ODAC Newsletter - 20 June 2008
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.
In a week which saw another record oil price of $139.89, there is much global interest resting on a meeting called by the Saudi King to be held in Jeddah on Sunday. The fact that the Saudis have determined to call this meeting unilaterally, would indicate that they are feeling the pressure. The Saudi Royal Family is entirely dependent on oil for its survival. Demand destruction amongst its key allies is not in its interests and winning new friends in the growing economies clearly is. Continued unrest over fuel prices around the world certainly has world leaders hoping that the Saudis have more than words of sympathy on offer, although so far the markets have remained largely unmoved by the various rumours of an impending announcement of a boost in output.
Gordon Brown will be going to Jeddah. Here is a man who is looking for good news after an annual banquet at the Mansion House, which must have been harder than usual to swallow. Both Mervyn King of the Bank of England and the Chancellor, Alastair Darling blamed the outside factors of rising fuel and food prices for above target UK inflation and a downbeat economic outlook. Both however share an optimism that things will be back on track soon. The Conservative leader David Cameron meanwhile also made a speech this week addressing economic downturn, in which he promised that the Conservatives would pursue green policies despite it. While this was encouraging and eye catching, as things stand, both parties are attempting to manage increasing energy insecurity and be green while governing the economy in a ‘business as usual’ mode. The fact that actual reduction in energy usage will be required and the incompatibility of this with an economy driven by consumption remains entirely unaddressed.
In the world’s biggest oil guzzling economy, the race for the White House is on and energy policy is high on the agenda. The candidates clashed this week over renewables and whether their expansion should be government funded. McCain came out against this kind of government intervention into the market. Whichever view you take, if Alan Greenspan, or more recently Brigadier-General James Ellory, are right and the Iraq War was all about oil, then any amount of money invested by the government in renewables would be a drop in the ocean compared to that invested in oil.
The candidates also differ in their stance on opening up off-shore drilling rights. Hopefully Obama’s comment that “This is not something that's going to give consumers short-term relief and it is not a long-term solution to our problems with fossil fuels generally and oil in particular“ can open up an informed debate on energy constraints and prevent reflex reactions. In the meantime we can take comfort from the fact that Senator McCain wants to save the environment for hunting, fishing and the enjoyment of national treasures. Good to know that the environment, at least as a playground, is safe in his hands.
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Riyadh set to test power to move market
Bush doesn't expect oil output boost at Saudi meeting
Four oil majors return to Iraq
World crude capacity peaked at 85 million bpd: Pickens
Shooting the moon on renewables
Bush calls for offshore drilling
Obama on oil drilling: 'Not a long-term solution'
McCain Plans to Add 100 U.S. Nuclear Reactors, Invest in Coal
Ethanol output faces sharp cuts
South Korean Truckers' Strike Costs $6.57 Billion in Lost Trade
Petrol crisis: Deal agreed to end fuel tanker drivers' strike
Fuel protesters target Brussels
Bank of England's Mervyn King warns wages will stagnate and house prices will fall
Green agenda still key - Cameron
E.ON CEO says no new UK nuclear plants before 2018
Marks & Spencer boss says oil price is hitting out-of-town retail