As oil companies reported sharply increased profits this week, an estimated 5000 barrels of oil a day was spewing into the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig. This ecological disaster comes just a month after President Obama gave the green light to expand drilling off the US coast, and while the timing of the disaster could hardly be worse for big oil's PR...

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ODAC Newsletter - Apr 30

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 oil companies reported sharply increased profits this week, an estimated 5000 barrels of oil a day was spewing into the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig. This ecological disaster comes just a month after President Obama gave the green light to expand drilling off the US coast, and while the timing of the disaster could hardly be worse for big oil's PR, it is unlikely that policy will change as a result: the oil depletion stakes are just too high. As the remaining resources become ever harder to produce, the likelihood of this kind of accident can only increase. Obama said yesterday the US military may have to join the cleanup effort, and he would be sending BP the bill.

Threats to the oil supply were reinforced this week by a statement from Khalid al-Falih, chief executive officer of Saudi Aramco, which said Saudi Arabia's domestic demand for energy is set to rise by 250% to 8.3 million barrels a day of oil equivalent by 2028. This follows report data from the IEA earlier in the month showing that Saudi Arabia is now the second largest source of demand growth after China. While some commentators point out that a perception of a coming supply constraint which supports a strong oil price is in the kingdom's interests, Saudi Arabia's role as the only swing producer with significant spare capacity means that the warning should be taken seriously.

In the UK this week, election fever continued against the backdrop of the worsening European debt crisis. Energy policy continues to play a back row seat, though news that the UK attained one gigawatt of installed offshore wind capacity was welcomed by all parties. Pushing through an energy transition while reigning in the vast public debt is going to be a tough sell for whoever wins — leadership will therefore be essential. On the basis of the Guardian energy hustings we reported last week, there seems little hope of that.

Oil

Gulf oil spill 'five times' larger than estimated

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Drilling and spilling for all the oil that's left

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Deepwater Horizon disaster comes at bad time for oil industry

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Oil spill overshadows BP results

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Shell profits rise 60%, helped by oil price

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Shell, Total Rely on Gas as Access to Oil Declines

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Saudi Arabia global oil exports to wane post-2010

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Oil Rises to Two-Week High on Signs of Global Economic Recovery

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Deal opens Barents Sea to exploration

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Coal

Cash-starved UK Coal tries land sell-off

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US research paper questions viability of carbon capture and storage

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Nuclear

Putin Proposes Russia, Ukraine Nuclear Energy Merger

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Chernobyl Radiation Killed Nearly One Million People: New Book

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Bags of radioactive waste from Sellafield dumped in landfill site

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Renewables

Regulators Approve First Offshore Wind Farm in U.S.

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UK offshore wind breezes through 1GW barrier

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Coping with wind

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Giant gravel batteries could make renewable energy more reliable

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UK

Shell drafted letter Tony Blair sent to Gaddafi while Prime Minister

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Brutal choices over British deficit

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Geopolitics

Parliamentarians swap blows as Ukraine exchanges naval lease for cheap Russian gas

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Iraq's ex-premier calls for caretaker government, new elections

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Economy

Spain hit as Greek 'illness' spreads over Europe

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Transport

Volcano crisis and soaring oil prices send air fares up by more than 11%

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Editorial Notes: The Oil Depletion Analysis Centre (ODAC) is an independent, UK-registered educational charity working to raise international public awareness and promote better understanding of the world's oil-depletion problem. --- UPDATE (April 30) Bruce Robinson of ASPO-Australia Dear ODAC, (and Energy Bulletin) writes: You reported faithfully an article about Saudi domestic consumption and exports, but the article itself misquoted Saudi Aramco's President and CEO ["Saudi Arabia global oil exports to wane post-2010" by Lianna Brinded, Risk.net, 27 Apr 2010 - see above]
... Domestic energy demand is expected to increase by almost 250%, from about 3.4 million barrels per day (b/d) in 2009 to about 8.3 million b/d by 2028, which will eventually affect the country's ability to export oil, he said...
However, the report is misleading, as it does not accurately quote the Saudi Aramco speech. A direct quote is:
"total domestic energy demand is expected to rise from about 3.4 million barrels per day of oil equivalent in 2009 to approximately 8.3 million barrels per day of oil equivalent in 2028" Source: Speech
The original has units of barrels of oil equivalent per day. This term includes both oil and gas. Hence, although the total energy use is forecast to rise, oil consumption may even perhaps fall, if natural gas replaces oil. Al-Falih, the Saudi Aramco President and CEO did say in the speech on the website
"If no efficiency improvements are achieved, and the business is as usual, the oil availability for exports is likely to decline to less than 7 million barrels per day by 2028, a fall of 3 million barrels per day while the global demand for our oil will continue to rise."
He did not discuss replacing oil with gas, as I read it. Lianna Brinded's article has drawn an unsubstantiated conclusion, and she has misquoted the Saudi Aramco speech. She may well be correct in her concern about Saudi domestic oil use and dwindling exports, but misquoting Saudi Aramco is not good journalism [Lianna Brinded replies to the criticism at the original article. -BA ]

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