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ODAC Newsletter - May 21

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.

Oil prices fell below $70/barrel this week before recovering slightly. The drop reflected market nervousness about the gravity of the Euro crisis and its potential impact on the global economy, coupled with continued high US crude oil stocks.

In the meantime all eyes continue to be focused on the Gulf of Mexico where challenges to BP's estimate of the size of the oil spill is further damaging the credibility of the company. A BP spokesman on Thursday commented that the tube put in place on Monday is siphoning off around 5,000 barrels/day, but oil continues to spill and is now hitting the Louisiana shoreline. Some estimate the actual amount to be at least ten times the working BP estimate of "a little more" than 5000/barrels per day, and point to the huge plume of oil which can be seen on a live video feed which BP released under pressure from Congress on Thursday.

The political consequences of the disaster gathered paced this week as Interior Secretary Ken Salazar announced the creation of three new bodies to replace the now discredited Minerals Management Service, which was in charge of regulation leading up to the accident. The moratorium on off-shore drilling remains in place as the investigation into the causes of the accident continues. BP also faces the possible closure of its Atlantis platform following a submission by US lawmakers questioning its safety.

While off-shore drilling grabbed the headlines, there was also considerable interest this week in another environmentally costly oil frontier — the tar sands. China increased its interest in the region early in the week, through a deal between China Investment Corporation (CIC) and Penn West Energy Trust. Meanwhile, both Shell and Statoil defeated shareholder resolutions challenging their investment in the tar sands at their annual meetings; although a report released this week by investment advisors RiskMetrics Group and Ceres lent weight to the position of the rebel shareholders, that the tar sands represent risky investments due to their high carbon, remediation and energy costs.

In another new report released this week IHS CERA presented a bullish narrative of the growing role of the tar sands in US oil imports, which it says became the largest single source of its imports this year. The report's writers see the tar sands as critical for US energy supply and deal with the environmental impacts by pointing to the role of innovation in reducing their severity. The timing of the report serves as a warning of how the Gulf of Mexico catastrophe could make the on-shore oil production of the tar sands look less threatening. However, even CERA's report states that "GHG emissions from oil sands are approximately 5 to 15 percent greater than the average crude oil consumed in the United States". Their economic analysis naturally excludes the long-term environmental impact beyond immediate remediation. The link between GHG emissions and rising ocean temperatures and acidity may not be as photogenic as a ruptured pipeline, but their eventual impacts are likely to be even more severe.

View our Reports and Resources page

Oil

Oil Is Set for Third Weekly Drop on Europe, U.S. Growth Concern

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BP has fallen short in providing oil leak data, says US

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The Peak Oil Crisis: The Deepwater Horizon

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Don't worry, besieged BP chief tells staff

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Oil is sinking amid 'oceans of public debt'

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Financial Hazards Seen in Oil Sands

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Alberta oilsands become largest U.S. supplier of crude in 2010: Report

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Statoil Defeats Shareholder Revolt Against Oil Sands

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Investors reject Royal Dutch Shell oil sands review

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China moves into Canada's oilsands

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Gas

Russia covets Ukraine gas as ties improve

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Electricity

SSE and E.ON delay gas plants on low demand

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National Grid in £3.2bn rights issue

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Nuclear

Nuclear industry presses sceptical Huhne over backing new reactors

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Where next for nuclear as Labour's 'unaccountable quango' faces axe?

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Renewables

Britain's offshore renewable energy worth a billion barrels of oil and 145,000 new jobs

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Why China holds 'rare' cards in the race to go green

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The whey to greener electricity : Using dairy waste as an alternative source of power

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Climate

Man-made climate change blamed for 'significant' rise in ocean temperature

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New UN climate head demands ambition and transparency

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Geopolitics

US and partners react quickly to Iran's uranium deal with new sanctions

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Iran agrees to send uranium to Turkey

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Economy

Chinese shares drop to one-year low on property curbs

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Petrol expected to fuel inflation

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Euro under renewed attack ahead of EU crisis talks

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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.

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