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.
Confusion around the true extent of the spare oil production capacity of Saudi Arabia increased this week following a statement by Saudi oil minister Ali al-Naimi that his country had reduced production in March by 800,000 barrels—this despite the loss of 1 million barrels/day of production from Libya. Al Naimi went on to claim that global markets are currently oversupplied.
While the earthquake and tsunami in Japan have certainly resulted in a short-term dip in oil demand, the question remains as to whether Saudi is really in a position to increase production if the need arises. In March Saudi Aramco unexpectedly called on oilfield service firms to expand the kingdom’s oil rig count by nearly 30 percent. This follows on from the Wikileaks revelation in February alleging that the kingdom may theoretically be able to reach a production capacity of 12mb/d, but would be unable to maintain that for long. Add to all this the political imperative currently being felt in Saudi Arabia to raise as much money as possible from exports in order to stave off domestic unrest—made easier by a high oil price—and reliance on the kingdom to balance global supply is looking like a risky bet.
The increasingly difficult nature of oil production became self-evident last year as the world watched the Deepwater Horizon disaster unfold in the Gulf of Mexico. BP chose the anniversary of the disaster on Wednesday to serve its partners in the venture Transocean, Halliburton and Cameron with legal proceedings for their part in the failings which led to the accident. The convenient timing of the announcement ensured that press coverage of the anniversary was not solely focused on BP and its shortcomings.
In interesting news this week Google became a major investor in solar power. The company invested $168 million in a concentrated solar power plant being built in California. The plan is that the plant, which works by concentrating the sun’s rays on a tower to produce steam to drive a turbine, will when completed almost double the amount of commercial solar thermal electricity produced in the U.S. today.
Oil
Fuzzy Data Help Roil Oil Markets
Unreliable data on oil production—starting with the world’s largest exporter, Saudi Arabia—are adding to the price volatility triggered by unrest in the Mideast, despite efforts to improve transparency.
Saudi Arabia said on Sunday that its production had been at least 700,000 barrels a day lower in March than existing estimates, including those published by the Organization of Petroleum Exporting Countries. The surprise news pushed the price of oil down by more than $1 per barrel Monday morning…
U.S. Team to Study Whether ‘Speculators’ Driving Up Pump Prices
The Obama administration is exploring whether rising oil and gasoline prices are being driven higher by illegal manipulation.
Representatives of the Justice Department, other federal agencies and state attorneys general will monitor for fraud, collusion or misrepresentation at the retail and wholesale level, the department said in a statement yesterday. The group also will examine the role of speculators and traders in oil futures markets.
“The attorney general’s putting together a team whose job it us to root out any cases of fraud or manipulation in the oil markets that might affect gas prices, and that includes the role of traders and speculators,” President Barack Obama said yesterday in Reno, Nevada. “We are going to make sure that no one is taking advantage of American consumers for their own short-term gain.”…
Crude Oil Advances a Third Day on Improving Outlook for Global Fuel Demand
Oil rose for a third day in New York as signs of an improving economy in the U.S., the world’s biggest crude consumer, stoked speculation that demand for fuel may increase.
Futures for June delivery climbed as much as 0.9 percent as the dollar slumped to a 15-month low against the euro, heightening demand for commodities to protect against inflation. Prices also gained after the Energy Department reported an unexpected drop in U.S. crude supplies and a decline in gasoline supplies yesterday. Equity markets rallied after Apple Inc.’s profit beat projections…
Sinopec Halts Fuel Exports to Ensure Domestic Supply Amid Refining Losses
China Petrochemical Corp., Asia’s biggest oil refiner, halted fuel exports to ensure domestic supply as high crude costs and retail price caps cause private refiners to cut back on production.
Sinopec Group, as the company is known, “stopped exporting to other regions apart from sustaining the basic resource needs of Hong Kong and Macau,” it said in its online newsletter today. The Beijing-based company will run its refineries at full capacity and cut petrochemical production to boost output of gasoline and diesel for domestic use, it said…
BP sues Halliburton and Transocean for $80bn over Gulf of Mexico disaster
BP is seeking $80bn (£48bn) in damages from Transocean, the owner of the Deepwater Horizon rig that exploded in the Gulf of Mexico last year, and contractor Halliburton.
On the first anniversary of the major oil spill, London-based BP also said it is suing Cameron International, claiming a blowout preventer made by Cameron failed to avert the catastrophe…
France Mulls Banning Shale Exploration
PARIS—U.S. oil company Toreador Resources Corp. has bet big on pumping millions of barrels of oil locked away in deep shale rock formations in northeastern France. But it could be some time before this oil sees the light of day.
Amid growing concern over the environmental impact of drilling for shale gas and oil, the French government is considering banning exploration in the country—a first in Europe…
Welcome to the era of ‘extreme energy’
Celina Harpe was 7 when her grandfather made a prediction that would forever change her life.
“I won’t see it, I’m too old now, but it’s going to be really bad,” she recalls him saying on a warm summer night after returning from a moose hunt. The two were standing on a hill that overlooks the birch-and-spruce-lined river here in far northwest Canada.
“You see these plants and this water we’ve got? That’s going to be all polluted. You’re going to have to buy water — and water is life…
Plans for tough European rules on oil spills come under attack
European plans to crack down hard on oil companies with a series of measures to prevent a spill in EU waters like that of BP’s Gulf of Mexico disaster, are under attack from the UK and other national governments, the Guardian has learned.
The measures, backed by the EU’s energy chief Günter Oettinger, require companies to use a higher standard of equipment, pay for damage for which they are not liable now, and prove they have enough funds to clear up after any accident, before they can be licensed to drill…
Secret memos expose link between oil firms and invasion of Iraq
Plans to exploit Iraq’s oil reserves were discussed by government ministers and the world’s largest oil companies the year before Britain took a leading role in invading Iraq, government documents show.
The papers, revealed here for the first time, raise new questions over Britain’s involvement in the war, which had divided Tony Blair’s cabinet and was voted through only after his claims that Saddam Hussein had weapons of mass destruction…
Gas
Big guns vie to tap Azeri gas riches
An ugly mass of buildings, pipes and vents sprawled beside the Caspian Sea appears an unlikely beginning for Europe’s future energy supply.
Yet the Sangachal terminal in Azerbaijan is designed to become the opening link in a new chain that will connect the European Union to another source of natural gas, reducing the continent’s dependence on Russia…
‘Gasland changed everything’ — fracking firm battles to woo English villagers
From the outside, the UK’s second shale gas drilling site looks surprisingly small — a 30 metre-high white tower that houses the drilling equipment, and around 20 huts — each about the size of a shipping container.
It is also unnervingly quiet. On a bright spring morning, in the lane just a few yards from the gate, the silence is unbroken except by birdsong…
The villages of southern France take on Sarkozy over shale gas
In the southern French region of Languedoc-Roussillon, there is a long and fine tradition of highly organised opposition to the threat of oppression and injustice.
In the 13th century the Cathars put up a strong defence of their beliefs and territory against the merciless persecution meted out by the Albigensian crusade. Following the revocation of the Edict of Nantes in 1685, French Protestants regrouped to continue practising their religion for more than 100 years in a network of secret gathering places. And during the second world war, the region was a hub of resistance against the Nazis…
Fossil fuel firms use ‘biased’ study in massive gas lobbying push
Senior executives in the fossil fuel industry have launched an all-out assault on renewable energy, lobbying governments and business groups to reject wind and solar power in favour of gas, in a move that could choke the fledgling green energy industry.
Multinational companies including Shell, GDF Suez and Statoil are promoting gas as an alternative “green” fuel. These companies are among dozens around the world investing in new technologies to exploit shale gas, a controversial form of the fuel that has rejuvenated the gas industry because it is plentiful in supply and newly accessible due to technical advances in gas extraction known as “fracking”…
Electricity
On Our Radar: Power Shortages Loom in China
Provinces in central and southwestern China may face their worst electricity shortages in years this summer due to intensifying coal shortages and drought, state officials warn. Fuel supplies are dwindling due to steadily rising prices and transportation problems, while meager rainfall during March has left hydroelectric facilities generating significantly below peak capacity. A major copper producing region is already suffering regular power shortages, hampering production…
For Energy-Starved India, Japan’s Crisis Raises Hard Questions
As I noted in an article in Friday’s Times, India faced a big energy challenge even before the earthquake and tsunami in Japan called the future of nuclear power into question.
About 40 percent of the country’s 1.2 billion people live off the grid, and most of the rest, excluding the well-off residents of a few big cities like Mumbai and New Delhi, cannot count on having power 24 hours a day. Many industries must rely extensively on diesel generators to keep their operations going…
Second phase of $1.4bn Gulf power grid starts
The second phase of the AED5bn ($1.4bn) Gulf power grid became operational on Wednesday with the UAE joining the grid, officials said.
The electricity grid unifies those of six Gulf states with the first phase having become operational in early 2009 connecting Saudi Arabia, Kuwait, Bahrain and Qatar…
UK’s first local power station rattles the bucket for investment
The UK’s first renewable “community power station” will on Tuesday begin raising money to install solar panels housed on the roof of a local brewery. If its backers can raise enough money to get it off the ground, the project will begin generating electricity for the local area later in the year.
The planned 500 sq m installation in Lewes, near Brighton, will also use part of the revenue generated by the government’s feed-in tariff scheme to fund community projects. But its future is in doubt because of a pending government review of the scheme…
Nuclear
Fight to stop Fukushima radiation leaks ‘could take nine months’
The company at the centre of the world’s worst nuclear crisis since Chernobyl has announced that it could be nine months before the Fukushima Daiichi plant is under full control, tripling some previous forecasts.
The new estimate came as the US Secretary of State Hillary Clinton touched down in Tokyo in a show of solidarity with Japan’s beleaguered government. Tokyo Electric Power Co (Tepco) said it will take three months to reduce radiation and restore the plant’s cooling systems to the overheating uranium fuel…
Violence grows over India’s nuclear goals
Violent protests at the site of one of India’s most ambitious nuclear installations have thrown into sharp relief the domestic resistance the country faces in achieving its nuclear power ambitions.
French group Areva hopes to complete a $10bn deal by mid-year for two third-generation European pressurised water reactors in India, despite increasingly violent local protests against the project…
Japan bans entry into Fukushima evacuation zone
Japan has made it illegal to enter a 20km (12-mile) evacuation zone around the stricken Fukushima nuclear reactor.
People were urged to leave the area shortly after the 11 March earthquake and tsunami crippled the plant, but the order was not enforced by law…
Radioactive spills and breakdown revealed at British nuclear plants
There have been two spillages of radioactive waste and a breakdown in an emergency cooling system at Britain’s nuclear plants in the last three months, according to a report to ministers leaked to the Guardian.
A brown puddle containing plutonium five times the legal limit leaked from an old ventilation duct at the Sellafield nuclear complex in Cumbria. This exposed “a number of shortfalls in the design”, says the report…
Slim majority of Americans see nuclear plants as safe energy sources, poll finds
A slim majority of Americans see nuclear power plants as a safe energy source, but nearly two-thirds reject the idea of building new reactors in the United States at this time, according to a new Washington Post-ABC News poll.
The 53 percent who approve of nuclear power are a mirror image of the 53 percent who said such power was unsafe in the wake of the 1986 meltdown at the Chernobyl plant in Ukraine. But while there is majority support, more than four in 10 say they’re less confident in U.S. reactor safety after the troubles at the Fukushima Daiichi nuclear plant in Japan…
Renewables
Google invests $168m in world’s largest solar power tower plant
Google’s product portfolio has now expanded from search engine power to solar power.
The company has invested $168 million in a Mojave Desert facility that will become the world’s largest solar power tower plant. The site is located on 3,600 acres of land in the Mojave Desert in southeastern California…
Transparent Photovoltaic Cells Turn Windows Into Solar Panels
A new class of transparent photovoltaic cells has been developed that can turn an ordinary windowpane into a solar panel without impeding the passage of visible light, scientists said Tuesday.
The cells could one day transform skyscrapers into giant solar collectors, said Richard Lunt, one of the researchers on the project…
Solar companies take legal action over UK feed-in tariff cuts
Solar power companies are taking the government to court over last-minute changes to subsidies that they say are destroying their business.
A group of companies filed on Tuesday for a judicial review against Chris Huhne, secretary of state for energy and climate change, for his decision to review the feed-in tariffs (Fits) that top up revenues for renewable power…
Economy
Chinese Stocks Slump on Inflation, U.S. Credit Rating Concerns
China’s stocks fell the most in two months on concern inflation will spur the government to keep tightening monetary policy and as Standard & Poor’s Ratings Service cut its outlook on U.S. credit, fueling concern that a recovery in the global economy may slow.
Jiangxi Copper Co., China’s biggest producer of the metal, dropped 3.4 percent after copper prices slid for a sixth day in New York. China Vanke Co. paced losses for developers after Credit Suisse Group AG said the government may boost measures to curb property investment. Henan Shuanghui Investment & Development Co., the biggest publicly traded food producer, plunged by the 10 percent daily limit amid an investigation into illegal additives…
