ODAC Newsletter – Nov 5

Oil traded near its highest level in two years in New York as the dollar headed for a weekly decline against most major counterparts after the Federal Reserve’s decision to purchase more debt to boost the U.S. economy.

Crude climbed for a fifth day, the longest rising streak in seven months. The dollar has depreciated versus all but one of its 16 most-traded peers this week. The Fed said Nov. 3 it will buy about $75 billion of Treasuries every month through June. Oil gained even as a U.S. government report Nov. 3 showed stockpiles rose last week to the highest level since May 2009…

Saudi Arabia’s shift to a higher oil price comfort range reflects a desire to make up for a weaker dollar rather than strain on the kingdom’s budget and government spending is seen staying strong in the coming year.

The world’s top crude exporter moved its preferred price up a notch this week, saying $70-$90 a barrel was an acceptable range for consumers, driving oil prices higher…

The global energy watchdog will next week throw its weight behind calls for governments to implement pledges to fight climate change and cut fossil fuel subsidies, warning that a failure to do so would significantly inflate oil prices.

The International Energy Agency forecasts that implementation of new environmental policies would see demand for oil almost 10 per cent lower by 2035 than under current policy commitments. That would result in prices roughly $20 a barrel lower…

Iraq will miss its target of producing 12m barrels of oil a day by 2017 and could take another 20 years to achieve even half that level of output, says the International Energy Agency…

BP lifted its estimate of the likely cost of its Gulf of Mexico oil spill to $40 billion on Tuesday, denting profits, but its underlying performance beat all expectations on higher refining margins and a lower tax rate.

BP, the world’s biggest non-government controlled oil company by production last year, said delays in capping its blown-out well prompted the increased charge for ending the leak, cleaning up the damage and compensating those affected…

Brazilian state oil company Petrobras on Wednesday questioned British gas producer BG Group’s move to boost its oil reserve estimates for discoveries in Brazil, saying the company should await the completion of wells being drilled there.

BG on Tuesday lifted estimates for total recoverable resources from the Tupi, Iracema and Guara areas in Brazil by 34 percent, raising BG’s net resources from those areas to 2.8 billion barrels of oil equivalent (boe)…

BP Plc Chief Executive Officer Robert Dudley expects to drill in the U.S. Gulf for 20 years as the company exploits its experience searching for oil miles below the sea.

“Companies like BP, one of the roles they play in the industry is working in riskier areas,” Dudley, 55, said in an interview at BP’s worldwide London headquarters yesterday. BP “is now going to become incredibly focused on managing the risks, for example, of deep-water. It’s not going to shy away from the risk, it’s going to get even better at it.”…

The Persian Gulf, the world’s biggest crude-oil loading region, has too few supertankers to haul the fuel for the first time in almost a year, potentially helping to sustain a rally in freight costs.

There are 1 percent fewer very large crude carriers, or VLCCs, for hire over the next 30 days than there are cargoes, according to the median estimate of eight shipbrokers and owners surveyed by Bloomberg News today. There was a 20 percent surplus a week ago…

Opec’s gleaming new headquarters in Vienna strives to project an image of confidence in the future and benign concern for the health of the world economy.

“An efficient and regular supply of petroleum to consumers, a steady income to producers and a fair return on capital,” reads the organisation’s mission statement…

Battle lines have been hardening over the proposed Keystone XL pipeline over the last couple of weeks. The pipeline, which will stretch from Alberta in Canada to refineries on the Gulf Coast, would nearly double the United States’ capacity to import oil made from Canadian oil sands. Canadian oil sands are a plentiful and secure source of oil, but the extraction process is high in carbon dioxide emissions and takes a toll on pristine Canadian forest ecosystems.

Secretary of State Hillary Rodham Clinton will soon have to decide whether to allow the pipeline construction to proceed next year, and the State Department is -– once again -– studying the potential environmental impact. Environmental groups and a host of government agencies, including the Environmental Protection Agency and the Energy Department, had judged an earlier evaluation inadequate…

Pipeline leaks, like one that cut U.S. crude imports last month and pushed oil prices up $4 a barrel, may become more frequent as the U.S. delays safety reforms on its aging 2.5 million mile network of energy lines.

Following BP’s Gulf of Mexico spill, oil companies face a torrent of new offshore rules. But some advocates say making pipelines on land safer is just as urgent…

Projecting a growth of 40 per cent in India’s oil demand in next decade, Prime Minister Manmohan Singh today stressed on securing energy supplies at affordable prices to meet requirement of rapidly expanding economy.

“India needs adequate supplies of energy at affordable prices to meet the demand of its rapidly growing economy,” he said inaugurating the Petrotech-2010 oil and gas conference here…

BG Group will spend $15bn (£9.3bn) on the world’s first project to liquify and ship gas produced from coal deposits, the natural gas company’s biggest ever investment, it was announced today .

The 20-year Queensland Curtis scheme is the first of a clutch of “coal seam methane” projects in eastern Australia to get the go-ahead, and will underline Australia’s growing importance as a supplier of natural resources to South East Asia. It will involve building a 540km underground pipeline in Queensland which will link the gas producing coal deposits to a new terminal near Gladstone, on the east coast, which will liquify the gas for export by tanker…

Vane Minerals currently exploring for uranium deposits on the edge of the Grand Canyon National Park in area with alleged history of contamination affecting former miners and local indigenous population

A British mining company is pushing ahead with plans to re-start uranium mining in the Grand Canyon area despite claims the process could contaminate the area and its groundwater supplies, The Ecologist has learnt…

A new report from the Energy Biosciences Institute (EBI) in Berkeley projects that development of cost-competitive algae biofuel production will require much more long-term research, development and demonstration. In the meantime, several non-fuel applications of algae could serve to advance the nascent industry.

‘Even with relatively favourable and forward-looking process assumptions (from cultivation to harvesting to processing), algae oil production with microalgae cultures will be expensive and, at least in the near-to-mid-term, will require additional income streams to be economically viable,’ write authors Nigel Quinn and Tryg Lundquist of Lawrence Berkeley National Laboratory (Berkeley Lab), which is a partner in the BP-funded institute…

The British oil industry has threatened to take legal action to defend its interests in the North Sea against offshore wind farm developers.

Dozens of giant offshore wind projects are being planned, mostly in the North Sea, and many will encroach on areas licensed for oil exploration and production. One wind farm developer told the Observer that conflict between the two industries looks likely…

The Government want to build up to 7,000 turbines offshore over the next decade.

However the rules laid down for leasing the sea bed currently state that wind turbines have to be moved if a licence to drill for oil is given in the area…

Work is to start in the New Year on Europe’s largest building made from straw bales, which will rise from the slopes of Eccleshill above the river Aire valley in Bradford.

Thousands of tightly packed cubes of compressed straw will form the core walls of the 2,787 square metre complex on a brownfield site, formerly occupied by a now-demolished high school…

Landlords will be forced to install insulation under new legislation to make every home in Britain as energy efficient as possible.

Chris Huhne, the Energy and Climate Change Secretary, will set out radical plans to upgrade all 26 million homes in the country over the next decade…

Two new power stations that use a fuel critics say contributes to the destruction of rainforest in south-east Asia may be built in the UK through subsidies added to customer bills.

The two plants in the south of England would run on palm oil, which in many cases is sourced from plantations sited on cleared rainforest land…

Proposition 23, the oil industry sponsored initiative to suspend California’s greenhouse gas law, was touted early on by environmentalists as a “David vs. Goliath” battle. “Its our slingshot vs. their oily club,” said Steve Maviglio, a spokesman for opponents.

But in the end, Proposition 23 failed by a stunning 61% to 39%, giving heart to national environmental leaders and signaling the advent of new players in eco-politics: high-tech entrepreneurs, mainly based in Silicon Valley, who see clean energy as an economic investment…

With political control of the House and Senate now decided, the next big question becomes: gridlock or compromise?

President Obama lost his Democratic-led House and now will need to work with Republicans to accomplish legislative goals. Republicans eager to pursue their priorities must partner with Democrats to get bills through the Democratic-led Senate, as well as to secure Obama’s signature…

The Federal Reserve cranked its printing presses back into action, promising it would spend $600bn (£373bn) of newly minted money buying US government debt in an attempt to bring down interest rates and speed up the economic recovery.

The US central bank’s Federal Open Market Committee said yesterday that “progress towards its objectives has been disappointingly slow”, because unemployment remains high and inflation uncomfortably low in the world’s largest economy…

The Fed’s “QE2” risks accelerating the demise of the dollar-based currency system, perhaps leading to an unstable tripod with the euro and yuan, or a hybrid gold standard, or a multi-metal “bancor” along lines proposed by John Maynard Keynes in the 1940s.

China’s commerce ministry fired an irate broadside against Washington on Monday. “The continued and drastic US dollar depreciation recently has led countries including Japan, South Korea, and Thailand to intervene in the currency market, intensifying a ‘currency war’. In the mid-term, the US dollar will continue to weaken and gaming between major currencies will escalate,” it said…