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ODAC Newsletter - July 27

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

Lower oil and US gas prices saw Q2 profits down at most of the oil majors, though Exxon recorded another record quarterly profit of $15.9 billion due to asset sales. Nevertheless the Brent oil price hit $106/barrel on Thursday even as the global economy stutters on, the Eurozone unravels and the UK falls further into recession.

British Gas, which is owned by Centrica, bucked the trend with a profit hike of 23%, the company benefiting from increased gas consumption due to the poor weather. The news was greeted with anger by consumer groups who accused the company of profiteering. They say the British Gas is slow to pass on reductions in wholesale prices, and renewed calls for stronger competition in the sector.

Gas received a boost in the UK this week as part of the long awaited government announcement of renewable subsidy revisions. To listen to Ed Davey the announcement was a victory for the Lib Dems as they held off pressure from Conservatives to reduce onshore wind tariffs by more than 10%. Bloomberg however seems to have the story about right with the headline "U.K. Boosts Gas While Cutting Support For Wind, Biomass". In comes a tax allowance for offshore gas production, but subsidies for onshore wind are to be reviewed again almost immediately, reporting in early 2013, so even that victory for Ed Davey might be short-lived.

The underlying picture is one of the Treasury dictating energy policy to DECC, not only on wind and gas, but also in the broader Electricity Market Reform (EMR) - the long awaited energy bill intended to set the investment framework in the power sector over the next couple of decades. Tim Yeo MP, the senior Tory who chairs the energy select committee, this week excoriated the Treasury's influence on the EMR, and in a scathing report his committee condemned the proposals as "vacuous" and "unworkable".

This seems to mark the beginning of a profound and retrograde shift on energy policy. The new "energy glut" message has strong advocates on the government side of the house, and Osborne's recent statements have shown him moving away from the political consensus on climate change policy. If the GHG emissions of a new fleet of gas fired plant are allowed to continue unabated, Britain is highly unlikely to hit its legally binding climate targets. A pro-gas generation policy also lashes UK energy prices to a depleting fossil fuel whose price is bound to be volatile and to rise over time. In a week when consumers complained bitterly about the cost of energy, somebody isn't joining the do...

And finally...Anyone interested to read a conclusive demolition of the recent Maugeri report should check the www.lastoilshock.com/blog on Monday.



For Exxon Mobil and Shell, Earnings Fall With Energy Prices

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Big oil on the back foot in changing energy world

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Oil Gains Fourth Day on Speculation Economic Prospects Improving

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China dives into UK's North Sea oil industry

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Shell May Trim 2012 Alaska Drilling For Inspections, Ice

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Is peak oil dead?

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EPA finds remaining water safe in famous fracking town

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Frackers Fund University Research That Proves Their Case

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Drax aims to go coal-free after biomass subsidy review

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Oil group sues over law on scarce biofuel

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U.K. Boosts Gas While Cutting Support For Wind, Biomass

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Davey hails 'strong future' for renewables and gas

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Government energy plan 'unworkable', MPs warn

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National Grid faces 'conflict of interest' in energy reforms, MPs warn

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DECC launches £8m community renewable heating funding competition

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Consumer groups accuse British Gas of profiteering

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Brussels bids to rescue carbon-trading scheme

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