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ODAC Newsletter - Jan 29

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.

This week saw the Chairman of one of the world’s major oil companies publicly acknowledge the approaching peak in oil production. During a panel discussion at the annual World Economic Forum at Davos in Switzerland on Thursday, Thierry Desmarest, Chairman of Total said:

“The problem of peak oil remains. We have always been relatively prudent in our assessment of a peak oil date in Total between, I would say, the International Energy Agency, which was extremely optimistic a few years ago - a bit less today - and some so called experts who were announcing that the peak oil has already taken place. In our opinion it will be very difficult to raise the oil production above 95 million barrels/day, which is something like 10% above today's level - so its not enormous...So I think we must keep in mind that in a few years from now the market may be in a relatively difficult position in, the energy security concerning oil (because I think for gas we have certainly more time), will be a big problem.”

You might think that such an explosive point would provoke a lively debate, but you would be wrong. Panel moderator Daniel Yergin, the founder of CERA and a long-term antagonist of peak oil, moved quickly onto Iraq and the prospects for expanding production. Only Khalid al-Falih, Chief Executive of Saudi Aramco contradicted Desmarest, saying that although “long-term it [oil] is a depletable resource”, it would be possible with the use of technology to exceed 95 or even 100 million barrels/day.

Both Tony Hayward and Peter Voser, Shell’s chief executive, emphasised the growing global demand for energy and insisted hydrocarbons will continue to make up to 80% of the energy mix for the foreseeable future. Despite nods towards environmental responsibility, their focus was on the need for governments to provide the conditions to allow the industry to develop the remaining resources. The organizers seemed to agree and to have made their minds up in advance, since there was little discussion of renewables in a debate billed as a ‘World Energy Outlook’.

Press reports continue to punt the idea that an imminent expansion of oil production capacity in Iraq will soon cause a glut – this despite the massive security, legal and infrastructure challenges. This week however it was Venezuela that was touted as the ‘next Saudi Arabia’. The claims are based on a new US Geological Survey estimate that raises the country’s recoverable reserves numbers. ODAC trustee Dr Richard Miller is sceptical that the development will lead to any significant change in the global supply situation, as he explains in this week’s ODAC commentary.

In the UK this week the government tried to slow the decline of North Sea oil and gas by bowing to pressure to increase tax relief for oil companies. ODAC waits with interest to see if the treasury will give equally generous incentives to renewables in its forthcoming feed-in tariff scheme. According to a YouGov survey conducted for Friends of the Earth, the Renewable Energy Association and the Co-operative Group, the UK public is receptive to the idea. However Alan Simpson MP, the government's special adviser on renewable energy sounded a note of warning: "As things stand, the government could turn a brilliant idea into a pitiful failure. What the public are looking for is real vision and ambition, not a towering lack of it.” You have been warned.

Oil

Davos - Global Energy Outlook

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DAVOS-Saudis say don't worry about peak oil

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Davos 2010: a new peak in oil production is needed, energy leaders argue

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Venezuela oil 'may double Saudi Arabia'

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Shell forced into oil sands U-turn

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IEA to Meet CFTC, OPEC, Banks on Curbing Speculation

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BP's Iraq oil deal faces court battle

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Kazakhstan to force foreign oil firms to pay more tax

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Tax breaks to lure oil and gas sector

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Shell faces legal fight over Arctic wells

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Iraq’s production bonanza may fuel a slide in oil

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Gas

Crown in row over energy supply

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Cold winter leaves utilities with a warm feeling inside

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Coal

E.ON chief: Preserve coal plants to keep lights on

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Renewables

Public supports ambitious scheme for micro-scale renewable energy: poll

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Climate

Barack Obama commits to climate change bill

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China admits ‘open attitude’ over warming

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Geopolitics

Iranian forces fully withdraw from Iraq oilfield

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Russia, Belarus sign deal ending oil dispute: official

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Economy

UK economy emerges from recession

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Sarkozy seeks a new order and throws down gauntlet to China

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Economic growth 'cannot continue'

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Iata says airlines suffered 'worst year' in 2009

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