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ODAC Newsletter - 9 Mar

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.

For the oil industry this was CERAweek. As might be expected the conference was an occasion for considerable optimism about energy breakthroughs and successes especially in unconventional production. Behind the self-promotion there were nonetheless some notes of alarm in the air. At the conference the most obvious word of caution came from Total's Yves-Louis Darricarrere. He said that it "will be difficult to produce more than 95 to 97 million barrels per day in the foreseeable future" that is liquids excluding biofuels (the IEA estimates oil demand excluding biofuels at 99mb/d by 2035). He went on to say that even this will mean that "25 to 45 million bpd will need to be supplied from fields that are not online today" or 2 to 4 Saudi Arabia production equivalents. Total is thus still the only major to be giving realistic outlooks.

So how do things look for finding all of this extra production? On the upside Iraq announced this week that it had produced more than 3 million bpd for the first time in 30 years — a major landmark. Much is hoped for in Iraq, the IEA has estimated that it could produce at 8 million bpd by 2030, while acknowledging that there are many challenges. Political and geopolitical challenges are of course not confined to Iraq — see news of the declaration of autonomy in the oil rich region of Cyrenaica, Libya, along with a report from risk analysts Maplecroft on resource nationalism.

And what of Saudi Arabia on which so much hope continues to rest? Brad Bourland, Chief Economist for the Jadwa Investment Company struck a warning note on a CERAweek panel with regard to the growing pressure caused by rising domestic oil demand in the Kingdom. On current trends he said that "By 2030, Saudi Arabia would require a break-even price for oil of about $320 per barrel to balance its budget". This was especially interesting in view of a warning on Tuesday from Saudi oil minister Ali Al Naimi that "In light of such unpredictable fluctuations (in the oil market)...we should depend on oil revenues, products and various usages to create other sources of economic growth and prosperity" — this from a man for whom $28/barrel was a fair price for the future in 2004.

Exxon Mobil also rather spoiled the party by announcing that it expects a drop in production in 2012 followed by modest growth in the coming years. Exxon's investment plans are in line with what the IEA believes is required to increase production, but this is expensive oil and by no means assured. CEO Rex Tillerson also told analysts that new methods and tools will need to be invented to tap many of the shale fields in Europe and China saying that "Some of the shales don't respond as well to hydraulic fracturing". According to Tillerson "An unprecedented level of investment will be needed to develop new energy technologies to expand supply of traditional fuels and advance new energy sources".

Another key event this week is the one year anniversary of the Japanese tsunami, and the Fukushima nuclear disaster. The plant itself is now in cold shutdown, though permanent retirement is a long way off and holds many uncertainties. The after effect of the disaster on nuclear power has been most pronounced in Germany where the government reversed its policy and now plans to exit from nuclear by 2022 — Belgium and Switzerland also announced plans to move away from the technology. This aside, it looks like nuclear took a real hit in the 2011-12 period—according to The Guardian only 2 new builds began in that time compared to 38 during 2008-2010. The drop is however unlikely to be indicative of the future with 50 countries either continuing to operate plants or planning to construct them. A report in Nature Journal this week by Professor Peter Bradford argues that it is the cost of nuclear which is likely to be the greatest barrier to further adoption.

View our Reports and Resources page


CERAWEEK: Total's Upstream Chief Says Peak Oil Is Around The Corner

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Plateau Oil meets 125m Chinese cars

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CERA panel on Middle East touches on challenges for Saudi Arabia and Iran

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Oil Producers See Untapped, Unconventional Fields Meeting Demand

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Dependency on oil income not suitable

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Iran is far from the only threat to oil prices

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Playing With Fire

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Nigerian Delta Unrest Cuts Oil Output by 1 Million Barrels

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Libya's oil-rich east declares autonomy

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Exxon Mobil sees dip in 2012 oil, gas output

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BP Deal Opens a New Phase, but Case Is Far From Closed

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Oil up as Greece hopes, US jobs data fuel rebound

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Exxon in spotlight after Papua New Guinea landslide

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Fracking Failing to Crack China, Europe Shale, Exxon Says

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Dramatic fall in new nuclear power stations after Fukushima

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World nuclear powers on after Fukushima, costs rise

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Why taxpayers serve nuclear power and not the other way around

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UK nuclear sites at risk of flooding, report shows

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Energy storage: Packing some power

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'Germans Are Willing to Pay' for Renewable Energies

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Sun, sewage and algae: a recipe for success?

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Cable: put offshore wind "success story" at heart of UK industrial policy

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Cable says green tax must be cut to save companies

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Scottish finance report sparks row over North Sea oil and independence

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Wadebridge, the UK's first solar-powered town - video

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Controversial renewable energy report branded 'shoddy nonsense'

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