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 oil price hit a two and half year high this week of $123/barrel as the Libyan conflict continues to dominate market sentiment. This pushed the sterling value of crude to an all time high, exceeding even its level in the summer of 2008 when the dollar price reached $147/barrel, because the pound has slumped 17% against the greenback since then. Prices had fluctuated mid week as Portugal became the latest Euro nation to request a bail out raising again the spectre of a Euro crisis.
The damaged Fukishima reactors in Japan reportedly avoided further calamity as a result of a magnitude 7.1 earthquake which hit North East Japan on Thursday. Meanwhile work to stabilise the reactors continues.
In the UK nuclear safety regulators delayed their decision on new reactor designs by Areva and Westinghouse by 3 months to await the outcome of the safety review ordered recently by Energy Secretary Chris Huhne. The debate over the safety of nuclear power continued to rise in pitch this week — ODAC trustee David Strahan provides his view on the difficult choices to be made around power generation.
In the UK this week there were concerns that the rising oil price will damage the fragile economy with costs for industry, construction, and of course transport rising. The government is also under pressure to rethink its new tax on the oil industry as companies warn that it will result in a reduction in North Sea investment — especially in gas.
Oil
Libyan unrest sends oil prices soaring to $123 a barrel
Oil breached the $123-a-barrel mark for the first time since August 2008 on Friday after attacks on Libyan oil fields fuelled concerns about supply.
Brent crude surged by $1.05, or 1.0%, to $123.95 (£75.50) per barrel, while US crude jumped by 98 cents to $111.28, its highest level since September 2008…
Inflation fears limit Beijing fuel hike
With oil firmly over $120 this week, Beijing responded by raising motor fuel prices on Thursday, the second time it has done so in a year.
More significant than the rises, however, is their restraint. The threat of inflation is such that Beijing has kept motor fuels much cheaper than the basket of international crude oils it uses as its reference…
Oil could hit $200-$300 on Saudi unrest, former minister says
Oil prices could rocket to $200- $300 a barrel if the world’s top crude exporter Saudi Arabia is hit by serious political unrest, former Saudi oil minister Sheikh Zaki Yamani said on Tuesday.
Yamani said he saw no immediate sign of further trouble following protests last month calling for political reforms but said that underlying discontent remained unresolved…
Reports of BP resuming Gulf drilling a ‘misconcepton’
US interior secretary Ken Salazar has rejected claims that BP has reached an agreement to restart drilling for oil in the Gulf of Mexico.
Media reports have said that the UK oil giant will resume work in July at 10 sites in the Gulf…
BP unites Christians in opposition to high exec pay and poor safety
Christian groups with more than £200m in BP shares are unhappy with the oil giant’s response to improving safety following the Gulf of Mexico oil spill and are advising members to vote against certain resolutions at the BP annual shareholder meeting next week.
The UK’s Church Investor Group (CIG), whose members include the Church Commissioners and the Methodist Church Central Board of Finance, advise voting against the oil giant’s remuneration report. They also recommend a vote against the re-election of Sir Bill Castell, the senior non-executive in charge of BP’s safety committee…
Total Says U.K. Open to Easing Effects of Oil Tax
The U.K. government appears willing to consider measures to mitigate the effect of a recent increase in tax on oil and gas producers, following a meeting with oil-industry representatives last week, a senior executive at French oil company Total SA said Wednesday.
Representatives of the Department of Energy and Climate Change and the Treasury “realized that the concerns of industry are real…not just a selfish reaction,” said Patrice de Vivies, Total’s vice president of exploration and production in northwestern Europe…
Oil-Sands Standards to Tighten
The Alberta government said Tuesday it intends to set new environmental standards—including outlining specific benchmarks for water contamination—for areas affected by Canada’s vast and growing oil-sands production in the west of the country.
The provincial government, in unveiling a new development plan for the oil-sands region on Tuesday, also said it would set aside two million hectares, or more than 7,700 square miles, of land in the region for conservation. The move will require the cancelation of 10 oil-sands leases, though the government didn’t disclose which companies had been affected…
Coal
Coal price reaches new heights as demand from Asia soars
Huge demand for energy resources in China and India has pushed the price of thermal coal to an all time high, reinforcing fears about spiralling inflation.
Thermal coal is the largest source of energy for the generation of electricity worldwide and demand could rise still further if nuclear power programmes suffer a setback following the crisis at the Fukushima reactors in Japan…
World Bank to limit funding for coal-fired power stations
The World Bank is planning to restrict the money it gives to coal-fired power stations, bowing to pressure from green campaigners to radically revise its funding rules.
The new proposals would not mean an end to funding for fossil fuels, but would represent a departure from previous regulations. Under these rules, the bank has provided sizeable financial support for coal-fired power stations in the developing world in spite of protests from governments and green groups…
Nuclear
The real cost of not going nuclear
Just because the nuclear backlash was inevitable doesn’t make it right. Long-standing opponents have naturally seized on the Japanese emergency in a bid to reverse the industry’s budding renaissance, and in Europe at least there is a chance they could succeed. Industry share prices have slumped as governments including Switzerland, Germany and Britain have applied the brakes. Since northern Europe is far less prone to earthquakes and new reactor designs are based on passive safety, the implications should be more political than technical. But the consequences of ditching nuclear now could be severe for both the climate and energy security.
The antis are right there are huge issues around nuclear: costs, subsidy, toxic waste disposal, secrecy, and the potential for catastrophic accidents — though the industry generally kills far fewer people than coal or oil, and nobody calls for hydro to be banned when a dam bursts with a death toll of thousands. But what they never acknowledge is its one undeniable strength: it is currently the only source of zero carbon baseload generation, the kind we need day in and day out regardless of fluctuating demand and renewable supply…
Japan quake: Nitrogen pumped into nuclear reactor
Workers in Japan have begun injecting nitrogen into one of the reactors at the crippled Fukushima Daiichi nuclear plant to prevent more hydrogen blasts.
The gas is being pumped into reactor 1 of the six-unit plant which was damaged by last month’s quake and tsunami…
‘Fukushima Has Made Me Start to Doubt’
Energy Commissioner Günther Oettinger used to be a firm supporter of nuclear energy. But now he’s not so sure. SPIEGEL spoke with Oettinger about Chancellor Angela Merkel’s about-face on nuclear energy, what it means for the European energy supply and whether other EU countries will follow suit…
Fukushima disaster delays UK nuclear approval
Britain’s plans to generate power from two new nuclear stations by 2018 received a blow, after the safety regulator delayed its verdict on reactor designs by at least three months.
The UK authorities are having to rethink their approach to approving nuclear stations following the Fukushima atomic disaster. Japan is still struggling to contain radiation at the nuclear plant after an earthquake and ensuing tsunami destabilised reactors which were supposed to be able to withstand natural disaster…
Renewables
Wind farm efficiency queried by John Muir Trust study
Wind farms are much less efficient than claimed, producing below 10% of capacity for more than a third of the time, according to a new report.
The analysis also suggested output was low during the times of highest demand…
Investment in US clean technology highest since 2008
Global investment in US clean technology has reached its highest level since 2008, while investment in UK companies has dropped sharply, quarterly figures show.
Increasing investor confidence and rising oil prices have helped investment in North American companies more than double compared with the previous quarter, according to a report by Cleantech Group, an international firm that works to accelerate the development and market adoption of clean technologies…
G.E. Plans to Build Largest Solar Panel Plant in U.S.
In a move that could shake up the American solar industry, General Electric plans to announce on Thursday that it will build the nation’s largest photovoltaic panel factory, with the goal of becoming a major player in the market.
“For the past five years, we’ve been investing extremely heavily in solar,” said Victor Abate, vice president for G.E.’s renewable energy business. “Going to scale is the next move.”…
Biofuels
Biofuels Industry Battles Past Bumps in the Road
When Royal Dutch Shell PLC announced its $12 billion joint venture with Brazilian sugar-cane-ethanol producer Cosan Ltd. last year, it was a massive vote of confidence in a sector that has taken a battering over the last few years.
After a big boom in the middle of the decade, biofuels were hit badly by the global recession, though they have recently begun to stabilize. Concerns about greenhouse-gas emissions, oil-price spikes and energy security have turned them from a niche sector into a global industry that attracted nearly $650 million in venture capital last year. World-wide production grew to more than 100 billion liters in 2010 from 16 billion liters in 2000. Shell says biofuels could make up as much as 20% of all transportation fuels in 30 years, up from about 3% now…
Rush to Use Crops as Fuel Raises Food Prices and Hunger Fears
The starchy cassava root has long been an important ingredient in everything from tapioca pudding and ice cream to paper and animal feed.
But last year, 98 percent of cassava chips exported from Thailand, the world’s largest cassava exporter, went to just one place and almost all for one purpose: to China to make biofuel. Driven by new demand, Thai exports of cassava chips have increased nearly fourfold since 2008, and the price of cassava has roughly doubled…
In Spain, scientists look for fuel of the future in algae
In a forest of tubes eight metres high in eastern Spain scientists hope they have found the fuel of tomorrow: bio-oil produced with algae mixed with carbon dioxide from a factory.
Almost 400 of the green tubes, filled with millions of microscopic algae, cover a plain near the city of Alicante, next to a cement works from which the C02 is captured and transported via a pipeline to the “blue petroleum” factory…
UK
Soaring oil prices ‘could put the brakes on UK’s manufacturing boom’
Oil prices hit a two-and-a-half-year high yesterday amid warnings that the soaring cost of raw materials will put the brakes on Britain’s manufacturing boom.
Brent crude pushed above $120 a barrel after traders voiced concern that continued fighting in Libya and the prospect of a resurgent US economy would put pressure on supplies…
Oil price rises will hit road repairs
The UK will struggle to foot the bill of repairing its weather-damaged road network as soaring oil costs spark concerns about the price of building materials.
In a series of letters obtained by the Financial Times, the world’s largest asphalt and concrete suppliers warn customers about the likely impact high oil prices and ongoing unrest in the Middle East will have on costs…
Turbine?maker warns on wind subsidies
Uncertainty about wind subsidies could cost the UK thousands of green jobs, the head of the world’s biggest wind turbine manufacturer has warned.
Ditlev Engel, chief executive of Vestas, said his company was looking to create thousands of jobs to build its latest model of turbine, which will be taller than London’s Gherkin…
Petrol sales plummet as prices climb
Sales of petrol at the pumps have dipped sharply over recent years, according to Government figures highlighted today by the AA.
In terms of weight, petrol sales fell 13.95% between 2007 and 2010…
Climate
Senate rejects measure to stop EPA on climate
The Senate rejected a measure on Wednesday to kill the Environmental Protection Agency’s regulation of greenhouse gas emissions, handing President Barack Obama a victory in his effort to quicken the move to clean energy.
The EPA’s rules, which it began rolling out on polluters such as power plants and oil refineries early this year, are one of Obama’s top strategies to show the world the United States is fighting climate change…
Economy
Spain rules out becoming bailout victim after Portugal succumbs
Spain has insisted it will not become the next victim of the eurozone debt crisis after Portugal finally bowed to widespread pressure on Wednesday night and joined Greece and Ireland in requesting a European Union bailout.
Attention turned to Spain as investors questioned whether Portugal’s decision to seek help would bring calm to Europe or help to drag Madrid into the mire…
Geopolitics
Libyan rebels near Ajdabiya ‘killed in Nato air strike
Rebels in eastern Libya say their forces have been mistakenly hit in a Nato air raid on a rebel tank position.
Rebels said five died, while doctors in Ajdabiya told the BBC at least 13 rebel fighters had been killed in the strike…
Gaddafi forces attack eastern oilfields
Oil production in rebel-controlled eastern Libya has stopped after troops loyal to Muammer Gaddafi bombarded several oilfields, the opposition said on Wednesday…
