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.
“For decades, we have known the days of cheap and easily accessible oil were numbered. For decades, we have talked and talked about the need to end America’s century-long addiction to fossil fuels. And for decades, we have failed to act with the sense of urgency that this challenge requires. Time and again, the path forward has been blocked—not only by oil industry lobbyists, but also by a lack of political courage and candor.” These were the words of President Obama during his national address on the Gulf oil disaster from the Oval Office on Tuesday. Is the President accepting that we have reached peak oil? Perhaps—if so however the rest of the speech was rather disappointing and lacking in specificity on how to effect the change which he deemed necessary. Where the President is being more specific, and where he is feeling the most political pressure at home, is in ensuring that BP is made to pay for the disaster.
This week saw BP executives called to the White House for a crisis meeting at which the company agreed to freeze dividend payments for the rest of the year, and to hand over $20 billion for an independently run compensation fund. This will however by no means be the full extent of the company’s liability, and as the damage increases along with the estimate of the amount of oil leaking into the ocean, the future prospects for BP are looking uncertain.
Thursday saw the spectacle of CEO Tony Hayward giving evidence to the Congressional Committee—a session which, while high in drama, shed little new light on the situation. The quest to determine the causes of the disaster is both understandable and necessary. There are however many in who’s interest it is to categorise this as a one off caused only by BP’s negligence, while ignoring the broader energy security issues and undermining political efforts for change.
While President Obama waits for ideas from either party on how to break Americans fossil fuel addiction he might take a moment to read the Zero Carbon Britain 2030 report released this week by the Centre for Alternative Technology. The report takes a holistic approach to making an urgent and rapid energy transition which addresses carbon reduction, peak oil and social equity. The plan requires significant change in personal transportation, diet, and employment, but peak oil and climate change assure that change is coming anyway. The Gulf Oil Disaster might just be one of the first visible manifestations of that change.
View our Reports and Resources page
Oil
In Oval Office Speech, Obama Calls for New Focus on Energy Policy
President Obama summoned Americans on Tuesday to a “national mission” to move away from reliance on oil and develop alternative sources of energy, casting the massive oil spill in the Gulf of Mexico as an imperative for Congress to act quickly to overcome “a lack of political courage and candor.”
Speaking to a national television audience for the first time from the Oval Office, Mr. Obama also promised a long-term plan to make sure that the gulf states suffering from the oil spill are made whole again. He said he was appointing Ray Mabus, the secretary of the Navy and the former governor of Mississippi, to develop a Gulf Coast restoration plan in cooperation with states, local communities, tribes, fishermen, conservationists and gulf residents…
Congress tells Hayward BP ignored oil well dangers
BP chief executive Tony Hayward has been told by an angry US Congressional panel his firm ignored dangers when drilling in the Gulf of Mexico.
House committee on energy and commerce chairman Henry Waxman said BP’s “complacency” before the 20 April rig explosion had been “astonishing”…
BP bows to Obama and cancels its dividends
BP capitulated to the White House yesterday, cancelling dividend payments to its shareholders for the rest of the year and promising $20 billion (£14 billion) for an independently run compensation fund for victims of the Deepwater Horizon catastrophe.
After a poorly received speech to the nation and a dramatic morning of negotiations in the White House, President Obama emerged to announce that the massive fund was not a cap on BP’s liability. Minutes later the company’s chairman offered his first full apology…
Obama vows to ‘make BP pay’ for oil spill damage
President Barack Obama has vowed to “make BP pay” for damage caused by the Gulf of Mexico oil spill, in his first national address from the Oval Office.
Mr Obama said he would meet company executives later and tell them that they must set up a fund to compensate those affected by the spill…
Sharp increase in BP spill estimate
The Obama administration has sharply lifted its estimate of the amount of oil gushing into the Mexican gulf because of the BP disaster to 60,000 barrels a day.
If accurate, the new figure signified that a spill the size of the Exxon Valdez catastrophe could be occurring every four days…
BP credit rating slashed as oil spill costs mount
BP’s credit rating has been slashed by Fitch to just two notches above junk status, as the potential cost of the Gulf of Mexico oil spill continues to escalate.
Fitch cut its rating on BP from AA to BBB this morning, a day after US politicians demanded the company deposits $20bn (£13.58bn) in an escrow account to cover the cost of the Deepwater Horizon disaster…
Oil spill: David Cameron confronts Barack Obama in battle to protect BP
The Prime Minister called for the company to be protected from excessive compensation claims as President Barack Obama made it agree to potentially unlimited damages.
BP provisionally agreed the biggest compensation payment in corporate history, setting up a fund worth at least £13.5 billion to cover the damage caused by its leaking oil pipe in the Gulf of Mexico…
BP searches for escape route from oil slick that threatens to envelop it
Only a few weeks ago, it would have seemed unthinkable — but several drastic options are on the table for BP, including placing part of the business in bankruptcy protection from creditors, as possible ways of coping with the Deepwater Horizon oil disaster.
The nightmare scenario for BP would be to be forced to accept a takeover bid or, perhaps more likely, to break itself up and sell off assets piecemeal to raise cash…
Exxon Distances Itself From BP’s ‘Dramatic Departure’ in Gulf
Federal investigators must determine if BP Plc took risks “beyond industry norms” with the Gulf of Mexico well that exploded and caused the worst U.S. oil spill, Exxon Mobil Corp. Chief Executive Officer Rex Tillerson said.
The April 20 disaster that killed 11 workers and sank Transocean Ltd.’s Deepwater Horizon drilling rig “represents a dramatic departure” from the track record of deep-water oil explorers, Tillerson said in remarks prepared for a House Energy and Commerce Committee panel hearing today…
Oil Falls a Second Day on Doubts Over Pace of Recovery in U.S.
Oil fell for a second day in New York amid doubts about the pace of the economic recovery in the U.S., the world’s largest energy consumer, after an increase in jobless claims and a manufacturing slowdown.
Crude extended yesterday’s 1.1 percent drop after the Labor Department said the number of Americans seeking jobless benefits last week climbed to a one-month high. U.S. fuel consumption fell 0.9 percent to the lowest level in five weeks in the seven days ended June 11, the Energy Department reported June 16…
Was geology already a problem for deepwater Gulf oil?
Was geology looming as a problem for deepwater production in the Gulf, long before a moratorium and new regulations came into effect?
Last week we wrote that, despite the EIA’s assertions that deepwater Gulf production would help US oil production grow through to at least 2035, the IEA and the MMS both seem to expect output from these developments to peak in a few year’s time (even in an optimistic scenario)…
BP Gulf Spill Fuels Australian Opponents to Drilling
BP Plc’s Gulf of Mexico disaster is generating opposition to deepwater drilling off Australia, where the government is opening new exploration areas less than a year after the country’s third-worst oil spill.
Resources Minister Martin Ferguson will receive the results tomorrow of an investigation into last August’s Timor Sea oil spill, he said in a phone interview. A month ago, he invited companies to bid for permits to explore new “frontiers” as Australia faces an import cost for oil and liquid fuels that may double in five years to A$30 billion ($26 billion). The country was self sufficient in oil as recently as 2000…
Brazil set to face deepwater oil challenge
Over the past three years, geology has become a hot topic of conversation in Brazilian homes.
Most people have learnt, through the news, that buried deep under the sea bed, hundreds of kilometres off the Brazilian coast, is a thick layer of salt…
Electricity
Kuwait parliament to debate power cuts amid record heat
Kuwait’s parliament will hold an emergency session on Sunday to study the deteriorating power situation in the Gulf state after temperatures and electricity consumption hit record highs.
Twenty-one MPs in the 50-member house demanded the session in a request filed Tuesday after power consumption almost reached the maximum production capacity in the OPEC member…
Nuclear
Nuclear sector loan set to be axed
An £80m government loan to support Britain’s civil nuclear supply chain is set to be axed, barring a last- minute reprieve, as the result of a Treasury review of pre-election spending by the last government expected to be announced today.
Danny Alexander, chief secretary to the Treasury, is expected to tell MPs that most of the business-related loans and grants in the review of post-January spending decisions have been spared…
Nuclear reactors could see closure deferred to help bridge funding gap
Plans are under way to extend the life of the UK’s oldest nuclear reactors, which would ease the government’s need to find an extra £4bn for clean-up funding, the Guardian has learned.
The Wylfa reactor on Anglesey, due to close at the end of the year, would remain open until at least 2012 if safety regulators agree…
Renewables
Built on the wings of the super jumbo
GKN is to make a dramatic tilt at putting itself at the centre of the British windmill industry.
Other than a ground-breaking development on Tyneside, where Clipper Windpower is trying to build the world’s biggest wind turbine, the wind energy manufacturing industry in Britain barely exists. Government has conceded that this may be a huge oversight. It has committed to hoisting 8,000 turbines off the shores of Britain over the next decade in an attempt to provide 25 per cent of the nation’s power through wind energy…
Ministers urged to extend wind subsidies
One of the biggest investors in UK wind power will warn the government on Tuesday that it must extend subsidies for the industry or risk losing investment as European countries vie to build up wind capacity.
Anders Eldrup, chief executive of Denmark’s Dong Energy, which accounts for a third of UK offshore wind capacity, said he would seek assurances from Charles Hendry, energy and climate change minister, at a ceremony to mark completion of Gunfleet Sands wind farm off Essex on Tuesday…
Food
Food prices to rise by up to 40% over next decade, UN report warns
Food prices are set to rise as much as 40% over the coming decade amid growing demand from emerging markets and for biofuel production, according to a United Nations report today which warns of rising hunger and food insecurity.
Farm commodity prices have fallen from their record peaks of two years ago but are set to pick up again and are unlikely to drop back to their average levels of the past decade, according to the annual joint report from Paris-based thinktank the OECD and the UN Food and Agriculture Organisation (FAO)…
UK
Zero-carbon vision sees UK as cleaner, greener and leaner within 20 years
It’s 2030, only 20 years from now: you have driven to work, there is meat for dinner and you are considering taking your partner to India to visit family later in the year. So far, so normal, but this is also a vision of a zero carbon Britain: where not a single gram of the greenhouse gases blamed for global warming and climate change are emitted to power our future lives.
There are changes, however, some invisible, many more obvious. Cars will be electric, and instead of owning them many drivers will borrow from car clubs or lease them. Airlines will no longer fly short distances, and long-haul trips will be a rare treat. Workers from more traditional heavy-energy industries like steel or cement will need to retrain to work in insulating millions of buildings or back on the land, possibly involving big social upheavals. Dinner might be a roast, but poultry or pork because lamb or beef rearing would take up too much land and emit too many greenhouse gases; while mango and bananas will be a luxury as food imports have been halved. And the very landscape of Britain will look different too: instead of green and pleasant fields with grazing Fresian cattle there will be millions more acres of vegetables and grain to eat, and trees for biofuels or buildings…
Fiscal watchdog downgrades UK growth forecast
The new independent fiscal watchdog has downgraded the economic growth projections for the UK economy.
The Office for Budget Responsibility (OBR) predicts the economy will expand 2.6% in 2011, down from the 3% to 3.5% estimate given in Labour’s last Budget…
Geopolitics
Worries mount over China’s ‘rare earth’ export ban
Beijing’s plan to ban exports of key raw materials called ‘rare earths’ as of 2015 should cause concern among manufacturers of high-tech products ranging from computers to electric car batteries and wind turbines, experts warned.
Since 2005, China has imposed a “rapid diminution of export quotas” on a number of rare metals and is planning a full export ban as of 2015, said Christian Hoquart, an economist at BRGM, a French public institute specialised in earth sciences…
Value of Afghanistan’s mineral discovery needs to be dealt with cautiously
The good news from the men at the Pentagon is that beneath the landmines Afghanistan is sitting on a goldmine.
Exactly when they took their degrees in geology is unclear but officials have estimated that Afghanistan’s mineral resources could be worth $1 trillion…
Taleban zone’s mineral riches may rival Saudi Arabia, says Pentagon
Afghanistan is sitting on mineral resources worth $1 trillion and could become one of the world’s most important mining centres, the Pentagon announced yesterday, as it tried to drum up foreign investment and wean the country off the opium trade.
A Pentagon memo predicted that the country could become the “Saudi Arabia of lithium” — a metal that is a key raw material in the manufacture of batteries for laptops and mobile phones…
