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.
The Gulf of Mexico oil disaster has increased the risk of an imminent global oil crunch — so says the UK Industry Taskforce on Peak Oil and Energy Insecurity (ITPOES). The group, whose members include Virgin and Stagecoach among others, called on the government to speed up adoption of renewables and energy efficiency measures, and to engage with them on a contingency plan to address the risks of peak oil. Meanwhile a study from the University of California at Davis has found that at present investment rates supply could fall 90 per cent short of demand before oil is replaced with other fuels.
But there was also good news as the National Grid issued announced Britain is on target to meet its 2020 renewables target. Agreements have now been secured to generate 32GWs of power, 3GW more than necessary. However, the National Grid warned that reform of planning and energy markets will be required to ensure that all of the additional capacity becomes a reality.
The detail of the government’s nuclear policy remains unclear, but an article in The Telegraph this week claims that assurances of ‘no subsidies’ are likely to be rather semantic. Lib Dem Energy Secretary Chris Huhne, who now supports nuclear despite his party’s opposition, insists new stations will not be subsidised. But it has been clear for some time that the definition of ‘subsidy’ may well be interpreted in its narrowest sense as industry negotiates other forms of support to underwrite the risk.
Risk to the Euro appears to have been deferred again this week as Ireland moves towards accepting a bail out. The markets rallied in anticipation of the news, but the worry is that Spain and Portugal will now be tested. The financial crisis looks far from over, and while a slow economy dampens fuel consumption, it is also likely to slow the urgently-needed move away from fossil fuels.
Oil
Business warns of ‘oil crunch’
Business leaders are warning the disaster in the Gulf of Mexico has increased the chances of an “oil crunch” in the coming decade.
John Miles of Arup warns of the tightened regulation on deep water drilling which could see oil prices rise and threaten the UK economy.
Protect us from peak oil, says Richard Branson (and others)
In February, a group of business leaders (including Richard Branson) came together to issue the government a warning: we’ve had the credit crisis, the next crisis will be a peak oil crisis.
Their message to government was to stop listening to the over-exuberance of oil companies who promised great things from their upstream operations and start thinking seriously about how to move away from the UK’s dependence on oil…
Oil will run out 100 years before new fuels developed: study
The world will run out of oil around 100 years before replacement energy sources are available, if oil use and development of new fuels continue at the current pace, a US study warns.
Researchers at the University of California, Davis (UC-Davis) used the current share prices of oil companies and alternative energy companies to predict when replacement fuels will be ready to fill the gap left when oil runs dry…
Oil Rises, Paring Weekly Loss, as Sovereign-Debt Concern Eases
Oil rose, paring its biggest weekly loss in two months in New York, amid speculation a European Union-led bailout of Ireland may be enough to stabilize sovereign-debt concerns in the region.
Futures retraced losses of as much as 0.5 percent as the dollar dropped against the euro, bolstering the appeal of commodities as an alternative investment. Prices rose 1.8 percent yesterday after Ireland’s central bank governor said he expects the country to seek help…
Who’s right on oil demand, OPEC or the IEA?
Opec today raised its predicted level of oil demand for 2011 from 86.83m barrels per day to 86.95mbpd, or an increase of 120,000 barrels…
BP failed to learn from past ‘near misses’: oil spill panel
BP’s failure to learn from past “near misses” and its “insufficient consideration of risk” were major factors in the oil well blowout that led to the biggest US environmental disaster, a panel of US scientists concluded on Wednesday.
The report — the most comprehensive examination so far of the massive oil spill in the Gulf of Mexico — also found that numerous technical and operational breakdowns contributed to the Deepwater Horizon oil rig explosion and the massive spill from the Macondo well…
Greenland wants $2bn bond from oil firms keen to drill in its Arctic waters
Greenland is demanding that oil companies bidding to drill in huge areas of its Arctic waters each pay an estimated $2bn (£1.25bn) upfront “bond” to meet the clean-up costs from any large spill.
The condition, which is thought to be the first of its kind anywhere in the world, will please environmentalists and could encourage other governments to follow suit in the wake of BP’s Gulf of Mexico disaster. Half a dozen energy companies — thought to include Shell, Cairn Energy, Statoil, the Danish companies Dong and Maersk Oil — are in negotiations with the Greenland government about the licensing round, the largest for years…
Oil Exploration, Production Spending May Climb 5%, Wood Mackenzie Says
Oil and gas companies will increase spending on exploration and production by more than 5 percent this year as the outlook for commodity prices improves, Wood Mackenzie, a consultant, said in an e-mailed report today.
Investment may exceed $380 billion, up $19 billion from 2009, IainBrown, the Edinburgh, U.K.-based company’s regional upstream research manager, said in the report. Spending may recover to a record level set in 2008 by 2012 or 2013, he said…
Gas
Gazprom expansion fuels hiring spree
Gazprom, the Russian state-controlled gas group, is mounting an aggressive hiring spree that could see it recruit up to 600 staff in London as it seeks to expand its energy and commodities trading operations worldwide…
China’s Natural Gas Supply May Fail to Meet Demand Next Year, Caijing Says
China’s natural gas supply may not meet demand next year, Caijing magazine reported on its website today, citing Yang Jianhong, a deputy director at PetroChina Co.’s planning and engineering institute.
The country’s natural gas supply may reach 130 billion cubic meters, while demand may be as much as 140 billion square meters, the report said, citing Yang…
Pittsburgh council bans natural gas drilling
The Pittsburgh City Council voted unanimously on Tuesday to ban natural gas drilling in the city amid concern about threats to water quality.
By a vote of 9-0, the council adopted an ordinance that would prevent any energy company from drilling a gas well within city limits…
Coal
‘CCS Is One of the Few Options to Minimize CO2 Emissions’
Grass-roots movements are protesting against carbon capture and storage pilot projects in various parts of Germany. Geologist Andreas Dahmke talks to SPIEGEL about the shortsightedness of the protests and why nuclear power is much more dangerous than CCS technology.
SPIEGEL: Last week the government of the northern state of Schleswig-Holstein managed to successfully block a draft law, drawn up by Chancellor Angela Merkel’s administration, that would have cleared the way for research into carbon capture and storage (CCS) technology in Germany. In your opinion, is it wrong that Schleswig-Holstein Governor Peter Harry Carstensen opposes the underground storage of CO2?…
Biofuels
Climate change and disease will spark new food crisis, says UN
A food crisis could overtake the world in 2011, according to the Food and Agriculture Organisation, an agency of the United Nations.
Climate change, speculation, competing uses such as biofuels and soaring demand from emerging markets in East Asia are the factors that will push global food prices sharply higher next year, claims the FAO.
The FAO warns the world to “be prepared” for more price hikes and volatility if production and stocks do not respond. Price hikes of 41 per cent in wheat, 47 per cent in maize and a third in sugar are foreseen by the FAO. The last time that happened it sparked riots from Mexico to Indonesia…
Will the decline of newsprint boost biomass energy?
We newspaper journalists are used to lamenting the decline of newsprint – of watching slumping readership numbers with a sense of impending doom (obviously that applies less to us bloggers)…
US ethanol exports fuel European unease
After a disastrous couple of years brought on by high corn prices and low demand, the US corn ethanol business has emerged as a force in global energy markets…
UK
National Grid declares readiness for 2020 renewables goal
Renewable energy developers have secured enough agreements to connect nearly 32 giggawatts (GW) to the National Grid as a result of recent policy reforms, relieving concerns that the aging grid poses a major threat to the UK’s 2020 renewable targets.
National Grid confirmed yesterday in its latest quarterly update that it has now granted sufficient connections to link up nearly 32GW of existing and proposed renewables projects by 2020, well beyond the 29GW that were previously identified as being required to achieve 15 per cent of energy being generated by renewable sources by the same year…
Confusion as ministers meddle with £1bn green tax on business
Chris Huhne, the Energy Secretary, acknowledged that there were still problems with the controversial Carbon Reduction Commitment Scheme (CRC), which will force 5,000 UK businesses to pay £12 per tonne of carbon they emit. On Wednesday, he launched a new consultation and delayed some elements of the programme.
Some business leaders welcomed the prospect of a simplified scheme, but other experts warned that business has been left unable to plan for the extra costs and administration in the pipeline…
Government blinks first in UK’s nuclear stand-off
‘No subsidy for nuclear” has been the mantra of Chris Huhne, the Liberal Democrat energy secretary, ever since he arrived at Whitehall ready to row back on his long-held blanket opposition to atomic power.
The steadfast denial of public money for nuclear is baffling to the experts, who say that £40bn of new stations is clearly not — with the present subsidy regime — cost competitive with gas or coal…
British Gas to raise gas and electricity bills by 7%
British Gas customers will face a 7% rise in gas and electricity bills this winter, the company has announced.
The increase, which comes into effect on 10 December, was the result of rising wholesale prices, it said…
Economy
Britain slumps another £10bn into the red
Britain slumped into the red by another £10.3 billion last month despite a leap in business tax and VAT revenues, figures revealed today.
Public sector net borrowing in October set a record high for the month and marked an increase on the £10.1 billion seen a year earlier, according to the Office for National Statistics (ONS)…
Ireland fights to retain economic sovereignty
There is an ante-room in the Department of Finance in Dublin where ministers often receive visitors. Portraits of finance ministers past line the walls. One of them is of Michael Collins, finance minister as well as insurgent commander during the Irish war for freedom from Britain. What would he say, 88 years after independence, as Ireland fights the bond markets and its eurozone partners to retain its economic sovereignty?…
China inflation surges to 25-month high
Chinese inflation jumped to its highest level in just over two years in October, prompting new fears that the economy could be overheating as a result of the government’s huge stimulus measures…
Transport
Aviation industry ‘ditches’ hydrogen
It took just 32 seconds to extinguish faith in the airship and the hydrogen that once buoyed the Hindenburg, which erupted in a fatal inferno 73 years ago.
Now hydrogen is being dropped again by the aviation industry…
