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.
Big oil was smiling this week as Q3 profits rose on the back of higher oil prices. Prices are 12% higher than last year, and according to JP Morgan and Goldman Sachs are likely to go higher, even above $100/barrel, by next year. Such a price rise may provide a test of OPEC’s ability to raise production; it would also put a serious strain on global economic recovery.
The natural gas market has traditionally operated more regionally than oil, with gas trickier to transport. The development of more liquid natural gas facilities at the same time as breakthroughs in extracting gas from shale rock in the US is however beginning to change this. The future gas price is one of the big unknowns in energy at the moment as the jury remains out on how shale gas will play out in Europe and Asia, especially in the light of concerns around water contamination. For now prices in the US are low enough to see Conoco take action to shut in supply, with CEO Jim Mulva describing current prices as “unsustainable”. Either way the market is likely to be well supplied to the middle of the decade, but from there the outlook is less certain as global demand rises.
Rare earth metals were in the news this week as prices soared and international concern grew over an unofficial cessation of exports of the minerals from China to Japan since a diplomatic dispute in September. China holds a virtual global monopoly on production of the rare earth minerals and magnets essential in the high tech electronics industry, including batteries and renewables, and has announced that it is cutting export quotas to concentrate on production for its domestic market. While China’s premier Wen Jiabao has claimed that the country will not use its monopoly as a bargaining chip the move is a threat to the hi-tech industry as it isn’t possible to ramp up production quickly elsewhere to replace supply.
In other news this week, even as the race to meet GHG emissions targets continues, Vestas, the Danish wind turbine manufacturer is to close 5 plants due to a lack of demand in Europe. In the UK meanwhile investments in turbine manufacturing by Siemens, Gamesa and GE were confirmed this week following the government’s spending review commitment to invest in port infrastructure. As the debate about how best to power the future continues the BBC began a 3 part series this week our relationship with electricity. UK readers can catch The Secret Life of the National Grid on BBC iPlayer.
Oil
Exxon, Shell, Eni, Sinopec profits jump on higher oil and gas prices
Underpinning the results were a 12pc rise in crude prices compared with the same period in 2009, driven by economic recovery worldwide and strong demand from China, which became the world’s largest energy user this year.
Exxon Mobil, the world’s largest non-government controlled oil company, said net income rose 55pc to $7.35bn (£4.6bn) compared with the same quarter in 2009, ahead of forecasts of $7.26bn…
Oil could hit $100 a barrel soon, JP Morgan predicts
Chinese demand could push crude to $100 a barrel soon, according to JP Morgan, with the weaker dollar and restocking of French oil inventories once strikes end also helping to drive up oil prices.
China’s economy was quick to recover from the global downturn and has been growing at a spectactular pace, resulting in rampant demand for oil. Growth has slowed slightly to an annual rate of 9.6% in the third quarter from 10.3% in the second…
Halliburton Spill Liability May Rise on BP Well Report
Halliburton Co. may face increased liability in the Gulf of Mexico oil spill after the staff of a U.S. presidential panel said the contractor knew cement it mixed for BP Plc’s well was unstable.
The staff of the National Commission on the BP Deepwater Horizon Oil Spill said documents provided by Halliburton showed at least three tests of the mixture, in February and April, found the recipe wasn’t stable. BP received data in March from at least one of the tests, the commission staff said in a letter yesterday…
US sets up security zone around BP oil spill site
A security zone has been set up around the site of the BP oil spill in the Gulf of Mexico to safeguard any evidence of the environmental disaster earlier this year, the Justice Department said Wednesday.
“In response to a motion by the US Department of Justice, the US District Court in New Orleans has ordered the establishment of a security zone extending 750 feet (228 meters) in all directions from the mobile offshore drilling unit Deepwater Horizon wreckage site and its debris field,” the DoJ said in a statement…
Alaska’s untapped oil reserves estimate lowered by about 90 percent
The U.S. Geological Survey says a revised estimate for the amount of conventional, undiscovered oil in the National Petroleum Reserve in Alaska is a fraction of a previous estimate.
The group estimates about 896 million barrels of such oil are in the reserve, about 90 percent less than a 2002 estimate of 10.6 billion barrels…
Surging price of oil forces US military to seek alternative energy sources
It’s a secret just how much oil the US military uses, but estimates range from around 400,000 barrels a day in peacetime — almost as much as Greece — to 800,000 barrels a day at the height of the Iraq war. This puts a single nation’s armed forces near Australia as an oil consumer and among the top 25 countries in the world today.
Either way it is by far the world’s largest single buyer of oil and the last thing any admiral, general or under secretary of defence has had to be been concerned about is whether there’s gas in the tanks or that the navy’s carbon emissions are a bit extravagant…
Cairn Energy fails to find enough oil off the coast of Greenland
Shares in Cairn Energy fell by more than 7% after the oil and gas group said that its controversial drilling programme off the coast of Greenland had come to an end without making a commercial discovery.
It said it had managed to complete only two out of four planned wells by the 30 September, the end of the drilling season in Greenland…
Tea Party climate change deniers funded by BP and other major polluters
BP and several other big European companies are funding the midterm election campaigns of Tea Party favourites who deny the existence of global warming or oppose Barack Obama’s energy agenda, the Guardian has learned.
An analysis of campaign finance by Climate Action Network Europe (Cane) found nearly 80% of campaign donations from a number of major European firms were directed towards senators who blocked action on climate change. These included incumbents who have been embraced by the Tea Party such as Jim DeMint, a Republican from South Carolina, and the notorious climate change denier James Inhofe, a Republican from Oklahoma…
Top scientists answer your ‘toughest’ energy questions
Post your questions on peak oil, wind power, nuclear power and more for our panel of six of the world’s leading energy scientists
Can the world shift entirely from fossil fuels to renewable sources such as wind, solar and marine power? Is nuclear power a good green alternative to coal and gas? When will the oil run out? And what should power the cars of tomorrow – oil, biofuels or electricity?…
Gas
More firms expected to follow Conoco in gas shut in
ConocoPhillips (COP.N) shut in a small amount of its natural gas production in the third quarter and would like to shut in more at current low prices, but some of its partners need to drill, chief executive Jim Mulva told analysts during a conference call Wednesday.
“We think the price levels we see today are unsustainable,” he said…
Penn to halt future natgas drilling on state land
Pennsylvania Governor Ed Rendell will announce on Tuesday a moratorium on future natural gas drilling in state forests, state officials said on Monday.
The Democratic governor will sign an executive order instituting the moratorium on further leasing of state lands for natural gas drilling…
Russia, Ukraine fail to agree new gas deal
Russia and Ukraine were unable to agree a new gas supply deal sought by the cash-strapped Ukrainian government on Wednesday, leaving the threat of a new year gas war hanging in the air.
In January 2009, a pricing row between Moscow and Kiev resulted in a stoppage of Russian gas flows to Europe for about two weeks, tarnishing Russia’s image as a reliable exporter and spurring a European quest for new suppliers…
Coal
Gridlock on Chinese Highways Sends Coal to Four-Month High: Energy Markets
China is driving up world coal prices as clogged roads and railways from Beijing to Tibet restrict deliveries in the world’s fastest-growing major economy while the country tries to build stockpiles ahead of winter.
A jam held up traffic for as many as 10 days along the country’s main east-west highway in August, underscoring a crisis that may buoy prices for the next two years, according to Daniel Brebner, an analyst at Deutsche Bank AG in London. The China Coal Transport and Distribution Association says it may take up to four years to ease the gridlock…
Renewables
US approves world’s biggest solar energy project
The United States approved on Monday a permit for the largest solar energy project in the world — four massive plants at the cost of one billion dollars each in southern California.
“The Blythe solar power plant will consist of four, 250-Megawatt plants, built on public lands in the sun-drenched Mojave desert,” Interior Secretary Ken Salazar said…
Jeremy Leggett: Solar storm coming: the battle for the UK energy industry
“It is a great big battle of ideas, and we haven’t won it yet,” says Jeremy Leggett. The green guru and founder of Solarcentury — the solar-photovoltaic (PV) supplier that is Britain’s fastest-growing energy company — is in the vanguard of the battle. And while the clean-energy industry is breathing a sigh of relief that last week’s Government Spending Review did not axe the feed-in tariff (FIT) widely hailed as a cornerstone of Britain’s renewable-energy revolution, Mr Leggett has no time for complacency.
“We’ve had a lucky escape,” he says. “There were massive forces of darkness lined up against us — a whole cadre of politicians and officials trying to, at the minimum, cut back the FIT and, if they could get away with it, shut it down completely.”…
Power failure: UK’s wind farm plans in disarray
Hundreds of local revolts against wind farms have jeopardised the plan to use them to generate more than a quarter of Britain’s electricity, figures seen by The Independent reveal.
New wind farms are needed to have any chance of creating enough renewable energy to reduce reliance on coal and gas power production. But planning approvals for them in England are at an all-time low, with only one in three applications getting the go-ahead from councils in the face of angry and organised opposition from people living nearby…
Vestas to close five wind turbine plants
Vestas, the Danish wind turbine manufacturer, said today it would close five production plants across Scandinavia and cut 3,000 jobs.
The group said the surge in demand for wind power it had hoped for in Europe had not materialised and it would have to shift production away from Denmark and Sweden towards Spain to protect profits…
Go-ahead for wind to generate 70,000 jobs
Offshore wind will create 70,000 “green jobs”, the government said on Monday, as hundreds of millions of pounds of planned investments in turbine manufacturing were confirmed…
Mining and Minerals
Concerns over shortage of rare metals
You may never have heard of lanthanum, cerium or neodymium, but these and other so-called “rare earth” metals play a vital role in many modern technologies.
Cerium, for example, is an abrasive used in the manufacture of flat screen televisions…
German Industry Feels Rare-Earth Metals Squeeze
Worries over a bottleneck in rare-earth metals from China, which are needed in the production of high-tech equipment, have dominated a conference on raw materials in Berlin this week. Beijing says export quotas are almost filled for the year. German Economics Minister Rainer Brüderle has called for more recycling and greater cooperation between the EU and the US to fill the gap.
German Economics Minister Rainer Brüderle told industrial and financial heads in Berlin on Tuesday that Chinese restrictions on rare-earth metal exports have started to weigh on the German economy…
China pledges not to use rare earth minerals as weapon
China has said it will not use exports of so-called rare earth minerals as a diplomatic bargaining tool.
The country produces more than 90% of these valuable commodities, which are used to produce electronic items such as mobile phones…
UK
Utilities to issue warning on carbon price
Britain’s “big six” energy companies will this week warn Chris Huhne, secretary of state for energy, that the government’s proposed “floor price” for carbon emission permits is not enough of an incentive for them to invest in new nuclear power stations…
The Secret Life of the National Grid
Ever since Prime Minster Stanley Baldwin promised a land of cheap and abundant electricity in 1926, we have grown ever more dependent on free-flowing power.
It has become as essential to the modern world as water and sunlight were to previous ages…
Fowl energy: Chicken poo lights Gloucestershire town
Cherie Blair may have been moved to buy a “beware of the hen poo” sign on eBay, but one town in Gloucestershire is embracing chicken manure as a fuel for lighting its homes.
Strange though it may seem, thousands of chickens will next month be contributing their droppings to a biogas power station that will provide enough electricity to light 350 homes…