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.
Hurricane Alex, the first hurricane of the season, hampered the Macondo oil well disaster clean-up efforts in the Gulf of Mexico on Wednesday and resulted in the precautionary closure of 25% of crude oil production in the area. Reports indicate however that it didn’t cause any delay to the drilling of relief wells on which so much hope rests.
With investigations into the causes of the disaster continuing, the potential financial impact on the oil industry and on BP were looking increasingly grave this week as the Senate Environment and Public Works Committee voted to eliminate the liability cap of $75 million which is currently in place. Should the bill become law it could be retroactively applied to BP, and leave oil companies operating in US waters facing unlimited liability. In another move this week the US Justice Department wrote to the 5 companies associated with the spill demanding that the US government be given notice of any asset depletion which could jeopardise future payments in the event of judgements being made against them. President Obama clearly intends to make good on his promise that the American people will not pay to clean up the damage, he will however undoubtedly face considerable opposition from both political and industry groups.
The announcement of a new oil field discovery in the North Sea this week was greeted by The Times with the eye-catching headline — North Sea oil strike holds out the prospect of Seventies-style riches. While the Catcher field is anticipated to be the largest find in a decade, it is, at approx 300 million barrels in place (150 million recoverable), not remotely close in size to the real revenue generators of the seventies like Forties (approx 5 billion barrels) and Brent. The find, while significant for the region, is still unlikely to forestall the growing energy deficit of the UK.
Oil
First Hurricane of Season Closes Offshore Rigs, Port
Hurricane Alex bore down on the oil-rich region of southern Texas and the western Gulf of Mexico, closing energy platforms and the Louisiana Offshore Oil Port as it headed for landfall below the Rio Grande.
About 25 percent of crude oil production in the Gulf of Mexico and 9 percent of natural-gas output was shut down, the U.S. government reported. Alex was about 190 miles southeast of Brownsville and moving northwest at 7 mph, heading for landfall in northeastern Mexico…
Senate panel votes to end oil spill liability cap
Congress on Wednesday took major steps to rein in Big Oil’s offshore drilling practices, as one Senate panel voted to lift all caps on liability in oil spills and another moved to deny offshore leases to companies with poor track records.
The action on Capitol Hill comes 72 days after an explosion involving a BP oil rig, which has left millions of gallons of oil pouring into the Gulf of Mexico from a ruptured deep-water well…
BP, Transocean Asked to Notify U.S. Before Depleting Assets
The U.S. Justice Department asked BP Plc and four other companies associated with the Gulf of Mexico oil spill to give the government advance notice before depleting assets that could cover judgments against them.
The letters, dated June 23 and provided yesterday to Bloomberg News in response to a Freedom of Information Act request, also went to Transocean Ltd., Anadarko Petroleum Corp., HalliburtonCo. and Moex USA Corp. The letters described “significant” potential liability…
BP in move to raise more funds
BP has returned to banks seeking additional short-term loans to help the energy group tackle growing liabilities following the oil spill in the Gulf of Mexico.
The new round of financing would augment the $20bn of cash and credit that the company managed to raise by the end of last week. BP could raise about $5bn, according to some people familiar with the talks…
BP to consider relief wells at new sites
BP will consider creating relief wells at new oil exploration sites in a move that would double the cost of deepwater drilling.
Iain Conn, chief executive of refining and marketing at BP, said that pre-emptive relief wells were a “very practical proposal”. He estimated that the measure would increase costs from about $100 million to $200 million…
BP ‘staked future on expanding offshore drilling’
BP staked its future on expanding offshore drilling a month before the catastrophic explosion on the Deepwater Horizon triggered the United States’ worst environmental disaster, according to company documents revealed yesterday.
The investigative web site ProPublica published a March 2010 strategy document in which BP named “expanding deepwater” as its number one area for long-term growth…
The Peak Oil Crisis: The Real Gulf Crisis
At last report BP was making progress on the relief wells that are being drilled to plug the runaway well in the Gulf. The London Times reports that BP hopes to penetrate the casing of the leaking well and start pumping in well-sealing mud in about two weeks. Let’s hope something works.
In the next few weeks, or if things do not go well, perhaps months, the leaking well will be plugged, fishing hopefully will resume, the tourists will return, and the whole matter will be left to lawyers who will spend decades arguing how much New Orleans strip clubs that lost business during the oil spill should be remunerated by BP…
Crude Oil Tumbles as Economic Reports Spur Concern Over U.S., China Growth
Crude oil tumbled to a three-week low on concern economic growth in the U.S. and China will slow, curbing demand in the two largest energy-consuming countries.
Oil slipped 3.5 percent after U.S. manufacturing increased at a slower pace last month and the Labor Department reported that more Americans applied for jobless benefits last week. China’s manufacturing growth slowed for a second month in June, adding to signs the fastest-expanding major economy is cooling, according to a survey…
Nigerians angry at oil pollution double standards
Nigeria’s Niger Delta is one of the most oil-polluted places on the planet with more than 6,800 recorded oil spills, accounting for anywhere from 9 million to 13 million barrels of oil spilled, according to activist groups.
But occurring over the 50 years since oil production began in the Delta, this environmental disaster has never received the attention that is now being paid to the oil-spill catastrophe hitting the U.S. Gulf coast…
‘Norway crude will see rapid decline’
Norway’s oil production is expected to decline “rapidly” over the next 10 to 20 years, so the country needs to save its revenue through some form of wealth fund, the country’s central bank governor said today.
Norges Bank Governor Svein Gjedrem gave no details of the expected production decline in comments during a talk in Singapore, which he is visiting to open an office of the central bank unit that manages Norway’s $425-billion government pension fund…
UK backing loans for ‘risky’ offshore oil drilling in Brazil
The British government is subsidising one of the world’s largest and riskiest oil-drilling projects in the Atlantic Ocean and would be liable for tens of millions of pounds if a major accident took place.
Documents seen by the Guardian show that UK trade ministers underwrote loans taken out by the Brazilian state-run energy company Petrobras in 2005 in order that Rolls Royce and other companies could contribute to the building of the giant P-52 platform…
North Sea oil strike holds out the prospect of Seventies-style riches
A North Sea oil find believed to be as big as the largest discoveries of the seventies has sent shares in the project’s stakeholders soaring.
Two wells off the east coast of Scotland are thought to have struck a single reservoir that could hold up to 300 million barrels of oil…
Biofuels
U.S. Allocates Up to $24 Million for Algae Biofuels Projects
The U.S. Department of Energy will award as much as $24 million in new grants to three research projects aimed at commercializing biofuels derived from algae.
The projects will be carried out by three groups that include partners from academia, national laboratories and private companies, according to a statement from the department…
UK
New UK Energy Minister and the Continuing Decline in Energy Production
The UK Department of Energy and Climate Change (DECC) published their quarterly Energy Trends document last week. It covers up to the first quarter 2010. The key points:
Total energy production in Q1 2010 was 6.5% lower than in the first quarter of 2009…
Planning body’s closure angers industry
Business groups yesterday accused the government of playing politics with the planning system after the coalition confirmed it would close Labour’s new planning body despite fears the move could slow delivery of vital infrastructure.
Industry had encouraged the previous government to set up the Infrastructure Planning Commission to help push through key schemes, such as nuclear power stations or airports, that might otherwise become bogged down in local planning disputes…
Britain needs £1 trillion to turn the country’s infrastructure green
Britain will need up to £1 trillion of investment to replace and decarbonise infrastructure over the next 20 years, according to a report by the Green Investment Bank (GIB) Commission on behalf of the Government.
The report, commissioned by Labour in 2009, sets out how a GIB might be set up to tackle the low carbon investment needs of Britain…
Spending cuts pose threat to green future
Plans to axe billions of pounds from Britain’s energy and scientific research budgets threaten to cripple the nation’s efforts to meet ambitious carbon reduction goals, one of the country’s most distinguished scientists warned yesterday.
Sir David King, the former chief scientific adviser to the Prime Minister, told The Times in Oxford that plans to cut up to 25 per cent from the budget of the Department for Energy and Climate Change as well as a range of other funding programmes were a “real concern” for Britain’s drive to reduce emissions of carbon dioxide by 80 per cent by 2050 while creating new green industries based on low carbon technologies…
Climate
No consensus as Obama, senators discuss energy bill
U.S. President Barack Obama on Tuesday urged lawmakers to put a price on carbon pollution in an upcoming Senate energy bill, but a meeting at the White House ended with no consensus, according to some senators and congressional aides.
Senate Democratic leaders are aiming for July to debate legislation that would encourage more use of clean, alternative energy sources, such as power from wind, solar and biomass. That measure also is likely to clamp down on offshore oil drilling practices after the unprecedented BP Plc oil spill in the Gulf of Mexico…
Economy
Scrap dollar as sole reserve currency: U.N. report
A new United Nations report released on Tuesday calls for abandoning the U.S. dollar as the main global reserve currency, saying it has been unable to safeguard value.
But several European officials attending a high-level meeting of the U.N. Economic and Social Council countered by saying that the market, not politicians, would determine what currencies countries would keep on hand for reserves…
G20 summit agrees on deficit cuts by 2013
Leaders at the G20 summit in Canada have agreed to cut national budget deficits while endeavouring to promote economic growth.
Host Stephen Harper, the Canadian prime minister said short-term stimulus measures would be needed to get economies moving…
China targets miners of rare-earth metals
China has begun a ferocious onslaught against the illegal mining of rare-earth metals in a six-month campaign that seeks to consolidate the industry in the hands of a few state-owned Chinese players.
The Times has learnt that at least ten foreign companies running rare-earth processing facilities in China have been forced to suspend operations in recent days as supplies have run dry…
Transport
Carmakers on the attack over electric subsidy
Electric car manufacturers will today warn the coalition Government that it is putting Britain’s leadership in lowcarbon vehicles “at great risk” by threatening to renege on promises to subsidise their introduction.
The carmakers’ attack comes as it emerged that the Lib-Con Government could be about to pull the plug on the previous Labour administration’s £250 million electric car incentive plan due to come in at the turn of the year — worth £5,000 each for the buyers of a new electric car…
Air passenger traffic bounces back
The number of passengers carried by the world’s leading airlines has bounced back above pre-recession levels after almost two years of sharp declines…
Solar Impulse plane postpones record night flight bid
Pilot Andre Borschberg has announced he is postponing an attempt to make aviation history because of a technical problem.
He had planned to take off from a Swiss airfield in a solar-powered plane and fly through the night…
Blimps could replace aircraft in freight transport, say scientists
Fresh fruit, vegetables, flowers and other foreign luxuries could be part of a global revolution by carrying cargo around the world in airships instead of planes, one of the UK’s leading scientists has predicted.
The government’s former chief scientific adviser, Professor Sir David King, now director of the Smith School of Enterprise and Environment at the University of Oxford, told a conference that massive helium balloons — or blimps — would replace aircraft as a key part of the global trade network as a way of cutting global warming emissions…
