the consequences, if not? So in keeping with our tradition, here to present the World Energy Outlook report from the IEA, please join me in welcoming Dr. Fatih Birol. It's great to have you joining us here, Fatih. The stage is yours. Thank you.

Good morning to all the friends and colleagues in Oslo. We just heard that the Madam Minister will participate for the first time in this very event by Norwegian colleagues, probably the energy event of the year. And of course, this is the first time that we have the new CEO of Equinor attending for the first time. There are many good firsts, but there is one best first, which is the -- I think this is more than a decade. For the first time, I am not able to make this event in person in Oslo, in this theater -- Norske theater. I never thought I would miss the theater. Sometimes, you understand the value of certain things, real value of certain things in your life when you don't have it, like this time, not to have the possibility to have the -- being there in person. And I very much hope that next year, I will be in person there and meeting my friends and colleagues in Oslo. Now what I thought today to give you, first, what is happening this year in the energy world. And then taking you through basically 2 things: oil, what is the future for oil and also gas; and climate change. So these 3 topics today, energy world, oil's future, if I may say so, under different context, and the issue of climate change. Now dear colleagues, to -- one of the advantages to be head of the IEA, there are many advantages and many, of course, challenges itself. But one of the advantages is you have all the data, world's energy data at your fingertips. So -- and we follow the energy world. And the first headline message I want to share with you is that this year, global energy use, global energy demand will decline about 5%. 5% decline. It's a huge decline. But to make you understand how big it is, our deepest decline is -- I'm sure we all remember the financial crisis in 2008, 2009. After that financial crisis, global energy demand declined as well. And this year's 2020 decline is 7x larger than the decline we had after the financial crisis. It's a huge, huge, huge decline. All fossil fuels get a strong hit, the biggest hit mainly on oil and coal. Oil demand is a result of, of course, economic downturn, and the lockdown in place in transportation, we expect this year to decline about 9%. And when it comes to coal, we think that the coal is now in a terminal decline, coal use around the world. Still the largest contributor to global electricity generation, but it is in a decline. And natural gas was not hit as bad as oil and coal, but about 3% decline this year, the biggest decline in the history of natural gas industry. Now renewables, what about renewables, especially solar and wind? They are -- our numbers show they are immune to COVID. They have resisted mainly as a result of their size, government support and their economics. We have seen small increases both in solar and wind. But of course, this is much lower than the previous year's increase in the renewable energies. Emissions. This year, dear colleagues, global emissions are declining about 7%, which means raising -- increasing global emissions in the last 10 years. 1 year, we raised the increase in the last 10 years of emissions. Normally, we should be all happy to see that the emissions are declining. But I am -- myself, I am not happy because this -- I don't think this is a trend. Declining emissions is something to be celebrated because it is not happening as a result of robust government policies, as a result of a new clean energy technology is coming in the picture. It is happening. Basically, global economy is slowing down and also the pandemic hits all of us for the wrong reasons. And if we do not take the necessary measures, it will rebound and go back to where it is before. So big decline in emissions, but I suspect that they will go back to where they are if the governments do not take the necessary measures. I will give you one proof. Just as of yesterday, I have a number to share with you, to alarm everybody that the emissions will go there than they were in the end of 2019, if the governments do not take the necessary measures, which is the following: China. In fact, China is a very important test drive for all of us to understand before and after COVID, how the energy world could look like. Because China is the first country where we have experienced the COVID. China, first country that was locked down, China, first country, in big terms, addressing the COVID's challenge. And going out of the lockdown, again, the first country, the economy started to rebound. And as of today, Chinese emissions this year, 2020, will be higher than 2019. They rebounded. They are higher. So China, the largest emitter of the world. Their emissions are back to 2019 levels in a world where the global emissions are declining 7%. This is a very important, in my view, number to understand when we look at the hard facts of the emissions and climate change. I will share with you one more issue about the COVID and its implications, and I will start to look at the future. It's about Africa. Now this afternoon, I have a meeting with about 15 energy ministers from Africa talking about African energy situation and growth hosted by the South African Energy Minister and myself. Now in Africa, we are following how many people in the world have no access to electricity year-by-year, and we do it for 20 years. And I remember, when I started this work at IEA 20 years ago, like 25 years ago, as a young analyst, I get the first financial support from [ Norax ] that time to make this study, to see how many people have no access to electricity. Now coming to today, in the last 10 years, we have seen number of people who have no access to electricity. We have no electricity, and Africa was diminishing despite the population growth. Every year, good news, good news, good news. It was a very nice trend. But 2020, we saw the trend reversing. And unfortunately, a number of people who have no access to electricity is now -- increase in 2020, a bad news. But after a major, we all know, I guess, a major hit of COVID in terms of economics, debt issue and others in Africa, and this is the implications. To finish this part, dear colleagues, I want to tell you, and this is -- perhaps I start to forecast period -- forecast discussions now, or the future discussions. Now I believe, of course, this COVID, as a result of the COVID energy demand, is down, renewables, investments and everything. They will go back, but scars, scars of COVID will be with the energy sector for years to come. This is in different ways and different means. Now I would like to show you 4 slides to take you through a couple of findings. Then we look at the next few years as of -- from today's perspective, there are many uncertainties, but 2 of them are big. First, when will the world have pandemic under control and the economy rebounds, we don't know yet. In Paris, we live in France. We are in Paris only 5 days ago, 6 days ago. I don't remember exactly the number of new cases were, over 50,000. And yesterday, I looked at this morning, it is now about 4,000. If they go up again, third wave, second wave, we don't know. This is the biggest uncertainty. Then second uncertainty is of the government in terms of energy policies, economic policies, respond to the challenges coming from this COVID. Now under these big uncertainties, we still wanted to look at the future. How the oil demand will develop. This was oil demand growth in the last few years, growth in oil demand. And last year, we I had the pleasure to be in Oslo, I told you that oil demand will continue to grow in the absence of new policy of the government. It will continue to grow. But even without major policies, oil demand growth is slower. Now if we assume that the -- as of next year, the COVID is under control and the global economy rebounds, we have our -- in the -- our policies, stated policies, scenarios are -- scenario with the current policies of the governments, they don't make a major change in their policies. We see that the oil demand will start to rebound but the growth will be much less than what we thought last year. And if the world gets COVID under control later, which we call the delayed recovery scenario, which is very likely because we don't know when the COVID will be under control, oil demand will be much less, and there's a big gap that we expected last year and that we expect this year. And again, the biggest unknown is the COVID and the economic responses. So that is a long discussion in the oil circus. Then oil demand will go if and when oil demand go back to 2019 levels. Many CEOs of international oil companies said oil demand has already peaked. We will never go there, but it was in the year 2019. And because people are changing their behavior, their way of looking at life, they are better human beings now after they have seen COVID. Line of argument, which I do not subscribe. I do not subscribe. I see it since -- a few months that the -- those colleagues, those friends, they are very good friends, those CEOs, they see oil demand has peaked is something I don't subscribe, for the following reason: If the economy rebounds, which will hopefully, sometimes, with global economy. If the governments do not take bold measures in terms of oil consumption, incentives for different oil-using sectors, they will go back there where they were before. Again, I was saying this as a theory. Its the expectation to my colleagues, to governments, the international press and so on. But now I have a proof, at least in China. As we know, China is the second largest oil consumer of the world, the largest oil importer of the world. And today, again, China, these numbers of China oil demand now rebounded. And today, we expected China oil demand this year will be slightly higher than 2019, [ full stop, full stop ]. So if we want to see, if the world wants to see oil demand going down, as we have in our sustainable development scenario, then you will need -- governments need to put policies in place to push -- to see this -- industry -- push away from use of oil. But the current context, we see that the oil demand will rebound, but will be not pronounced. I think that those glorious day of oil continues to growing. They are passé, they are over. We will see a flat oil demand, but the decline, structural decline, we do not expect. A few words on natural gas. Yes, this continue to grow mainly driven by emerging countries, China, India. Last 10 days ago, we had a meeting with Prime Minister Modi. He is coming up with a major gas program for India, gasification of the Indian gas program. China is also very strong. And the -- again, China's gas demand is much higher this year compared to last year. Why it is happening? For 2 reasons. It is -- we used more and more for industry sector, where you need higher feet. There was the petrochemical sector, such as plastics and others, or even textile, food. Second, it is replacing coal and, in some cases, less than this oil to reduce air pollution. Therefore, we see gas to grow. And as we all know, there's a strong downward pressure on the gas prices, which improves gas position, vis-à-vis coal and others, natural gas. But oil and gas, I wouldn't put in the same basket in terms of future prospects. Now what about the climate change? Now this -- the current policies government have, first, emissions are perfectly in line with a temperature increase, about 3 degrees Celsius, which is, of course, as we, I guess, all appreciate, major, major problem for the -- well, the -- our fragile [ market ], by fragile, because of extreme weather events, the loss of species and the spinoff with [ raw material ]. So this is unacceptable. Now we want to see emissions going down substantially, is behaving as sustainment development scenario. And we also know that several European countries, U.K., New Zealand, Canada, came up with the net-zero pledges, which is a very good news. And China also made a statement, pledges, I think. China also -- [ 2016 at New York State ]. These are all very good, but there is a -- there are 2 buts. First, pledging is something, doing it -- something else. Second, there is a big gap, what happens with the other happens. And yes, dear colleagues, we want to see that emissions come to 0, not 2070 but 2050, which means that we -- for the first time this year, what does it mean for the next year 2050, which means today, 80% of the global energy comes from fossil fuels, and 30 years of time, it should basically unabated, fossil fuels, basically, should come close to 0. So from 80% in 30 years to close to 0, which is a huge, huge challenge. But of course, challenges that will come from the change of climate are much more serious, huge implications. Now we just wanted to share with all stakeholders, just to put a context, what does it mean for the energy world to reach 2050 net zero, just in case it will be made, and I wanted to tell you. First of all, the most important thing is that what happens in the next 10 years will determine everything else, which is our -- perhaps the most important conclusion. And we think everybody, all stakeholders, have to do a lot of things to reach the net zero in 2050, 0 emissions. A couple of examples. Companies need to do a lot of things. We have heard from Equinor recently taking very strong positions in terms of the emission reductions, and being part of, if not one of the drivers of reducing emissions. But we have to see a huge, huge push for clean energy technologies from CCS to offshore wind, from offshore wind to others. Just to give you an example, in terms of hydrogen, we have to see -- in 10 years, the use of hydrogen needs to be multiplied by hundreds, just to put this in context. And in fact, I just mentioned the CCS. Let me take this opportunity to congratulate Norway for their Longship project. I was honored to release our carbon capture storage report internationally just a day after of the Longship project that was announced together with Madam Prime Minister. I thank you very much for them to -- Norwegian government being the leader here. Now it's business. They also do something and many things. In fact, as we have highlighted in our report, less than 3 kilometers, you just take your bike or you walk. The -- that needs to be reduced substantially. Or electric cars. Norway is one of the leaders, but Norway is different in that, representing the average season in the world, Norwegian's business. This year, 2.5 million electric cars were sold in the world, reach our targets in 2030, 50 million cars [ to be sold ], which means, in other words, every second car -- because we expect about 100 million cars to be sold in the world in 2030, every second car sold in the world in 2030 would -- should be an electric car to reach that. Finance. They also need to push the clean investments with -- and IT investments in different ways, derisking the new technologies, increase the investment for renewables and developing new financial tools. But again, to put the order of -- magnitude of the challenge, the context, for clean electricity investment, this year, the world spent $380 billion. You don't need to remember this number. In 2030, it needs to be multiplied by 4, $1.6 trillion. Again -- to give you the context, again, this is what we try to do. Today, an entire energy world, oil investments, refineries, pipelines, gas fields, coal mines, our plants, renewables, everything, the entire energy investment today is $1.6 trillion. Only clean electricity in 2030 should be $1.6 trillion. So what we aim for the entire energy sector, [ investment in that ] sector, we have to invest only in clean electricity in 2030, a huge -- [ important ]. And of course, I imagine companies, this is their finance, they have to do something. As we said, dramatic actions, you look at the energy terms, I have to say this. But the government is definitely at the heart of this. Because many of these choices need to be incentivized by government policies. And therefore, how governments take it, serious or not, they just make pledges or they go beyond the pledges, will be a critical factor, whether or not we have any chance to reach net zero by 2030. So dear colleagues, let me finish my words by saying you that the -- this pandemic will leave lasting scars for many years to come. And the question is still open, whether it will be a setback for a secure and sustainable energy world or we can use it as an acceleration for change in the right direction. Renewables are growing very strongly, especially solar. Just to give you one number, again, I cannot stop myself. This year, of all power plants [ built ] in the world, of all power plants built in the world, 50% was solar, other 50%, everything else put together, oil plus coal, gas, hydro power, wind, all these power plants, 50%. Solar alone, 50%. I have high expectations from offshore wind with the sharp decline in the cost and government policies. And the renewables are growing very strongly, but they are mainly growing in the -- decarbonizing the electricity system, and we need much more than that. Yesterday, I had meetings with the several leaders of the Middle East countries. And as I told them, the time of [ having economy ], index to oil and gas is about to change. They need to diversify their economies, they need to diversify their energy systems. And as I've told them, no company -- energy company, no energy-producing country will be unaffected from clean energy transitions. Going to net zero means we need all clean energy technologies. We cannot only rely on solar and wind. They are very important, definitely, but we need other renewables, such as hydro power, such as bioenergy. But also we need innovation in terms of the hydrogen, CCS battery storage and others. And unfortunately, I should say, to reach 2050, it will not happen by sending tweets and making strong statements. These are all nice and good, but we believe there are no shortcuts. We need to implement well-designed, well-put profound changes in a better context, global electricity system. And here, we believe, at the end of the day, it's a choice, the choice for all of us, for citizens, for investors, for energy companies, but most importantly, for the governments. The choice is in front of the governments, whether they are going to have a commitment to bring their economies to a net zero context and put to policies in place to reach those targets or whether not. It's a choice that we will see. We will understand what kind of choices [ countries will ] make in the next days, weeks, months to come, especially when we are reaching the COP 26 Glasgow next year. Thank you very much, once again, for inviting me, International Energy Agency, to your very meeting and listening to me.

Thank you, Fatih, for a very sobering presentation and a very clear call to action. And we'll see you back here shortly for the panel discussion. Thank you so much.

And now to kick off our reflections and that panel discussion on what we just heard, and specifically what is happening closer to home, we are joined here in the studio by our 2 special guests, Norway's Minister for Petroleum and Energy, Ms. Tina Bru. Welcome.

Thank you. Good morning.

And President and CEO of Equinor, Anders Opedal.

Good morning to you.

So let me start with a question to you, if I can, Minister. You took up the position as the Minister for Petroleum and Energy here in Norway in January. Perhaps not the year you expected, if that's an understatement. Maybe you could share us a little bit about what is been like for you this year.

It's not an understatement, that's for sure. It's been, of course, a really, really strange and also demanding year for everyone. The main focus of government has, of course, been to save and protect lives, mainly, and also, of course, to mitigate the effects of the pandemic on the economy and our businesses to make sure as many of them as possible are there when we're through this crisis. That's been the main focus. But I think I got, probably exactly 1 month, in a kind of normal situation. And then we basically almost locked down the country in the 12th of March. And for the sector that I mostly work with, of course, including the oil and gas industry, it's been a really, really tough year. They were hit with a kind of perfect storm with the pandemic happening and the big drop in demand, all of a sudden. And at the same time, you had a bigger production than you normally would, so that caused really havoc on the prices. So following that whole situation, trying to figure out what can we do and, at least, the role that also the IEA played in contributing to trying to stabilize the market again after seeing these really, really horrible prices and the long-term effects that could have has, of course, been a big part of my job. And at the same time, we were looking at the Norwegian industry, which was also in a really demanding situation. We were risking -- losing thousands of jobs overnight, key technology communities, competence that we need for the future, not least in the whole green shift that we know, it's just going to be super important to have also this industry, still here, to take part of that transition. So right before the summer, we actually ended up proposing a temporary change in the tax regime for the NCS, the Norwegian continental shelf, to try to keep up activity and to move projects forward that we know are good projects. They are robust for oil price, et cetera, but they were stopping because of the pandemic. So there's been many different things that were related to the pandemic. But at the same time, we have to keep all the normal things going, preparing for the future that's coming after the crisis. So of course, we had the APA round. That was important. We've just now also announced the 25th concession round, which is important. So we're doing all these normal things on top of the crisis. So it's been a really strange year.

When you summarize it that way, and we're only in November, 11 months into your role as a Minister, I'm struck really by how much there has been to do, both in terms of coming -- in terms of handling the effects of the pandemic and, as you very clearly outlined, the impact that's had on the energy landscape here in Norway. What are your reflections on how Norway is now positioned in the future that Fatih just described in terms of a net zero ambition?

Well, we are pushing forward. Norway is also one of the first countries to actually increase our goal under the Paris Agreement. So we're taking this really seriously, and we're also pushing the policies to back it up. One of the big decisions that, of course, came not too long ago was, as Dr. Birol also mentioned, the CCS project, Longship. It's been a project we've been working on in Norway for many, many years. We started in 2013, and now we've actually made a proposal for an investment decision. It's in Parliament right now. But that, of course, is a big key of also looking long term, both in how can we contribute to reducing global greenhouse gas emissions, but also building new industry, in new areas that also use the same competency, the technology that we're already so good at here in Norway. So that was a big milestone, actually in our work. At the same time, I'm trying to think ahead to what do we need for the future, because there's so many things happening. It's a huge shift. I think there's really no stopping the growth in renewables, and that's a good thing. But we're also seeing, as Dr. Birol mentioned, big challenges if not -- policies keeping up and governments aren't stepping up.

I mean you came out very recently with the white paper from the government outlining a lot of these initiatives and activities. So maybe you could just take us through 1 or 2 of them. I know in that, you mentioned offshore wind, and I know Fatih also mentioned offshore wind as being perhaps something that needs even more focus, doesn't have a lot of focus in the bigger renewable picture. Maybe you could tell us a little bit about Norway's ambitions there?

Yes. The ambition with the white paper that I'm working on now is to look at -- in my view, the oil and gas sector in Norway and the renewable energy sector in Norway is getting more and more integrated. Not least, it's a big part of the plans for the NCS to cut emissions, we're using power from shore out to our platforms and installations to cut emissions. But to see how can this contribute to long-term value creation? How can we build on what we're good at already? How do we keep up activity on the NCS? Because we know we are going to need oil and gas for many years to come. We can produce a low emission. That's -- it's a sensible thing to do. At the same time, what are the new options, the new possibilities that we're seeing. Offshore wind is, of course, one of those things. Hydrogen, of course, also a big thing. We have now the opportunity to produce blue hydrogen, not mainly also because of the CCS project. Of course, now that we have the storage through the Northern Lights project. That opens up many new doors. We're got to need hydrogen on a large scale globally to be able to actually reach our goals under the Paris Agreement. And we're also looking at things like seabed mineral mining, which is also part of the future. So it's trying to look ahead to how can we build on what we're already good at, connect in more ways and create long-term value creation from the energy sector in Norway.

And if I can bring you into that, Equinor is obviously clearly taking the lead in some of those initiatives. And I'm struck, really, when we're talking about things like offshore wind. To what extent we think -- I should say, you're thinking about how profitable that can be without subsidies going forward? Or is that something that's really a test bed for future technologies?

While we see that -- clearly, that the offshore wind, the tradition now has been profitable over time based on the cost curve coming down. We have taken a leadership also in the floating offshore wind that we need to do going forward in several places of the world. If -- Fatih Birol said, we need more offshore wind. Also in our energy perspective, we see that we need 9x more offshore wind than we have today to reach net zero. And we have been very early movers into the floating offshore wind, and we are on the way down on the cost curve, together with the government. And then [ over ] we have the Hywind Tampen, where we're actually going to give electricity to 5 platforms offshore, the first time ever in the world. So that will be one of the actions we are -- underway to create a very profitable floating offshore wind as well.

And both Tina and Fatih mentioned hydrogen, and that's something that, again, I know Fatih mentioned, is key really going forward or is an opportunity going forward for having an impact in the industry in terms of particularly the green hydrogen. But there'd been a lot of challenges happening around the costs associated with commercializing hydrogen. So talk us through a little bit about how you're going to address some of those challenges.

Yes. But here is also where we can build on the competence we have built over many, many years of hydrogen, and particularly blue hydrogen, that require gas. And we have built up gas value chains over many years. So we have access to gas very close to the coast, particularly in Norway. We know how to actually kind of produce gas from -- to hydrogen. And we're able to also [ pipe ] gas, and we have a long experience of that. And with the CCS and the Longboat that we have developed together with the government, we're able to store the CO2. So here, we're actually putting together all the technology and the industrial experience we have had over many years, such that we're able to scale up this going forward. But the challenge is the market. So we need to see a strong demand for a hydrogen market. It's very important now that governments do not pick winners among green hydrogen versus blue hydrogen, but to kind of leave it up to the competition to find the most cost-effective technology. And then we will -- are ready to scale up when we have the demand. And then [ as mentioned ] by Fatih Birol, are we seeing those governmental actions that will create that demand for hydrogen.

And if I can ask you a similar question that I asked Tina. You've come into this position, at the helm of Equinor, just over 3 weeks ago, and you're already dealing with the effects of the pandemic, starting to respond or continuing the response to the ambitious targets on the climate. And we're talking now about some of these challenges, which go from great statements and promises and pledges towards, for example, commercializing and making more cost-effective solutions, like carbon capture and storage and hydrogen and even offshore wind. Tell me, if you can already, about some of the short-term measures, some of the actions we can expect to see that will really make the difference, that will turn the needle from great pledges to real actions.

Well, the real action -- and we worked on them for many, many years. So actually, it's going to -- really kind of more forcefully implement those actions. We will need oil and gas for many years, also as the Minister said. And Norway, on Norwegian continental shelf, is in forefront of producing oil and gas with the lowest emission possible. We will continue to develop technology, cost-effective technology, power from shore, and hopefully also CCS solutions that we can utilize offshore. We will need to accelerate further the growth within renewables. And for us, in particular, is in the floating offshore wind where we already see we have a competitive advantage. And then together with governments and the other industry, see how we can really take all our competence now and build the value chain for hydrogen and CCS. The Northern Light, which is part of the Longship, is a really important project in that respect, and we are very pleased that this is in the budget for 2021. So we're really looking forward to work with the government in Norway to complete this project.

If I can just build a little bit on what Mr. Opedal is saying because I think this is really key and it's important. Because one thing is what governments do. I mean you can have really -- you can have big ambitions, you can say this is where we're moving. But if industry isn't following, if industry isn't stepping up to the plate, and also like with the Northern Lights project, if you're not putting your money where your mouth is, I think we're not going to move far. So the Northern Lights project is a really good example of industry leaders actually coming together and saying, okay, we're willing to do this. We want to put our money in it. We're seeing this as a possibility. Of course, there's also a risk. I mean the biggest risk for the Norwegian CCS project in Northern Light is that no other countries follow. But this is something that we're doing in Norway, and then nobody else wants to do the same. But we know that technology is so key if we are to actually meet the goals in the Paris Agreement, at least at the most cost-efficient way. So I have great belief that this is something that we're going to see more of in Europe. But my point was to say that industry needs to actually join in the efforts, and what Equinor has done is not only put some great ambition on a sheet of paper, but you're actually showing it through your actions, and I think that's really key.

And I think we'll talk a little bit more about what -- I know the IEA has certainly commended Norway. And Fatih, maybe we can bring you into the conversation now and join us in this panel discussion. The IEA has been very positive and complementary when it comes to Norway's -- the recent activities we've been talking about, in the Longship project, for example, towards the net zero ambition. If we just zoom out a little bit and stay with the global picture, it's -- I know you've been asked this question several times because I've heard you answer it. But for our audience, if you would -- what are the changes in the recent political landscape in the U.S.? What kind of impact can we expect to see that have on the climate agenda going forward do you think?