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.
There was an almost audible sigh of relief this week in the US as BP and the White House proclaimed the ‘static kill’ procedure on the Macondo oil well a success. With elections approaching the Obama administration will be keen to draw a line under the oil spill and focus on other issues, as reflected by a surprisingly upbeat press conference on Wednesday in which officials announced not only the plugging of the well but also the apparent disappearance of 75% of the spilled oil.
For BP and the oil industry the timing of this breakthrough could prove felicitous. Congress failed to pass even the watered down energy bill before the summer recess which starts next week. There will now be a break of month, which will then be shortly followed by elections, by which time the oil spill will no longer be the top news story, possibly allowing the questions of liability and tighter regulations to be fought out in less of a media spotlight. Typically this has proved to be beneficial to the defendant – just ask Exxon, who managed to haggle down their initial fines for the Exxon Valdez disaster by a factor of ten.
US failure to pass the energy bill demonstrated once again the massive challenge of fighting peak oil and climate change in a global system where energy companies hold huge political sway. A report this week from Bloomberg New Energy Finance demonstrated just how unfair is the fight between renewables and fossil fuels. Despite endless carping about subsidies for renewable energy, the report shows subsidies to the fossil fuel industries are ten times higher. And governments depend on the tax revenues from fossil fuels just as the producers rely on subsidies, creating huge inertia in the system. Getting off fossil fuels isn’t just about a change of energy sources, but also a power shift – if you’ll excuse the pun.
Meanwhile alarming news about the urgency of the task at hand continues to accumulate. A report published in Nature this week claims that there is evidence of a 40% drop in phytoplankton in the oceans in the last century, but largely since the 1950s and probably due to global warming. This follows on from last week’s National Oceanic and Atmospheric Administration (NOAA) report that the last decade set another milestone for the hottest on record. With UN climate talks in Bonn stuttering on, a glimmer of hope that progress might be possible came this week by way of the heat haze and raging fires of Russia. President Medvedev was quoted as saying: “What’s happening with the planet’s climate right now needs to be a wake-up call to all of us, meaning all heads of state, all heads of social organizations, in order to take a more energetic approach to countering the global changes to the climate.” Right on, Dmitry, now make it count.
Oil
BP leak the world’s worst accidental oil spill
The BP spill spewed 4.1m barrels of oll into the Gulf of Mexico over 87 days, making it the biggest unintentional offshore oil spill in the history of the petroleum industry.
Around 4.9m barrels leaked from the time the well ruptured a mile below sea level on April 20 following an explosion that killed 11 workers and its capping on July 15, with only some 800,000 barrels captured during containment operations, according to new US government estimates…
U.S. optimistic end in sight in drive to permanently seal oil well
As the cement hardens Friday in the crippled oil well in the Gulf of Mexico, federal officials are sounding increasingly optimistic that the end is in sight in the drive to permanently seal the well.
BP finished pouring cement down the well on Thursday in an operation known as a “static kill,” completing the job earlier than expected. The process took six hours…
Deep-water drilling ban might end early
The Obama administration’s moratorium on deep-water drilling in the Gulf of Mexico could be lifted earlier than its November 30 expiry date if oil companies show they have improved their spill containment and response plans, the drilling watchdog said on Tuesday…
In Gulf, Good News Is Taken With Grain of Salt
There is little celebration on the Gulf Coast.
Even with the news of the tentative plugging of BP’s well, the attention here has largely been focused elsewhere, on a week’s worth of reports, culminating in a federal study released on Wednesday, that the oil in the Gulf of Mexico has been rapidly breaking down and disappearing. These reports have been met, for the most part, with skepticism if not outright distrust…
Britain slams ‘unconstitutional’ plan to ban BP from drilling in US
BP will this week step up its fight against an “unconstitutional” proposal to ban it from new US offshore drilling, which the British Embassy has warned could be seen as protectionism.
US lawmakers have been working for more than a month on new legislation to stop any company from winning offshore oil licences if it has contributed to the deaths of more than 10 workers in the last seven years…
Crude Oil Heads for Biggest Weekly Gain in a Month on Equities
Crude oil headed for its biggest weekly gain in four, as advancing equities tempered investor concern over rising fuel inventories.
Futures in New York traded near a three-month high of $82.97 a barrel reached earlier this week as better-than- expected company earnings buoyed stock indexes. Crude may retreat next week, according to a Bloomberg survey of analysts. A government report on U.S. non-farm payrolls due today may show a drop of 65,000 jobs for July, another survey showed…
Fossil fuel subsidies are 10 times those of renewables, figures show
Despite repeated pledges to phase out fossil fuel subsidies and criticism from some quarters that government support for renewable energy technologies is too generous, global subsidies provided to renewable energy and biofuels are dwarfed by those enjoyed by the fossil fuel industry.
That is the conclusion of a major report released late last week by analyst Bloomberg New Energy Finance, which analyses subsidies and incentive schemes offered globally to developers of renewable energy and biofuel technologies and projects…
US Senate delays action on scaled-back energy bill
The biggest maritime oil spill was not enough to get US senators to agree on a scaled-back energy bill that would have tackled oil exploration and spill cleanup, a top lawmaker said Tuesday.
Senate Majority Leader Harry Reid said the offshore oil drilling reform bill would be delayed to September, after legislators return from their summer August recess, because there is not enough support for it at present…
Al-Qaeda-Linked Group Claims Suicide Bombing Attack on Mitsui Oil Tanker
The Brigades of Abdullah Azzam, a militant jihadist group, said one of its members carried out a suicide bomb attack on a Mitsui O.S.K. oil tanker in the Strait of Hormuz last week, according to Site Intelligence Group.
The group, linked to al-Qaeda, said that Ayyub al-Taishan bombed the ship, and posted a photograph of him posing with a tanker pictured on a screen behind him, according to the website of Maryland-based Site, which monitors terrorism-related activities…
Iraq
The US isn’t leaving Iraq, it’s rebranding the occupation
For most people in Britain and the US, Iraq is already history. Afghanistan has long since taken the lion’s share of media attention, as the death toll of Nato troops rises inexorably. Controversy about Iraq is now almost entirely focused on the original decision to invade: what’s happening there in 2010 barely registers.
That will have been reinforced by Barack Obama’s declaration this week that US combat troops are to be withdrawn from Iraq at the end of the month “as promised and on schedule”. For much of the British and American press, this was the real thing: headlines hailed the “end” of the war and reported “US troops to leave Iraq”…
Gas
EU Seeks Caspian Gas Accord to Cut Russian Dependence
The European Union is seeking an agreement on a natural-gas pipeline between Turkmenistan and Azerbaijan as the 27-nation bloc aims to import Caspian fuel and reduce its dependence on Russia.
The EU regulator’s energy unit drafted a document that the parties could use as the basis for a deal on building at least one pipeline across the Caspian Sea, according to a copy of the non-binding paper obtained by Bloomberg…
NY Senate passes gas drilling moratorium
The New York State Senate has approved at least a nine-month delay in issuing permits for a method of natural gas drilling, saying more study is needed to ensure it does not contaminate the state’s water supply.
The 48 to 9 vote by the senate late on Tuesday was an unusual display of bipartisan cooperation in a divided chamber where Democrats hold a thin majority. The moratorium must still be approved by the state assembly and signed by the governor…
Electricity
Carbon Capture Closer to Profit as Oil Rallies Toward $100: Energy Markets
Capturing pollution from European power plants and using it to force oil from underground reservoirs may turn a profit for the first time as crude prices rise toward $100 a barrel.
Gathering carbon dioxide and pumping it into deposits to extract more crude for so-called enhanced oil recovery became too costly for companies after Brent crude fell 73 percent between its record high in July 2008 and December that year, according to Thomas Greenwood, an analyst at Bloomberg New Energy Finance. The 115 percent rebound since then may make it profitable even without government subsidies that are designed to curb the emissions, he said…
Power line in China could help bring cheap, sustainable electricity to the EU
Innovative technology used in a Chinese ‘electrical highway’ could provide the solution to Europe’s energy problems and ensure cheaper electricity for consumers.
Sustainable power project DESERTEC aims to provide the European Union (EU), the Middle East (ME) and North Africa (NA) with electricity generated from large concentrations of solar panels located in the deserts of North Africa and the Middle East…
Renewables
World’s biggest wave hub starts installation in St Ives
The installation of the world’s largest wave energy testing site has begun.
The ‘Wave Hub’, which is being set up just off the north Cornish coast, is set to bring half a billion pounds into the local economy and create up to 1,800 jobs.
The new device will function like a ‘socket’ on the sea-bed, allowing for future wave-power harnessing devices to channel their energy through the National Grid.
Madrid cuts subsidies for solar power plants
Spain will cut the subsidised electricity prices paid to new photovoltaic solar power plants by up to 45 per cent, the industry ministry has announced, in a move designed to increase efficiency and cut government spending at a time of austerity…
Iceland geothermal takeover under a cloud
Magma Energy of Canada has threatened to delay or even pull out of the biggest foreign investment in Iceland since the country’s banking crisis amid a political storm over its proposed takeover of a geothermal power company.
The Vancouver-based company was scheduled this week to complete its acquisition of HS Orka, the largest private Icelandic power generator, but the deal has been thrown into doubt after the government bowed to pressure for an inquiry into the controversial takeover…
Biofuels
World Bank: Biofuels Didn’t Cause Grain Price Booms
Washington, D.C. A new white paper from the World Bank’s Development Prospects Group concludes that biofuels were not the main reason for the spike in grain prices from 2006 to 2008.
While demand for ethanol was a factor, the authors of the report say that rising energy prices, speculation in the futures market and poor weather conditions in certain regions played equally important roles. Between 2000 and 2008, the price of food commodities doubled, according to the report…
You can read the report here.
Drax delays biomass power station decision
Power producer Drax has delayed its decision on its first power station to run entirely on environmentally friendly biomass until next year.
The firm, based near Selby, North Yorkshire, said it needed greater assurance of government support…
Waitrose to convert food waste into energy
Bracknell-based supermarket giant Waitrose has added a new scheme converting leftovers into energy at its head office.
The company has launched its “food to fuel” technology in all its dining areas at its HQ in Doncastle Road…
China
New Silk Road Built by China Connects Asia to Latin America
The high-speed rail link China Railway Construction Corp. is building in Saudi Arabia doesn’t just connect the holy cities of Mecca and Medina. It shows how Asia, the Middle East, Africa and Latin America are holding the world economy together.
Ties between emerging markets form what economists at HSBC Holdings Plc and Royal Bank of Scotland Group Plc call the “new Silk Road” — a $2.8-trillion version of the Asian-focused network of trade routes along which commerce prospered starting in about the second century…
Hot political summer as China throttles rare metal supply and claims South China Sea
The United States and Europe have been remarkably insouciant about supplies of rare earth minerals so crucial to frontier technologies, from hybrid engines to mobile phones, superconductors, radar and smart bombs.
The United States and Europe have been remarkably insouciant about supplies of rare earth minerals so crucial to frontier technologies, from hybrid engines to mobile phones, superconductors, radar and smart bombs…
Climate
Will Russia’s Heat Wave End Its Global-Warming Doubts?
Russians are not used to heat waves. When the high temperatures that have overwhelmed Russia over the past six weeks first arrived in June, some 1,200 Russians drowned at the country’s beaches. “The majority of those who drowned were drunk,” the Emergencies Ministry concluded in mid-July, citing the Russian habit of taking vodka to cool off by the sea. But while overconsumption of vodka is a familiar scourge in Russia, extreme heat is not, and as the worst heat wave on record spawns wildfires that are destroying entire villages, Russian officials have made what for them is a startling admission: global warming is very real.
At a meeting of international sporting officials in Moscow on July 30, Russian President Dmitri Medvedev announced that in 14 regions of the country, “practically everything is burning. The weather is anomalously hot.” Then, as TV cameras zoomed in on the perspiration shining on his forehead, Medvedev announced, “What’s happening with the planet’s climate right now needs to be a wake-up call to all of us, meaning all heads of state, all heads of social organizations, in order to take a more energetic approach to countering the global changes to the climate.”…
Big Oil’s politics rule Senate on energy
Here are a couple of statistics whose connection may not be immediately apparent:
• According to the National Oceanic and Atmospheric Administration, 2010 looks to be the hottest year in recorded history, capping the hottest decade on record.
• According to the nonprofit watchdog group Center for Responsive Politics, the oil industry contributed more than $35 million to federal political candidates and parties in the 2008 election cycle…
The second fact may help to explain why the U.S. Senate recently watered down an energy bill sponsored by Sens. John Kerry and Joe Lieberman that would have begun to address address the first: global warming.
Climate deal loopholes ‘make farce’ of rich nations’ pledges
Rich countries have been put on the back foot after new research showed that current pledges to cut greenhouse gas emissions could be wiped out by gaping loopholes in the UN climate change treaty put forward in Copenhagen last year.
Developing countries have argued strongly for minimum 40% emission cuts from industrialised nations by 2020. But new analysis from the Stockholm Environment Institute and Third World Network (TWN), released at the latest UN climate talks in Bonn, showed that current pledges amounted to only 12-18% reductions below 1990 levels without loopholes. When all loopholes were taken into account, emissions could be allowed to rise by 9%…
The dead sea: Global warming blamed for 40 per cent decline in the ocean’s phytoplankton
The microscopic plants that support all life in the oceans are dying off at a dramatic rate, according to a study that has documented for the first time a disturbing and unprecedented change at the base of the marine food web.
Scientists have discovered that the phytoplankton of the oceans has declined by about 40 per cent over the past century, with much of the loss occurring since the 1950s. They believe the change is linked with rising sea temperatures and global warming…
EPA rejects challenges to labelling carbon emissions a pollutant
US climate sceptic lobbyists’ attempts to stop greenhouse gas emissions from being labelled as a pollutant were last week rejected by The US Environmental Protection Agency (EPA).
Climate sceptics and oil and coal lobby groups, including the Peabody Energy Company, had challenged the EPA’s ruling from December 2009 that climate change caused by GHG emissions was a threat to public health and the environment. Citing the University of East Anglia ‘climategate’ controversy they said the science could not be trusted…