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.
Rising petrol prices and huge oil company profits combined to put pressure on President Obama this week. Prices are reaching around $4.00/gallon, levels not seen since 2008 and a psychological barrier for many Americans whose entire infrastructure is designed around the motor car.
President Obama finds himself in the firing line on fuel prices for two reasons: the promised economic recovery is proving slow in coming, and oil companies and Republicans blame him for holding up US oil production due to the drilling moratorium he imposed following the Deepwater Horizon disaster.
The political response to high oil prices in the US, along with the arguments about fuel duty in the UK clearly demonstrate the pitiful state of public debate around oil. It continues to be all about politics and geopolitics, rather than any consideration of resources limits.
In an interview for Australia’s ABC television this week, the IEA’s Fatih Birol said governments are not doing enough to avoid an oil crunch, and more interestingly admits that he is not confident that all the potential oil included in the IEAs forecast will actually “be developed and brought to the market in a timely manner”. Also well worth watching are ODAC trustee Chris Skrebowski’s interview and Uppsala Professor Kjell Aleklett on what is wrong with the IEA projections.
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Oil
Exxon and Shell see profits boosted by high oil prices
Two oil firms – Exxon Mobil and Royal Dutch Shell – have reported big rises in first quarter profits thanks to higher world oil prices.
Texas-based group Exxon generated profits of $10.7bn (£6.4bn), up 69% on last year…
BP first-quarter profit up 17% despite spill damage
Bolstered by soaring crude oil prices, BP reported a 17 percent increase in first quarter profit to $7.1 billion and sought to convince investors that it was coping with the costs of the massive oil spill in the Gulf of Mexico last year.
The company’s earnings did show signs of spill damage. The sale of assets last year to fund the costs of spill cleanup and reparations helped shrink the oil giant’s production of oil and natural gas by 11 percent compared with the first quarter of 2010. BP also set aside $400 million to cover spill costs, on top of the $40.9 billion it had already reserved for those costs…
Billionaire hints Russians may sell TNK-BP stake
One of the billionaires behind TNK-BP has indicated that the group of four Russian investors who together hold 50pc in the joint venture could sell their stake if they received an “interesting proposal”.
In a rare interview, Viktor Vekselberg, one of four Russian businessmen who co-own the joint venture with BP, signalled willingness to sell his own 12.5pc stake…
Putin Revokes Export Breaks for TNK-BP, Rosneft on Oil Price
Russia revoked export tax breaks on oil from eastern Siberian fields developed by TNK-BP, the Russian venture half-owned by BP Plc (BP/), and OAO Surgutneftegas after prices for the fuel climbed.
TNK-BP’s Verkhnechonsk deposit and Surgut’s Talakan project will have to pay the regular rate starting from May 1, when the duty will rise to the highest level since the 2008 financial crisis, according to an order signed by Prime Minister Vladimir Putin April 25 and posted on the government website today. OAO Rosneft will also have to pay the full rate on oil from the Vankor field…
Oil Slips for Second Day on Concern High Prices to Curb Growth
Oil slipped for a second day after the head of Saudi Arabia’s national oil company said the kingdom isn’t comfortable with prices near a 31-month high and on concern rising futures will slow the economic recovery.
Oil fell 7 cents after Khalid al-Falih, chief executive officer of Saudi Arabian Oil Co., said the world’s biggest crude exporter is committed to maintaining 3 million to 4 million barrels a day of spare capacity to stabilize the market. U.S. Treasury Secretary Timothy Geithner said today that oil prices have become an obstacle to economic growth…
G20 investigates agencies over oil price transparency
Argus Media, which is privately owned, and Platts, which belongs to US information services group McGraw-Hill, play a leading part in how oil is priced across the globe. Despite their critical role in the market, pricing companies are largely unregulated.
In a new update to the G20, officials from the International Organisation of Securities Commissions (IOSCO) said they will assess the “representativeness of the data provided by price reporting agencies” as well as “governance and conflict of interest management at price reporters.” The study will also provide a “critique of the main methodologies” used when setting prices and “the degree of transparency provided by price reporting agencies”…
USA
Boehner questions tax breaks for oil industry
The future of billions of dollars in subsidies to leading oil companies has been cast in doubt in Washington after the Republican leader in the House of Representatives said companies such as Exxon and Chevron “ought to be paying their fair share”.
President Barack Obama seized on the remarks by John Boehner in a rare letter to Republican and Democratic leaders in Congress in which he reiterated his call for “immediate action to eliminate unwarranted tax breaks” for the oil and gas industry…
Gas Price Surge Triggers Political Brawl
Surging gasoline prices have triggered another energy brawl between the White House and congressional Republicans, this time over oil-company tax breaks, as both sides try to skirt voter blame for the increasing pain at the pump.
Now averaging $3.88 a gallon nationwide, gas prices have jumped 37% so far this year and have more than doubled since President Barack Obama took office. The issue could weigh heavily over the 2012 election…
High gas prices cut into driving habits — and Obama’s approval rating
Soaring gasoline prices are biting into household incomes and nibbling at Americans’ fuel consumption — and support for President Obama, according to a Washington Post-ABC News poll.
About six in 10 respondents said they had cut back on driving because of rising fuel prices, and seven in 10 said that high pump prices are causing financial hardship…
Gas
Shale Drilling Faces Crackdown
The Environmental Protection Agency will more closely regulate the use of diesel fuel in a drilling process used to recover natural gas, Administrator Lisa Jackson said Tuesday.
The EPA until recently hasn’t moved to regulate hydraulic fracturing, a process that involves injecting various types of drilling fluids into wells to free oil and natural gas trapped in shale formations deep underground…
US gas well contained, but concerns rise on ‘fracking’
Crews in Pennsylvania gained control Friday of a natural gas well that blew out and spilled thousands of gallons of chemical-laden drilling fluid into the environment over two days.
But the incident has drawn attention to concerns over a controversial drilling process of hydraulic fracturing or “fracking,” which is seen as having enormous potential for capturing natural gas but has environmental risks…
China takes step towards tapping shale gas potential with first well
China has begun trials of a controversial drilling technique to exploit the world’s largest reserves of shale gas, as it attempts to cope with the increasing energy demands of a fast-growing economy while reducing its dependence on coal.
In the past two weeks, engineers have completed the country’s first horizontal shale gas well in Sichuan and government officials have begun drafting a national strategy to identify a trillion cubic metres of exploitable resources by 2020…
Pipeline Blast in Sinai, Said to Be Sabotage, Cuts Gas Supply in Israel and Jordan
An explosion early Wednesday at a gas pipeline in the northern Sinai Peninsula cut supplies of Egyptian natural gas toIsrael for the second time this year in what Israeli and Egyptian officials said was an act of sabotage.
The blast, caused by a package containing TNT, set ablaze a pipeline terminal near the North Sinai city of El Arish and also forced an interruption in the flow of gas to Jordan and some local disruptions in El Arish, according to Egyptian officials. No one was hurt, andIsrael was expected to be able to fill in for the lost supply until the pipeline is repaired…
Europe will get first Nord Stream gas in Oct-Nov: Putin
Europe will start receiving Russian natural gas via the Nord Stream pipeline being constructed under the Baltic in October or November, Russian Prime Minister Vladimir Putin said Tuesday.
“The maritime part will be finished on May 15th. Thankfully there were no problems,” Putin told a press conference during a visit to Denmark…
Coal
Is peak coal coming?
The price of oil isn’t the only hydrocarbon going through the roof. Check out thermal coal prices to see how dependent economic growth has become on burning increasing amounts of fossil fuels. Prices of Newcastle coal, the Asian coal price benchmark, are poised to rise by as much as 30 per cent this year, approaching the peak levels seen in 2008.
It is no surprise the countries driving global coal demand through the roof are the same countries pushing global crude demand. Find the fastest growing economies, and you will find where demand for oil and coal are the strongest…
Nuclear
Radiation Readings in Fukushima Reactor Rise to Highest Since Crisis Began
Radiation readings at Japan’s Fukushima Dai-Ichi station rose to the highest since an earthquake and tsunami knocked out cooling systems, impeding efforts to contain the worst nuclear crisis since Chernobyl.
Two robots sent into the reactor No. 1 building at the plant yesterday took readings as high as 1,120 millisierverts of radiation per hour, Junichi Matsumoto, a general manager at Tokyo Electric Power Co., said today. That’s more than four times the annual dose permitted to nuclear workers at the stricken plant…
Thousands march against nuclear power in Japan
Thousands of people marched in Tokyo on Sunday to demand an end to nuclear power in Japan and a switch to alternative energy after the crisis at an atomic plant hit by the March 11 earthquake and tsunami.
Brandishing placards bearing the slogan: “Bye Bye Genpatsu” (Goodbye Nuclear Power), demonstrators — including many young people and families — walked along a route from Yoyogi Park in the centre of the capital…
Chernobyl anniversary: Medvedev seeks nuclear rules
Russian President Dmitry Medvedev has called for new international rules covering safety at nuclear plants.
Such rules would permit the “necessary” development of nuclear energy, he said…
Biofuels
IEA: Biofuels Could Meet a Quarter of Transportation Fuel Demand By 2050
Global biofuel use could increase more than 13-fold by 2050 and meet more than a quarter of demand for transportation fuel, without jeopardising food and environmental security, the International Energy Agency (IEA) has said.
In a biofuel roadmap released on Wednesday, the IEA says worldwide biofuel consumption could rise from 55 million tonnes of oil equivalent (Mtoe) today, to 750Mtoe by 2050 — provided the right policies and technology developments are in place…
UK
Solar power: a niche or serious energy source for the UK?
Last month the UK government announced plans to slash subsidies for solar power in the UK. The solar industry is outraged. Similar events are being played out across Europe with the German, Spanish and Italian governments all deciding to reduce the amount of public money they spend on subsidising solar power. ?
The debate about solar subsidies is beset by claim and counter-claim. As usual, the argument is really about how to stop climate change…
CBI calls for end to delays on renewable energy
Business leaders are to accuse ministers of failing to lay the groundwork fast enough for the raft of urgently needed low-carbon energy projects that are vital if Britain is to plug the widening gap between its energy requirements and its fast dwindling sources of power.
The CBI employers’ group is urging the government to set out long-term, business-friendly guidelines that will give companies the confidence to invest in green energy infrastructure projects…
Fuel protesters could bring UK to standstill
TWO Flintshire businessmen are spearheading a mass protest that will bring the UK to a halt.
Fuel protesters Ian Charlesworth, from Hawarden, and Kevin Bowker, from Saltney, have organised a mass go-slow in North Wales that will culminate in a blockade of the Stanlow Oil Refinery in Ellesmere Port on Sunday, May 8…
Geopolitics
Syria: EU push for UN condemnation fails
The UN Security Council has failed to agree on a statement condemning Syria’s violent crackdown against protesters.
A draft proposed by France, Britain, Germany and Portugal was opposed by several within the 15-member council, with Russia insisting events in Syria were not a threat to global peace…
Putin Says NATO Strikes Destroying Libya, Violate Mandate
Russian Prime Minister Vladimir Putin said Western military efforts to overthrow Libyan leader Muammar Qaddafi are destroying the nation’s infrastructure and violate a United Nations mandate to protect civilians.
“Who decided they had the right to execute a man, regardless of who he is?” Putin told reporters in Copenhagen today during a joint briefing with his Danish counterpart Lars Loekke Rasmussen…
Transport
Biggest US airlines have combined 1Q loss over $1B
With fresh red ink at Delta and US Airways, the five biggest U.S.
airlines showed a combined loss of more than $1 billion for the first quarter. Soaring jet fuel prices are the big culprit.
The total loss was only about $100 million larger than a year ago, even though jet fuel spending jumped by 28 percent, nearly $1.9 billion. Airlines were able to narrow the difference in fuel spending with a 12 percent increase in revenue…
Plymouth City Airport to close in December
Plymouth City Airport is to close in December, its owner has announced.
Sutton Harbour Group blamed the economic downturn and “challenges for the UK regional aviation market”…
Vauxhall boss warns over UK carmaking future
The future of carmaking in the UK could be in danger if the industry fails to develop a British-based supply chain, the boss of Vauxhall has said.
Nick Reilly, chairman of General Motors in Europe, said a lack of home-based parts manufacturers was the most critical issue facing the industry…