Why Norway is Becoming the World's Richest Country

Summary

Norway is a geographic anomaly - despite having little arable land, harsh terrain, and a sparse population, it has been wealthy for centuries due to its expansive coastline and lush forests. After discovering offshore oil and gas in the late 1960s, Norway employed forward-thinking policies like state ownership, foreign partnerships, and its massive sovereign wealth fund to avoid typical 'petrostate' problems. Now, with some of the world's largest oil, gas, and emerging mineral reserves combined with immense renewable energy potential, Norway is positioned to remain a European and global energy superpower while diversifying into a broader economic giant.

Takeaways

• 😲 Norway has a massive coastline and rugged terrain, making travel by land difficult but travel by sea easy
• 🤑 Norway was already quite wealthy before discovering oil due to industries like lumber, hydroelectric power and shipping
• 💡 Norway took a pragmatic, long-term approach to foreign investment in natural resources like hydropower and later oil/gas
• 🌳 Norway's oil wealth did not lead to authoritarianism or inequality due to existing decentralized wealth/power and cooperative ownership
• 📈 Norway set up a sovereign wealth fund in 1990 to invest oil profits abroad, shielding itself from overreliance and price drops
• ⚡️ Norway uses ample renewable energy to meet domestic needs, freeing up more oil and gas to export and further diversify its economy
• 🚗 Norway incentivizes electric vehicle adoption to reduce oil consumption and enable higher exports
• 😎 Norway is displacing Russian market share as the EU's top supplier of oil, gas and potentially future renewables
• 🔋 Newly discovered mineral deposits may allow Norway to supply vital metals and rare earths to Europe as well
• 💰 Norway's oil fund owns 1.5% of global stocks - its future generations are set up for prosperity

Q & A

How did Norway's geography contribute to its early prosperity?

Norway's rugged geography made land transportation difficult but gave it an extensive coastline. This allowed maritime trade to flourish early on, enabling Norway to become a major lumber exporter and develop a strong merchant fleet and shipbuilding industry.

When did Norway discover offshore oil and gas?

In late 1969, the Phillips petroleum company discovered the Ekofisk oil field, one of the largest offshore oil fields ever found. This kicked off Norway's oil era in the 1970s.

How did Norway avoid the "resource curse" with its oil wealth?

Norway was already a stable democracy with decentralized wealth and power. It set up state-owned Equinor to give it control over its resources. In 1990 it established a sovereign wealth fund to invest oil profits abroad, avoiding economic over-reliance on oil.

Why is Norway such a major oil and gas exporter?

Its small population means low domestic energy needs. Its abundant renewable hydro and growing wind power meets most of its electricity needs, leaving more oil and gas to export. And its proximity to Europe provides ready export markets.

What is Norway's electric vehicle policy?

Norway offers generous tax incentives for its citizens to adopt electric vehicles. As a result, almost a third of vehicles in Norway are now EVs, reducing domestic oil demand further so more can be exported.

How did the Ukraine invasion benefit Norway economically?

As Europe imported less Russian energy after the invasion, Norway exported more oil and gas to replace it. Norway's 2022 energy export revenue doubled year-over-year to a record $131 billion.

How did Norway come to dominate phosphate reserves?

In 2023 a huge, world-leading phosphate deposit was discovered in Norway, instantly doubling global reserves. This undermines Morocco's previous dominance of phosphate vital for agriculture and batteries.

How could Norway undermine China's rare earth dominance?

The Norwegian phosphate discovery likely also contains large titanium and vanadium deposits. Europe relies heavily on China for these metals vital to high-tech manufacturing.

How does Norway use its oil wealth responsibly?

Norway caps withdrawals from its $1.2 trillion sovereign wealth fund at 3% yearly. This lets it keep growing to diversity away from oil dependency, while providing for 20% of Norway's annual budget.

Why does Norway have the potential to remain an energy superpower?

Climate change may increase Scandinavian precipitation and wind levels. Norway could not only export more renewable hydro and wind power, but replace even more Russian energy imports to Europe.

Outlines

00:00

👷‍♂️ Norway has a small population but large area with little arable land

Norway has a small population of 5.2 million compared to city states like Singapore. But it has a very large land area, mostly mountains and fjords, with only 2.2% arable land. This limits agricultural potential.

05:01

🚢 Norway's geography encouraged maritime culture and timber exports

Norway's difficult terrain made land travel hard but sea travel easy via the fjords. This enabled maritime trade and exports of lumber from the interior forests. Shipbuilding became a cooperative effort.

10:02

💡 Hydropower unlocked Norway's potential in early 1900s

Harnessing rivers for hydropower electrified Norway by 1920. This enabled energy-intensive aluminum production and industry. Hydropower is now 95% of electricity.

15:03

🛢️ Oil discovered in late 1960s made Norway even richer

The Ekofisk oil field was discovered in 1969. Further discoveries followed. Rules ensured Norwegian control, with Statoil (now Equinor) always having over 50% stake.

20:04

😎 Norway exports oil and gas but keeps renewable energy

Domestic hydropower and growing wind power are kept for Norway's needs. This enables exporting most of the oil and gas, making Norway a major exporter despite modest reserves.

25:06

🏦 Oil wealth wisely invested in sovereign fund since 1990

The oil fund was established to invest surplus oil revenue. Strict rules prevent overspending. It has grown to be the world's largest sovereign fund at $1.2 trillion.

30:07

🔋 Norway displaces Russia as top EU energy supplier

With Russia's invasion of Ukraine, EU banned Russian energy imports. Norway has filled much of the gap, with its oil and gas exports to EU surging.

35:08

🤑 Financial bonanza enables further strategic investment

Norway's oil and gas revenue hit record levels in 2023. Tens of billions are being invested in new production, pipelines to EU, and the wealth fund.

40:10

💰 Norway set to export minerals and renewable energy also

In addition to oil and gas dominance, huge phosphate deposits discovered in 2023 position Norway to supply vital minerals. Excess renewable power may also be exported.

Keywords

💡Norway

Norway is the main subject of the video. It is described as a geographically harsh and agriculturally challenged country, yet one that has become very prosperous due to its communal ownership of natural resources like lumber, hydropower, oil, and gas. The video explores how Norway's geography, history, and policies have enabled it to export its oil and gas while meeting its own energy needs domestically.

💡geography

Norway's mountainous terrain and long jagged coastline make transportation difficult but enabled a maritime culture and easy access to lumber resources. The video argues Norway's geography challenged agriculture yet facilitated other industries like hydropower and oil exports.

💡hydropower

Norway harnessed its rivers and waterfalls to become a major hydropower producer in the 20th century. This electrified Norway early on and enabled energy-intensive aluminum and other industries. It is also domestically produced renewable power that allows more oil and gas exports.

💡oil and gas

Discovered in the late 1960s, Norway's offshore oil and gas reserves are a major part of its economy and exports. The video describes how Norway has used state ownership, cooperation with foreign companies, and oil wealth funds to avoid typical "petrostate" problems.

💡communal ownership

A theme in the video is Norway's history of communal ownership of natural resources like lumber, fishing, and hydropower. This is extended to today's state majority ownership of the oil and gas industries and Norway's sovereign wealth fund.

💡exports

Thanks to domestic hydropower and other policies, Norway is able to export nearly all the oil and gas it produces. It has very high global export shares despite more modest production volumes. Exports are rising to replace Russian energy in Europe.

💡Russia

As a contrast, the video compares democratic Norway's handling of its oil wealth to autocracies like Russia. Norway is now displacing Russia as Europe's main energy supplier after Russia's invasion of Ukraine.

💡renewables

Norway aims to domestically power itself on renewable hydropower and increasingly wind energy, in order to free up more oil and gas for profitable exporting. There is even talk of exporting renewable power to Europe in the future.

💡rare earths

Newly discovered Norwegian mineral deposits could make it a major supplier of metals and rare earths vital for technology and batteries. This would reduce European reliance on dominant producers like China and Russia.

💡wealth fund

Norway's trillion-dollar sovereign wealth fund, financed by oil industry taxes and surplus revenues, is a way of communal saving and diversification. Only 3% of the fund can be withdrawn per year to support the government budget.

Highlights

Norway has a massive coastline, second longest in the world, enabling maritime trade despite difficult overland travel

Lumber industry thrived in medieval Norway due to accessible forests and fjords for transport

Early shipbuilding was cooperative, influencing Norway's economy for centuries

Hydropower unlocked in early 1900s, rapidly industrializing Norway

Oil discovered in 1969, transforming Norway into a major energy exporter

Norway avoids "resource curse" via communal ownership, existing institutions

Sovereign wealth fund created in 1990 to diversify away from oil dependency

Fund now largest in world, worth $275,000 per Norwegian

Domestic renewables allow Norway to export more oil and gas

War in Ukraine made Norway top EU energy supplier, huge windfall

Further pipelines and exploration with windfalls

Future renewable exports possible as climate change increases precipitation

Massive rare earth discovery doubles global phosphates, with more possible

Set to supply EU with raw materials, undermining Russian and Chinese leverage

Infinite money glitch from oil wealth diversification and strategic industry control

Transcripts

in terms of people Norway is a pretty

small country home to only about 52

million individuals to put that into

perspective Norway has fewer people than

many of the world city states do such as

Singapore's 6 million people or Hong

Kong's nearly 7 1.5 million people but

while small in people Norway is very

large in land the country has about

385,000 Square km worth of overall land

roughly 140 times larger in geographic

area than Hong Kong and roughly 464

times larger than Singapore despite

having a fewer number of people than in

either put another way Norway's

Geographic size is also roughly

equivalent to Japan's and both countries

have a similar amount of mountains that

cover them and yet Japan has 22 times

more people living within its similar

mountainous area than Norway naturally

this makes Norway one of the most

sparsely populated and overall empty

countries in the world with the lowest

density of people that can be found

anywhere in Mainland Continental Europe

with the northern half of the country

stretching beyond the Arctic Circle in

the Far North with a very thin layer of

top soil above Bedrock the land of of

Norway is mostly harsh mountainous

rugged and very cold with a short

growing season an environment that

doesn't lend itself very well to

sustaining large numbers of people only

2.2% of Norway's land is even considered

aable and suitable for agriculture one

of the lowest percentages in the world

and roughly equivalent to Yemen's

percentage a mountainous country in the

Arabian Desert without even any rivers

that's widely regarded as a failed State

this ultimately means that despite

having 385,000 km of overall land only

about

7,124 square kmers of Norway's land is

suitable for agriculture a poultry

amount that is similar to the amount of

arable land found in El Salvador a

country that is 16 times smaller than

Norway in overall land but which has a

similar population of about 6.3 million

people because the two countries have a

similar amount of aable land that they

can actually use to sustain their

populations with and then to make

matters even worse for Norway their

small amounts of varable land are

scattered all throughout the south of

the country in small valleys in between

all of their massive mountains which has

always made the creation of large

integrated and efficient farms in the

country impossible with its vast and

wide open expanses of varable land all

throughout the country the average Farm

size in the United States is more than

eight times greater than that in Norway

as a result and so American Farms are

more integrated more efficient and more

productive as a result and can simply

feed many times more people because of

these inherent disadvantages when it

comes to agricultural potential there

have been expectations and assumptions

made by people all throughout Norway's

history that the country should

naturally be poor or at least that

Norway was historically a poor country

until the sudden discovery of oil

changed everything in the late 1960s and

paved the way for Norway's currently

well-known Prosperity but the

interesting truth is that oil didn't

actually make Norway Rich it just made

Norway even richer than it already was

beforehand contrary to popular belief

Norway has been a relatively wealthy

country for most of its entire history

and it almost counterintuitively has to

do exactly with the same geography that

makes the country so terrible for

agricultural production there are other

Geographic factors that can determine

the fate of Nations Beyond agricultural

potential and one of the biggest others

is how easy it is to travel around the

country's territory and conduct trade

transportation across Norway by land

however has always been very difficult

for thousands of years before modern

highways and tunnels traveling along the

Norwegian West Coast on foot or horse

was basically impossible because of the

omnipresent steep mountains and deep FS

that carved all across the landscape but

this seemingly Geographic first actually

turned into one of Norway's greatest

Geographic blessings and disguise

because of all the jagged fjords located

all throughout the Norwegian Coast

Norway is generally regarded as having

by far the longest coastline anywhere in

Europe with a coastline that's more than

6 and 1 half times longer than the

United Kingdom according to the CIA

World fact book in fact Norway's

coastline is considered to be so

enormous because of all these fjords

that it's ranked as having the second

longest coastline of all the countries

in the entire world remaining only

behind the number one spot spot of

Canada this is always meant that as

Norway coalesced into a modern nation

state its small population was always

scattered in small clusters all

throughout the mountains and the fs

separated from one another across land

not too unlike other mountainous

societies like Afghanistan or Persia but

unlike those societies deep within the

interior of Eurasia the small scattered

population clusters across Norway all

had easy and immediate access to the

global ocean because of all of the fs

that cut deep into Norway's interior

this geography encouraged a maritime

culture to developed within Norway from

very early on and the fs granted the

Norwegians the ability to rapidly travel

between each other's settlements by sea

moreover the fs enabled easy access for

Traders to penetrate deep into the

country's interior and get close to one

of Norway's greatest natural assets its

huge forests and lumber resources Norway

has never had the largest forest in

Europe it's beaten out by many other

countries with larger ones like Russia

Finland Sweden and even France but for

centuries all throughout the age of sale

before the development of railroads

unlocked Russia's Lumber potential

Norway's Lumber industry was the biggest

in Europe because of how much more

relatively easier it was to access their

forest in the interior through the fs

and exported to markets Norway's Lumber

could be felled within the interior then

cheaply and efficiently dumped into

rivers and floated Downstream toward the

settlements and Sawmills along the

fjords where Sawmills powered by those

same downhill rivers and their

waterfalls would refine the lumber and

the lumber could then be cheaply

exported out through the fs and onto the

global market and so until the later 19

18th century when railroads fully unlock

the lumber potential of European

countries with larger forests like

Russia Finland and Sweden these relative

Geographic advantages made Norway the

lumber Powerhouse of Europe for

centuries and the country's Maritime

culture enabled it to build out a

worldclass merchant Fleet by the time

that the 20th century rolled around

Norway already had the fourth largest

Merchant Marine Fleet in the entire

world the nature of Norway's well

connected but spread out in lowdensity

population also encouraged two things

one the communities were all connected

to each other by the fs and by the Sea

which led to a common identity emerging

between all of them despite their

mountainous geography and two Norway's

small population clusters learned early

on to cooperate together on ship

building and construction for all of

their common benefit entire Norwegian

towns would cooperate together on the

construction of ships that were vital

for all of their survival and shares in

the ship's ownership would be divided

amongst nearly everyone in the town who

participated from The Lumberjacks to the

Craftsmen over time this resulted in a

much more spread out in decentralized

distribution of wealth and ownership in

Norway in addition to the spread out and

decentralized population and so a large

centralized and Powerful class of

capitalists never really developed in

the country the same way that they did

elsewhere in places like France and

Britain with their populations and

economies both largely concentrated

around their political capitals Norway's

geography conversely forced its people

to trust each other and to cooperate on

building the ships that were vital to

their survival and so early ship

building in Norway was largely

Cooperative in nature and then that

influenced the country's economy for

centuries afterwards through to the

present day as Norwegian agriculture

forestry Maritime insurance and fishing

all became dominated by cooperatives

while the Norwegian banking sector

throughout the 19th and 20th centuries

became effectively dominated by

Cooperative Credit Unions as well across

the 19th century then when Norway was

widely believed to be a fairly poor

region Norway was actually already doing

very well for itself in relative terms

by the 1850s Norway's GDP per capita was

already higher than basically the

entirety of Eastern Europe exceeding

that of Bulgaria Romania Poland Hungary

and Czechoslovakia and by the 1880s

Norway's GDP per capita had eclipsed

virtually all of southern Europe too

including Portugal Spain and Greece

while by the turn of the 20th century in

1900 it had even surpassed that of Italy

and then by 1938 on the eve of the

second world war decades before the

discovery of oil in the country Norway's

GDP per capita had already exceeded

those of Germany France and the United

Kingdom and by some estimates it was

already the wealthiest country on

average in Europe a huge part of the

reason why Norway's economy accelerated

so rapidly between 1900 and 1938 was the

Advent of modern advanced water turbines

and hydroelectric dams that completely

revolutionize Norway's Geographic

potential even further Norway is a land

that is almost completely covered by

rivers that begin high up in the

mountains and then Thunder down their

steep elevations toward the fs and the

coast in the west these rivers are fed

by predominantly Westerly winds that

bring them abundant levels of

precipitation and their steep drops and

waterfalls provide a massive amount of

kinetic energy just sitting there that

can be captured by turbines to generate

electricity Norway therefore has one of

the highest hydroelectric power

potentials of any country in the world

and beginning in 1905 they started

allowing outside foreign companies with

higher levels of expertise come in and

start building modern hydroelectric dams

to unlock their potential dozens and

then hundreds of Hydro power stations

were built all across the country to the

point where today there are 84 large

hydrop power stations with capacities

greater than 10 megaw and 838 small

hydrop power stations with capacities

between 1 and 10 megaw with hundreds of

even smaller stations on top of that all

combined these hydr power stations today

are powerful enough to generate an

overwhelming 95% of all of Norway's

total electricity demand while Norway is

the seventh largest producer of

hydropower anywhere in the world as of

2024 with a total generation rate that

is more than half of the United States

but all for only 167th of the American

population the harnessing of Norway's

hydromite in the early 20th century

provided the country with its first

major economic boom as it enabled the

country to rapidly industrialize and

Electrify Itself by 1920 Norway was

consuming more electricity per capita

than any other country in the world and

more than 2third of the population

already had access to electricity which

was double the rate in the United States

at the time this huge amount of energy

for such a small population then enabled

the Norwegians to develop extremely

energy-intensive factories that

eventually leing in specializing in

refined aluminum production under the

norsk hydro corporation which is today

one of the largest aluminum companies in

the world norsk Hydro continues to

Source the vast majority of the energy

they use to produce refined aluminum

from Norway's hydrop power and the

company is 34% publicly owned by the

Norwegian state it has enabled Norway to

become by far the largest producer of

aluminum in Europe and the eighth

largest producer in the world today

which further makes the country the

largest provider of aluminum to the

European Union but just hydr power

continued unlocking Norway's potential

in the early 20th century the industry

came to become dominated by the large

foreign companies that came to Norway to

invest and build all of the dams out and

so Norway sought to gradually rest

control over them to secure its own

National control over its own resources

Norway's small and spread out population

lacked large amounts of capital and

Technical expertise however they needed

the large foreign investors to help them

build out their hydroelectric and

Factory potential and so a straight up

quick nationalization of the foreign

investor assets would have sent all of

that foreign investment and expertise

they needed fleeing in the future to

avoid that outcome but to still secure

their own control over their own

resources Norway decided on taking a

pragmatic and long approach to the hydro

industry that would directly influence

their approach to the oil and gas

industry decades later Norway

established rules that foreign companies

who came to invest in Norwegian Hydra

would have to follow that included

Clauses that hydroelectric power

stations and mines they built and funded

would have to be turned over to the

Norwegian government without

compensation after a period of 60 to 80

years of operation this way the larger

foreign companies would continue to

invest in the country since they would

see a long enough return on their

investment but the Norwegian State knew

that in the long run they would be the

ones to secure the keys to their crown

jewels and as a result more than 90% of

Norway's hydr capacity is publicly owned

by the state today and this is all why

Norway was already a wealthy heavily

industrialized Democratic and lowc

Corruption state by the time that

interest in the country's potential

offshore oil and gas Fields came around

in the late 1950s but at the time back

then there were very few people who

actually believed that there was any oil

or gas to be found around the country

particularly on the shallow and

submerged part of the European

continental shelf stretching beneath the

North Sea a large part of which had

geologically speaking only been recently

submerged a few thousand years ago at

the end of the previous Ice Age in a

letter written by the Geological Survey

of Norway in 1958 that has since aged

fairly poorly They concluded that the

possibility of any oil or gas resources

being discovered on the Norwegian part

of this continental shelf should be

discounted entirely but then very

suddenly in 1959 just the year after

that letter was written a very major

natural gas Discovery was made nearby

that sparked significant further

interest the grenan gas field in the

northern Netherlands it turned out that

the grin field to date is the 11th

largest single natural gas field ever

discovered in the world and the largest

one ever discovered within the European

continent it became Central to the early

emergence of the Netherlands as a major

gas producing country and it became a

Cornerstone of the domestic European gas

market and so naturally its Discovery

back in 1959 sparked renewed interest in

curiosity that just perhaps there were

further gas and potentially even oil

Discovery still to be made further

Beyond beneath the as yet unexplored

North Sea as well 3 years later in 1962

the American petroleum major Phillips

became the first to submit an

application to the Norwegian government

to begin exploring for oil and gas

resources within their section of the

North Sea the only problem was at the

time nobody really knew where Norway

section of the North Sea actually was

because the maritime boundaries within

the North Sea hadn't been firmly or

legally settled yet between all of the

Nations that surrounded it but luckily

for Norway in 1965 eager to get

exploring and drilling themselves the

government of the UK hastily agreed to

Simply divide the continental shelf

beneath the North Sea based on the

principle of the median line distance

the geographic Line running down the

center of the North Sea between the UK's

land territory and Norway's land

territory decades later this Hasty

calculation would go on to massively

benefit the Norwegians because it took

into account all of the thousands of

Norway's Islands just off of their

western coast in determining where the

median line ran including the island of

UTA 16 km west from the mainland

Norwegian Coast which shifted the median

line boundary westwards just ever so

much by a few extra kilometers that when

the massive stratch yard oil field was

discovered later in the 197 s right

along the median line only 15% of it

would exist within the previously agreed

upon UK Maritime Zone while 85% of it

would be within the Norwegian Zone

giving literally billions of dollars in

extra oil Revenue to the Norwegians over

the British as a result almost

immediately after agreeing with the

British on the median line principle in

1965 the Norwegian government began

granting exploration licenses to larger

and more experienced foreign companies

to search through their Waters that

included Phillips and the first oil was

struck only a couple years later in 1967

at a field they called Boulder but it

wasn't considered economically viable at

the time it wouldn't be until the 1990s

three decades later that balder would

finally begin operation and then finally

just before Christmas Day in 1969

Phillips delivered the Norwegian

government and people perhaps the

greatest Christmas present in their

nation's entire Millennia long history

the news that they had discovered the

echo Fisk field which turned out to be

one of the largest offshore oil fields

that has ever been discovered before or

since anywhere in the world production

out of echo Fisk began only a couple

years later in 1971 and then a series of

further major oil and gas discoveries

were made all across the Norwegian

continental shelf over the years that

followed at Fields like Stratford osberg

gfax and troll the latter of which

generated a media sensation in 1996 when

the Norwegians transported the troll a

offshore oil platform to the field from

the Norwegian Mainland to date this

operation remains both the heaviest and

the tallest structure that has ever been

moved by human beings from one part of

the Earth's surface to another it was

also during this time that the

Norwegians quickly began applying the

previous lessons they had learned with

the country's Hydro industry to the

rapidly emerging oil and gas industry as

well the country founded a state-owned

oil and gas company that they initially

called stat oil almost immediately after

the first production of oil began and

just like the pragmatic and long-term

approach that the Norwegians took with

the country's Hydro industry in the

early 20th century they began

establishing rules that the larger and

more experienced foreign oil and gas

companies would have to follow in order

to invest in Norway's resources that

would ensure Norway's eventual control

over them the Norwegian state-owned stat

oil was to always have more than a 50%

ownership stake in every production

license that the government granted

which was designed to provide the larger

and more experienced foreign oil and gas

companies an incentive to still come and

invest in the country while also

providing stat oil with valuable Real

World Experience through learning from

the joint ventures and Norway's previous

high levels of expertise in the ship

ship building industry proved invaluable

to Norway's quick Mastery of offshore

and subsea oil and gas infrastructure

projects too one of the leading

underwater oil and gas infrastructure

companies in the world today is

currently sub C7 with billions of

dollars in annual revenue and they were

founded as a joint venture in 2002 by an

American company and a Norwegian ship

building company known as

name was changed to what it's currently

known by Econo and today thanks to

Norway's foresight and guiding the

company and helping it gain foreign

expertise over the decades ecor is

itself a global energy major and is

ranked as the 10th largest oil and gas

company in the world with a current

market cap of roughly $85 billion which

puts it on a similar footing to the

current market cap of BP at about 98.3

billion equinor now produces

approximately 70% of all the oil and gas

on the Norwegian continental shelf today

and it remains 67% majority owned by the

Norwegian government with the remaining

33% of its shares being publicly traded

on global stock exchanges like the New

York Stock Exchange on the NASDAQ and as

it turned out there actually was a lot

of oil and gas on the Norwegian

continental shelf so much so the Norway

now has the largest reserves of oil in

Europe outside of Russia and is ranked

20th in the world with similar volumes

as former OPEC countries Angola and

Ecuador and with more than three times

as many reserves as the next place in

Europe just across the North Sea the UK

and in terms of natural gas Norway again

is ranked as having the largest reserves

in Europe outside of Russia and the 21st

largest in the world with volumes that

are similar to The Lights of Kuwait and

aeran and with its extremely close

proximity to the European Union's Market

Norway had a ready too export Market all

lined up for itself as well with hardly

any oil and gas resources of their own

beyond the Gren gen gas field in the

Netherlands the EU has practically

always had to import the vast majority

of the oil and gas they consume from

abroad oil was a far easier problem for

the EU to solve though because oil can

effectively be imported from anywhere

else in the world the block was less

handicapped by geography here because in

its crude form oil is a liquid that can

be easily loaded up into barrels or

containers and shipped across the oceans

on container ships from origin to

destination meaning that the EU could

easily import oil from as far away as

the Americas in Nigeria with little

worries but natural gas was a completely

different problem for the Europeans to

solve gas is far more difficult and

expensive to export and move around the

world than oil because well it's a gas

while it's in its gas estate it takes up

a huge amount of volume and it's

completely economically impractical to

load up onto container vessels and ship

somewhere else thus before the rise of

liquefied natural gas production gas

markets were highly geographically

Regional in nature for Europe this meant

building out a series of pipelines to

transport natural gas from relatively

nearby sources to Consumers

the largest of which during the 20th and

early 21st centuries were constructed

from the relatively nearby gas sources

in the Netherlands Algeria the Soviet

and later Russian Siberian fields from

aeran after the collapse of the Soviet

Union and of course from Norway and the

Norwegian continental shelf this

historically made the EU mostly

dependent upon natural gas imports from

three of its closest and largest

neighbors Russia Norway and Algeria by

2021 Norway had constructed a total of

11 undersea gas pipelines connecting

their gas resources directly to European

consumers and then in 2010 Norwegian gas

production exceeded the country's oil

production for the very first time as

the demand in the EU and the UK

continued growing for more and by the

2010s Norway had already emerged as the

second largest exporter of natural gas

to the EU only behind the Russians by

2021 the year immediately before Russia

launched its full-scale Invasion into

Ukraine Russia was supplying about 40%

of the eu's total gas Imports while

Norway was supplying about another other

25% of them while Russia was further

supplying the EU with about 25% of their

oil imports up against Norway's share of

99.4% of their oil imports and by this

point with billions of dollars a year

gushing into the Norwegian economy

Norway had already effectively become a

Petro State the only one in Europe other

than Russia in 2021 oil and gas made up

roughly 21% of the entire Norwegian GDP

and made up a whopping 51% of all of

Norway's exports by value but Norway

never actually evolved into the usual

petate stereotypes of corruption and

authoritarianism for several notable

reasons that set it notably apart from

the others well there is no universally

agreed upon definition of what actually

constitutes a Petro State the most

General definitions revolve around

countries whose economies are very

heavily dependent upon the extractions

and exporting of oil and gas to the

point where without those Industries

their economies could face collapse 25

countries around the world spanning

South America Africa the middle east

Europe and Asia usually come to mind as

the world's most classic examples of

Petro States and out of all 25 of them

every single one are considered by The

Economist democracy index to be either

authoritarian regimes or hybrid regimes

except for only two of them Indonesia

and Norway but Norway stands out above

all of the rest ahead of even Indonesia

because the same index from The

Economist literally ranks Norway as the

single most democratic free and

egalitarian society on the face of the

Earth which puts its status as a Petra

State into an extremely stark contrast

with the likes of Saudi Arabia Iran

Russia and Venezuela which are all among

the most heavily authoritarian and

corrupt states in the world and a big

part of the reason why an abundance of

oil and gas resources didn't turn Norway

into a heavily authoritarian and corrupt

state like most of the other Petra

States is because of the country's

geography history and forward-looking

policies that their government enacted

from early on when Norway discovered oil

the country already had a long culture

of communal ownership of Natural

Resources going back centuries to the

lumber and hydro Industries the country

was was already wealthy industrialized

highly developed and had a stable

functioning democracy where wealth and

power were each already highly

decentralized Democratic institutions

and communal ownership of resources were

already strongly ingrained within the

fabric of Norwegian society as a result

which is an incredibly stark contrast to

just about every single other country

that discovered enormous oil and gas

wealth Saudi Arabia discovered its oil

wealth when it was ruled by a warlord

who had established an absolute monarchy

and had already centralized Power full

around himself and so the oil wealth

only further cemented the monarchy's

power oil was similarly discovered in

Iran while the country was ruled by an

autocratic monarchy and the keys to the

oil wealth were inherited by the still

autocratic Islamic revolution after 1979

oil was discovered within Russia during

the zaris period and the keys to the oil

wealth were inherited by the still

autocratic Soviets and then further

inherited by the modern Putin regime oil

was discovered in Venezuela during the

autocratic military dictatorship of Juan

vente Gomez while the oil Industries in

Syria Iraq the United Arab Emirates and

all across Africa were basically handed

over directly from autocratic European

Colonial administrations to autocratic

dictatorships that immediately or very

quickly took over in their place of all

the countries to have ever discovered

enormous oil and gas wealth only a

handful have ever done so while already

being wealthy politically independent

and with stable traditions of democracy

and low levels of inequality and the

only one with a very small population to

have ever done so has been Norway Norway

was thus better prepared to handle the

sudden influx of oil and gas wealth than

most others havean but it still

initially caused the Norwegian economy

to become rapidly undiversified and

dependent on oil and gas anyway

throughout the 1970s and early 80s when

the price of oil was high the oil

dependent Norwegian economy was booming

but then in 1986 the price of oil

suddenly collapsed and with it Norway's

heavily oild dependent economy suffered

its first oil induced recession over the

past six Decades of History going back

to 1960 the Norwegian economy has only

ever shrunk on three occasions in 2020

during the outbreak of the covid-19

pandemic in 2009 during the depths of

the great financial crisis and in 1988

back during the depths of this oil

recession but the Norwegian government

learned a valuable lesson from this

recession in the 1980s it needed to

diversify itself away from the

unpredictable es and flows in the oil

market and so just a couple years later

in 1990 the Norwegian state with its

long history of communal ownership of

resources and Democratic institutions

had the foresight and the capability to

establish the pension fund Global

otherwise known as the so-called oil

fund the fund was established as a

communal Sovereign wealth fund owned by

the Norwegian State and people into

which the Surplus revenues from the

state-owned oil company equinor and

taxes on the oil and gas industry would

be invested into for the benefit of

Norway's future generations and to

diversify the government and economy

away from oil and gas strict rules and

guid lines were established around the

funds operations it would invest heavily

into Global stock markets and real

estate in order to diversify away from

the Norwegian economy and very strict

rules were set into place that no more

than 3% of the funds assets could be

withdrawn in any given year which not

only enabled the fund to continue

growing and compounding with time but

also disallowed the abuse of the fund's

assets by Norwegian politicians who

would otherwise be tempted into

promising to lavishly spend the oil

wealth today at the expense of tomorrow

in order to get themselves elected a

Hallmark of the more autocratic Petra

states where unpopular regimes or

dictators spend the oil wealth lavishly

on their people as a sort of bargain for

them to put up with their

authoritarianism and as the Norwegian

oil and gas industry continued growing

and more wealth was deposited into the

oil fund and as the global economy

continued growing alongside it and as

withdrawals were capped at no more than

3% per year the Norwegian oil funds

steadily evolved from nothing in 1990

into the absolute Behemoth that it is

today currently the fund is by far the

largest Sovereign wealth Fund in the

entire world its current net assets

exceed more than 1 and A2 trillion ion

us and the fund owns an estimated 1.5%

of all the shares of all the more than

9,000 publicly traded companies in the

world and is the global stock market's

single largest investor today making the

fund the world's biggest stock market

whale this is despite the fact that the

Norwegian economy itself only represents

about 0.5% of the entire global economy

and despite the fact that the Norwegian

population only represents about

0.07% of the worldwide human population

and yet they own 1 and a 12% of the

global stock market the oil fund is

currently so massive relative to

Norway's small population that it's

worth approximately

$275,000 per Norwegian citizen if they

decided to ever cash it all out and it's

already reached a point where the funds

conservatively capped 3% withdrawal rate

per year can safely provide for about

20% of the entire Norwegian government's

annual budget in perpetuity giving

Norway the ability to rely Less on the

unpredictable fluctuations of of oil and

gas price Revenue to continue funding

their government operations and

shielding the country from future oil

price collapses now back to Norway's oil

and gas industry the country controls

the 20th largest proven reserves of oil

and the 21st largest proven reserves of

natural gas which have granted Norway

the ability to become the world's 13th

largest oil producer and the ninth

largest gas producer representing about

2% of worldwide oil demand and 3% of

worldwide gas demand but Norway's fairly

modest shares of worldwide oil and gas

reserves and production are reach

absolutely dwarfed by Norway's massively

outsized shares of worldwide oil and gas

exports despite only being the 13th

largest oil producer and only having the

20th largest reserves Norway is

currently the world's eighth largest oil

exporter and is fast approaching the

exports of Kuwait in seventh place

despite Kuwait having 12 and 1 half

times more oil reserves than Norway and

50% higher oil production and it's even

more lopsided when it comes to Natural

Gas where despite only only being the

ninth largest producer and only having

the 21st largest reserves Norway is the

fourth largest global exporter anyway

only just barely behind the big three of

the global gas market the United States

Russia and Qatar the latter of which the

Norwegians are rapidly approaching a

takeover of to become one of the new top

three in the global gas industry now

Norway has been able to achieve this

massively outsized presence in its share

of global oil and gas exports due to

several different factors the first of

which is of course its close proximity

to the energy hungry European union and

its ability to construct subc pipelines

directly from source to Consumer the

next factor is Norway's own small

population that naturally has a lower

energy demand than countries with

similar reserves but much larger

populations like Angola Ecuador and

aeran while the third and arguably

biggest factor is a result of Norway's

own geography and strategically chosen

policies Norway produces enough

Renewable hydr Power through all of its

rivers and dams to power 95% of the

country's electricity demand and in

addition to having the largest Hydro

potential in Europe the country also has

one of the largest wind potentials as

well the coasts around Norway and the

mountains that run along the country's

spine are among the windiest locations

to be found on a continent that is

generally not a very windy place so in

addition to having the seventh largest

installed hydroelectric capacity in the

world Norway already has the 18th

largest installed wind capacity in the

world as well and has a massively

untapped potential here that is only

just starting to grow so in addition to

having pretty large amounts of oil and

gas the country also has huge amounts of

renewable energy potential as well and

they've been using that potential to

their strategic Advantage they

effectively keep all of their renewable

hydro and wind resources in house to

meet their own energy demands

indefinitely which has freed them up to

sell most of their oil and gas resources

that they don't really need to Outsiders

abroad and especially to the energy

hungry EU directly next door and in

addition to harnessing their local Hydro

wind and even geothermal potential to

effectively turn their entire electric

grid into 100% domestically produced

Renewables they're also reducing the

amount of fossil fuels their country

consumes even further by offering

generous tax and financial incentives to

their citizens to adopt fully electric

vehicles or EVS as well as a result a

whopping 88% of all new car sales in

Norway across 2022 were EVS which is by

far the highest market share that EVS

have yet achieved in any country in the

world today and since these proe

policies have been being pursued within

Norway for a long time now nearly one in

every three vehicles on Norwegian roads

are already EVS that don't consume any

oil and are powered instead by the

state's domestic and renewable Hydro

wind and geothermal resources and for

Norway this is about far more than

simply reducing emissions and combating

climate change it's also about National

Security and financial power the more

that the Norwegian electricity grid

became powered by renewable sources from

within Norway the more secure the

country became from having to rely on

foreign energy Imports and Supply chains

and the more of their own oil and gas

resour resources they could sell abroad

and the more cash they could plow into

their Sovereign wealth fund to diversify

their economy further away from oil and

the more EVS they get adopted within the

country that can be indefinitely powered

by their domestic renewable sources then

that even more of their domestic oil

resources they won't need and can sell

abroad as well to continue plowing even

more money into the Sovereign wealth

fund to diversify even more away from

oil it is a cascading strategy that has

been diligently followed in Norway for

decades that is steadily transforming

the country into one of if not the most

powerful and influential States in

Europe it is thus Norway's unique 21st

century philosophy and doctrine that its

oil and gas resources are to be produced

and sold to foreigners while its

renewable resources are to be harnessed

and provided for the needs of the

Norwegian people this clever and unique

strategy has set them up to be capable

of selling and exporting virtually all

of the oil and gas that they produce

while simultaneously being completely

energy independent at the same time

which is how Norway's modest Global oil

and gas reserves and production levels

take up so much more of the world's

total exports and how the country has

gotten so spectacularly Wealthy on the

process the results of all of this

prudence and Decades of forward-looking

strategic thinking all culminated in

2022 after the Russians decided to

invade Ukraine in the aftermath of

triggering the biggest war in Europe

since World War II the European Union

decided to begin shutting down their

previously massive Imports of Russian

oil and gas in order to deny the Kremlin

its primary source of funding for their

War Machine attempting to overrun

Ukraine but of course the EU had to

quickly find somebody else to begin

replacing Russia's previously large

shares of 25% of their oil imports and

45% of their gas Imports and Norway with

its Big Oil and Gas resources right

nearby and its friendly relations was

the best positioned country in the world

to take advantage of the situation and

fill in the demand consequently exports

of Norwegian oil by tankers gas through

pipelines and even liquefied gas or LNG

by tankers all began surging towards the

EU Market to replace the Russians with

Norway's overall share of EU oil imports

rising from 99.5% just before the war to

13.3% in the first quarter of 2023 which

makes Norway currently the eu's single

largest provider of oil Norway's share

of the eu's imported piped gas also

skyrocketed upwards from 38.1% just

before the war to a whopping

46.1% in the first quarter of 2023 while

Norway's share of the eu's imported LNG

Rose from basically nothing just before

the invasion to 6.6% in q1 of 2023 the

Block's fifth largest provider of LNG

now overall and at the same time as

Norway's oil and gas export volumes to a

suddenly desperate EU were rapidly

Rising the global prices of oil and gas

were each rapidly Rising right alongside

them the result of this situation caused

by Russia has been an absolute Financial

Bonanza for the Norwegians the likes of

which has never before been seen the

country pulled in a whopping

$12.3 billion in revenue from their oil

and gas industry in 2022 alone and then

immediately shattered that record with

another

$131 billion in oil and gas Revenue

across 2023 compared to a relatively

poultry $29 billion in oil and gas

Revenue that they earned Before the War

and the energy crisis in 2021 Norway's

oil and gas Revenue in 2023 alone was

roughly equivalent to the entire

Collective GDP of Slovakia and they've

been utilizing their sudden windfall

very wisely they have invested enormous

amounts of it into the Sovereign wealth

fund and tens of billions of dollars

more being invested to explore for even

further untapped oil and gas deposits

that could be found within Norway's far

Northern baren SE that Still Remains

largely unexplored more pipelines are

being built to Europe to expand their

export capacity even further and to

replace the Russians previous market

share even further Norway's increasing

displacement of Russia in the European

energy Market was perhaps best

symbolized in September of 2022 on the

27th of that month a series of bombs

detonated underwater destroying sections

of the nordstream 1 and 2 natural gas

pipelines that connected German

factories and homes directly to Russia's

huge natural gas fields in Siberia both

pipelines were rendered completely

inoperable by the sabotage destroying

Russia's ability to directly export gas

to Germany and then the very next day

afterwards the Norwegians and the poles

inaugurated the opening of the Baltic

pipe Norway's brand new gas pipeline to

Poland that will replace all of the

roughly 60% of Poland's natural gas

Imports that had been coming from Russia

with Norwegian gas instead Norway has

therefore emerged in the 2020s as the

European Union's largest single supplier

of energy and in the future it isn't

likely to be limited to oil and gas

exports either in the future as climate

change progresses it's expected that

precipitation levels in Scandinavia will

actually increase further than what

they're like today which will mean that

even more water will be feeding into

Norway's rivers that Cascade down the

mountains toward the west Coast while

Norway's still largely untapped wind

potential is expected to be expanded to

make the country a global leader in wind

energy as well Norway likely won't need

all of this excess renewable hydro and

wind power for just itself in the future

and so the possibility has already been

raised of building out transmission

lines from Norway to the EU so that the

Norwegians can export their hydro and

wind sourced energy to Europe in

addition to their oil and gas resources

and besides transforming into Europe's

most significant energy Province Norway

will also likely become one of Europe

and the Western world's largest sources

of mineral and rare earth might as well

it's well known by now that the global

push toward a green energy transition

which is being largely spearheaded by

European economies will require vast

amounts of metals and Rare Earth

elements to keep itself going rare

Earths especially are vital materials

that are necessary for Ev batteries

smartphones wind turbines digital

cameras hard drives and tons of other

things that are vital for powering

modern 21st century life and growth

unfortunately though for Europe and the

Western World the vast majority of the

world's proven Rare Earth reserves are

currently dominated by China China

conducts an overwhelming 63% of all the

rare earth mining in the world which is

more than every other country combined

and China conducts an even more

overwhelming 85% of all the world's Rare

Earth processing China controls roughly

a third of the planet's proven Rare

Earth reserves followed up by Vietnam

Russia and Brazil after which there's a

huge gap before Australia comes next

lagging far behind any of the top four

and China has already been weaponizing

its dominance over these Rare Earth

Resources as well in a similar way to

how Russia weaponizes its dominance over

oil and gas in July of 2023 China

declared that they were introducing new

export restrictions on two metals that

are critical for the manufacturing of

semiconductors gallium and Germania in

retaliation to US economic sanctions on

China's semiconductor industry China

currently produces 98% of the world's

gallium and 68% of the world's germanium

so if China decides you can't have them

you effectively just can't and although

neither gallium nor germanium are rare

earth metals they are nonetheless also

still critical to powering modern

Digital Life and so China's export

restrictions on them were meant as a

clear threat that additional metals and

minerals that China dominates could

become restricted in the future as well

but it was around that same time that a

company called Norgay mining in Norway

suddenly made a surprise announcement in

June of 20123 they had just about out of

nowhere discovered by far the largest

reserve of phosphate rocket ever found

in the world and was just sitting there

in southern Norway this whole time the

company has since estimated that this

deposit contains around 70 billion tons

of economically recoverable phosphate

which literally in a Flash doubled the

entire world's previously proven

reserves of phosphate that had sat at 71

billion tons beforehand put another way

this recent Norwegian Discovery is so

vast that it can supply the entire

world's demand for phosphate all on its

own for the next half a century to come

and it completely undermined the

previous dominance over phosphate that

was up to then enjoyed by Morocco who

controls an estimated 50 billion tons of

the resource that equaled about 70% of

the world's proven reserves before June

of 2023 and then was cut down a size by

half to only about 35% of the world's

proven reserves after the discovery in

Norway prior to Norway's gigantic

Discovery it was Morocco and China who

were the largest producers of phosphates

and they dominated the global market for

it phosphates are really important

because they're a critical component

used in fertilizer and Global food

chains and in smaller quantities they're

also similarly used to produce digital

devices and EV batteries and noray

Mining still isn't finished either they

believe that their huge phosphate

Discovery in southern Norway also

contains huge amounts of metals like

titanium and vadium as well metals that

are vital for the construction of

everything from aircraft to computers

and submarines and more at the moment

the production of both metals are

dominated by China who produces roughly

36% of the world's titanium and more

than half of the world's vadium while

vadium is produ is further 99% dominated

by the bricks countries with virtually

all of the world's production of the

metal happening in China Russia South

Africa and Brazil this has meant that

for a very long time the US and the EU

have each had to rely on geopolitically

tenuous Supply chains for their access

to these raw materials that are vital to

continue building airplanes and

submarines and computers and China's

export restrictions on germanium and

gallium show that China could in the

future decide on introducing even

harsher export restrictions on titanium

and vadium as well Norway's probable

massive amounts of both titanium and

vadium could end up granting Europe and

the West their strategic autonomy from

China if norg mining delivers while

Norway is also Now set to become the

world's newest largest source of

phosphates this ultimately means that in

addition to becoming Europe's largest

source of oil and gas and a major source

of renewable energy Norway is also

primed to become Europe's largest source

of many of the rare earth materials that

are crucial for modern Technologies the

green energy transition and AG culture

and Norway is completely undermining the

previous dominance in all of these

industries in Europe that have

previously been enjoyed by more

autocratic powers like Russia and China

Norway is providing the Europeans with

the ability to rely more on the most

democratic country in the world for

their raw materials and less on their

historically large autocratic providers

like Russia Algeria Libya aeran and the

Gulf States which means the Norway is

probably only going to continue growing

richer and richer by expanding their

Sovereign wealth fund even further to

dominate more of the global stock and

bond markets while expanding its tax

incentives to completely Electrify their

vehicles and grid even further so that

they can keep selling more oil and gas

to Europe to continue fueling their

Sovereign wealth fund Norway has

basically discovered the geopolitical

equivalent of the infinite money glitch

and they've wisely set themselves up for

generations of prosperity for every

Norwegian citizen for years to come now

there's a lot of data that goes into

producing these kinds of videos when

whether it's showing how Norway and

Russia compete for the oil and gas

market in Europe what Norway's wind and

hydroelectric potentials look like how

Norway's small population Stacks up

against larger city states are showing

how China dominates the rare earth

metals industry the ability to visualize

raw data like this on the map is exactly

what makes learning the stuff so

fascinating to me and it's why the

exploring data visually course is one of

my favorite courses that I've ever taken

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watching