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ODAC Newsletter - July 6

Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.

For anyone watching peak oil this has been a busy week. The Harvard report by Leonardo Maugeri, covered in last week's newsletter, has been seized upon by those waiting for a chance to consign peak oil to the dustbin of history. In Britain, columnist George Monbiot fell for it hook line and sinker, presenting the report as conclusive proof that peak oil is bunk — evidently without a moment's critical appraisal.

So does the report stand up to scrutiny, or is this just another cornucopian fantasy based on dodgy numbers and worse analysis? Read on for exclusive commentary from Stephen Sorrell, senior lecturer, and lead author of the UKERC Global Oil Depletion report, and Christophe McGlade, doctoral researcher at the UCL Energy Institute.

Maugeri's impending oil glut rests on three foundations: 1) high oil prices have unlocked huge amounts of investment which will result in a massive boost in new oil production by 2020, 2) new technology is allowing the industry to tap previously unproducible resources, especially shale oil in the US, and 3) global decline rates of existing wells have been overestimated by more than 50%.

The first two points are swiftly despatched by Dave Summers at The Oil Drum. Summers points out just some of the holes in the projected production figures and includes a demolition of the US shale oil projections.

Less attention has been paid to the decline side of the equation. In their analysis below, Stephen Sorrell and Christophe McGlade show how Maugeri has used decline rates less than half those established by the IEA, UKERC and CERA — which all broadly agree. Maugeri provides no justification for this, and his language suggests some confusion about the distinction between decline and depletion rates. Replacing Maugeri's decline rate with that of the IEA slashes 2020 capacity from 110.6 mb/d to just over 95mb/d.

That Maugeri has authored such a rose tinted report is not remotely surprising; he has been rubbishing peak oil for many years. He may catch the market mood following the recent slump in the oil price, but the current apparent glut has more to do with weak demand following a record stretch of $100-plus prices (240 days this year against 170 in 2008) than any fundamental change in the supply outlook. Sadly the ability to hoodwink a credulous columnist has given his report far more currency than it deserves.

View our Reports and Resources page


COMMENTARY: Maugeri's decline rate assumptions

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We were wrong on peak oil. There's enough to fry us all

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Monbiot says he was wrong on peak oil but the crisis is undeniable

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Oil Drops in New York as Growth Concern Weighs on Demand Outlook

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Sanctions cut Iran's July oil exports to nearly half

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Brent Oil Exceeding $100 A Barrel 'Sustainable,' Mirae Says

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Japan panel: Fukushima nuclear disaster 'man-made'

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Japan regains nuclear power as first reactor resumes operations

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Doubts linger over Japan's nuclear future

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Renewable UK threatens legal action as Tory MPs call for wind policy U-turn

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Wiltshire council votes for tough new planning restrictions for windfarms

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Fight on for wind power subsidies

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E.ON heats up plans for five deep-geothermal power plants

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Ban food waste from landfill for renewable energy, urges thinktank

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UK 'biorenewables' centre opens

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CCS competition closes amid "significant" industry interest

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CBI issues rallying cry for government to back green economy

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MPs give green light to loan plan for home insulation

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What do you think? Leave a comment below.

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