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ODAC Newsletter - May 13

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.

Oil demand appears to finally be responding to high oil prices, most significantly in the US where petrol prices have hit $4/gallon. The IEA cut its 2011 demand forecast by 190,000 barrels/day on news of increased US stockpiles and reduced consumption, and prices dropped back from recent highs to around $110/barrel for Brent.

Plans to revolutionise energy markets through shale gas fracking provoked mixed reactions this week. A study by scientists from Duke University found evidence that methane leaks from fracking are polluting drinking water, though they found no evidence of fracking fluids in the water. The study is likely to be used by both supporters and opponents of the technology. A new report by the Post Carbon Institute focuses on what it argues are unrealistic projections for shale gas production in the US, calling into question plans to use gas to reduce US dependence on foreign oil. Energy Information Administration (EIA) production scenarios anticipate 45% of US gas to come from shale by 2035, which would require unprecedented rates of drilling especially given the fast depletion rates of shale plays, safety concerns, and higher costs.

Even within the gas industry there are those who are anticipating a slowdown in the shale boom. In the words of Neal Anderson of Wood MacKenzie, "They're starting to wake up that a lot of companies are just simply churning cash here. And the real winners in this are the service companies.... I'll remind you of that old adage from the California gold rush: The guys that really made the money were the guys selling the shovels. It looks a little bit like that." Meanwhile, in France, MPs bowed to public pressure by voting through a ban on fracking which, if passed by the Senate would make France the first country to disallow the technique.

Germany and Japan took further steps this week towards reducing their reliance on nuclear power in response to public concern following the Fukishima disaster. A draft report from Germany's ethics commission set up by Angela Merkel is to recommend a complete shutdown of Germany's nuclear fleet by 2021. In Japan, Prime Minister Naoto Kan announced the abandonment of Japan's plans to expand its nuclear industry, as well as requesting the closure of the Hamaoka nuclear plant, which lies on a fault line near Tokyo, "for the safety of the Japanese people".

With two of the world's leading industrial and high-tech nations apparently set to abandon nuclear, is this the start of a radical new energy paradigm, or a knee-jerk reaction? It will be interesting to see how they replace the lost nuclear power, especially since one of the early impacts of Germany's nuclear moratorium — it has mothballed 7 of its 17 nuclear stations — was to raise emissions by some 10% because of increased power imports from the coal-heavy Czech Republic.

In the UK this week, where rising energy costs look set to push inflation higher still, a review of renewable energy options by the Committee on Climate Change (CCC) was widely reported as concluding that offshore wind, the backbone of UK renewables policy, is "too expensive". But a closer reading of the report shows this was not its meaning at all.

True, the report says nuclear is the most cost effective of the low carbon technologies, and that offshore wind is "significantly more expensive". However, it also called for the government to make firm commitments to support less mature technologies during the 2020s, and that with a carbon price of £70/tCO2 offshore could be competitive with fossil fuels by 2030. It also found that renewable could make up 45% of the energy supply by 2030, although the central forecast is for 30%. What's more, even if intermittent renewable were to reach 65% of power generation by 2030, and 80% by 2050, the cost of all the storage, interconnectors and back-up generation required to balance the grid would be far less than the cost of generation - just 1p/kWh.

Economic considerations have also caused a split in the cabinet as ministers decide whether to approve the CCCs fourth carbon budget to keep the UK on track with the Climate Change Act. The vote will be a big moment for assessing the coalition's commitment to its environmental manifesto. Despite the promise to be "the greenest government ever" energy policy is increasingly falling victim to short-term political gain over longer term sustainability.

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Oil

Oil Rises for Second Day, Climbs Above $100, as German Growth Accelerates

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Oil prices begin to dent demand

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Big oil targeted in budget fight

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BG Group warns of oil and gas disruption over windfall tax

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IEA: Oil's Bull Run May Continue

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Shrinking Supplies Are Putting Pipeline In Alaska at Risk

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Shell's Hopes Raised on Arctic Drill Permits

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Domestic oil usage to vie with exports

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Gas

Europe's Nabucco Pipeline Delayed Again

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France to ban fracking of fossil fuels

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Methane in water near US shale gas drillers: study

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Energy players debate shale drilling's prospects

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Coal

Coal's future suddenly looks brighter in Germany

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Electricity

The soaring cost of making sure the lights don't go out

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How nuclear disaster forced Japan to be frugal with energy

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Only an 'energy internet' can ward off disaster

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Nuclear

IEA: The world needs nuclear

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Japan nuclear power expansion plans abandoned

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Nuclear commission pinpoints 2021 for German atomic shutdown

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'World's most dangerous' nuclear power plant is closed down

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Renewables

Can Designer Power Masts Win Over the Public?

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Protests after Chile backs giant dams in Patagonia's valleys

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Renewable energy can power the world, says landmark IPCC study

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Mining and Minerals

Canada's Quebec province opens up north for mining

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UK

Nuclear 'cheapest low-carbon option' for UK energy

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Cameron must intervene in carbon row, say businesses and campaigners

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Vestas says offer of 2,000 new UK jobs depends on energy policy

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Key parliamentary moment for energy bill's 'green deal'

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