Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
Brent oil prices plunged to less than $89/barrel this week, an eighteen-month low, amid deepening economic gloom. Suddenly everyone is in the business of predicting just how far the oil price might fall — Credit Suisse has forecast $50/barrel — and for how long. One particularly interested and anxious observer is likely to be Vladimir Putin. With around 50% of Russia’s revenue coming from oil and gas the Kremlin is worried about the potential for a budget shortfall.
A more positive piece of news this week for Mr Putin was an announcement by Exxon that it is pulling out of shale gas exploration in Poland. As the country with the biggest shale potential in Europe, Poland hopes a shale gas boom will slash its dependence on Russian imports. Exxon’s failure to find gas will be a significant blow, coming after the government’s huge downward revision of the estimated shale resource earlier this year. There are some reports that Exxon’s move is less about Polish gas, and more related to plans for a closer alliance with Rosneft to develop shale oil in Siberia.
In the UK this week Tim Yeo, Chairman of the Energy and Climate Change Select Committee, urged the government to clarify its position on emissions from gas fired power stations, or risk a serious shortfall in investment to decarbonise the energy sector. Against a background of delays to new nuclear, strident calls from Tory backbenchers to cut wind targets and subsidies, and much hopeful noise about a British shale gas boom, the stage looks set for another dash to gas that could be the death knell for our climate targets.
For those who think developing shale gas would at least improve Britain’s energy security, there was a salutary warning from industry consultant Arthur Berman at ASPO 2012. “Shale plays are not a renaissance or a revolution”, he told the conference, “this is a retirement party”
Oil
Oil Futures Drop Below $80 For First Time In Eight Months
Oil tumbled below $80 a barrel for the first time in eight months as U.S. inventories surged and concern grew that the European debt crisis will drag down the global economy.
Futures dropped as much as 1.9 percent as U.S. stockpiles rose to the most in almost 22 years and growth slowed in the U.S., Europe and China…
BP Wins Oil Leases in U.S. Gulf of Mexico Near Spill Site
BP Plc (BP/) was the high bidder on 43 leases to drill in the central Gulf of Mexico where two years ago its Macondo well exploded, causing the largest U.S. offshore oil spill. The U.S. auction raised $1.7 billion.
Royal Dutch Shell Plc (RDSA) offered $406.6 million, or 24 percent of all the bids, followed by Statoil (STL) ASA with $333.3 million, the Interior Department said. Stavanger, Norway-based Statoil bid $157 million for a single tract, a record in the region, Tommy Beaudreau, director of the department’s Bureau of Ocean Energy Management, said today. BP’s total bids were $239.5 million…
Russia May Change How It Calculates Oil Price: Minister
Russia is taking steps to decrease its dependence on oil, with the government mulling a different formula for calculating the oil price for the state budget and measures to encourage other sectors of the economy to grow, Stanislav Voskresensky, Russian deputy minister of economic development, told CNBC.com on Thursday.
Russia’s oil exports are both a blessing and a curse for the country, analysts told CNBC.com, as the recent fall in oil prices is likely to translate into a higher budget deficit, with half of the revenues to Russia’s budget coming from the oil and gas sector…
Russia: oil gloom over St Petersburg
Oil prices slipped another notch on Thursday, putting pressure on producers, not least Russia, where the US$-denominated RTS index was down by 1.4 per cent around noon, Moscow time.
It was hardly an auspicious backdrop for the St Petersburg Economic Forum, Russia’s premier business conference, which is hosted personally by president Vladimir Putin…
Why oil prices are keeping Putin up at night
My mom out in California is elated — gasoline prices in her neighborhood are below $4 a gallon for the first time in four months. Less so are the world’s petro-rulers, who are watching the price of oil — their life blood — plunge at a rate they have not experienced since the dreaded year 2008. Industry analysts are using phrases such as “devastation” and “severe strain” to describe what is next for the petro-states should prices plummet as low as some fear. No one is as yet forecasting a fresh round of Arab Spring-like regime implosions. But that’s the nightmare scenario if you happen to run a petrocracy…
Gas
Europe shale push shaken by Exxon’s Poland pullout
Europe’s most ambitious shale gas plans were in disarray on Monday after U.S. major ExxonMobil announced it would pull out of exploration projects in Poland.
Poland’s lucrative reserves had spurred hopes of transforming Europe the way a shale boom has left the United States brimming with supplies, potentially turning the Poles into net gas exporters…
Electricity
Earthquake risk for carbon capture and storage schemes
Move over fracking: carbon capture and storage schemes (CCS) are more likely to trigger earthquakes, warns the US National Research Council (NRC). Meanwhile, a separate study warns that quake-fractured rocks could undermine CCS efforts by allowing the trapped gas to leak back into the atmosphere.
Carbon sequestration involves pumping CO2 at high pressure below ground and trapping it in porous rocks at depths of 1 to 4 kilometres. Similar deep injection wells are used to dispose of waste water, but despite the large number of such wells, “very few [seismic] events have been documented over the past several decades”, writes an NRC panel in a new report, Induced Seismicity Potential in Energy Technologies…
Nuclear
Explosives found at Sweden nuclear site in Ringhals
Security at Sweden’s nuclear power stations has been tightened after explosive material was found on a truck near the largest plant in the country.
A routine vehicle check carried-out at the Ringhals power plant uncovered a fist-sized lump underneath the truck…
Japan approves two reactor restarts, more seen ahead
Japan on Saturday approved the resumption of nuclear power operations at two reactors despite mass public opposition, the first to come back on line after they were all shut down following the Fukushima crisis.
Prime Minister Yoshihiko Noda, his popularity ratings sagging, had backed the restarts for some time. He announced the government’s decision at a meeting with key ministers, giving the go-ahead to two reactors operated by Kansai Electric Power Co at Ohi in western Japan…
Renewables
Japan approves renewable subsidies in shift from nuclear power
Japan approved on Monday incentives for renewable energy that could unleash billions of dollars in clean-energy investment and help the world’s third-biggest economy shift away from a reliance on nuclear power after the Fukushima disaster.
Industry Minister Yukio Edano approved the introduction of feed-in tariffs (FIT), which means higher rates will be paid for renewable energy. The move could expand revenue from renewable generation and related equipment to more than $30 billion by 2016, brokerage CLSA estimates…
Renewable energy in the EU: which countries are set to reach their targets?
Renewable sources accounted for 12.4% of the EU’s energy in 2010 and Sweden are leading the way amongst the member states. How do other countries compare?
Energy obtained from renewable sources is estimated to have contributed to 12.4% of the European Union’s (EU) overall energy consumption in 2010, up from 11.7% in 2009, according to latest figures published this week…
EU commits to “no regrets” 2030 energy policy
The European Union has committed to a “no regrets” long term policy framework to 2030 that would see an increased share of renewables in the energy mix.
At an EU energy council meeting in Luxembourg on Friday, most EU states agreed to support the “no regrets” option, the most ambitious of the three low-carbon energy policy pathways agreed by the EU…
Floating turbine and energy-saving vessels lead offshore wind cost-cutting plans
EDP and Principle Power are reportedly seeking funding from Brussels to build five floating offshore wind farms off the coast of Portugal, after cutting the ribbon on the first demonstration project of its kind this weekend.
WindPlus, a consortium led by EDP, inaugurated the world’s first floating offshore wind turbine on Saturday, which consists of a Vestas 2MW turbine installed on to a triangular floating foundation designed by Principle Power…
UK
Energy bill must vow to ‘decarbonise’ sector or face losing investment
The government must set a clear “twilight” on gas-fired power generation in its forthcoming energy bill, or face a dearth of much-needed investment into the power sector, according to a top Tory MP.
Tim Yeo, the chairman of the influential energy and climate change select committee, said the bill should provide “confidence, certainty and long-term stability”, and that this could only be done through setting a clear target for “decarbonising” the electricity sector. Without such a framework, he warned, the required investment in the energy sector — estimated at more than £200bn in the next ten years — would be doubtful…
New UK nuclear plants a step nearer as EDF awards £2bn contract
The prospect of new nuclear power stations being built in the UK for the first time in 20 years has moved a significant step forward after EDF Energy awarded a £2bn contract to build a plant at Hinkley Point in Somerset.
French company Bouygues and private British construction group Laing O’Rourke have been named as preferred bidders for a construction contract that is estimated to create 4,000 jobs…
EDF edges forward with plans for Hinkley Point nuclear plant
The UK’s plans for a new fleet of nuclear reactors took an important step forward today, after EDF Energy announced it had selected a preferred bidder for the contract to undertake construction work at its proposed new nuclear plant at Hinkley Point in Somerset.
The energy giant confirmed that a joint venture between engineering and construction firms Bouygues TP and Laing O’Rourke had been granted preferred bidder status for the £2bn contract…
Climate
Eurozone crisis and US presidential race ‘damaged Rio+20 prospects’
Building a global consensus on sustainability is becoming increasingly difficult as a result of economic crises and a US political climate that is increasingly hostile to action on climate change, according to Gro Harlem Brundtland, one of the chief architects of the first Rio Earth summit in 1992.
The former Norwegian prime minister lamented the absence of Barack Obama, David Cameron and many other leaders from the follow-up Rio+20 conference currently taking place in Brazil, but said they faced circumstances that are very different from those of the 1992 summit…
