Oil and Gas Development in The Faroese Islands, Iceland and Greenland: How Local Competence Development Contributes to a Social License to Operate

Smits, C.C.A. (Royal HaskoningDHV) | Justinussen, J.C.S. (University of the Faroese Islands) | Bertelsen, R.G. (UiT-The Arctic University of Norway/Aalborg University)



Offshore oil and gas projects in the Arctic are to an increasing extent subject to global public opinion and scrutiny. Over the past decade the Arctic has turned into the World's back yard, where potential impacts can easily become a global topic for discussion. Looking from an industrial perspective to Arctic operations, it is thus of major importance to gain the support of local stakeholders counter balancing international tumult.

Gaining local support for developing offshore operations is dependent on a number of factors, including the benefits for local societies besides the taxes paid to a national government. Local support cannot be fooled, tricked or manipulated over a resisting population just as soft power is not empty propaganda. Not always the initiative to support local societies comes from the oil companies themselves. Often it is the regulation of a country making it mandatory for oil companies to exercise these efforts. These efforts could thus be seen as obligatory while they do not necessarily only cost money, but also increases local resilience which could lead to support for a company's operations. However, these longer term positive externalities are often hard to measure and quantify.

This manuscript will look at three case studies: the Faroese Islands, Iceland and Greenland. These three microstates have the aim to develop an oil & gas sector. Potential impacts of these developments are mostly felt locally, while the product will be mainly exported globally. For this reason the local societies are aiming to maximise their benefits and use a number of policy instruments to ensure this will happen. This manuscript will examine the measures that are incorporated into the Faroese, Greenlandic and Icelandic policies to stimulate local competence development via higher and vocational education. Furthermore it will try to illustrate how supporting and funding local competence development could contribute to increasing the resilience of local societies in the Arctic and obtaining a social license to operate.