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.
Oil prices vacillated this week, falling back from their recent high on news of unexpectedly large US inventories, later rallying as the US economy officially emerged from recession. Meanwhile China reported a 12.5% rise in oil demand in September.
Third quarter profits from the supermajors this week predictably reflected the collapse in the oil price since last year, though BP turned in better than expected results. Despite the falls, profits are still vast, with BP earning $100,000 every 3 minutes. That might go some way to explain the enduring hold of fossil fuels over renewables in the energy mix.
Despite growing calls for a shift to low carbon energy and an increasingly challenging oil market, the energy company executives meeting last week at the Oil & Money Conference were feeling confident. The main reason is the boom in non-conventional gas production in the US, where the EIA has just raised its estimate of non-conventional gas reserves by 3%, following a 13% last year. Along with a wave of new LNG plants coming on stream around the world and a slump in demand due to the recession, this has transformed the global gas supply picture to produce a short term glut and low spot prices.
Nevertheless, OFGEM warned of potential gas shortages in Britain within six years due to delays in key Russian projects, and others warned of the perils of increasing dependence on imported gas. But the danger is that the short term glut will distract policy makers from creating the investment conditions which would stimulate a genuinely clean and renewable energy future while also raising expectations that energy demand can continue to grow long term.
Oil
Oil firms’ profits keep dropping as recession shrinks demand for energy
The world’s biggest oil companies are reporting sharp declines in quarterly profit as the recession continues to weigh on consumer demand, driving down energy prices.
Exxon Mobil, the world’s largest oil company by market value, said Thursday that its third-quarter profit slumped 68 percent, to $4.73 billion (98 cents per share). That’s down from $14.8 billion ($2.85), in the same July-September period a year ago, the most lucrative quarter ever for the oil industry, when crude oil prices neared $150 a barrel…
BP reports sliding third quarter profits
BP, the oil and gas group, today reported that its profits for the third quarter dropped by a third from $8.05 billion (£4.92 billion) to $5.34 billion as it was hit by lower production and higher costs.
BP said that its replacement cost profit, used by analysts as a performance indicator for oil and gas groups, had more than halved between July and September from $10.03 billion a year ago to $4.98 billion…
Oil Climbs More Than $2 After Report of U.S. Economic Expansion
Crude oil rose more than $2 a barrel following a report that the U.S. economy grew in the third quarter for the first time in more than a year, spurring optimism that fuel demand will increase.
Oil climbed 3.1 percent after the Commerce Department said that the world’s largest energy-consuming country expanded at a 3.5 percent annual pace from July through September. The economy was forecast to strengthen at a 3.2 percent annual rate, according to a Bloomberg News survey…
Opec signals rise in oil output as global price rallies
Opec, the oil producers’ cartel, has said that it may increase oil production this year if prices continue to rise.
José Botelho de Vasconcelos, the Angolan Oil Minister who is the present president of Opec, said that oil prices of between $75 and $80 per barrel were at an optimum level for both consumers and producers…
China oil demand in fastest growth in over 3 yrs
China’s apparent oil demand rose 12.5 percent in September from a year earlier, the sixth rise in a row and the fastest rate since June 2006, as refiners operated at record rates amid a sustained recovery in economic activity.
However, the robust September rate, anticipated by some analysts, may have been inflated by a low base a year earlier when implied oil demand inched 2.3 percent as the global financial crisis began infiltrating into the world’s second largest oil market…
Of Alberta’s Oil Sands and ‘Harmonizing’ Canadian and U.S. Climate Policy
In the run-up to December’s global climate change meeting, fissures are emerging between Canada and the United States over how to deal with the internationally contentious issue of Alberta’s vast oil sands projects, which have been responsible for a sharp increase in Canada’s greenhouse gas emissions.
At an Ottawa conference last week, the president of the Center for American Progress, John Podesta, a co-chairman of President Obama’s transition team, reprimanded Canada for not keeping pace with the drive to adopt green energy technology…
New Oil Price Benchmark Gathers Steam as Saudis Sign On
A new U.S. oil pricing benchmark is rapidly taking shape, threatening to further erode the dominance of the Nymex crude futures contract.
Argus Media said Wednesday its Sour Crude Index will be adopted by Saudi Aramco to set prices for oil sold in the U.S., in a move away from a formula tied closely to light, sweet crude futures traded on the New York Mercantile Exchange…
Thirst for oil poses threat to US national security, says military adviser
America’s thirst for oil is a gathering threat to its national security – and the risk will grow further as the world’s population touches 7 billion, a military adviser to the Pentagon told the Senate today.
In a second day of debate on energy, Democratic senators today pivoted from the economy to national security to try to make the case for a climate change bill…
A post-oil world gets less sci-fi by the day
It is 30 years since the film Mad Max was made, launching the career of Mel Gibson.
The film made a big splash at the time for its terrifying view of a world without oil, where gangs of grisly looking people roam deserts in a post-apocalyptic world, killing each other to get their hands on the few drops of petrol that some have managed to produce in makeshift refineries. Social order has completely broken down.
Great film if you like that sort of thing but complete fiction, of course. Or is it? Three decades later, and I wonder if the film was, in fact, years ahead of its time…
The rise and fall of oil production
Conventional oil powers modern economies and provides around a third of the world’s energy. But many commentators forecast a near-term peak soon and subsequent decline in global production as the resource is depleted. Some expect this to lead to major economic disruption, with “non-conventional” sources being unable to fill the gap in the timescale required…
Steve Sorrell is the lead author of a new report on Global Oil Depletion from the UK Energy Research Centre
Gas
E.ON plant plans raise fear of gas-dependent Britain
E.ON, the energy group that shelved plans for a new coal-fired power station at Kingsnorth, Kent, is drawing up plans to build a new gas-fired plant of the same size in Nottinghamshire, leading to fears that Britain will be over-reliant on imported natural gas.
An E.ON spokesman said that the group had begun a “scoping study” to construct a 1,600 megawatt gas-fired power plant — enough to power two million homes — at High Marnham, on a site where a coal-fired station was closed in 2003. The plans, unveiled quietly last month, also appear to counter E.ON’s claim that it had ditched the plans for Kingsnorth because of a shortage of UK electricity demand…
Britain faces gas shortage in six years due to Russia
Britain is facing an energy shortfall by 2015 over its exposure to six risky Russian gas developments, if the UK becomes much more dependent on imports from abroad, according to Ofgem.
Alistair Buchanan, chief executive of the energy regulator, has found that Europe could be under-supplied by 41bn cubic metres in six years’ time, if key Russian projects – many already delayed – fail to deliver. This will affect the UK if it relies on a significant expansion of gas-fired power stations to replace retiring coal stations, while nuclear plants are not operational until 2020 and energy demand rises in a strong global economy. It would narrow to a 33bn cubic metre shortfall of gas by 2020…
EIA sees boost in US gas cache
The head of the Energy Information Administration (EIA) told Congress today that the agency will report later this week that US proved natural gas reserves increased from 2007 to 2008 by 3%.
That is slower growth than the 13% increase in proved gas reserves seen the year before, the EIA’s Richard Newell told the Senate Energy Committee at a hearing on natural gas…
Exxon Qatar gas output to hit 4bn cfd
Exxon Mobil natural gas output in Qatar would reach 4 billion cubic feet per day (cfd) when all its projects there reach full capacity, senior Exxon executive Mark Albers said on Tuesday.
Exxon is the biggest foreign investor in Qatar, the world’s largest exporter of liquefied natural gas (LNG). It has a stake in all four of the giant LNG projects starting up this year to double Qatar’s LNG export capacity to 62 million tonnes per year (tpy) from 31 million tpy…
Put out the rubbish and turn on the gas
The answer to dwindling North Sea gas reserves may lie in our rubbish bins. National Grid estimates that up to a fifth of Britain’s gas needs could be met by capturing gas produced from decaying household waste and pumping it straight into the national supply. The problem is finding the technology to make it possible.
A company backed by Goldman Sachs, the investment bank, and Fidelity International, the fund manager, says it has the answer…
Nuclear
Double nuclear use, urges EDF chief
A target for Britain to derive 30 per cent of its electricity from nuclear power by 2030 is needed to ensure planned cuts in the nation’s carbon dioxide emissions, according to Vincent de Rivaz, chief executive of EDF Energy…
Renewables
UK wind industry gets breath of fresh air
Centrica, the owner of British Gas, has sold a 50 per cent stake in three British wind farms to an American fund management group, in the latest sign of renewed investor interest in the industry.
Centrica said that Trust Company of the West (TCW), a Los Angeles-based fund manager, was buying the stake in its Lynn and Inner Dowsing offshore wind farms off the Lincolnshire coast, and Glens of Foudland, an onshore wind farm in Scotland…
Solar superpower: Should Europe run on Sahara sun?
EVERY two weeks, the sun pours more energy onto the surface of our planet than we use from all sources in an entire year. It is an inexhaustible powerhouse that has remained largely untapped for human energy needs. That may soon change in a big way. If a consortium of German companies has its way, construction of the biggest solar project ever devised could soon begin in the Sahara desert. When completed, it would harvest energy from the sun shining over Africa and transform it into clean, green electricity for delivery to European homes and businesses…
Fred Pearce is New Scientist’s senior environment correspondent
Germans conquer the world by tilting at wind turbines
As the workforce at the only wind-turbine factory in Britain was laid off at the end of April, Rene Umlauft, boss of the renewable-energy division of Siemens, the industrial giant, was enjoying a run of turbine sales. He had sold more than 120 in Britain, Turkey and at home in Germany.
The Vestas factory on the Isle of Wight was closed by its Danish owner — in the face of an occupation by some of its workforce — because of a lack of orders in Britain…
Outcry over Crown’s rent rise for wind farms
Plans by the Crown Estate to treble its revenues from offshore wind parks have angered energy companies, who say that the move could jeopardise the viability of important new projects and undermine government hopes to boost renewable energy in Britain.
The Crown Estate, which owns the seabed out to 12 nautical miles, is already set for a £500 million windfall from offshore wind power production by charging rent based on each unit of electricity produced…
Toshiba targets metals deal in Kazakhstan
Japanese companies, urged on by their government, are racing to secure supplies of rare metals and rare earth elements that are vital to many technology products…
Biofuels
Who says it’s green to burn woodchips?
One of the most cherished articles of faith of the green movement – that wood-fuelled power stations can help save the planet – is being increasingly challenged by campaigners and conservationists around the world.
Electricity generated by burning woodchips is on the verge of a global boom. America is planning 102 power stations fuelled by woodchips in the next few years. Europe is reported to be planning a similar, if yet unquantified, expansion. And in Britain, the next three years will see wood-fuelled power station capacity increase sevenfold, requiring, according to the campaign group Biofuelwatch, so much timber that it would need an area 12 times the size of Liechtenstein to grow it…
UK
London’s rubbish could power 2m homes, report says
Boris Johnson is considering plans to convert rubbish into energy as part of plans to save at least £100m in refuse collection and disposal costs, it emerged today.
City Hall signalled the move in response to a report by the London assembly which found that the waste generated by Londoners could be used to generate enough electricity to power up to 2m homes and provide heat for 625,000 houses…
The capital produced around 22m tonnes of waste every year, the report found, enough to fill the largest skyscraper at Canary Wharf every eight days.
Green groups propose planning system overhaul
A coalition of environmental, countryside and leading development planners will today set out proposals to overhaul the planning system and force local councils to consider climate change impacts when making planning decisions.
The group, led by Friends of the Earth and the Town and Country Planning Association (TCPA), will call on the government to introduce a package of planning reforms designed to tackle widespread council opposition to renewable energy projects such as onshore wind farms…
Green tax proposals ‘would increase household energy bills by £800 a year’
Plans put forward by the Green Fiscal Commission (GFC), a Government-supported think tank, would see the tax on gas and electricity rise every year.
By 2020, the new levy would amount to 80 per cent of the cost of the average gas bill and 30 per cent of the average electricity bill…
Saving the planet at school
Built just a few years before the first bombs of the blitz began to rain on London, Fox primary school in Notting Hill is from a time when the world had other things on its mind than global warming. Its giant, single-glazed, south-facing windows leak heat during the winter and soak up stifling sunshine in the summer. Insulation, where there is any, is of a poor quality. Overall, the school building is rated as an unsatisfactory D when it comes to energy efficiency…
Climate
Climate chief Lord Stern: give up meat to save the planet
People will need to turn vegetarian if the world is to conquer climate change, according to a leading authority on global warming.
In an interview with The Times, Lord Stern of Brentford said: “Meat is a wasteful use of water and creates a lot of greenhouse gases. It puts enormous pressure on the world’s resources. A vegetarian diet is better.”…
Transport
Ministers under pressure to electrify rail
The company that runs Britain’s rail network looks set to put pressure on ministers to agree to further rail electrification after it concluded that a programme announced in July excluded the line that would most benefit.
Network Rail’s electrification strategy, to be published on Wednesday, says electrification of the Midland Main Line between Bedford and Sheffield would produce net savings for the railway industry, not costs, over the investment’s 60-year life…
