ODAC Newsletter – Oct 2

Oil fell in New York, paring this week’s gain, on signs the U.S. economy is still in the midst of a recession, limiting fuel demand in the world’s biggest crude consumer.

Oil snapped two days of increases after the number of Americans filing first-time claims for unemployment benefits climbed and a report showed manufacturing dropped lower than projected by economists. U.S. fuel demand, in terms of products supplied over the past four weeks, fell for a third week, the Energy Department said Sept. 30…

China’s Communist regime is celebrating its 60th birthday this week with a massive parade in Beijing, and another big play for a greater share of the global resource pie.

Sovereign wealth fund China Investment Corp. sealed a deal yesterday to acquire an 11-per-cent stake in KazMunaiGas Exploration and Production, Kazakhstan’s second-largest oil producer.

Also this week, the Nigerian government confirmed that government-controlled China National Offshore Oil Corp. has made a pitch to buy up to six billion barrels of Nigeria’s crude oil reserves in a deal that could be worth as much as $30-billion (U.S.)…

Don’t look for Iran to throw up the white flag anytime soon.

The Obama administration is scrambling to tighten trade sanctions against Iran after the disclosure last week that Tehran was hiding a heavily fortified facility that many believe is designed to make material for nuclear weapons.

But the kind of sanctions that would really hit Iran’s economy – sanctions against its energy industry – are thought to be off the table because China and other nations are too reliant on Iran’s oil…

The Organization of Petroleum Exporting Countries trimmed production for a second consecutive month, led by declines in Iraq, Saudi Arabia and Angola, a Bloomberg News survey showed.

Production averaged 28.395 million barrels a day last month, down 50,000 from August, according to the survey of oil companies, producers and analysts…

Offshore capital expenditure is forecast to increase from last year’s $260 billion to $360 billion by 2013 with the long-term outlook for the industry remaining bullish, market consultants Douglas Westwood said today.

“Leading indicators have been improving since the beginning of the year; our view is that offshore expenditure will grow,” Steve Robertson, the director of Douglas Westwood, told the Trends in the Offshore Drilling Industry conference in London…

Robertson questioned whether supply could meet this demand, with 66 out of 99 producing countries having reached their peak production by 2008.

“Peak oil is not a myth or a scare tactic, in our view it is very much a reality,” he said…

The U.S. government on Tuesday revised down U.S. oil demand in July to 4 percent below year-ago levels as the struggling economy sent petroleum consumption to the lowest level for the month in 13 years.

Oil demand in July was 133,000 barrels per day (bpd) less than the Energy Information Administration previously estimated at a revised 18.771 million bpd, the lowest since 1996. That’s down 786,000 bpd from a year earlier when demand was 19.557 million bpd…

Editing by Lisa Shumaker

The Russian prime minister had invited them to a town with a population of 36,000, right on the polar circle, to highlight the promises of the gas fields of the Yamal Peninsula, and to throw open the doors to Western investment and technology.

No doubt his guests salivated at the idea of getting a piece of the action. By 2020, Yamal is estimated to be capable of yielding up to 300bn cubic meters of gas annually. This compares with a total annual Russian production that currently stands at around 550bcm. State-owned Gazprom spends around 25pc of its capex on the Yamal fields…

Russia’s Gazprom will cut gas output in 2009 by 13.8 percent to the lowest in history on low demand at home and in Europe and much lower demand in the former Soviet Union, a newspaper reported on Wednesday.

The world’s largest gas producer, which supplies a quarter of Europe’s gas needs, will produce 474 billion cubic metres (bcm) in 2009 with exports to Europe expected to fall by 10 percent to 142.5 bcm, Vedomosti business daily said, citing Gazprom documents…

Editing by Michael Urquhart

Uzbekistan has restored natural gas supplies to Tajikistan after its Central Asian neighbour repaid most of its debt, Tajik state gas company Tajiktransgas said on Thursday.
Uzbekistan halted supplies on Tuesday demanding that Tajikistan settled $18 million in debt.

Tajiktransgas said Tajikistan had repaid $10 million and the two countries had agreed it would repay another $7.5 million by supplying electricity to Uzbekistan…

Louis Meeks, a burly 59-year-old alfalfa farmer, fills a metal trough with water from his well and watches an oily sheen form on the surface which gives off a faint odor of paint.

He points to small bubbles that appear in the water, and a thin ring of foam around the edge.

Meeks is convinced that energy companies drilling for natural gas in this central Wyoming farming community have poisoned his water and ruined his health…

The steepest rally in natural gas prices since 2006 is coming to an end as the 400 salt caverns, depleted oil fields and aquifers used to store the fuel in the U.S. reach capacity for the first time.

Stockpiles may surpass the record of 3.545 trillion cubic feet by as much as 350 billion cubic feet this fall, Energy Department estimates show. Gulf South Pipeline Co. says its fields in Louisiana and Mississippi are so full that customers will have to pay penalties for exceeding their limits. With no place to go, producers will be forced to dump excess fuel on the market…

India’s prime minister today signalled a huge push in nuclear power over the coming decades, using an untested technology based on nuclear waste and the radioactive element thorium.

Manmohan Singh, speaking at a conference of atomic scientists in Delhi, announced that 470,000MW of energy could come from Indian nuclear power stations by 2050 — more than 100 times the current output from India’s current 17 reactors…

SCIENTISTS in the North-East have developed groundbreaking diamond-driven technology, capable of making renewable energy affordable on a mass scale for the first time.

Evince Technology Ltd, based in the Printable Electronics Technology Centre, NetPark, Sedgefield, has developed a diode capable of converting electricity, including that from wind turbines and photovoltaics more simply and cheaply than existing devices…

Global biofuel use is expected to increase twofold by 2015 and Brazil will remain the world’s top exporter of biofuel, according to a report released Wednesday by Hart Energy Consulting.

The U.S. is expected to see the largest increase in biofuel use per country, increasing its current consumption by more than 30 percent, according to data from the “Global Biofuels Outlook: 2009-2015” report…

The overall increased use of biofuel in many countries around the world will make a dent in the world’s consumption of traditional gasoline, according to Hart…

The country’s largest biomass power plant that will burn wood chips to generate electricity for half a million homes has been approved, the government said on Wednesday.

The Prenergy power station in South Wales is expected to produce electricity with 50-80 percent fewer greenhouse gas emissions than a typical gas or coal fired power station.

The Environment Agency has for the first time stipulated that all the wood used at the plant comes from sustainable sources. If a new tree is planted for each that is one burnt, there are no overall carbon emissions…

Editing by Keiron Henderson

Economic recovery in Britain will be slowed down by a possible credit shortfall of £180 billion next year, caused by the weakness of the banking sector and the state budget deficit, the International Monetary Fund (IMF) warned today.

In its bi-annual Global Financial Stability Report, the IMF concluded that the damage done to banks by the financial crisis was not as great as it had first feared, but also singled out the British economy as being most at risk of restricted funding…

Greenhouse gas emissions created by Britons are probably twice as bad as figures suggest, says the government’s new chief energy scientist.

Professor David MacKay told the BBC that reductions in carbon dioxide emissions since 1990 are “an illusion”.

“Our energy footprint has decreased over the last few decades and that’s largely because we’ve exported our industry,” he said…

Britain’s old coal-fired power plants have only six more years to live at the most. Their death sentence has been passed by the European Union, which decreed that the most polluting stations must be retired after a fixed number of hours.

Britain’s old coal-fired power plants have only six more years to live at the most. Their death sentence has been passed by the European Union, which decreed that the most polluting stations must be retired after a fixed number of hours. But experts predict that the phasing out of these reliable but dirty old beasts will leave the UK facing a catastrophic shortage of energy that may lead to power cuts and vastly inflated bills…

Adapting to impacts of climate change will cost $75-100bn (£47-63bn) per year in the developing world from 2010, a World Bank study concludes.

The bank released preliminary findings from its new global study at the latest round of UN climate talks in Bangkok.

The figures assume that temperatures rise by 2C (3.6F) in the next 40 years…

US President Barack Obama has welcomed the publication of a bill to combat climate change.

The bill, sponsored by leading Democratic senators, would establish a “cap and trade” scheme to cut greenhouse gas emissions…

Unwilling to wait for Congress to act, the Obama administration announced on Wednesday that it was moving forward on new rules to regulate greenhouse gas emissions from hundreds of power plants and large industrial facilities.

President Obama has said that he prefers a comprehensive legislative approach to regulating emissions and stemming global warming, not a piecemeal application of rules, and that he is deeply committed to passage of a climate bill this year…

The largest American business federation, the US Chamber of Commerce, has suffered a rash of high-profile walkouts as multinational companies become uncomfortable with the organisation’s hard-line opposition to measures tackling climate change.

In a sign of mounting acceptance in the business community of a need for action on carbon emissions, big names including the sportswear manufacturer Nike and the household products empire Johnson & Johnson have attacked the chamber for its refusal to back “cap-and-trade” legislation supported by the Obama administration…

Unchecked global warming could bring a severe temperature rise of 4C within many people’s lifetimes, according to a new report for the British government that significantly raises the stakes over climate change.

The study, prepared for the Department of Energy and Climate Change by scientists at the Met Office, challenges the assumption that severe warming will be a threat only for future generations, and warns that a catastrophic 4C rise in temperature could happen by 2060 without strong action on emissions…

India plans to launch a domestic energy-efficiency trading scheme as part of its efforts to reduce emissions of greenhouse gases and combat climate change.

Jairam Ramesh, the environment minister, said the ruling Congress party would make amendments to the Energy Conservation Act in the coming months to create a financial mechanism that would help put India on a par with some of the world’s most energy efficient economies. He said India was already as energy efficient as Germany, and had ambitions to match Japan…

China’s cabinet has laid out detailed plans to curb overcapacity in industries such as steel, aluminum, cement and wind power, warning that the country’s economic recovery could otherwise be hampered.

In a reiteration of existing policy targets, the State Council said meeting the government’s long-standing goal of reducing overcapacity was urgent because the result of inaction would be factory closures, job losses and rising bad bank loans…

Additional reporting by Chen Aizhu, Alfred Cang and Fayen Wong; Editing by Tomasz Janowski

The global economy is expanding again and financial conditions have improved significantly, the International Monetary Fund (IMF) has said.

But in its latest World Economic Outlook, the IMF said the “pace of recovery is expected to be slow”.

It added that the recovery is likely to be “insufficient to decrease unemployment for quite some time”…