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 market was plunged into turmoil as the IEA announced it will tap its strategic reserve for only the third time ever. The agency had hinted in the past months that it might be prepared to release stocks to offset the shortfall in production from the Libyan crisis, to calm prices and avoid a “hard landing” for the global economy. But it was widely expected that Saudi Arabia was to be given time to make up the difference. Instead the IEA will release 60 million barrels over the next 3 months in order to “bridge the gap” until new OPEC or Saudi supplies are available.
Prices dropped sharply — as intended — and Brent ended Thursday at $107/barrel. Whether the action can balance the markets in the longer term however is surely in doubt. There is no end to the Libyan conflict in sight, and so far oil prices have remained stubbornly high even in the face of weak economic data including the Greek debt crisis stalking the Eurozone. Everything rests on Saudi Arabia being able to deliver the extra capacity — although many doubt it can, at least not in time. Their announcement suggests even the IEA agrees.
In the UK this week the government published a clutch of National Policy Statements making the case for new energy infrastructure — fossil plants, renewable and gas and electric grids – and a list of eight sites proposed for new nuclear stations. The papers are intended to guide planning authorities about the national interest when considering new energy infrastructure projects. There is much to be welcomed in the documents, but it remains to be seen if they will clear local resistance to energy infrastructure. As part of its localism agenda, the coalition intends to abolish the last government’s Infrastructure Planning Commission, which was meant to take major energy decisions out of the local planning system. So there remains the risk that strategic decisions on new energy investment could get bogged down in local issues and NIMBYism — although the final decision now rests with the Secretary of State.
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Oil
Oil Rises on Concern IEA Emergency Crude Release May Limit Future Supplies
Oil rose in New York, reversing yesterday’s plunge, on concerns that stockpile releases by consuming nations may limit the ability to respond to supply disruptions in future.
Crude climbed as much as 1.5 percent after sliding 4.6 percent yesterday. The International Energy Agency agreed to release 60 million barrels to buyers starting next week. Oil stockpiles among the 28 member-countries of the IEA declined by 340,000 barrels a day during the first quarter of this year, the Agency said in its monthly Oil Market Report on June 16…
Markets dive on growth fears, shock drop in oil prices
Oil prices crashed more than $7 a barrel to a four-month low on Thursday after the world’s consumer nations said they would band together to aid the global economy by releasing emergency oil reserves for the third time ever.
The International Energy Agency said it would help ease the strain by releasing 60m barrels of government-held stocks, immediately increasing global supply by nearly 2.5pc, making up for the loss of Libyan exports…
Ahmadinejad loses fight over oil portfolio: parliament
Iranian President Mahmoud Ahmadinejad’s plan to merge the strategic oil ministry into an enlarged energy portfolio has been “cancelled,” the official parliamentary website said on Tuesday.
“The merger of the two ministries has been cancelled and taken off the government’s agenda to merge ministries,” the website quoted Hossein Sobhani-Nia, a member of the parliamentary management committee, as saying…
Transocean blames BP for 2010 gulf oil spill
Transocean, owner and operator of the drilling rig that caught fire and sank in the Gulf of Mexico last year, has concluded that the oil well’s owner, BP, was primarily responsible for the massive spill triggered by the blast.
In a report issued Wednesday after an internal investigation, Transocean said BP used a “faulty” well design, failed to check the integrity of cement used to seal the well and chose a plan for temporarily abandoning the well that “created unnecessary risk.”…
Head of IEA pleads with Russia: join us to help solve energy price crisis
Energy consumer organisation the International Energy Agency (IEA) has invited Russia and the Opec oil producers to join it, in a desperate bid to broker a peace between buyers and sellers over soaring crude prices.
The olive branch was extended today by the IEA’s executive director, Nobuo Tanaka, to Russia’s deputy prime minister, Igor Sechin, but has already run into powerful opposition from the country’s state-owned gas group, Gazprom…
In Rebuilding Iraq’s Oil Industry, U.S. Subcontractors Hold Sway
When Iraq auctioned rights to rebuild and expand its oil industry two years ago, the Russian company Lukoil won a hefty portion — a field holding about 10 percent of Iraq’s known oil reserves.
It seemed a geopolitical victory for Lukoil. And because only one of the 11 fields that the Iraqis auctioned off went to an American oil company — Exxon Mobil — it also seemed as if few petroleum benefits would flow to the country that took the lead role in the war, the United States…
Gas
‘Fracking’ Disclosure to Rise
The natural-gas industry, bowing to longtime pressure, will disclose more information about the chemicals it uses in the controversial process of hydraulic fracturing.
On Friday, Texas Gov. Rick Perry signed into law a bill that will require companies to make public the chemicals they use on every hydraulic fracturing job in the state. While a handful of other states have passed similar measures, Texas’s law is significant because oil and gas drilling is a key industry in the state and the industry vocally supported the measure…
Gazprom Chases China Pipe Dream
Failing to sign up 1.3 billion potential customers for your product would count as an immediate setback in most businesses. But Gazprom isn’t most businesses.
Having failed to sign a long-term supply contract with China last week, the Russian natural-gas giant believes there is a good chance it will still agree to one by the end of the year. The key issue is price. Gazprom makes most of its profits selling gas to Europe at prices linked to the oil market. This year, the company expects these to average more than $11 per million British thermal units…
Shell floats plan to harvest stranded gas
New technology led by Royal Dutch Shell to harness natural gas stranded offshore could transform the global liquefied natural gas industry.
The breakthrough — floating liquefied natural gas terminals — will enable gas to be recovered from fields that were in the past considered too small or too far offshore to warrant the infrastructure required to pipe the gas onshore to LNG plants…
Nuclear
Saudi Thirst for Oil Fuels Nuclear Plans
Rapid population growth, wastefulness and economic development are driving up Saudi Arabia’s thirst for energy, steadily reducing the amount of oil available for export and driving the kingdom’s interest in nuclear power.
By eating into its own oil supplies, Saudi Arabia risks reducing a formidable spare capacity that it could pump to counter disruptions to output elsewhere…
The timebomb of ageing US nuclear reactors revealed
Getting old isn’t pleasant: things start to creak or stop working all together. The good news, you would think, in the case of nuclear power plants is that you can replace worn, corroded or cracked parts with new ones.
But an impressive year-long investigation into the US nuclear power industry by Associated Press reveals how the regulators and the industry have repeatedly found a much simpler solution to ageing: weaken the safety standards until the creaking plants meet them…
German energy plan seen as ‘viable’
The European Investment Bank is confident that Germany will be able to fund its ambitious plan of closing its 17 nuclear plants and replacing them with renewable energy and gas-fired power stations by 2022, a bank official said.
The European Union’s development bank reckons retooling the electricity supply will cost €90bn over a decade, with 15 per cent of this coming from its own coffers, according to Matthias Kollatz-Ahnen, EIB deputy president…
After Inspections, China Moves Ahead With Nuclear Plans
After taking a step back in the wake of Japan’s nuclear disaster this year, energy-hungry China is moving cautiously ahead with its ambitious nuclear energy program.
That is the message that Chinese officials have been giving to visiting environmental experts and local news media. According to a statement posted Tuesday on the Web site of the Ministry of Environmental Protection, the vice minister, Li Ganjie, told a visiting delegation from the United States that China had completed an inspection of the country’s 13 nuclear power plants. The statement implied that the plants had passed the test, which was announced in April after the Fukushima Daiichi nuclear plant disaster in Japan…
Tepco Suspends Water Treatment Operation
Tokyo Electric Power Co., the operator of the damaged Fukushima Daiichi nuclear power plant, said it halted the use of a new system for decontaminating highly radioactive water after levels of radiation in one part of the system rose faster than expected.
The suspension came only five hours after Tepco started operation of the system, which aims to reduce the vast amounts of irradiated water at the facility. The pools of highly radioactive water are a major obstacle to stabilizing the stricken power plant…
Renewables
Chile court blocks giant Patagonia dam project
A Chilean court ordered the suspension of a project to build a complex of giant hydroelectric dams in the Patagonian wilderness, bowing to appeals by lawmakers and environmental groups.
The appeals court in the southern port city of Puerto Montt ordered a stay “which means the project is paralyzed until the essence of the matter is resolved,” the judiciary said in a statement…
UK urges Ireland to build windfarms on west coast
Ireland’s unspoiled, windswept west coast could become the focus of a new wave of windfarm construction in the wake of a high-level diplomatic meeting to be held tomorrow in London.
UK deputy prime minister Nick Clegg, Taoiseach Enda Kenny and other senior members of the British-Irish Council will gather to discuss a plan to expand electricity grid connections throughout the British Isles. In particular, they want to build new inter-connectors to link the electricity grids of Ireland and Britain in order to transmit power from new windfarms in Ireland to England…
Price of solar panels to drop to $1 by 2013, report forecasts
Prices of solar panels are falling so fast that by 2013 they will be half of what they cost in 2009, according to a report from Ernst & Young that argues solar electricity could play “an important role” in meeting the UK’s renewable energy targets.
The average one-off installation cost of solar photovoltaic (PV) panels has already dropped from more than $2 (£1.23) per unit of generating capacity in 2009 to about $1.50 in 2011. Based on broker reports and industry analysis, the report forecasts that those rates of decline will continue, with prices falling close to the $1 mark in 2013…
Mining and Minerals
Rare earth prices soar as China stocks up
Prices of some rare earth metals have doubled in just three weeks amid heavy stockpiling in China that has raised fears over global supplies.
China produces more than 90 per cent of the world’s rare earths, 17 elements used in hybrid cars, fluorescent lights and many high-tech applications…
Biofuels
KLM plans to fly planes on reused cooking oil
The Dutch airline KLM says it plans to use recycled cooking oil on 200 flights between Paris and Amsterdam.
The fuel, biokerosene, is derived from used frying oil, which has to be tested to meet the same technical specifications as traditional kerosene…
Honeywell Demo Flight Seeks to Generate Momentum For Aviation Biofuels
Hoping to spark international attention and support for the fledgling concept of aviation biofuels, Honeywell International Inc. flew a business jet across the Atlantic on Saturday using a blend of of its vegetable-based “Green Jet Fuel” and traditional petroleum-based fuel and landed safely at Le Bourget Airport outside Paris…
UK
Nuclear power plant site plans released by government
The government has pushed ahead with plans for new nuclear power plants in the UK, as it confirmed a list of eight sites where the next generation of reactors can be built.
The eight sites are: Bradwell, Essex; Hartlepool; Heysham, Lancashire; Hinkley Point, Somerset; Oldbury, south Gloucestershire; Sellafield, Cumbria; Sizewell, Suffolk; and Wylfa, Anglesey. All are adjacent to existing nuclear sites. It is the first major announcement on the future of nuclear power in the UK since the Fukushima disaster in Japan…
Welsh Government restrictions on wind farms rebuffed
The Welsh Government has accused the UK Government of trying to “ride roughshod over Wales’ natural resources”.
The UK government has rebuffed guidance from the Welsh Government to limit the number of wind farms in mid Wales…
Green houses: Lowering your carbon footprint starts at home
On the floor next to the kitchen in Suzie and Iain Webb’s house sits a small terracotta pot with a glazed lid and a knitted cushion on top. “That’s the fridge,” smiles Iain. “We tend to only eat ice cream when we are round at other people’s houses, but this keeps cool most of what we want.”
The fact that the “fridge” is leaning up against a radiator might seem strange, but Iain has already explained that the heating is pretty much never switched on…
CO2 pipeline proposals bring Scottish CCS closer to reality
National Grid, ScottishPower and Shell have teamed up to present plans for a 260-kilometre pipeline capable of pumping up to two million tonnes of CO2 offshore for storage under the seabed.
The trio want to use an existing gas pipeline running from Falkirk to Peterhead to transport emissions from the Longannet power station in Fife to the North Sea. Once at Peterhead, the CO2 will be compressed and pumped to Shell’s Goldeneye Platform in the North Sea for permanent storage…
Climate
UK says Poland blocked EU deal on CO2 emissions
The UK government has sharply criticised Poland for blocking an EU effort to set a higher target for cuts in CO2 emissions.
“I’m deeply disappointed that the only country in the EU that could not accept a good compromise on how we can move Europe to a low carbon economy was Poland,” said UK Energy and Climate Change Secretary Chris Huhne…
