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ODAC Newsletter - Nov 25

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.

Saudi Arabia announced this week that it is halting its $100bn oil expansion programme, claiming that the requirement for the kingdom to increase production has "substantially reduced" in the face of emerging new oil and gas supplies. There is likely to be much speculation as to the reasons behind the Saudi announcement – has the Kingdom already reached peak production capacity as it struggles to replace depleting supplies? Is this a case of budgetary priorities shifting as Saudi moves spending to social programmes to avoid contagion of unrest from neighbouring countries? Or might this reflect a decision to invest in other power generation options to meet rising domestic energy demand?

Much has indeed changed since Saudi began its capacity expansion programme in the early 2000s. The IEA predicts a large increase in Iraq's oil production of more than 5mb/d by 2035, Brazil is set to become a major deep water oil producer, and in North America exploitation of oil shales (such as the Bakken) has allowed the US to buck the downward trend of its oil production curve. What has also changed however in the last decade is the cost of oil – the first 3 years of the last decade saw prices between $30-40/barrel. 2011 is shaping up for a record average price of $110/barrel. This is the highest annual oil price since 1864, during the American Civil War. Depleting oil production is being replaced for now, but at a huge cost to the global economy and at an increasing environmental risk.

The good news is that as the cost of fossil fuels rises, renewable energy ought to become more cost competitive. According to a report released by the IEA this week this is indeed the case. The report says that 20% of world power generation now comes from renewables, it pointed to decreasing cost of technologies such as wind and solar, and also defended the use of subsidies to support the growth of the renewables sector.

A warning about risks associated with renewable power was sounded this week in a report from the CRO (Chief Risk Officers) Forum of the insurance industry. 'Power Blackout Risks' named intermittent power, and power surges from renewables without the support of sufficient infrastructure, as one of its risk factors for major blackouts. Another key concern was the role of market liberalisation and privatisation in weakening the reliability of investment in the maintenance of infrastructure.

In the UK the political battle over energy policy continued this week with the release of government figures on the estimated impacts on energy costs of current climate change policies. The release coincided with DECCs launch of the Green Deal, aimed at kick starting a major energy efficiency upgrade of UK building stock. The government argues that the combination of measures will by 2020 leave households £94/year better off than they would have been with no policy interventions. This however assumes that households can be sufficiently convinced to take up the schemes. The improvements are long overdue, but politically this is going to be a bumpy ride.

View our Reports and Resources page

Oil

Saudi Sees Threat Of Shale Oil Revolution

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Don't bet on big fall in oil — even as crisis looms

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Oil price could strangle economic recovery hopes: IEA

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Chevron Banned From Brazil Drilling on Leak Probe

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Analysis - Chevron spill may complicate Brazil oil dreams

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Oil Heads for Second Weekly Loss on European Crisis; Mirae Sees Iran Risk

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Saudi Fuel for Power Plants to Rise 53% by 2017 as Demand Grows

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EPA delays carbon limits on oil refineries

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How big is Exxon's gamble in Kurdistan? (Answer: BIG)

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Gas

Shale threat to carbon target

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EPA Accepts Environmental Petition on Fracking Chemicals

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Propane substitutes for water in shale fracking

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Renewables

Renewable energy becoming cost competitive, IEA says

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Commons vote to save solar incentives defeated

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Green energy could trigger 'catastrophic' blackouts

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China Bends to U.S. Complaint on Solar Panels but Plans Retaliation

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Global giants back launch of WindMade label

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UK

Chris Huhne unveils 'green deal' to insulate homes

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U.K. Report Gives Clean-Energy Costs

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U.K. Energy Laws May Raise Company Bills 20% in 2020, Huhne Says

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Commons vote to save solar incentives defeated

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National road charging is inevitable, warns head of UK motoring group

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How a leaky 1990s terraced home's energy bills were cut by 69%

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UK reaching a 'tipping point' for biomass

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Government unveils £5m offshore wind innovation scheme

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