Although less than one-twentieth of Norway’s total area is agricultural land, productive forests constitute more than one-third of the total area. Forestry forms the basis for the wood-processing industry, which accounts for a small but important part of Norway’s total commodity exports, and it is of major importance for the roughly half of all Norwegian farms that are so small that a second major source of income must be found.
Along the coast, fishing plays the same role that forestry does elsewhere. At the same time, it forms the basis of a large fish-processing industry and offers seasonal employment for many farmers. Of all fishermen, only half fish as their sole occupation. Most vessels are owned by the fishermen themselves, the necessary crew members being paid by shares of gross income in a continuation of a centuries-old tradition of the sea. A critical problem is how to avoid depleting the fish resources while maintaining the volume. Norway’s principal seafood products include fresh fish, dried and salted fish, smoked fish, frozen fish fillets, and other processed forms such as marinated and tinned fish. Fish offal is used as feed at mink farms. In the northwest the city of Ålesund thrives on fishing.
By the mid-1990s fish farming had developed over a period of 25 years into the cornerstone of the coastal economy. Norwegian fish farms are especially renowned for the production of Atlantic cod, Atlantic halibut, and spotted wolffish. The total number of fishermen decreased by about three-fourths from 1950 to the end of the 20th century, and the number of vessels decreased by more than three-fifths over the same period. At the beginning of the 21st century, there were some 10,000 registered fishing vessels in Norway, though only about one-tenth of them were engaged year-round. Most of the remaining boats are small, but large vessels account for much of the catch.
Once a world leader in Antarctic whaling, Norway has since 1968 hunted only smaller species of toothed whales. In the late 1980s and early 1990s, Norway complied with the International Whaling Commission’s total ban on commercial whaling. By the mid-1990s, however, the Norwegian government gradually was allowing limited catches of some species, arguing that they were not endangered any longer and that they posed a serious threat to fish populations. The latter argument is also used in defense of sealing. However, both whaling and sealing have declined sharply as a result of low profitability and international criticism. Resources and power
With an area of more than 386,000 square miles (1,000,000 square km), Norway’s continental shelf is about three times as large as the country’s land area. The rich resources found there were largely responsible for a boundary dispute between Norway and Russia. Negotiations between the two countries began in the mid-1970s and involved competing approaches to the line separating their claims in the Barents Sea. In 2010 the two countries agreed to a boundary that divided the contested area (67,600 square miles [175,000 square km]) into approximately equal sections. Oil and gas
By the mid-1990s Norway had become the world’s second largest oil exporter (behind Saudi Arabia), and it remained among the world’s most important oil exporters in the early 21st century. The first commercially important discovery of petroleum on Norway’s continental shelf was made at the Ekofisk field in the North Sea late in 1969, just as foreign oil companies were about to give up after four years of exploratory drilling. Intensified exploration increased reserves faster than production. Nevertheless, by the mid-1990s about half of export earnings and about one-tenth of government revenues came from offshore oil and gas. Export earnings from oil and gas continued to climb into the middle of the first decade of the 21st century, when they tapered off somewhat. By the first decade of the 21st century, oil and gas revenue accounted for about one-fifth of overall government revenue. Oil production peaked in 2001 but remained steady into the second decade of the 21st century, while that of natural gas has continued to increase significantly since 1993.
More than one-fourth of the huge investment made in Norwegian offshore operations by the mid-1990s went toward the development of the Troll field just west of Bergen, one of the largest offshore gas fields ever found. Its development ranked as one of the world’s largest energy projects. With a water displacement of one million tons and a height of nearly 1,550 feet (475 metres), the Troll A production platform was the tallest concrete structure ever moved when it was towed into place in 1995. Gas deliveries from the Troll field made Norway a leading supplier of natural gas to continental Europe. Hydroelectricity
About half of Norway’s 65,000 largest lakes are situated at elevations of at least 1,650 feet (500 metres); about one-fifth of the country lies 2,950 feet (900 metres) or more above sea level; and predominantly westerly winds create abundant precipitation. As a result, Norway has tremendous hydroelectric potential. It is estimated that almost one-third of that potential is economically exploitable, of which more than three-fifths had been developed by the end of the 20th century. Hydropower stations meet virtually all of Norway’s electrical consumption needs. At the beginning of the 21st century, Norway’s per capita production of hydroelectricity was the world’s highest, and renewable energy constituted more than three-fifths of the country’s total energy consumption. Deep in the Vestlandet fjords lie many of Norway’s largest smelting plants, constructed there to exploit the great hydroelectric resources of the region. Electrometallurgy
A significant portion of the country’s production of electricity is utilized by its electrometallurgical industry, which is Europe’s largest producer of aluminum. Norway was also an important producer of magnesium until the early 21st century, when the country’s inability to compete effectively caused it to withdraw from the world market. In addition to being among the world’s leading exporters of metals, Norway is a significant producer of iron-based alloys. Europe’s largest deposit of ilmenite (titanium ore) is located in southwestern Norway. The country is among the world’s principal producers of olivine and an important supplier of nepheline syenite and dimension stone (particularly larvikite). Pyrites and small amounts of copper and zinc also are mined, and coal is mined on Svalbard. Manufacturing
Mining and manufacturing (excluding petroleum activities) account for between one-fifth and one-fourth of Norway’s export earnings. Metals and engineering are the two main subgroups, each accounting for more than one-tenth of nonpetroleum exports. The level of petroleum-related investment is crucial for the engineering industry, which accounted for about one-third of the manufacturing workforce at the beginning of the 21st century. With the decline of traditional shipbuilding beginning in 1980, the importance of the production of equipment for the petroleum industry increased. Supply ships and semisubmersible drilling platforms are exported worldwide, and the Norwegian-designed Condeep production platforms (such as Troll A) are well suited to the rough seas off Norway’s shores.
The Østlandet region plays a particularly prominent role in mining and manufacturing. Stavanger is a leading industrial area in western Norway. Ålesund contains many engineering firms, and the bulk of Norway’s furniture industry is gathered on its rocky coast. Finance
The Bank of Norway has all the usual functions of a central bank, and it also advises the government on the practical implementation of credit policy. Publicly financed banks give favourable loans to housing, industry, agriculture, and other economic sectors but share the credit market with savings banks, commercial banks, and insurance companies. In 1984 foreign banks were allowed to establish branches in Norway. The country’s financial system includes an active stock market. Norway’s currency is the krone.