Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.
This week brought warnings on future oil prices and supply from both Andrew Sentance, a member of the Bank of England’s Monetary Policy Committee and Christophe de Margerie, CEO of Total. Mr Sentance used his speech at the British Institute of Energy Economics Sustainable Energy Seminar to warn that energy price volatility is one of the key threats to the future economy. His speech also pointed to supply and demand balance as the likely key cause of the upward movement in oil prices since the mid-2000s. De Margerie, speaking to the BBC warned that a lack of investment now would lead to a shortage by around 2015. He also stated that “the price of oil is at $60-70/barrel, we consider it is not enough to protect our long-term investment”.
Oil prices fell this week in response to higher than anticipated inventories and weak US economic data. Some commentators predict that prices may fall further in the short-term as crude inventories continue to outpace demand. If so, it is only likely to exacerbate existing investment challenges.
World leaders gathered this week at the UN, followed immediately by the G20 meeting in Pittsburgh. The week had been billed as crucial opportunity to build up momentum for action ahead of the Copenhagen Climate Change talks in December. By Thursday despite some eloquent rhetoric about the need to build a future for our children, it had become clear that the real focus is still on short-term economic recovery making it tough to reach a meaningful deal, especially with no US emissions bill in place yet. Add into the mix a coming oil shock which doesn’t even appear to be on the agenda and it is clear that working at the grassroots and local level will be essential to moving away from fossil fuels and building a resilient future.
Link to the ODAC report – Preparing for Peak Oil: Local Authorities and the Energy Crisis
View our Reports and Resources page
Oil
BoE’s Andrew Sentance warns Britain’s recovery at risk from rising energy prices
Recovery is underway in Britain but the economy is vulnerable to future shocks such as rising energy prices, Andrew Sentance, a senior Bank of England policymaker, declared on Monday.
Mr Sentance, a member of the Bank of England’s Monetary Policy Committee, said: “The latest evidence suggests that the UK and other major economies are starting to recover from the deep recession triggered by the global financial crisis.”…
Total issues oil shortage warning
The head of oil giant Total has told the BBC the world could face a shortage of oil because of underinvestment.
Chief executive Christophe de Margerie warned that too little has been spent trying to tap into new oil reserves because of the economic crisis…
Oil Industry Sets a Brisk Pace of New Discoveries
The oil industry has been on a hot streak this year, thanks to a series of major discoveries that have rekindled a sense of excitement across the petroleum sector, despite falling prices and a tough economy.
These discoveries, spanning five continents, are the result of hefty investments that began earlier in the decade when oil prices rose, and of new technologies that allow explorers to drill at greater depths and break tougher rocks…
Oil Rises as Traders Purchase After Biggest Drop in Two Months
Oil rose in New York as investors bought contracts after they deemed yesterday’s decline, the biggest in two months, as excessive.
Crude oil, which fell 4.5 percent yesterday, is poised for its biggest weekly drop since July as an Energy Department report showed increases in U.S. fuel stockpiles, boosting speculation of a supply glut…
Saudi oil minister says no need for OPEC cuts in 2010
OPEC does not need to cut output next year, according to the latest oil supply and demand estimates, the oil minister of top exporter Saudi Arabia told Reuters on Tuesday.
Demand for Saudi crude was increasing, and this was evidence the world’s economy was recovering from recession, Ali al-Naimi said in an interview on Tuesday…
Saudi Aramco Sees Idle Oil Fields Through 2010 on Weak Demand
Saudi Aramco, the state-run oil monopoly, sees little chance of pumping crude from idle fields next year because a recovery in world demand has yet to begin, its chief executive officer said.
Saudi Arabia has idled about 4 million barrels a day, or about one third of its crude-oil production capacity, according to the oil ministry. The Dhahran-based company, the biggest exporter of unrefined crude oil, is spending $90 billion to develop new reserves and refineries over five years to 2012…
Obama to press G20 leaders to cut fossil fuel subsidies that benefit big business
Barack Obama will press leaders at the G20 summit tomorrow to end the billions of dollars of subsidies that encourage the use of fossil fuels around the world and help drive climate change.
Obama, who will host the summit in Pittsburgh, will propose a gradual elimination of the tax breaks, cheap loans and other measures extended to oil, gas, coal and electricity producers. The White House said elimination of the subsidies would be a “significant downpayment” to ending global warming…
British companies poised to cash in after Kurdish dispute with Norwegian oil producer
A bitter row between the Kurdish Regional Government (KRG) and one of the biggest foreign oil companies operating in Iraq could trigger a fresh scramble for drilling rights in the oil-rich province.
British companies, including Heritage Oil, Gulf Keystone and Sterling Energy are among those best placed to benefit, industry insiders said…
Gas
Ceres Power closer to mass production
British alternative energy company Ceres Power moved a step closer to bringing its “green” fuel-cell boiler to the mass market on Wednesday by signing an outsourcing deal with a Dutch company.
Heating appliances maker Daalderop will make the boiler assembly, the white box that houses Ceres’s fuel cells parts, in volume, thus saving Ceres having to set up its own facility to do so.
Ceres’s combined heat and power product, which it is developing in conjunction with British Gas, enables people to use the gas and fuel already coming in to their homes to generate their own electricity, rather than buying it from the grid…
Editing by Rupert Winchester
Renewables
UK launches £22m wave energy fund
The government has today formally launched its Marine Renewables Proving Fund, inviting wave and tidal energy developers to bid for £22 million in new grants designed to accelerate the commercial development of marine energy technologies.
The fund, which was announced in July as part of the government’s renewable energy strategy and will be managed by the Carbon Trust, aims to help marine energy developers get their technologies to a stage where they can be installed, at which point they can apply for further financial assistance from the Marine Renewables Deployment Fund…
Power firm generates investment
The company behind the Oyster wave-powered generator has raised £10m in its first round of fund raising.
One of Aquamarine Power’s devices was recently installed at the European Marine Energy Centre in Orkney.
It will be connected to the national grid as part of sea trials, with the first commercial wave-power station, scheduled to be ready in 2014…
Google plans new mirror for cheaper solar power
Google Inc is disappointed with the lack of breakthrough investment ideas in the green technology sector but the company is working to develop its own new mirror technology that could reduce the cost of building solar thermal plants by a quarter or more.
“We’ve been looking at very unusual materials for the mirrors both for the reflective surface as well as the substrate that the mirror is mounted on,” the company’s green energy czar Bill Weihl told Reuters Global Climate and Alternative Energy Summit in San Francisco on Wednesday…
Additional reporting by Laura Isensee; editing by Carol Bishopric
Biofuels
‘UK’s first’ landfill gas-powered collection vehicle unveiled
A trial which claims to be using a collection vehicle fuelled by a mixture of landfill gas and diesel to collect household recycling for the “first time” in the UK is being launched today (September 21) in the Royal borough of Kensington and Chelsea.
The six-month recycling and refuse collection trial is being undertaken by the London borough’s waste contractor SITA UK. The vehicle uses diesel as well as compressed biomethane (CBM) fuel, which is derived from the gas produced by the natural decomposition of waste deposited in landfill sites…
Pig muck to be turned into power
A Scottish farm has secured a grant to harness the power of pig muck by turning it into electricity.
The company in East Lothian was given more than £500,000 to convert slurry and vegetable waste into energy…
UK
Bank says recovery could prove a false dawn
The Bank of England warned yesterday that Britain’s tentative recovery could be a “false dawn”, despite issuing a relatively upbeat economic forecast and revealing that none of its policymakers saw the need to expand the asset purchase stimulus programme this month.
According to the minutes of the Bank’s rate-setting meeting this month, published yesterday, all nine members of its Monetary Policy Committee (MPC) voted to maintain Britain’s key interest rate at its record low of 0.5 per cent…
Tanker drivers threaten to strike over BP outsourcing
BP was on a collision course last night with hundreds of angry fuel tanker drivers after the oil company threatened to start outsourcing its petrol deliveries in the UK to other companies.
Representatives of Unite, the union, are set to meet in London today to discuss possible industrial action against BP and other companies that may be considering similar steps, leading to fears that motorists could face a winter of unrest and disrupted fuel supplies…
Climate
Recession and policies cut carbon
The global recession and a range of government policies are likely to bring the biggest annual fall in the world’s carbon dioxide emissions in 40 years.
The International Energy Agency (IEA) estimates that global CO2 emissions will fall by more than 2% during 2009…
We will back a global deal to cut emissions, says Obama
Barack Obama insisted at a climate change summit yesterday that the US was committed to a new global treaty on greenhouse gases – explicitly distancing himself from George Bush – even while acknowledging that he faced an uphill task getting the necessary legislation passed in Washington. Listing actions taken in the US to curb carbon output since he took office, the President called his pledge “an historic recognition on behalf of the American people and their government. We understand the gravity of the climate threat. We are determined to act. And we will meet our responsibility to future generations”.
Even with bursts of encouraging rhetoric from leaders at the UN gathering in New York and some new commitments to act, notably from China, the mood among delegations was sombre. There was no hiding the acute awareness that talks towards sealing a new global pact on cutting emissions at another summit in Copenhagen this December are in deep trouble…
Can China make a great green leap forward?
The Chinese once rode to work on bicycles. Millions of pedalling commuters in Chinese cities would, decades ago, crowd out ancient lorries and limousines carrying Communist Party officials. The choice of two wheels wasn’t a fashion for Lycra-clad ethically green mobility. It was poverty. Given the choice, today’s Chinese commuters would rather burn petrol while seated in air-conditioned cars than inhale the foul fumes of China’s cities, while burning body fat.
The Chinese need to get back on their bikes. Not back-pedalling to a bleak past of rural poverty and backyard steel mills but a great leap forward. It must leapfrog from a neo-Victorian world of metal-bashing heavy industry to a low-intensity, low-carbon world of electric vehicles, wind turbines, light industry, organic farming and bicycles…
Geopolitics
Has America reached the turning point in Afghanistan?
Six months after proclaiming a new commitment to the war in Afghanistan, President Barack Obama is under growing pressure to make what would amount to a U-turn in US policy and scale back America’s commitment to a conflict that many experts – and a majority of the public – now fear may be unwinnable.
The debate, which divides Mr Obama’s most senior advisers, was thrown into stark relief by the leaked report of General Stanley McChrystal, the commander of US and allied forces in Afghanistan, warning that the war might be lost within a year without a further boost in troop strength and a major change in strategy to combat the spreading Taliban insurgency…
Lula Defends Ahmadinejad’s Nuclear Goal, Plans Visit to Iran
Brazilian President Luiz Inacio Lula da Silva said he will visit President Mahmoud Ahmadinejad in Tehran next year and defended his relationship with Iran, saying he can’t judge its nuclear ambitions or elections.
Lula, speaking to reporters outside the United Nations General Assembly yesterday, said Ahmadinejad assured him during a meeting that Iran was developing its nuclear industry for peaceful, civilian uses…
Russia says it will join sanctions against Iran
President Obama’s biggest foreign policy gamble appeared to pay off last night as Russia opened the door to punishing new sanctions on Iran to halt its nuclear programme.
Emerging from his first meeting with Mr Obama since the Eastern Europe missile shield was scrapped, President Medvedev of Russia conceded that “in some cases, sanctions are inevitable”…
Transport
Airlines plan ‘to cut emissions’
The aviation industry is to pledge to cut carbon dioxide emissions to half the 2005 levels by 2050, the head of BA will tell world leaders later.
British Airways Chief Executive Willie Walsh will say the industry’s proposals are “the best option for the planet”…
Shipping groups back trading scheme
A group of shipping companies unveiled their first serious plan for a global trading carbon trading system for the industry yesterday but failed to set a long-term target for cutting emissions.
A discussion paper prepared by the national shipowners’ associations of five important shipping nations suggests that, instead of creating entirely new emissions permits, the controllers of a new scheme for the shipping industry could auction off existing permits created for other schemes…
Electric vans are a viable cleantech alternative
I am cruising the outskirts of London in a vehicle that could turn white van drivers green. Green with envy, as a tank of diesel costs £100 compared with our £5 fill-up; and environmentally green because the van I am steering is electric.
The curved-nosed box-van can carry up to two tonnes (think Transit, but longer and taller). It is made by Modec, a Midlands-based company set up in 2004 by the former chairman of Manganese Bronze – makers of the iconic London taxi. After a £30m development, the Modec was launched in 2007…
