ODAC Newsletter – May 18

The IEA raised slightly its outlook for growth of oil demand this year but warned on Friday that risks of a shock from Iran persisted despite easing prices and a supply boost by OPEC.

In its monthly report, the International Energy Agency said that oil prices had dropped sharply in April amid poor economic data from the US and Europe and an apparent easing of tensions between Iran and the West…

Oil prices remain a threat to the fragile global economic recovery despite a recent fall, the International Energy Agency’s chief economist said on Wednesday, adding the IEA remained ready to release emergency oil stocks if needed.

North Sea Brent crude oil reached a peak of more than $128 in March before declining around $15 gradually over the last two months as tensions in the Middle East have eased and oil supplies have increased…

Saudi Arabia’s target for reducing Brent crude to $100 a barrel may be difficult to sustain as declining production capacity and Europe’s ban on Iranian imports put upward pressure on prices, according to a former executive of Saudi Arabian Oil Co.

“The $100 for Brent is quite a correction and it will be a challenge to sustain such a low price beyond the short term,” Sadad al-Husseini, the founder of Husseini Energy, a Dhahran- based researcher, said today in an e-mail…

Royal Dutch Shell is in talks with Iraq to cut its output target for the giant Majnoon oilfield, a move that could prompt other companies to seek similar revisions.

The European oil major won the rights to develop the giant oilfield in 2009, and is contractually obliged to increase production to 1.8 million barrels per day (bpd). But in a meeting held with government officials last month, the company proposed to cut the target to 1 million bpd, reduce spending, and extend the period under which peak production will be sustained, documents seen by Reuters show…

Occidental Petroleum (OXY.N) was among the first major U.S. oil drillers to make a big bet on the resurgence of domestic production, spending billions to grab oil patches from Texas to North Dakota.

Now, as it bemoans steep costs and moves its rigs out of the Bakken shale oil fields, some analysts wonder if the company has lost its clairvoyance. After two years of unyielding gains, costs are bound to fall, they say…

Oil fell for a sixth day in New York, heading for its third weekly decline, on concern demand will falter as Europe’s debt crisis worsens and the U.S. economy slows. Brent crude was at the narrowest premium to West Texas Intermediate in two weeks after a pipeline was reversed.

Futures slid as much as 1 percent after closing at the lowest price in more than six months yesterday. Greece was downgraded by Fitch Ratings, while Moody’s Investors Service cut 16 Spanish banks and manufacturing in the Philadelphia region unexpectedly shrank in May. Enbridge Inc. (ENB) and Enterprise Products Partners LP (EPD) reversed the Seaway pipeline to alleviate a glut in the U.S. Midwest…

U.S. President Barack Obama will seek support to tap emergency oil reserves from other Group of Eight leaders at a summit this weekend before the European Union’s July embargo of Iranian crude, Kyodo news agency reported on W edn esday.

The report suggests that a slide in oil prices to their lowest in months has not halted U.S. efforts to use strategic oil stockpiles to offset diminishing exports from Iran, which is facing tough new sanctions on its oil industry…

FOR the oil and gas industry, the Arctic Ocean is the final frontier. Beneath the ocean floor lies an estimated 90 billion barrels of recoverable oil – about 13 per cent of the global total. As the sea ice retreats and traditional sources of hydrocarbons dwindle, the pressure to drill is becoming irresistible.

It now seems inevitable that this harsh environment will be opened up to oil and gas production, which poses a big question: how much scientific research is “enough” to ensure safe drilling in the Arctic Ocean?…

First published at New Scientist, 17 May 2012.

People have fretted about when the world’s oil will start to run out ever since M. King Hubbert came up with the idea of “peak oil” back in the 1950s. The American geologist, who worked for Shell, pointed out that we are destined to reach a moment when oil production stops rising and goes into terminal decline. With it, the era of cheap oil that fuelled the post-war economic boom would end. The idea still provokes great debate, and many forecasters are predicting that global production will peak by the end of this decade as supplies dwindle…

The American Petroleum Institute (API), the powerful oil-industry group, outlined its energy priorities Tuesday for the Republican and Democratic platform committees that are crafting their parties’ stances for this summer’s nominating conventions.

While the API recommendations echo the group’s longtime policy wish-list, the move is the latest signal that the oil industry will play a major role in the upcoming election, where energy has already emerged as a divisive issue…

The gas leak from the Elgin platform in the North Sea has been stopped, according to oil firm Total.

The company’s platform was evacuated when the gas began leaking on Sunday 25 March…

Out past the vacant storefronts and abandoned buildings, beyond the shuttered steel mills and decaying industrial plants, residents of eastern Ohio suddenly are seeing dollar signs.

In a region more accustomed to hard times than optimism, residents hope that a boom in shale gas drilling using the controversial technique of hydraulic fracturing – or “fracking” – will lead to wealth, jobs and a reservoir of domestic energy that could dramatically boost the area’s fortunes…

Six years ago today Tony Blair figuratively pushed Britain’s nuclear button. Pre-empting the outcome of his review into the country’s future energy needs, he announced that to “keep the lights on” and prevent global warming the Government was backing the creation of the first new generation of nuclear power stations in a decade. If we don’t do this now, he said, “we will be committing a serious dereliction of our duty to the future of this country”.

On the sixth anniversary of that historic statement, Britain’s nascent new nuclear programme is in trouble, due to a combination of the economic crisis, the disaster in Fukushima and changing political winds…

Massive earthworks needed to prepare the ground for a new nuclear power station at Hinkley in Somerset have been delayed, dealing a further blow to the government’s energy plans.

Half of the big six energy firms have already abandoned their nuclear plans as too costly, but Hinkley is backed by the most pro-nuclear of them, EDF, which is 83% owned by the French state…

Romney Marsh in Kent, one of England’s most peaceful areas and most wildlife-rich wetlands, has been suggested as a site for Britain’s future nuclear waste dump.

Ten thousand letters have been sent to residents of the area by the local district council, Folkestone-based Shepway, canvassing their views about siting the proposed Nuclear Research and Disposal Facility in the geological strata deep beneath the marsh…

The Obama administration imposed heavy tariffs on Chinese solar panels on Thursday, after finding that China is flooding the market with government subsidised products.

The preliminary decision, that China had dumped solar products on the US for less than the cost of manufacture, will result in tariffs of between 31% and 250% on Chinese imports…

Over a beer or two, Danes like to tell a story that goes like this: One night the energy ministers of the countries around the North Sea got together to divide up its oil and gas wealth. The Danish minister got very drunk, but the Norwegian managed to stay sober. As a result, Norway carved out a jagged shape that included Ekofisk, which has proved to be a major field, and Denmark was left with the dregs.

Regarded as a model of how to spend oil and gas wealth wisely, Norway has stashed away surplus revenues from exports while hydropower caters for the bulk of its domestic electricity needs…

The government should do more to help green industries boost economic growth, stop the UK falling behind international rivals, and avoid losing its global leadership on the environment, William Hague has told cabinet colleagues, in a private letter seen by the Guardian.

The foreign secretary also warns in his letter to ministers that unless Britain takes stronger leadership on the green economy there is no hope of securing an international agreement on climate change…

Government plans to reform the electricity market to favour low-carbon power are “unworkable” and will lead to “a train wreck” in the sector, and higher and more volatile energy prices for consumers, according to a group of the UK’s leading renewable energy companies.

Instead of promoting low-carbon electricity, as ministers have claimed, the reforms — which will scrap current subsidies and replace them with long-term contracts — will deter investment and make it harder for the UK to meet its renewable goals, the group of six companies has said, in a letter and statement to the energy secretary Ed Davey. The main beneficiaries, the companies believe, will be nuclear generators…

The UK solar industry has today welcomed the announcement by Energy Secretary Ed Davey that he may move the start date back for the next set of cuts to the Feed-in Tariff for solar electricity, but said the sector needed “certainty”.

Davey told MPs in the House of Commons today that the Department of Energy and Climate Change (DECC) was looking at a potential “tweak” to the FiT regime for solar. The remarks followed Energy Minister Greg Barker, who wrote on Twitter yesterday that DECC was “looking at scope for pushing back a little the next proposed reduction in the solar tariffs” due in July…

National Grid, Shell, SSE and Centrica are among 16 companies who have signalled their intention to apply for the UK’s £1bn carbon capture and storage (CCS) funding competition.

The government today published the list of companies to encourage collaboration among suppliers and further stimulate interest in the industry…

The UK’s first tidal power project has edged closer to reality after an underwater turbine planned for the array successfully completed a trial period at a test centre off the Orkney Islands.

Despite facing some of the worst weather Scotland has seen in a decade, the 1MW HS1000 turbine achieved full export power and is currently providing electricity for homes and businesses on the island of Eday, one of Orkney’s northern isles…

The drive to promote greener, more efficient motoring will blow a £13bn hole in the public finances as revenue from fuel and road taxes dries up, leading thinktanks have warned.

Tax breaks for electric cars and lower fuel consumption from efficient vehicles will mean a collapse in income even as road traffic increases, the Institute for Fiscal studies has found…

Deep concerns over the government’s flagship policy to make 14m homes warmer and cheaper to heat have reached the top of government, with prime minister David Cameron and deputy prime minister Nick Clegg receiving a personal briefing on its troubles.

The green deal aims to provide “pay as you save” loans to homeowners to improve their energy efficiency and cut bills. It is due to launch in October but has faced widespread criticism from energy companies, the building industry, consumer groups and charities. The government’s own impact assessment shows loft insulations and cavity wall insulations — the most cost-effective measures by far — are set to fall by 93% and 67% respectively under current plans. “The impact assessment says it is going to be a train crash,” said Andrew Warren, director of the Association for the Conservation of Energy…

Local authorities across the UK should have a statutory duty to combat climate change, government advisors recommend.

The Committee on Climate Change says that councils can make major cuts in greenhouse gas emissions in areas such as housing, traffic and waste…

Europe should focus on cutting carbon emissions instead of just repeating the existing EU green policy targets which expire at the end of the decade, Britain’s energy and climate chief Edward Davey told a global energy and environment summit.

“We should be moving towards outcome targets,” Davey said on Monday (14 May). “Carbon emissions should be the key target.”…

Green taxes should play a crucial role in tackling Europe’s spiralling deficits, according to a major new report backed by some of the continent’s political heavyweights.

The 160-page report from NGOs the European Climate Foundation and Green Budget Europe and consultancy Vivid Economics argues that carbon and energy taxes present an effective means of tackling greenhouse gas emissions and raising much-needed revenue, while having less of a negative impact on growth than conventional fiscal measure such as income taxes and VAT…