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.
Brent oil briefly touched $128/barrel on Thursday as pressure on Iran over its nuclear programme continued, the latest development being demands from Israel on the US to be more explicit in its threat of military action. The sharply rising prices are already impacting the weakened economies of Europe and the US making some wonder whether sanctions intended to hurt Iran could be backfiring. In Saudi Arabia meanwhile, on which the world is relying to make up the difference in output, rigs have been deployed at their highest level in four years—perhaps an ominous sign of where this is all going.
While oil is grabbing the attention right now, shale gas is never far from the news. The Polish Geological Institute announced this week that it is likely to downgrade initial EIA estimates of its shale gas reserves following analysis of core samples. It is still early days for the shale gas industry in Poland, but so far there has been no repeat of the US success story. One of the arguments for shale gas put forward by the energy industry is that it is much cleaner than coal and should be exploited as a bridge fuel to real low carbon solutions—ODAC Trustee David Strahan looks at the arguments in his article Gas: Climate Panacea or Industry Propaganda?, while Damien Carrington takes on the economics of gas versus wind power with a look at initial data from a forthcoming UK Energy Policy Centre (UKERC) report.
In the UK, government energy policy got something of a boost this week by way of a report from Bloomberg New Energy Finance. According to the paper the lights will stay on through 2020, despite the scheduled retirement of coal powered plants due to European laws and parts of the nuclear fleet due to age. A primary reason for this finding comes down to reduced demand for electricity as a result of the economic crisis — perhaps not a deliberate energy policy of this government or the last, however new generating capacity is also anticipated to make a significant difference—renewables in the form of solar, wind and biomass are set to make up two-thirds of that new capacity.
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Oil
Oil price falls back from 43-month high
Oil prices have dipped from a 43-month high after Saudi Arabia denied reports that a key pipeline had exploded.
Brent crude fell back to $125.6 a barrel after jumping almost $6 to $128.40 in New York on Thursday. US light crude fell slightly to $108.5…
Cushions to stem Iran oil price spike are proving elusive
The oil market has reacted to the recent imposition of sanctions by the US and European Union in ways none of the leaders on either side of the Atlantic apparently contemplated…
Saudi Oil-Rig Use Soars as Obama Pressed on SPR: Energy Markets
Saudi Arabia is deploying the most oil rigs in four years as it prepares for possible shortages caused by tension with Iran, giving President Barack Obama one less reason to answer calls to curb prices by releasing supplies from America’s emergency reserves.
The number of rigs used in the desert kingdom more than doubled in January from a year earlier, the biggest annual increase on record, data from Houston-based Baker Hughes Inc. (BHI) showed. As much as 1 million barrels a day of Iranian crude exports may be lost as the U.S. and Europe tighten sanctions against President Mahmoud Ahmadinejad’s government over its nuclear program, the International Energy Agency said Feb. 10…
Soaring oil prices will dwarf the Greek drama
Since last week’s eurozone “grand summit”, the headlines have been positive and, in the official photos anyway, the main players appear to be smiling. As such, the global equity rally goes on.
Behind the rictus grins, though, the gloves remain off, the rhetorical daggers still drawn. Having launched the biggest sovereign debt restructuring in history, Athens now faces the Herculean task of persuading holders of Greek bonds to accept a “voluntary” hair-cut…
North Sea oil supply slumps as tax grab bites deep
NORTH Sea oil production collapsed by a record 18 per cent last year — the biggest fall since black gold started flowing four decades ago — as the Chancellor’s controversial tax hike shook investor confidence.
The slump was caused mainly by a combination of platform shutdowns for essential maintenance on ageing installations and a low number of discoveries being brought on stream…
Coalition to support UK oil and gas sector, says Business Secretary Vince Cable
Vince Cable said the Government is preparing to offer targeted support for Britain’s oil and gas sector as part of a new and “proper industrial policy”.
In a move that represents a shift from last year’s controversial tax raid on North Sea oil, the Business Secretary said the Government wanted to help the sector “re-energise” its supply chains, which include thousands of small businesses…
U.S. Was Net Oil-Product Exporter for First Time Since 1949
The U.S. exported more gasoline, diesel and other fuels than it imported in 2011 for the first time since 1949, the Energy Department said.
Shipments abroad of petroleum products exceeded imports by 439,000 barrels a day, the department said today in the Petroleum Supply Monthly report. In 2010, daily net imports averaged 269,000 barrels. U.S. refiners exported record amounts of gasoline, heating oil and diesel to meet higher global fuel demand while U.S. fuel consumption sank…
TransCanada in new push for US pipeline
TransCanada Corp announced Monday it would go ahead with building part of the controversial Keystone XL oil pipeline between Oklahoma and the Texas coast that does not require US presidential approval.
The company also said it will resubmit its proposal for the entire $7 billion pipeline project from Canada’s oil sands of Alberta to Gulf Coast refineries that US President Barack Obama rejected last month…
Gas
Gas: Climate Panacea or Industry Propaganda?
I once hitched a lift from New York to London in the private jet of an American gas billionaire. Robert Hefner III, who pioneered the drilling of deep wells in the 1960s, was planning to write a book and wanted to discuss it.
The Grand Energy Transition would argue that natural gas will solve “peak oil”, when global oil production starts to decline, and dramatically cut US emissions of greenhouse gases. Abundant and clean, gas offered a perfect bridging fuel to a future of limitless low-carbon energy based on hydrogen…
How to Frack Responsibly
To put it another way, the technique of hydraulic fracturing, used to extractnatural gas from once-impossible-to-get-at reservoirs like the Marcellus Shale that lies beneath New York and Pennsylvania, has more than proved its value. At this point, shale gas, as it’s called, makes up more than 30 percent of the country’s natural gas supply, up from 2 percent in 2001 — a figure that is sure to keep rising. Fracking’s enemies can stamp their feet all they want, but that gas is too important to leave it in the ground…
Poland May Cut Shale Gas Estimates After Data From First Wells
Poland’s estimated shale gas reserves, believed to be the largest in Europe, may be cut once data is analyzed from the country’s first wells, the Polish Geological Institute said.
“Core logs from Polish wells are being analyzed with the help of U.S. technology,” Miroslaw Rutkowski, a spokesman for the institute, said by phone. “As result, we’re expecting that our estimates will be lower than those of the EIA,” he said, in a reference to the Energy Information Administration…
China Estimates Exploitable Shale-Gas Reserves at 25.08 TCM
China has 25.08 trillion cubic meters (886 trillion cubic feet) of exploitable onshore shale- gas reserves, according to the nation’s land ministry.
The resources are part of an estimated 134.42 trillion cubic meters of total reserves of the gas in the country, the Ministry of Land and Resources said in a statement on its website today, citing a nationwide survey. Shale gas has already been discovered in 880,000 square kilometers (340,000 square miles) of exploration blocks that contain 15.95 trillion cubic meters of the fuel that can be extracted, it said…
Coal
Old king coal
“OUR civilisation”, wrote George Orwell over 70 years ago, “is founded on coal.” Unlike Europe’s, Asia’s still is. In 2010, according to the International Energy Agency (IEA), a think-tank, coal accounted for just one-fifth of primary energy supply in the OECD countries. But, in the world as a whole, coal accounted for almost half of the increase in energy use from 2000-10. Coal, says Edward Cunningham of Boston University, is experiencing an “historically incredible” resurgence, and may even overtake oil as a fuel by 2025. There is plenty of it and, compared with rival fuels, it is cheap. And often dirty…
Nuclear
Japan says possible all reactors shut this summer
It is possible none of Japan’s nuclear reactors, all but two of which were shut down after last year’s Fukushima disaster, will be up and running this summer when electricity demand peaks, the trade minister said on Thursday.
Only two of 54 reactors are still operating amid safety concerns after the March 11 earthquake and tsunami triggered a radiation crisis at Tokyo Electric Power Co’s Fukushima Daiichi nuclear plant, leading to widespread contamination and mass evacuations…
Mining and Minerals
Global mining boom is leading to landgrab, says report
The global mining, oil and gas industries have expanded so fast in the last decade they are now leading to large-scale “landgrabbing” and threatening farming and water supplies, according to a report by environment and development groups in Europe, Africa and India.
“The catalogue of devastation is growing. We are no longer talking about isolated pockets of destruction and pollution. In just 10 years, iron ore production has more than doubled, coal has risen 45% and metals like lithium by 125%. Across Africa, Latin America and Asia, more and more lands, rivers and aquifers are being devoured by mining activities…
UK
Bloomberg: Don’t panic, the lights will stay on
Fears that the UK could experience energy shortages in the second half of the decade are likely to prove overblown, according to an influential new white paper that predicts improvements to energy efficiency, extensions to the life of nuclear plants, and increased investment in gas and renewables capacity will address the risk of power cuts.
The report from analyst firm Bloomberg New Energy Finance (BNEF) predicts new investment in energy infrastructure, coupled with relatively weak power demand, means the UK is “on track to keep the lights on through the critical years between 2015 and 2020″…
Analysis reveals folly of betting UK’s energy future on cheap gas over wind
Electricity produced by wind turbines in the UK may be cheaper than that generated by burning gas within five years, even if the climate-warming pollution from the latter is allowed to be pumped straight into the air. That is one startling implication of a comprehensive analysis produced for the Guardian by experts at Imperial College London and the UK Energy Research Centre.
The chart, which is from preliminary analysis, reveals the folly of betting the UK’s energy future on the hope of cheap gas, the preferred option of many of the critics of reneweable energy…
Wind energy companies fear government’s commitment is cooling
Billions of pounds’ worth of investment in Britain’s energy infrastructure is on hold or uncertain because of concerns over the government’s commitment to wind energy.
In an exclusive survey, the heads of some of the world’s biggest wind companies, which have been considering setting up factories, research facilities and other developments in the UK, have told the Guardian they are reviewing their investments or seeking clarification and reassurances from ministers on future energy policy in the wake of growing political opposition to wind energy that culminated in this month’s unprecedented attack on the government’s policies in a letter signed by more than 100 Tory MPs…
Wind power still gets lower public subsidies than fossil fuel tax breaks
Public subsidies for the development of wind power in the UK are dwarfed by the tax breaks enjoyed by fossil fuels, a new Guardian analysis has revealed. Financial support for fledgling renewable energy industries has increasingly come under attack in recent months, but the new data shows that the older industries benefit to a far greater extent.
Gas, oil and coal prices were subsidised by £3.63bn in 2010, according to data from the Organisation for Economic Co-operation and Development , whereas offshore and onshore wind received £0.7bn in the year from April 2010. All renewables in the UK benefited from £1.4bn over the same period, according to data from the Department of Energy and Climate Change (Decc)…
Are the ‘big six’ energy companies blocking renewables in the UK?
Just six energy companies EDF, E.ON, Centrica, SSE, Scottish Power and npower control 99 per cent of our domestic energy market but show only minor interest in renewables
Huge profits announced by EDF and Centrica recently have sparked further debate about the behaviour of the so-called ‘big six’ energy companies and their stranglehold of the energy market. At worst they may not only be overcharging customers but also holding back a once-in-a-generation opportunity to make the transition to renewable energy…
Related link to thePeoplespower Project
Single spark sends 10% of UK’s renewable energy capacity up in smoke
Fire investigators believe a spark from machinery triggered the huge fire that swept through Europe’s biggest biomass power plant yesterday.
Firefighters spent more than 15 hours tackling the fire at the Tilbury power plant on the banks of the River Thames in Essex…
Economy
Rising oil costs hit growth figures
Growth in the UK’s manufacturing was weaker than expected in February as rising oil costs drove up prices at their fastest rate in more than 19 years.
The Markit/CIPS survey, where a reading above 50 represents growth, showed the sector grew at 51.2, down from 52 the previous month and weaker than City expectations of 52.1…
