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 commentary published in The Times this week to coincide with the Copenhagen climate talks, Fatih Birol, Chief Economist of the International Energy Agency wrote that on existing energy demand projections “the world faces the prospect of a peak in conventional oil production in about 2020.” Contrary to assertions in the Economist, which is routinely wrong about oil, this is not a new position for Mr Birol, but echoes both recent interviews and the 2008 World Energy Outlook (WEO). Dr Birol calls on governments to cut climate emissions by improving energy efficiency and decarbonising energy supplies, a call that ODAC wholeheartedly endorses. However, we fear that IEA forecasts of future conventional and non-conventional oil production remain highly optimistic, feeding a dangerous false sense of security amongst the governments that rely on them.
Among other questionable assumptions, the IEA’s forecast to 2030 relies on a near tripling of production in Iraq. Friday sees the next round of bidding for contracts to develop the country’s vast but under-exploited oil resources. The last auction, held in June, resulted in only one deal as oil companies played poker with the government over contract pricing. Friday’s sale is widely expected to be more successful as oil companies try to get their foot in the door before elections to be held next March. The current government is keen to strike deals, but companies will need to weigh the risk that contracts agreed now might not be honoured by the next administration. A series of 5 car bombs on Tuesday which killed and wounded hundreds of people provided a stark reminder that Iraq still presents appalling security risks.
In the UK this week the government released its pre-budget report setting out fiscal policy for the coming year. The package, which saw a number of tax increases aimed at reducing the budget deficit, also contained a smattering of ‘green’ measures including a boiler scrappage scheme, tax advantages for micro power generation to supplement feed in tariffs – when they finally arrive – and an extension of the rail electrification programme. The measures are welcome but still show nothing of the urgency that is going to be required to seriously address peak oil or reduce emissions.
Join us! Become a member of the ODAC Newsgathering Network. Can you regularly commit to checking a news source for stories related to peak oil, energy depletion, their implications and responses to the issues? If you are checking either a daily or weekly news source and would have time to add articles to our database, please contact us for more details.
Oil
Crude Oil Declines to Two-Month Low on Ample U.S. Supplies
Crude oil slipped to a two-month low as ample U.S. fuel supplies undermined confidence that demand in the world’s biggest energy-consuming country is recovering.
Prices have dropped 10 percent in seven days, the longest losing streak since September 2006, as gasoline supplies climbed to the highest level since April and a stronger dollar curbed investor appetite for commodities…
2020 vision
FATIH BIROL, the chief economist of the International Energy Agency (IEA), believes that if no big new discoveries are made, “the output of conventional oil will peak in 2020 if oil demand grows on a business-as-usual basis.” Coming from the band of geologists and former oil-industry hands who believe that the world is facing an imminent shortage of oil, this would be unremarkable. But coming from the IEA, the source of closely watched annual predictions about world energy markets, it is a new and striking claim…
Pemex Cantarell Oil Output to Drop Least in 5 Years
Petroleos Mexicanos, the state oil producer, said output at its Cantarell field will fall by about 5.2 percent next year, the slowest drop in five years.
Production at Cantarell will fall to about 550,000 barrels a day next year from an average 579,990 barrels through the first 10 months of this year, Jesus Puente Trevino, adviser to Chief Executive Officer Juan Jose Suarez Coppel, said in an interview in Houston today. The company’s total natural-gas production will fall 12 percent to 6.2 billion cubic feet a day, he said…
Mexico hedges against falling oil prices
Mexico has taken out a $1bn insurance policy against oil prices falling next year, a clear signal that commodities producers remain wary about the threat of a double-dip recession.
The world’s sixth largest oil producer said on Tuesday that it had hedged all its net oil exports for 2010, by buying protection against oil prices falling below $57 a barrel…
Saudi Arabia’s Al-Naimi Says Oil Price Is ‘Perfect’
Crude oil prices are in “the right range” and there is no need to reduce inventories, Saudi Arabian Oil Minister Ali al-Naimi said ahead of an OPEC meeting scheduled for later this month.
“Inventories are coming down, the price is perfect, and all investors, consumers, producers — they’re all very happy,” Al-Naimi said today in Cairo, where Arab oil ministers are holding an annual meeting…
Iraq
SCENARIOS-Will Iraq honour deals with oil majors after polls?
Iraq will on Friday begin a hotly anticipated auction of contracts to develop 10 oilfields, some of the world’s most promising and easily accessible, but will the deals be honoured after a March general election?
Iraq’s politicians are deeply divided along sectarian and ethnic lines, and the cabinet and lawmakers are at loggerheads over whether parliament should have a say over oil deals. Modern hydrocarbon laws governing Iraqi oil have not yet been passed, and the independent-minded oil minister has many enemies…
Pump It Up: The Development of Iraq’s Oil Reserves
In the spring of 2003, more than a million people marched through the streets of cities across Europe and the U.S. to rail against U.S. plans to invade Iraq and oust Saddam Hussein. Amid the chants for peace was an angry accusation: the war was merely a grab by Western companies for Iraq’s vast oil reserves.
Nearly seven years on — and after more than 4,600 Americans and tens of thousands of Iraqis have been killed — Iraq’s natural resources are only now emerging as spoils of war. As U.S. troops prepare to withdraw from the country next year, some of the world’s biggest energy companies, among them ExxonMobil and Royal Dutch Shell, are racing to lock up multibillion-dollar deals with officials in Baghdad that will allow them to exploit the country’s giant oil fields. The deals will not only allow Big Oil to return to Iraq for the first time since Saddam nationalized the industry in 1972. By modernizing a production system wrecked by conflict and embargoes, Iraq’s exports could also get a huge boost, putting the country’s parlous economy on firmer footing and allowing Iraq to take its place as an oil power almost equal to Saudi Arabia…
Iraq insurgents try to blast elections off course
A van charged through a checkpoint in western Baghdad, ran over a security guard and ploughed through a second barrier before crashing into the parking lot of al-Karkh courthouse, where it exploded on impact.
The incident was one of five near- simultaneous car bombs that destroyed official buildings across the Iraqi capital yesterday, killing at least 127 people and injuring more than 500 in the most co-ordinated attack in the city in recent years…
Gas
Russian Will Lead Gas Exporting Alliance
An organization of natural gas exporting countries informally known as the Gas OPEC has elected a Russian as its first secretary general, underscoring the oversize role the country is likely to have in the group that it helped found a year ago.
Leonid V. Bokhanovsky, a vice president at Stroytransgaz, a well-connected pipeline construction company, was elected at a meeting of energy ministers from the 11 member countries. The meeting was held in Doha, Qatar, where the group, the Gas Exporting Countries Forum, has its headquarters…
China’s Hu to woo Central Asia energy suppliers
Chinese leader Hu Jintao will mark a new milestone in Beijing’s quest for control over Central Asia’s energy resources when he inaugurates a new gas pipeline from Turkmenistan next week.
China has already stepped up its presence in the region by handing out billions of dollars in loans, snapping up energy assets and building an oil pipeline from Kazakhstan…
Aramco Drills Record Number of Wells, Adds Gas Output
Saudi Aramco, the world’s largest state-owned oil company, is drilling a record number of wells to find more resources and boost natural gas output to meet industrial demand, Oil Minister Ali al-Naimi said.
Saudi Arabia’s state producer aims to discover a minimum 5 trillion cubic feet (142 billion cubic meters) of so-called non- associated gas reserves annually, he said at a conference in Dubai today…
Economic chill delays work on Gazprom’s giant Arctic gasfield
The start of work on a giant gasfield in the Russian Arctic will be delayed because of cost and financing problems, according to Total, the French oil company, one of Gazprom’s partners in the $20 billion (£12 billion) project.
The final investment decision for the Shtokman field, which will extract gas from beneath the Barents Sea, was to be taken in the next few months, but Arnaud Breuillac, Total’s vicepresident for exploration in Central Europe, said that the decision would not be taken until the end of next year…
Coal
North Sea coal to be burnt underground
Vast coal deposits lying deep beneath the North Sea will be burnt in situ to generate up to 5 per cent of Britain’s energy needs, under new plans approved by the Government last week.
The UK Coal Authority has awarded licences to Clean Coal, an Anglo-American company, to develop five offshore sites for a technology called Underground Coal Gasification (UGC)…
Electricity
Industry looks to green electric future
The world’s electricity industry will set out a plan on Tuesday for rolling out the technologies needed to cut carbon dioxide emissions, showing how ambitious plans to tackle global warming could be achieved.
Electricity generation accounts for about a third of the world’s carbon dioxide emissions from energy use, which in turn accounts for two-thirds of all greenhouse gas emissions…
Electricity bills to rise to fund network repair
Consumers are facing rising electricity bills after Ofgem, the power industry regulator, announced today that it will allow Britain’s 14 regional electricity distributors to raise prices by 5.6 per cent for the next five years.
The average bill will rise by £4.30 a year from next April. About 16 per cent, or £76, of the average electricity customer’s bill goes towards the regional electricity distributor…
Renewables
Blowing in the wind
It is blowing a gale on top of Lynch Knoll in Gloucestershire. That makes green entrepreneur Dale Vince very happy. He likes extreme weather: “Cold, snowing, raining, baking hot – all that stuff.”
Most of all he likes wind. The huge wind turbine on top of the hill is twirling like a kid’s pinwheel. It is one of 52 that belong to Ecotricity, Mr Vince’s company, which sells renewable electricity direct to consumers. The company made a profit of about £2m ($3.3m, €2.2m) in the year to May 2008 on sales of £28m and has been valued at £100m…
California gives green light to space solar power
Energy beamed down from space is one step closer to reality, now that California has given the green light to a deal involving its sale. But some major challenges will have to be overcome if the technology is to be used widely.
On Thursday, the California Public Utilities Commission gave its blessing to an agreement that would see the Pacific Gas and Electric Company buy 200 megawatts of power beamed down from solar-power satellites beginning in 2016…
Biofuels
Nitrous oxide concerns cloud future of biofuels
Scientists at the European commission have cast doubt on whether biofuels could ever be produced sustainably in significant quantities, dealing a blow to the aviation industry, which sees such fuel as a key way to reduce its emissions.
The researchers argue that the greenhouse gases emitted in making biofuel may well negate most of the carbon dioxide savings made by replacing fossil fuels. Of particular concern is the uncertainty over emissions of the potent greenhouse gas nitrous oxide…
UK
Scrappage scheme unveiled for home boilers
A scrappage scheme that will pay people £400 to replace old boilers with new ones has been announced in Chancellor Alistair Darling’s pre-Budget report.
“Each inefficient boiler adds over £200 to household bills and one tonne of carbon to the atmosphere,” he said.
From April, some £200m would be added to help with energy efficiency to cut carbon emissions from homes, he said…
Pre-Budget Report 2009: tax breaks to boost North Sea oil
An extra 300 million barrels of oil could be pumped from beneath the North Sea — enough to supply the UK for six months, under new industry tax breaks unveiled by the Chancellor today.
With North Sea production dwindling — and set to fall by 6 per cent this year alone — Alistair Darling used his Pre-Budget Report to unveil an extension of an existing tax allowance for technically challenging oilfields in which oil extraction is complicated by high pressures and temperatures…
UK trade gap widens unexpectedly
The UK’s trade deficit with the rest of the world widened in October.
Imports rose more than exports, an unexpected move given the weakness of the pound, which makes foreign-made goods more expensive in the UK.
The deficit in goods and services was £3.2bn compared with £3.1bn in September, the Office for National Statistics said…
Climate
Power generation is the key to avoiding global catastrophe
With the UN climate change conference in Copenhagen under way, it is crucial that negotiators put the energy sector at the heart of their talks to come up with a robust, global deal. Energy accounts for 84 per cent of carbon emissions and, on the basis of existing policies, could be leading the world towards a mean temperature rise relative to the pre-industrial period of about 6C. This would be nothing short of an environmental catastrophe, leading to irreparable climate change. With energy at the heart of the problem, it must form the core of a solution…
In the new World Energy Outlook 2009, published last month and containing detailed analysis for the Copenhagen negotiators, the International Energy Agency sets out a “450 Scenario”, leading to a stabilisation of greenhouse gases in the atmosphere at 450 parts per million of carbon equivalent…
• Fatih Birol is chief economist of the International Energy Agency
‘Climategate’ at centre stage as Copenhagen opens
The “Climategate” row took centre stage on the opening day of the Copenhagen climate summit today as the world’s leading oil exporter intervened to question the scientific consensus on man-made global warming.
As 15,000 delegates from 192 nations began what was billed as the “last, best chance” to avert a catastrophic rise in sea and air temperatures, Saudi Arabia’s chief climate negotiator, Mohammed al-Sabban, spoke from the floor to say that e-mails hacked from a UK research centre had shaken trust in the work of scientists…
‘Draft text’ triggers Copenhagen furore
Environmental campaigners have accused rich countries of trying to strong-arm poor nations into an agreement on greenhouse gas emissions at the Copenhagen summit.
A draft text circulated at the talks, co-ordinated by the Danish government, included references to commitments from developing countries to curb emissions by 2020. Such commitments would be required in return for as yet unspecified amounts of financial assistance from the rich world…
Transport
Rail electrification given surprise boost
An extension of the rail electrification programme was a surprise feature of the chancellor’s speech.
Alistair Darling also affirmed his support for a series of key transport projects, including the £16bn Crossrail east-west rail link across London , offering potentially significant backing as big schemes are often vulnerable to spending cuts…
Heathrow’s third runway passes the carbon test
Climate change advisers have decided that an extensive building programme at Heathrow — including the construction of a third runway — can proceed without jeopardising the Government’s carbon emissions targets.
The Committee on Climate Change will report today that 138 million extra passenger could use British airports in 2050, an increase of 60 per cent, without breaching government targets to reduce aviation emissions to below 2005 levels…