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.
The first quarter results of the major oil companies were announced this week. The headlines predictably concentrated mostly on their huge profits; however the more significant story here was the drop in oil production reported by Exxon. Shell’s oil output continued to decline, while their natural gas production increased. Exxon has concentrated its efforts on oil and gas rather than alternatives and this week drew criticism from its founding family for this approach. Both Shell and Exxon continued to suffer disruptions this week in Nigeria, and this together with the industrial action at Grangemouth demonstrated how localized issues have a significant impact on the global picture in a tight market.
The results from the oil majors along with reminders of the 2000 UK fuel crisis this week, resulted in a large number of leader and commentary articles offering opinions on the future of the oil price. There are those who cling to the idea that prices are investor driven and tell you that the oil price spike may nearly be over, and those who see this as only the beginning of $100 plus oil (Khelil of OPEC predicted $200/barrel as has the EU Energy Commissioner). What the latter opinions take into account is the impact of flat production and increasing demand, along with the geopolitical changes in the supply dynamics. This demand is illustrated by news from China that its oil consumption hit record levels in Q1, and also by the UAE planning to meet its anticipated tripling of electricity demand in the next 12 years by betting on nuclear power rather than oil and gas.
With such high profits to be made in the hydrocarbon sector, Renewables are facing a battle for investment which was demonstrated by Shell’s decision to pull out of the flagship London Array project.
A lack of progress on Renewables is not good news for CO2 targets. The surprise sponsor for fighting climate change this week was the US Air Force who called for a programme to investigate greener fuels. A spokesperson also commented that the air force felt that it had much to learn from commercial airlines and their focus on reducing weight to save fuel. The commercial sector however continued to struggle with the collapse of Eos, a rescue deal for Silverjet and profit warnings from BA who are trying again to revive their fortunes through partnership talks with AA and Continental.
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Lower oil production is the real story
BP and Shell’s profits up on record oil prices
Opec head sees oil price hitting $200 a barrel
Oil is expensive because oil is scarce
Population explosion means oil at $100 a barrel is here for years
China’s oil consumption hits record high in Q1
Nigeria oil union says to continue Exxon strike
Fears grow of further strikes at Grangemouth oil refinery
Bush attacks Congress on energy policy
Gloucester Coal says makes major coal discovery
British Energy bid war unlikely
A nuclear future
Winds of change: Shell ditches renewable stake amid fears of a retreat to carbons
EC consults on how to overcome barriers to offshore wind in EU
Rich world must back 80 percent carbon cuts: Stern
US air force calls for mission to combat climate change
Eos bankruptcy filing signals end to cheap executive travel
Silverjet lands $25m lifeline and eyes new routes
Analysts braced for BA profit warning as oil price leaves airlines struggling