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.
Oil prices dropped back out of the $80/barrel range this week on weak economic news, and stockpile gains. There is growing anticipation that the US Federal Reserve is about to embark on a new round of quantitative easing following Tuesday’s downgrade of the recovery outlook. In China, July figures showed a slowdown in industrial production and retail sales which added to market nervousness.
In its monthly oil report the IEA raised its forecast for 2011 demand by 50,000 barrels/day to 86.6 million b/d, but with a significant downward risk due to the economy. The agency, which painted what ODAC considers to be an extremely optimistic supply/demand picture in its recent Medium Term Oil Market Report, also issued a stark warning against tighter regulation and permit delays for deepwater drilling following the BP Macondo oil disaster. To quote, it warns that “Macondo places the ability of the industry to access important new reserves on a knife edge,” and further that “Some 30 per cent of existing global oil, and nearly 50 per cent of new supplies by 2015, needs to be sourced from offshore, much of it from deep water.” The figures underline the perilous state of new oil production which now relies heavily on risky and expensive resources like the Brazilian pre-salt discoveries, the Arctic, and the tar sands.
BP’s final kill of the Macondo well via the relief well was delayed this week due to a tropical storm. In the meantime the focus is now moving to the legal proceedings. The chances of BP being banned from operations in the US looked much less likely this week as it emerged that the company is negotiating to use revenue from its US oil and gas production activities as collateral to back up the $20bn damages fund agreed with the Obama administration. Such a deal would mean that a ban could present a conflict of interest for the US administration. BP did suffer a minor blow this week however as a judicial panel determined that 77 damage suits relating to the disaster will be heard in New Orleans – the company’s legal team had been hoping to have them heard in Texas where it was hoped that strong oil industry links might result in a more sympathetic jury. Meanwhile scientific opinion on the extent of the damage caused by the oil spill remains divided despite last week’s report by NOAA. Greenpeace has announced the launch of a 3 month investigation of the effects by “independent scientists”.
Finally, ODAC wishes to pay its respects to Matthew Simmons who died of a heart attack on Sunday. Simmons did much to advocate a more analysis driven approach to global oil reserves based on auditing rather than on government numbers which often have a strong political element. He is likely to best remembered for his book Twilight in the Desert.
Oil
Crude Oil Rebounds From One-Month Low After Falling Below $76
Oil rebounded from a one-month low in New York as the dollar declined against the euro and some investors took the view a drop below $76 a barrel made the commodity attractive to buy.
Crude rose for the first time in four days as the euro climbed before a European report forecast to show growth in the 16-nation region accelerated. Oil, which has declined 5.5 percent this week, fell the most in six weeks yesterday as initial jobless claims in the U.S. rose and European industrial production unexpectedly declined in June…
IEA warns of Gulf spill effect on new oil supplies
BP’s oil spill in the Gulf of Mexico has placed the ability of the industry to find important new oil supplies on “a knife-edge,” the International Energy Agency, the rich country’s watchdog, warned on Wednesday.
“Macondo also places the ability of the industry to access important new reserves on a knife edge. Some 30 per cent of existing global oil, and nearly 50 per cent of new supplies by 2015, needs to be sourced from offshore, much of it from deep water,” the IEA said in its monthly oil market report…
Oil spill: BP nears deal to continue drilling in Gulf of Mexico
The deal with the White House would allow BP to guarantee its $20bn (£13bn) clean-up fund against revenues from its operations in the Gulf, which account for approximately 10pc of its oil and gas business.
If the deal were to be agreed – it remains one of a number of solutions being discussed – it would all but guarantee BP’s future in the Gulf, despite efforts by certain members of the US Congress to force the company away from US shores…
BP risks Obama row by hinting it may return to stricken oil well
A struggle between BP and the Obama administration over the future of the cemented well in the Gulf of Mexico erupted in public today when the oil company suggested it may drill in the same reservoir again.
In a briefing with reporters meant to symbolise BP’s return to business-as-usual in the Gulf, the chief operating officer, Doug Suttles, said the company may not give up all claims on the Macondo well, which leaked five million barrels of oil into the Gulf…
Experts split over level of BP spill damage
BP has scaled down its oil spill clean-up operation in the Gulf of Mexico, while vowing to continue its efforts at the level needed until the environment is made safe.
But it is embarking on this next phase of the operation amid a lack of consensus over the disaster’s environmental effects and the lessons that must be learnt to prevent future spills and minimise their impact…
Greenpeace to launch expedition to probe BP oil spill impact
Environmental watchdog Greenpeace on Wednesday announced the launch of a three-month expedition on which researchers will analyze the impact of the massive BP oil spill on the Gulf of Mexico ecosystem.
A Greenpeace ship sets sail Thursday from Saint Petersburg, Florida, and will tour the southern tip of Florida and its Keys before heading northward to the area of the failed oil well…
Oil sands toxins growing rapidly
Canada’s oil sands mining operations produce vast and fast-growing quantities of deadly substances, including mercury, heavy metals and arsenic, new data released by Environment Canada shows.
The information on pollutants sheds new light on the environmental toll exacted by Canada’s bid to extract oil from bitumen, showing in stark relief how many nasty substances are being laid on the northern Alberta landscape in the process – and how quickly those are growing…
Oil euphoria puts Lula’s legacy at risk
Brazil is flying high. Having emerged unscathed from the financial crisis, its economy has been growing at 9 per cent a year. Its hugely popular president, Luiz Inácio Lula da Silva, now in his last months in office, seemed set to retire with a chorus of praise – until he plunged into the complications of deep-water oil. Just as Icarus saw his wings of wax melt as he flew too close to the sun, so Mr Lula is risking his legacy as controversies multiply over his petroleum policies…
Texas sues BP over air pollution from refinery
The state of Texas accused BP of putting profits before environmental safety and sued the British energy giant Monday for the mass release of pollutants after a fire at its troubled Texas City refinery.
The lawsuit comes as BP works to finally kill a runaway well in the Gulf of Mexico responsible for one of the world’s worst ever oil spills…
Matthew Simmons, Peak-Oil Advocate and Simmons & Co. Founder, Dies at 67
Matthew R. Simmons, an energy investment banker and author of the book “Twilight in the Desert” that suggested Earth’s supply of oil is dwindling, died yesterday. He was 67.
Simmons “passed away suddenly,” according to an e-mailed statement today from the Ocean Energy Institute, founded by Simmons in 2007 to explore opportunities for harvesting energy from the seas. Simmons is survived by his wife, Ellen, and their five daughters…
Nuclear
Berlin May Extend Reactor Lifetimes by 14 Years
A major conflict is brewing in Chancellor Angela Merkel’s coalition over the extension of nuclear reactor lifetimes. Some conservatives are demanding that the power stations be kept open by an average of 14 years beyond the 2022 phase-out date. The decision due in autumn could decide the political fate of Norbert Röttgen, her ambitious environment minister.
Supporters of nuclear power in Chancellor Angela Merkel’s party want to extend the lifetimes of German nuclear reactors by 14 years on average beyond the planned phase-out by 2022, SPIEGEL has learned…
Russians fear worst as fires reach Chernobyl fallout zone
Radiation levels near Chernobyl could rise and pose long-term health dangers as deadly forest fires spread to land contaminated by the world’s largest nuclear-reactor disaster, Russian environmentalists said yesterday.
Activists said that the effect of the flames, fanned by the hottest weather in the region in 1,000 years, is bound to be serious. “This is radiation that will be dangerous for the local population living near the fires and firefighters managing the fires,” said Vladimir Chuprov, head of Greenpeace Russia’s energy unit. “What is not clear is what could be the danger of the combined radiation effect and toxic effect of the smog. No one knows how these effects multiply each other.”…
Biofuels
Waste ‘could meet gas demands’
Nearly 7.5 per cent of Ireland’s natural gas demand could be met by renewable sources such as grass and organic waste, a report commissioned by Bord Gáis has found.
The UCC and Ernst & Young report – The Future of Renewable Gas in Ireland – estimates that up to 300,000 homes each year could be heated by the renewable gas…
Bristol City Council objections to £70m biofuel plant are invalid, says inspector
A planning inspector has all but destroyed the city council’s case for opposing a £70 million biofuel plant at Avonmouth.
The inspector ruled that the environmental impact of biofuels cannot be taken into consideration during a public inquiry at the Council House…
China
China orders 2,000 factory closures over energy use
China has ordered more than 2,000 factories to shut by next month because they are wasting too much energy.
The government described the outdated smelters and other processing plants as backward. It is unclear how many jobs will be lost…
UK
Councils to sell electricity to the national grid in green initiative
Town halls could become mini power stations under plans to allow councils to sell “green electricity” to the national grid.
The scheme is designed to give local authorities a financial incentive to invest in wind turbines, solar panels and other forms of renewable energy. The cash raised could be channelled back into frontline services or used to limit council tax increases…
All new homes to run on green power by 2016
Every new home is to be powered by a green energy plant to offset its environmental impact under government plans for zero-carbon living from 2016.
If a development is too small, remote or shielded from wind or sun for an effective renewables scheme, developers will pay a levy to the local council to create bigger plants nearby that would cancel out the carbon footprint of the homes, while providing green power. According to government figures, more than a quarter of all CO2 emissions come from residential properties…
Energy efficiency ratings to be compulsory for home sales
EU legislation will make it compulsory for energy efficiency ratings to be published in all UK homes for sale advertisements from 2012.
At the moment homeowners are required to commission an energy performance certificate (EPC) before putting a property on the market, but the results may not be available when potential purchasers first view it. From 2012 the EU Directive will make it compulsory for the ratings to be published upfront giving buyers vital “green” information…
The Government has seriously miscalculated the cost of green homes
There’s a lot of nonsense talked, bought and done when it comes to eco-retrofitting houses. David Thorpe’s new book sorts the wheat from the chaff, and challenges some green orthodoxies…
Our homes are responsible for 60 per cent of EU building energy use, and around 80 per cent of the homes we will inhabit in 2050 are here now. So if we’re to meet the target of reducing carbon emissions by 80 per cent by 2050, it’s vital to find out what measures work to achieve this in existing homes…
Be wary of ‘solar for free’ offers, householders told
Householders tempted by a rash of new “solar for free” offers could double their financial savings by paying for the panels themselves, experts have warned.
The advice comes as installations of solar photovoltaic panels have exploded in the UK, with the number installed in four months in 2010 more than doubling on the whole of 2009 since a government financial incentive was launched in April…
Petrol prices to hit £1.20 by bank holiday
Filling up a tank in an average car will cost families £7 more than a year ago, and will become the latest increase in price to hit consumers, following warnings that bread, gas bills and insurance are all becoming substantially more expensive.
The increase of 4p would see prices jump from this weekend’s average price of 116.65p to around 121p before the end of the month and comes after the price of crude oil has steadily increased…
Low-carbon investment at risk, warn employers
The prospect of £150bn of private sector investment in low-carbon infrastructure is receding as the government fails to provide clarity about planning policies, according to the CBI.
Uncertainty about the planning regime was “making investors wary of committing to new energy projects”, the employers’ organisation said in a report entitled No time to lose: deciding Britain’s energy future…
Economy
Markets dive as depression fears grow
Fears that Britain could slip into a protracted depression intensified tonight as markets took fright at the US central bank’s wary economic outlook, the Bank of England’s own warnings on the UK, and a slew of gloomy data.
With businesses and households fretting over swingeing public sector spending cuts and shaky economic prospects around the world, the Bank cut its growth outlook and warned that Britain faces a long and “choppy recovery”…
Event
ASPO-USA 2010 Peak Oil Conference
The ASPO-USA Peak Oil Conference, October 7-9, 2010 in Washington, DC, is the world’s premier event focused on peak oil challenges and solutions. It is produced by the nonprofit Association For The Study Of Peak Oil & Gas – USA (ASPO-USA). The format includes keynotes, plenary sessions, concurrent educational tracks, networking receptions, and exhibits. The conference is supported by more than 30 publications, websites and partnering associations. ODAC newsletter subscribers can receive a $50 discount off the Peak Aware Package registration option by inserting the code mediapartner when prompted on the eRegistration page linked from www.aspousa.org/worldoil2010/.
