Norway sure has its extremes.

The days are getting longer and longer this time of year, evening out the gloomy darkness of the long Nordic winter.

In energy there's balance too. Norway's North Sea oil production is expected to drop by 100,000 barrels this year...

But the Norwegian government and local companies are looking towards a future in another abundant regional energy source—Wind power.

Still, we think they need to do more.

Norway's Wind Energy: Gusts Instead of Steady Breezes

On May 15, the Norwegian Ministry of Petroleum and Energy revised its 2008 budget to include a 100,000 barrel-per-day drop in oil production, down to 2.4 million bpd.

Here's the kicker: Norway's not alone in its decline—the U.K., the largest oil producer in the European Union, peaked in 1999.

In fact, 2007 was the year the U.K. turned into a net oil importer, as field decline rates and increasing fuel consumption put the squeeze on native capacity.

Luckily for the companies bringing North Sea oil up and out of the ocean, record high NYMEX and London-traded crude prices have bolstered the bottom lines of firms like Norway's StatoilHydro (NYSE:STO), a longtime Global Growth Stocks holding (and currently a 71% gain).

But we know $125 oil is only good if you can find the oil to sell, and those days seem numbered in the blustery waters of northern Europe.

It's a good thing, then, that Norway recognizes its wind energy potential.

As Deputy Petroleum and Energy Minister Liv Monica Stubholdt said recently, "Norway is among the (world's) most ideal locations for wind power, both on the coast and offshore."

But progress is moving more slowly than it should for a true transitional energy economy to emerge.

That goes for Norway, and its North Sea neighbors, too.

North Sea Countries Waffling in Wind

Last week, I alerted Green Chip Review subscribers to an unfortunate development in the United Kingdom's movement towards lofty renewable energy targets.

Royal Dutch Shell (NYSE:RDS.A), which along with BP (NYSE:BP) announced record profits in the first quarter, pulled out of an offshore wind farm project that would provide tens of thousands of Greater London homes with electricity.

Germany's electricity giant E.ON AG (OTC:EONGY) also got cold feet on the London Array.

Disappointing, considering the London Array has the potential to power a full quarter of all homes in the capital city area when completed.

And that's just a fraction of the total capacity that could come from Germany, the U.K., Belgium, Denmark and the Netherlands...

The German Wind Energy Institute said in 2000 that the total offshore wind bounty among those five nations is equivalent to five times their total electricity consumption.

Five times!

Yet Shell and E.ON have moved on wind in fits and starts, and StatoilHydro's New Energy Wind division is treading lightly with just a couple of wind farm demonstrator projects.

"Offshore makes sense in a way," that division's project head Jan Fredrik Stadaas says. "It is our area of competence."

That echoes what I heard in my time on the North Sea coast of Scotland, where I met with Norwegian oil rig engineer Gunnar Foss back in 2006.

Foss is involved with Canadian firm Talisman Energy (NYSE:TLM) and a deepwater wind pilot project they are working on, taking offshore structural pointers from the oil industry and moving it to the renewables sphere.

This collaboration is essential and encouraging to us energy investors, but the window for offsetting North Sea oil declines with clean energy advances is closing by the year.

We'll keep track of every turn of the turbines here at Energy and Capital, and tell you how to play the next big move.

Regards,

Sam Hopkins

"Energy stocks... The only way a human is going to make any money."

-- Matt Simmons, Peak Oil's first and most vocal proponent,
and founder of the country's last pure play energy investment banking firm.

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Everyone seems to keep saying that the installation of "X" MW of windpower capacity will be enough to supply "Y" number of homes but fail to add the capacity factor of this source which in Ontario where I live is less than 20%- but I like my power supply to be 100%

As a lifelong lover of all things that live on the planet I have had great concerns about wind turbine's effect on migrating birds and other wildlife. I have heard that several California Condors have been killed each year by these ugly killers.....isn't there a better way than endangering whole flights of migrating and native "Flyers"

As I am a newbie to this area, I wonder if, in the intial startup, the capacity may be low, but as we go down the road in this new energy development, things may improve and we learn how to get more capacity out of this energy supply. No matter what technology we delve into we find improvements and then capacity may improve. I can appreciate his comment, but were in the begginning stages of this new supply. We should take this into consideration. There is reportedly a plan to operate a wind bank east of new jersey and several electric companies have signed on to build this farm.Should be interesting.

This is just a passing thought. But is there a possiblity that the off shore oil towers may be converted into Wind Energy Plants? Many of them have been abandoned as the Texas Towers have. They are out in God's waters and would be a powerful way of having Wind Energy.I would grab at any straw if it were to assist with the present Energy problem. What ever method is available to bring Wind Energy to assist us should be done.

John Gurnham (comments) is right we need 100% capacity not 20%. The wasted susidies for wind is better spent on nuclear cleaner and 100% efficient . Everyone will realise that eventually as soon as their minds divorce power from bomb

One problem with wind and ground based solar is that they are not steady supplies.

The other is that they take so long to pay back the energy invested in making them.

Space based solar power, because the solar collectors are not affected by clouds or night does a lot better, the payback time is 3 to 6 times better than wind or ground solar. But the problem is the expensive rockets to lift the parts into space.

Perhaps mass production is the answer.

Keith Henson