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.
Markets jumped on Thursday as the Eurozone patched together yet another deal to relieve its debt crisis. The high spirits saw 3% added to the FTSE amid hope that the deal will buy time to develop a permanent solution — if that is possible. Meanwhile the turbulence in the markets is being increasingly reflected in the streets through the growing Occupy movement, and continuing demonstrations in Spain and Greece.
The role of peak oil in the economic crisis continues to be largely ignored in the mainstream press, however the stubbornly high price of oil even in the face of the economic gloom is catching some attention. The Daily Telegraph asked this week ‘Why is the oil price still so high?‘ and came up with the answer that “the most plausible explanation for such high prices is tight supply, counteracting the economic gloom.”
The impact of high oil prices on the US consumer was the subject of a new report from the New America Foundation think tank. The report ‘The Price-Induced Energy Trap‘ concludes that once easy substitutions have been made, higher spending on gasoline simply replaces other kinds of outlay. Essentially, people rely so heavily on driving for their daily lives that other spending must be sacrificed.
In the UK the high cost of energy is increasingly becoming a rallying cause amongst a faction of the Conservative party who hold ‘green taxes’ to be a key culprit, egged on by the Daily Mail. It’s nonsense of course: fossil fuels receive much larger subsidies worldwide; and rising domestic energy bills are driven largely by the wholesale gas price — forward prices are 40% higher this winter than last.
Energy Secretary Chris Huhne hit back in a major speech in support of renewables, telling industry delegates “We will not heed the naysayers or the green economy deniers. With over £200 billion worth of energy infrastructure needed by the end of the decade, this is our golden chance to deliver a greener future.” Such fighting talk is encouraging, but is only needed because there is clearly a major battle raging over energy policy, with chancellor George Osborne in the opposite corner. If the last two decades are anything to go by, the odds are that sensible energy policy will lose out to short term political and economic imperatives.
The Parliamentary Energy and Climate Change Committee report ‘UK Energy Supply: Security or Independence?’ released this week was a reminder that making the energy transition will take more than gung-ho talk. The report raised a number of concerns including insufficient gas storage, the risk to emissions targets of replacing decommissioned coal and nuclear power stations with unabated gas fired power plants, and insufficient understanding of the behavioural aspects of energy demand reduction.
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Oil
Why is the oil price still so high?
Four months ago, the world’s energy watchdog took historic action to reduce oil prices. Since then, the financial outlook has considerably worsened and some Libyan oil has returned to the market. But the price has remained above $100 a barrel.
Releasing 60m barrels of reserves was meant to dampen the high price of $113 per barrel, attributed to lost ouput from war-torn Libya and worries that the Arab Spring could spread to more oil producers…
Oil Drops on Japan Output, Pares Biggest Weekly Gain Since March
Oil fell in New York, paring its biggest weekly gain since March, as a drop in Japanese industrial output countered bets that U.S. economic growth and a deal to tame Europe’s debt crisis will boost fuel demand.
Futures slid as much as 1 percent after Japanese factory production declined 4 percent in September from the previous month, almost twice as much as the median estimate from economists surveyed by Bloomberg News. Prices rallied yesterday after data showed the U.S. economy grew in the third quarter at the fastest pace in a year and European leaders agreed on a plan to curb the region’s debt crisis…
China’s oil thirst will squeeze market -funds
China’s thirst for oil will squeeze prices higher and destroy demand in developed economies if world oil supply growth does not exceed current trends, said senior commodity fund managers who did not expect fast oil output rises in Libya and Iraq.
“In the last 12 months China’s demand for diesel for power generation has been one of the major drivers (of the market),” Tony Hall, chief investment officer of the Duet Commodities Fund, said at a conference in London on Tuesday…
We Pay More to Drive Than We Spend on Taxes
By the time the costs of gas, insurance, tolls, parking, and car payments are added up, the average American family spends more on driving than on health insurance or taxes. And for the bulk of society—those who use cars every day to commute, drop the kids off at school, and run errands—it seems impossible to trim the high costs of transportation in any substantial way.
These are the main findings of “Energy Trap,” a new study conducted by the non-partisan New America Foundation…
Shell’s Profit Soars
Royal Dutch Shell PLC Thursday said net profit for the third quarter more than doubled, driven by strong oil and rising natural gas prices and as major projects ramp up production.
Net profit for the quarter totaled $6.98 billion, more than double the $3.46 billion posted a year ago. Group revenue was $123.41 billion, compared with $90.71 billion in the third quarter of 2010…
BP third-quarter profits mark ‘turning point’
BP boss Bob Dudley said today that the embattled oil giant had reached a “definite turning point” following last year’s Gulf of Mexico disaster as he revealed a boost to third-quarter profits.
BP reported replacement cost profit of 5.14 billion US dollars (£3.2 billion) for the three months to September, compared with 1.8 billion US dollars (£1.1 billion) in the same period last year when BP was hit by heavy charges for cleaning up the Gulf spillage…
BP faces challenge to Shetland drilling
BP’s “public consultation” over its plan for a controversial deepwater oil well off the coast of Shetland, closed this month, has been reopened by Chris Huhne, for further comments.
The consultation exercise about the proposed North Uist exploratory well attracted no responses from the public, and angered environmental groups who said they did not know of its existence…
EU crackdown on oil firms will not extend to overseas operations
European plans to crack down on oil companies, with orders to improve safety to prevent a spill like that in the Gulf of Mexico last year, will be unveiled on Thursday.
The European commission has stopped short of extending the tougher new rules to the overseas operations of EU-based companies, after pressure from oil companies and the UK government…
Big Oil Poised to Scale Lower Height
The three largest U.S. oil companies are poised to post soaring profits this week. But it’s unlikely that they will surpass their second-quarter peak, due to concerns about global growth.
Exxon Mobil Corp., Chevron Corp. and ConocoPhillips will reap billions more than they did in the third quarter of 2010 because of higher oil prices. Brent crude—the European benchmark that companies use to price the other crudes and refined products they produce—rose 46% from the third quarter of last year to an average of $112.09 a barrel…
Nuclear
China environment minister says nuclear safety risks climbing
China is facing increasing safety risks from its nuclear power plants as existing facilities age and a large number of new reactors go into operation, the country’s environmental minister said in comments published on Wednesday.
“The safety standards of China’s early-phase nuclear facilities are relatively low, operation times are long, some facilities are obsolete and the safety risks are increasing,” said Zhou Shengxian in a speech published on the website of China’s parliament, the National People’s Congress (www.npc.gov.cn)…
Czechs Plan Nuclear Push
The Czech Republic is pushing ahead with the large-scale expansion of its nuclear-power industry despite increasing misgivings about atomic energy among its neighbors.
On Monday, the country’s government-controlled CEZ AS will issue technical specifications for a $25 billion project to build up to five new nuclear reactors, with the first two scheduled to go online by 2025…
Renewables
Economic Slowdown Challenges Renewable Energy
Top executives from the renewable energy industry said Wednesday that their industry faced huge challenges from the economic crisis and the rise of abundant natural gas, but they insisted that technologies like wind power still made some of the best sense for financiers and governments.
Sharpening the battle lines between the renewable sector and the oiland gas industry amid a worsening economy, the executives also argued that investing in sources like the wind and sun is more beneficial to the wider economy, and that unconventional sources of fossil fuel like shale gas are a significant threat to the environment…
Siemens reveals plan to mass produce offshore wind farms
Plans to dramatically cut the cost of offshore wind energy and ensure that the UK retains its market leading position could be given a major boost if manufacturers mass produce components such as substations and cables.
That is the message from offshore wind energy guru Matthew Knight, who is head of business development at Siemens’ Transmission and Distribution division…
Greece in talks to repay debts with solar power
EU’s energy commissioner Gunther Oettinger, the director general for energy Philip Lowe, and the head of the EU’s Athens task force Horst Reichenbach have discussed the idea of enabling Greece to repay some of its debts to EU member states, such as Germany, by providing them with solar energy.
EurActiv has learned that the EU’s energy directorate general has been asked to investigate the idea’s potential, which is so far hampered by a lack of enthusiasm from EU nations…
Biofuels
Trouble in the algae lab for Craig Venter and Exxon
A much-trumpeted partnership of one of today’s most celebrated scientists and the world’s largest publicly traded oil company seems stalled in its aim of creating mass-market biofuel from algae, and may require a new agreement to go forward. The disappointment experienced thus far by scientist J. Craig Venter and ExxonMobil is notable not only because of their stature, but that many experts think that, at least in the medium term, algae is the sole realistically commercial source of biofuel that can significantly reduce U.S. and global oil demand…
UK
Huhne slams ‘climate sceptics and armchair engineers’ for undermining green economy
Chris Huhne will crank up pressure on some of his cabinet colleagues today with a direct challenge to “green economy deniers”, accusing them of undermining the jobs and growth created by renewable energy companies across the UK.
In a keynote speech at the RenewableUK annual conference in Manchester later today, the Energy and Climate Change Secretary will hit out at “an unholy alliance of short-termists, armchair engineers, climate sceptics and vested interests who are selling the UK economy short”…
How to solve ‘green growth denial’ in one stroke
It feels good to get something off your chest. And that’s just what Chris Huhne did on Wednesday with his blast against “green growth deniers”. But even Huhne, frequently direct to the point of bluntness, stopped short of naming those deniers. So I’ll do it for him. And, later on, I’ll tell him how to solve the problem he faces at a stroke.
The energy and climate change secretary was speaking in Manchester, the home of the first industrial revolution, and argued that renewable energy will deliver a new industrial revolution for Britain. “Yes, the UK is only 2% of global carbon emissions. But if we grasp the opportunity now our businesses and economy can be much more than 2% of the solution,” he said. That is direct riposte the Chancellor George “Goldfinger” Osborne, who told the Conservative party conference: “Britain makes up less than 2% of the world’s carbon emissions to China and America’s 40%. We’re not going to save the planet by putting our country out of business.”…
Renewables could be UK’s major power source by 2030: WWF
The UK could be primarily powered by a secure and inexhaustible supply of renewable energy by 2030 without the need for new nuclear power plants, according to a report commissioned by WWF. Between 60% and 90% of the nation’s electricity could come from wind, solar, tidal and other sustainable sources, with the rest supplied via an international supergrid and gas power stations.
“This report is inspiring, but also entirely realistic. It shows that a clean, renewable energy future really is within our grasp,” said David Nussbaum, chief executive of WWF-UK. “Failure to commit to a high-renewables future would leave us facing the prospect of dangerous levels of climate change and high energy prices.”..
Government must define ‘energy security’, warn MPs
Improved energy security is commonly touted as one of the main benefits that will result from shifting to a lower carbon energy mix, but according to a new report by MPs the government is still failing to fully grasp the scale of the threat to the UK posed by rising energy insecurity and the country’s “dangerously low” gas storage capacity.
The Commons’ Energy and Climate Change Committee will today urge government to beef up its plans for enhancing energy security, calling on ministers to develop a more strategic approach to ensuring the long-term resilience of the country’s energy supplies…
UK offshore wind to struggle with surge in projects
Britain’s offshore wind industry will struggle to fulfill new orders in four years’ time as the yearly growth in UK offshore wind farms is expected to double between 2015 and 2016, figures released by Britain’s renewable energy trade association showed on Tuesday.
Annual offshore wind deployment will rise to 1.2 gigawatts (GW) in 2012 and exceed 2.5 GW in 2016, after a forecast drop in activity in 2013-14 due to a lack of consented projects, Renewable UK said…
Hydropower turbine brings renewable energy to river Thames
The first hydropowered turbine to be built on the river Thames in recent times will be unveiled on Tuesday, taking over at the last working watermill still located on the river.
Mapledurham Estate on the banks of the Thames in Oxfordshire is now home to the biggest Archimedes screw in the UK — an update of millennia-old technology that will allow electricity to be generated from 280 Olympic swmming pools of river water washing through the turbine every day…
UK And Norway Sign Energy Pact To Develop Resources
Britain and Norway signed an energy pact on Tuesday aimed at expanding ties in renewable and fossil fuel energy sources, including carbon capture and storage (CCS) technologies under threat after the UK government scrapped a flagship project last week.
UK Energy Secretary Chris Huhne and Norwegian counterpart Ola Borten Moe signed the cooperation agreement in London, according to a joint ministerial statement, to support industry in developing North Sea oil and gas resources using emissions-mitigating technologies…
Energy inefficiency costing UK small businesses £7.7bn a year
UK small businesses are losing £7.7bn a year by failing to install simple energy efficiency measures, according to research published today by E.ON.
The energy company found that only a fifth of the 1,167 small and medium sized businesses surveyed have energy efficient equipment at their workplaces, and that each is potentially missing out on savings of up to £2,000 per year as a result…
