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ODAC Newsletter - May 20

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.

There appeared to be signs of growing panic behind the latest declaration from the International Energy Agency. The statement calls on oil producing countries to increase production and reduce costs in order to avert economic crisis. To date Opec members have been insisting that the market is well supplied and that prices are being driven by speculation. Saudi Arabia actually reduced production substantially in April on claimed lack of demand. However, it is becoming clear that high oil prices are currently attractive to Opec leaders confronted with social unrest as it allows them to increase subsidies and other financial transfers to their populations. As a result of recently increased payments to the population in Saudi Arabia the Centre for Global Energy Studies now estimates the cost of running the Saudi state equates to $91/barrel.

The call for action from OPEC is all the more interesting in the light of news that Iranian President Mahmoud Ahmadinejad is likely to chair the meeting in his new temporary role overseeing the country's oil industry, following the sacking of oil minister Masoud Mir-Kazemi. Iran, which relies on oil revenues for the majority of its budget is unlikely be arguing vociferously for lower prices.

It emerged this week that the UK Department for Energy and Climate Change (DECC) has been undertaking some research on the likely effects on the UK economy of an oil price spike. The story was broken by The Times [article behind a paywall] who obtained the documents via the Freedom of Information Act [view documents]. The Times reports that "A sudden huge increase in oil prices would cut more than £102 billion from the economy over the next five years, wrecking Britain's economic recovery, increasing unemployment and provoking industrial action, according to government research." The report demonstrates that the effects of peak oil are known to Whitehall, the urgency to take serious action however still appears to be missing.

In other UK energy news this week, Chris Huhne announced that the government would accept the recommendations of the 4th carbon budget—albeit with a proviso that there will be a review in 2014 to assess alignment with Europe. There was also hedging on how much of the emissions reduction would come from domestic action rather than carbon trading.

The government received a green flag to continue with new nuclear this week from the Weightman commission, set up to review safety in the wake of the Fukishima disaster. The report assessed that what happened in Japan was simply not a credible risk in the UK. Critics argued that the report is premature given that the Fukishima plant is yet to be stabilised and so learnings from the accident aren't yet available.

The government's commitment that there will be no subsidies for new nuclear were in the spotlight this week in a review of proposals for electricity market reform by the Committee of Climate Change released on Monday. The committee was critical of the possible distortion of the reforms to hide the subsidies "merely to save political face." Tim Yeo, Chair of the Committee wrote in the Guardian that "ministers are tinkering at the margins of the electricity market instead of bringing forward the radical reforms that are needed."

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West's oil agency urges OPEC: pump more, or else

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Iran's President Ahmadinejad to Run Oil Ministry After Minister Dismissed

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Libya rebels eye OPEC meeting as oil minister 'defects'

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Saudi seen needing $91 oil to fund gov't spending plans

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Senate Refuses to End Tax Breaks for Big Oil

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Obama Shifts to Speed Oil and Gas Drilling in U.S.

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Alberta urges US to back oil pipeline

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Battle for Arctic oil intensifies as US sends Clinton to polar summit

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BP Defeat Puts Arctic Trove Back in Play for Shell, Exxon

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Crude Oil Declines as U.S. Economic Reports Signal Fuel Demand May Weaken

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Alaska Pipeline Scrapped

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Kazakhs threaten to halt BG gas field

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Poland to develop shale gas despite environment risk

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China forced to ration electricity

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Saudi Aramco Plans to Double Power Supply, Conserve Energy to Save Crude

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Japan's nuclear embrace is looser but not yet broken

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Tepco revises plan for cooling reactors

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Tidal energy — the UK's best kept secret

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Hydropower's Resurgence and the Controversy Around It

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Brazil's ethanol production in focus

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Chris Huhne briefs MPs on long-term carbon target

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UK's nuclear reactors 'won't need major changes' following Japan earthquake

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Nuclear inspector accused of complacency after reactors get all-clear

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UK energy market reform plans must be more ambitious

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Government warned off secret nuclear subsidies

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Price Tag for Somali Piracy Surges

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Berlin plans powerful spark for electric car sector

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Natural-Gas Trucks Face Long Haul

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