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ODAC Newsletter - Dec 18

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.

As ODAC News went to press, hopes of a deal in Copenhagen were finally rising, after two weeks of chaos and acrimony. In a scene reminiscent of the climax to a Hollywood blockbuster, Hilary Clinton arrived in the Danish capital on Thursday to announce US support for climate aid to the developing world of $100bn per year by 2020. Along with a softening stance from the African Union and China, there is finally the prospect that a deal can be done.

But if so, it is likely to fall far short of ideal. A leaked assessment from the UN climate convention secretariat shows that the current emissions reductions pledges are 2 to 4 billion tonnes short of what’s required to keep temperature rise below 2C. And the amount of money on the table, while vast, must be seen in context. $100bn to save the planet compares to $95bn profits that Exxon, Shell and BP racked up last year; $130bn budgeted for the US campaigns in Iraq and Afghanistan next year; and $439 billion expected to be spent by oil companies on exploration and production in 2010. With the stakes so high to squeeze out every last drop of fossil fuel, any deal at Copenhagen will have to be just the start.

Despite high profits, big oil is struggling to replace its reserves as the world’s ‘easy oil’ depletes. So no surprise at the high level of interest in last Friday & Saturday’s auction of contracts to exploit approximately a third of Iraq’s existing reserves. But the deals are also a sign of how far the international oil companies have fallen. With nowhere else on the planet offering access to such quantities of easy oil, Iraq has been able to drive a hard bargain, and companies will be paid a fee of around $1.40 per incremental barrel produced rather than a share of the profits. The once mighty Seven Sisters are now the hired help.

But reports that ramped up production from Iraq will transform the oil supply, slash the oil price and potentially break OPEC appear credulous. Contracts awarded in the auction require the oil companies to raise Iraq’s output from 2.5mb/d to as much as 12mb/d within a decade, but the world loses at least 3.5mb/d each year to depletion. So even if Iraq managed to overcome all obstacles and achieve that astounding increase, it would offset less than three years’ depletion. Then what?

In Britain, London Mayor Boris Johnson announced this week a £60 million initiative to develop a network of 22,500 charge points for electric vehicles around London. Such a plan could make a real dent in both transport emissions and oil dependency in the capital, all the more so if coupled with a strong public transport infrastructure, bike and pedestrian friendly roads and renewable energy. The IEA this week advised that to meet existing climate change goals, 72p of every pound invested in energy in Europe by 2030 would need to be spent on renewables. With the writing on the wall for both peak oil and climate change, what are we waiting for?

Read ODAC commentary on a recent article about the prospects for oil in the Falklands

This is the last ODAC newsletter of 2009 - we will be back on January 15th, 2010. All at ODAC wish you a Happy Christmas and all the very best for the New Year. If you are able to support our work with a donation it would be very much appreciated. Your contribution will help us continue our awareness-raising and outreach work. Please do help if you can. Thanks for following us in 2009. Please pass on our newsletter to your friends, colleagues, local Councillors and MPs.


OPEC Raises Forecast Demand for Its Members’ Crude Oil in 2010

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Opec leaves Iraq oil surge off agenda

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Global Oil, Gas Upstream Spending To Rise 11% In 2010 -Survey

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Speculators don't cause oil price swings - JPMorgan

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Crude Oil Falls as Dollar Reaches Three-Month High Against Euro

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Gulf brushes off Iraq oil threat, nears joint currency

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Majnoon win gives Shell a boost

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Shell, Lukoil to Join Iraqi Top Producers Based on Winning Bids

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Exxon Mobil buys 'unconventional' XTO for $31bn

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If gas could talk

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Gas price for Ukraine to rise sharply in 2010

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Natural Gas Hits 11-Month High on Inventory Data

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Wind farms for security not the climate, says E.ON Renwables chief executive Frank Mastiaux

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Unplugging from the world's power lines

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How Effective Are Renewables, Really?

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Head of Geopower Basel faces jail for causing earthquakes

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Iberdrola chief warns over green power

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IEA: 72p of every pound invested in energy needs to be spent on renewables

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Climate deal looks close, but may not halt warming

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Shell's promise of a bright future turns out to be yet another false dawn

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US House passes Iran sanctions bill amid nuclear row

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Mayor's £60m electric car scheme

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