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.
Even before OPEC meet for their emergency session today, their ability to set the oil price is being called into question. OPEC exports were down 900,000 barrels in September and everyone is expecting further cuts to be agreed at the Vienna meeting. Despite this the oil price continues to fall along with the markets, as investors respond to the stream of bad economic news including slowing growth in China and the likelihood of a deep recession in the US.
As oil revenues drop and credit remains tight there are signs that an increasing number of projects are becoming uneconomic or difficult to finance. Even Gazprom, which this week announced record profits, warned that it was facing credit constraints. A facet of peak oil is the economic viability of production. Thus lower prices and decreased investment now could exacerbate supply constraints in the future, thus feeding a cycle of economic turmoil. Some commentators see the current economic downturn as evidence that peak oil has already occurred.
While OPEC aim to flex their muscle on oil prices, Russia, Iran and Qatar announced this week that they are to create a ‘Troika’ on natural gas with increased collaboration between the 3 nations. The prospect of a pricing cartel is of concern to Europe with its increasing reliance on Russian gas.
In the UK this week both Gordon Brown and Mervyn King stated the obvious in admitting that recession was likely. In response the value of sterling fell to its lowest rate against the dollar for 5 years. A weaker pound holds the prospect of growing exposure to an increasingly competitive food and energy market. As Alastair Darling makes his plans to reprioritise public spending to stimulate the economy, it is to be hoped that he is taking note of the green New Deal ideas from the UN and NEF.
If we can afford £500 billion to bail out the bankers, surely we can afford it to bail out of oil?
Falling oil poses threat to supplies
OPEC Ponders Choices as Oil Prices Plummet
Oil dives and Asia tumbles on recession fears
Russia eyes swing producer role to influence prices
Africa’s Potential to Sate World’s Oil Demand Dims
China plans 150,000 km of oil and gas pipelines
Oil groups fear Nigeria reforms
Gas cartel could have a significant impact on Europe
Wind farms: Britain has enough offshore to provide power to 300,000
Queen of green: Crown Estate’s offer fans interest in wind farming
Shell pulls out of its last UK wind farm project
UK announces world’s largest algal biofuel project
European states plead poverty as credit crisis threatens ‘son of Kyoto’ agreement
UN announces green ‘New Deal’ plan to rescue world economies
US faces worst recession in 26 years
China blames slowing economic growth on world turmoil
Economic troubles hit air traffic
Bewildered by peak oil economics
Pensioners cutting back on heating risk death, warns expert
Miliband’s blueprint for greener homes
Darling to ‘reprioritise’ spending