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ODAC Newsletter - Jul 20

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

Oil prices rose this week as geopolitical tensions trumped economic concerns. The Syrian conflict, oil sanctions against Iran, and a suicide bombing of an Israeli tourist bus in Bulgaria, which Israel blamed on Iran, all added to fear of disruption in the region.

A paper from the G20 released this week suggested there might be other factors at work behind the oil price, claiming the market is vulnerable to being rigged like Libor. Maybe so, but the impact on the long term trend in the oil price can only be marginal. A recent paper from economists at the IMF found the only factor that explained the upward march since the turn of the century was the increasing difficulty of extracting oil. Also the cost of the marginal barrel has risen dramatically: tar sands producers require $90-plus for new projects, while Saudi Arabia and other Middle Eastern producers need over $100 to balance their budgets post Arab-spring.

Oil prices could soon slump, according to former Eni executive Leonardo Maugeri, who recently published a report predicting the oil market is about to enter a glut. In our July 6th newsletter ODAC published commentary from Steven Sorrell and Christophe McGlade debunking Maugeri's work. Now, on further examination, they have found the errors appear even larger than they first thought; Maugeri's implied decline rate is not 1.6% but 1.4%, in contrast to well-established estimates from the IEA and CERA of more than 4%. Replacing Maugeri's rate with that of the IEA now entirely eliminates the increased oil supply he projected to 2020. See the updated commentary.

Shell's controversial Arctic campaign got off to a rather sticky start this week as their drilling vessel slipped its anchor and apparently ran aground, which proved a godsend for Greenpeace's Save the Arctic campaign. The organization recently launched a spoof website called arcticready.com, and this week its protests shut down 74 Shell petrol stations in Britain. Whether any of this will affect decisions on drilling remains to be seen.

Meanwhile in the UK the government remained at loggerheads about its plans to decarbonize the energy supply. The rumours are that Energy Secretary Ed Davey can't get a meeting with the Treasury to decide on the level of cuts to onshore wind subsidies.

View our Reports and Resources page

Oil

Oil rises above $106 on Middle East tension

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Oil prices could be rigged by traders warns G20 report

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Markets Beware: Hormuz Still Vital To Global Energy Balance

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Iran arrests oil export decline as China buys more

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Major embarrassment for Shell as Arctic oil drilling ship slips its anchor and ends up 'grounded' in Alaska harbour

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Greenpeace activists shut down 74 UK Shell petrol stations

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Power grid in sea reaches for new depths

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Italy Seeks $18 Billion Investment Ditching Offshore Ban: Energy

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Electricity

Germany May Scrap Energy-Source Goal As Overhaul Stumbles

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Nuclear

Finland's Olkiluoto 3 nuclear plant delayed again

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Emails reveal UK government's moves to protect nuclear power from bad news

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UK

CBI voices "mounting frustration" over delay to renewables subsidy decision

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George Osborne in standoff over coalition's green energy plans

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DONG Energy and Siemens ink offshore turbine mega-deal

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Downing Street calls on regulator to investigate petrol price rigging

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People power: why we believe in championing community energy

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Energy projects in frame as Treasury announces £50bn in loan guarantees

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