TrueValueMetrics ... Impact Accounting for the 21st Century

Date: 2024-09-27 Page is: DBtxt003.php txt00026592

NORWAY NOT ONLY OIL, BUT ALSO PHOSPHATE Hindsight: You won't believe what Norway just found! PLAY YOUTUBE VIDEO Original article: https://www.youtube.com/watch?v=8xSs2DPIBQQ&t=310s Peter Burgess COMMENTARY Peter Burgess
Hindsight: You won't believe what Norway just found! March 8th 2024 84.5K subscribers ... 1.1M views ... 24K Likes #norway #phosphate You won't believe what Norway just found! Norway is already one of the richest countries in the world, but they will be much richer. On top of their vast offshore oil reserves, they now found out to have a massive deposit of phosphate. This will instantly make them the world leader of this precious mineral which is used to create fertilizer, batteries, and electric cars. MAIN SOURCES: ‘Great news’: EU hails discovery of massive phosphate rock deposit in Norway (Euractiv): https://www.euractiv.com/section/ener... Norway’s oil history in 5 minutes (Government.no): https://www.regjeringen.no/en/topics/... This video contains a sponsored section. 3:23: start sponsored section 4:29: end sponsored section #norway #phosphate Transcript Norway is at the brink of becoming unimaginably rich. We won’t supply gas, oil, coal, heating oil... We will supply nothing. When Russia invaded Ukraine, many European countries turned to Norway for oil and gas. This led to a five fold increase of their petroleum exports and it made Norway Europe's largest supplier. The Norwegian economy is strong. And like they always do, they invested the profits into their government pension fund, 0:28 which today is worth around $1.5 trillion 0:31 or $270,000 per person. 0:36 But you won't believe what just happened 0:39 in this region south of Stavanger. 0:41 They found a huge phosphate rock. 0:44 Phosphate is used to create fertilizer, 0:46 batteries, solar panels and electric cars. 0:50 It is an extremely rare mineral, 0:52 and about 70% of the entire global supply 0:55 is in Morocco, 0:57 followed by China, Egypt and Algeria. 0:59 For Western countries, 1:01 these are geopolitically complex regions. 1:03 But Norway just announced that they found 1:06 70 billion tons of this mineral 1:09 which would instantly make them the biggest player in the world. 1:13 This discovery can propel Norway 1:15 into a whole new category of rich. 1:18 At current prices, 1:19 this rock could be worth $24 trillion, 1:22 which is similar to the worth 1:23 of Saudi Arabia's entire remaining oil supply. 1:26 But the EU, 1:28 technical limitations, 1:29 and environmental concerns 1:31 might stand in the way of its extraction. 1:33 This is why Norway 1:35 will become the world's richest country... 1:38 with Hindsight. 1:54 In the 1950s, 1:55 Norway was only inhabited by around 1:57 three and a half million people. 1:59 They had export of fish, timber 2:01 and other staples for centuries. 2:03 But in the early 1900s, 2:05 they discovered that they could use their mountains 2:07 to generate hydroelectric power 2:10 and this facilitated the emergence of heavy industry. 2:14 This was the first major 2:15 commercial breakthrough of Norway's modern economy 2:18 before the discovery of oil. 2:21 There is a common misconception that Norway was very poor 2:24 before the discovery of oil. 2:27 But this is a myth. 2:29 In the 1950s, 2:30 they were already amongst the most literate, 2:33 rich and equal countries in Europe. 2:35 They were culturally far ahead of its time, 2:38 and they had established a robust democracy. 2:41 But no one believed that Norway's 2:43 maritime territory was blessed with oil. 2:45 This region was surveyed, 2:47 nothing was found, and so it was largely ignored. 2:51 But that changed when a discovery was made in the Netherlands. 2:55 The Dutch found a gas fields 2:56 that turned out to be the largest gas field in the world at that time. 3:00 This immediately created interest in the rest of the North Sea. 3:04 Within a few years, 3:05 all major oil companies were searching the North Sea 3:09 for Norway's government was hesitant. 3:11 They were concerned that foreign companies 3:13 might walk away with the profits. 3:15 There were also no clear maritime boundaries. 3:18 So if oil was found, 3:20 how could they know that it won't be claimed by another country? 3:23 So Norway took its security 3:24 very seriously and I should be doing the same. 3:27 In the making of this video 3:29 I googled a lot of weird things like 3:31 “classified documents Norway's government” 3:33 and “address Central Bank Norway” 3:35 And stupidly enough, I'm not protecting myself 3:38 and that's why I need Cyberghost VPN, the sponsor of today's video. 3:43 A VPN encrypts your data and protects your identity. 3:46 It protects you from hackers and malicious websites, 3:49 but you can also use it to access geo restricted content 3:53 or to find better prices while shopping online. 3:55 Cyberghost VPN works on all platforms. 3:58 They have an excellent 3:59 trustpilot rating and a 45 day money back guarantee. 4:04 It's by far the best deal that you can find, 4:06 and it's only $23 per month. 4:08 Just kidding. 4:09 It's $2.03. 4:12 It's super cheap and you can use it on seven devices. 4:15 Check my link in the pinned comment or in the description. 4:18 If you sign up today, you'll get four months for free. 4:22 This is a deal that you simply can't miss. 4:24 So start protecting yourself today. 4:29 So Norway had good reasons to assume 4:31 that there was oil of their coasts, 4:33 but it was not clear if the state or a company 4:35 would own the oil if it were found. 4:38 And it was unclear where Norway's maritime boundary exactly lay. 4:41 But these issues were quickly resolved. 4:44 In May 1963, 4:46 a royal decree placed to see that under Norwegian sovereignty 4:50 and two years later, 4:51 the European countries formally agreed on their maritime boundaries, 4:55 respecting the median line principle. 4:57 Exactly one month later, 5:00 Norway allowed foreign companies to police their bids, 5:03 and the exploration of the Norwegian North Sea started. 5:07 It took a couple of years and more than a few failed expeditions, 5:11 but eventually they found oil. 5:14 In their press release, they called it a giant. 5:18 This oil field was huge and it continues to be a significant source 5:23 of income for Norway today. 5:25 It took some time for Norway to take full control over this industry. 5:29 The first wells were discovered, explored 5:32 and refined by foreign companies, 5:34 but it was a top priority for the Norwegian government 5:37 to turn this into a domestic industry. 5:40 In 1972, they founded Statoil. 5:43 This company is owned by the government and continues to exist today. 5:48 The government owns two thirds of this company 5:50 and the rest is owned through public shares. 5:53 But under the banner of Statoil, they acquired majority shares. 5:57 They built refineries, 5:59 created an educated labor force, 6:02 and they successfully managed 6:03 to keep a large part of oil revenues within their country. 6:07 And this is quite unique in the world. 6:11 Economists have a term, the resource curse. 6:15 This describes a pattern within countries 6:17 that have an abundance of fossil fuels 6:19 and that end up with less economic growth, 6:22 less democracy and less social equality. 6:26 In these countries, the oil wealth is often expropriated by elites 6:31 at the expense of ordinary citizens. 6:34 But in Norway, this didn't happen. 6:36 There never really emerged 6:37 a class of Norwegian oligarchs, 6:39 and they developed into one of the countries 6:41 with the highest standards of living in the world. 6:44 That is, if you don't mind paying $10 for a beer. 6:47 Norway has a GDP per capita of over $100,000. 6:51 They live, on average, ten years longer. 6:54 And Norway's government is famed for its generous welfare state. 6:58 So what did they do differently? 7:02 One thing that helped is that Norway already 7:04 had a rich and stable democracy before oil was found. 7:09 This enabled them to create their own extraction infrastructure 7:12 without relying too much on foreign companies. 7:15 It also helped that they had a small population 7:17 of just three and a half million. 7:19 They also didn't have to worry too much about their neighbors 7:22 as they are surrounded by allied nations. 7:24 There are also cultural reasons, 7:26 and Norway's politicians just managed their wealth incredibly well. 7:30 Denmark also found oil 7:32 and they auctioned off their oilfields to private companies, 7:35 and the UK used their oil profits to fund tax cuts, 7:39 which of course can also be beneficial for an economy. 7:42 But Norway did something else. 7:44 They piled up all their profits into a government pension fund. 7:49 This fund 7:50 today is worth one and a half trillion dollars, 7:52 making it the largest sovereign wealth fund in the world. 7:55 In 2023, 7:57 their revenue was $380 million, 8:00 and the government that year was only allowed to spend 3%. 8:04 The rest needed to be saved up for future generations. 8:08 The flip side to this is that only the government is getting rich. 8:12 The people in theory own this money, 8:14 but they don't see it in their bank accounts. 8:17 But it was this careful balancing act 8:19 between financing important measures in the short term 8:22 while saving up for future generations 8:24 that made Norway very rich. 8:27 In comparison to other countries who relied on natural resources. 8:30 Their sovereign wealth fund made them more stable, 8:33 and Norway successfully diversified their economy. 8:37 Oil and gas today make up around 20% of Norway's economy. 8:42 It's a major sector, but they can do without. 8:46 But Russia's war in Ukraine is making Norway's 8:49 petroleum industry flourish. 8:51 And on top of that, now comes the discovery of phosphate. 8:56 This phosphate rock was already discovered a few years ago, 9:00 but only recently they found out that it runs 9:03 4500 meters or 15,000 feet deep. 9:06 That is much deeper than was previously assumed. 9:10 This amount of phosphate could meet 9:11 the entire world supply for the rest of the century, 9:14 and it would be in control of Western countries, 9:17 which is an immense geopolitical advantage. 9:21 Today, China controls about 30% of the industry. 9:25 They control a relatively small percentage of the phosphate rock, 9:28 but they control many of the world's refineries. 9:31 In 2021, China restricted its exports of phosphate. 9:35 This was because global prices were going up 9:38 and they wanted to meet their local demand first. 9:41 But this move resulted in global prices rising even further 9:45 in other parts of the world. 9:47 This example shows what the global economy is turning into. 9:51 The prices of goods are no longer determined by supply, 9:54 at least not how they used to. 9:56 Instead, a country that controls the market 9:58 can limit the flow of the goods for political or for economic reasons. 10:04 This is exactly where Norway's discovery 10:06 can change the nature of these markets. 10:09 If they control over half the world's supply, 10:12 they can control its prices. 10:14 So it wouldn't come as a surprise 10:16 that Norway's government responded very positively 10:19 to the plans to extract these minerals. 10:21 But the EU was less enthusiastic. 10:24 You might think that Norway isn't a member of the EU, 10:27 so it doesn't matter. 10:28 But they are a member of the European Economic Area, 10:31 which means that European legislation does affect them. 10:35 Their concern is that refined phosphate is very polluting. 10:39 This is the reason why the industry is no longer in Europe 10:42 and it has mostly been outsourced to China, Vietnam and Kazakhstan. 10:47 In 2024, 10:49 the EU is expected to vote on a bill 10:51 that can either speed up Norway's extraction of this resource 10:54 or it can slow it down. 10:56 For Morocco, who's currently the largest supplier of phosphate, 11:00 it is also bad news. 11:02 This industry makes up nearly a quarter of its entire exports. 11:05 If Norway suddenly doubles the world, 11:08 supply prices will inevitably drop and Morocco's industry will shrink. 11:13 There are obvious strategic advantages of mining this phosphate, 11:17 and there are many obstacles that Norway still needs to overcome. 11:21 One of them 11:21 is that with the current technology, 11:23 extraction is only possible up to a depth of 1500 meters, 11:27 leaving most of this precious mineral out of reach. 11:30 But this was also the case when Norway found its first oil 11:34 with the technology at that time. 11:36 The well was planned to operate 11:37 for only 30 years, 11:39 but today it has already been in production for over 50 years 11:43 and it has many more years to go. 11:47 There is no way of knowing what Norway would do with this wealth 11:51 if they managed like their oil. 11:53 They were most likely invested into their pension funds. 11:56 It could triple its value over the next few decades, 11:59 leading to the already largest wealth fund in the world 12:02 to be worth over $1,000,000 per person. 12:06 There are also some voices that speak of using this wealth 12:10 to increase their foreign aid. 12:11 And one Saudi prince mentioned 12:13 that it could build a city in the form of a very long line, 12:17 which sounds like a fabulous idea. 12:20 Don't forget to click on the link 12:22 in a description to get a special discount. 12:24 The Cyberghost VPN is granting to my subscribers. 12:27 This VPN will protect your data while you browse online 12:30 and will give you full access to all blocked content on the internet 12:34 for just $2.03 per month. 12:37 It is totally risk free, so check it out.

SITE COUNT