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.
The oil price this week was largely on a downward trajectory despite tensions over Iran’s nuclear program, until Wednesday, when the US posted lower than anticipated stockpile figures. After surging nearly 6%, back over $70/barrel, the price then fell back as weaker than anticipated economic data stoked fears that the US recovery lacks substance. News that the Chinese authorities are to crack down on industrial overcapacity is likely to add weight to concerns that China’s economy too is currently being driven more by stimulus money than genuine demand, which may put further downward pressure on commodity prices.
The Chinese state celebrated 60 years of communist rule this week with news of further progress in securing global oil and gas acquisitions, this time in Kazakhstan and Nigeria. China continues to benefit from its strong cash reserves in a world of tight credit.
The cost of burning fossil fuels was put at $100 billion/year according to a study released by the World Bank this week. That is their estimate for what it will cost for the developing world to adapt to the effects of a warming of 2C in the next 40 years. This may turn out to be a conservative estimate based on a report released this week by the Met Office which warns that without drastic action the world may see a catastrophic rise of 4C by 2060.
Hopes for a deal in Copenhagen were slightly improved this week as President Obama announced that he is to bring in new legislation on greenhouse gas emissions via the Environmental Protection Agency. The move coincided with the publication of a new climate change bill in the US Senate, and news that a number of major companies have withdrawn from the US Chamber of Commerce due its obstructionist stance on measures to tackle climate change. The real task however, of working out how to create a genuinely sustainable global economy in an oil and resource constrained world has as yet barely been acknowledged, let alone begun.
Oil
Crude Oil Declines on Concern U.S. Economic Recovery May Stall
Oil fell in New York, paring this week’s gain, on signs the U.S. economy is still in the midst of a recession, limiting fuel demand in the world’s biggest crude consumer.
Oil snapped two days of increases after the number of Americans filing first-time claims for unemployment benefits climbed and a report showed manufacturing dropped lower than projected by economists. U.S. fuel demand, in terms of products supplied over the past four weeks, fell for a third week, the Energy Department said Sept. 30…
China’s birthday present: More resources
China’s Communist regime is celebrating its 60th birthday this week with a massive parade in Beijing, and another big play for a greater share of the global resource pie.
Sovereign wealth fund China Investment Corp. sealed a deal yesterday to acquire an 11-per-cent stake in KazMunaiGas Exploration and Production, Kazakhstan’s second-largest oil producer.
Also this week, the Nigerian government confirmed that government-controlled China National Offshore Oil Corp. has made a pitch to buy up to six billion barrels of Nigeria’s crude oil reserves in a deal that could be worth as much as $30-billion (U.S.)…
Chinese oil demand fueling Iranian defiance
Don’t look for Iran to throw up the white flag anytime soon.
The Obama administration is scrambling to tighten trade sanctions against Iran after the disclosure last week that Tehran was hiding a heavily fortified facility that many believe is designed to make material for nuclear weapons.
But the kind of sanctions that would really hit Iran’s economy – sanctions against its energy industry – are thought to be off the table because China and other nations are too reliant on Iran’s oil…
OPEC Oil Output Falls in September, Bloomberg News Survey Shows
The Organization of Petroleum Exporting Countries trimmed production for a second consecutive month, led by declines in Iraq, Saudi Arabia and Angola, a Bloomberg News survey showed.
Production averaged 28.395 million barrels a day last month, down 50,000 from August, according to the survey of oil companies, producers and analysts…
‘Brighter days ahead offshore’
Offshore capital expenditure is forecast to increase from last year’s $260 billion to $360 billion by 2013 with the long-term outlook for the industry remaining bullish, market consultants Douglas Westwood said today.
“Leading indicators have been improving since the beginning of the year; our view is that offshore expenditure will grow,” Steve Robertson, the director of Douglas Westwood, told the Trends in the Offshore Drilling Industry conference in London…
Robertson questioned whether supply could meet this demand, with 66 out of 99 producing countries having reached their peak production by 2008.
“Peak oil is not a myth or a scare tactic, in our view it is very much a reality,” he said…
U.S. July oil demand lowest in 13 years: Govt
The U.S. government on Tuesday revised down U.S. oil demand in July to 4 percent below year-ago levels as the struggling economy sent petroleum consumption to the lowest level for the month in 13 years.
Oil demand in July was 133,000 barrels per day (bpd) less than the Energy Information Administration previously estimated at a revised 18.771 million bpd, the lowest since 1996. That’s down 786,000 bpd from a year earlier when demand was 19.557 million bpd…
Editing by Lisa Shumaker
Gas
Putin call to Western gas groups shows desperation
The Russian prime minister had invited them to a town with a population of 36,000, right on the polar circle, to highlight the promises of the gas fields of the Yamal Peninsula, and to throw open the doors to Western investment and technology.
No doubt his guests salivated at the idea of getting a piece of the action. By 2020, Yamal is estimated to be capable of yielding up to 300bn cubic meters of gas annually. This compares with a total annual Russian production that currently stands at around 550bcm. State-owned Gazprom spends around 25pc of its capex on the Yamal fields…
Gazprom to cut 2009 gas output to all-time low
Russia’s Gazprom will cut gas output in 2009 by 13.8 percent to the lowest in history on low demand at home and in Europe and much lower demand in the former Soviet Union, a newspaper reported on Wednesday.
The world’s largest gas producer, which supplies a quarter of Europe’s gas needs, will produce 474 billion cubic metres (bcm) in 2009 with exports to Europe expected to fall by 10 percent to 142.5 bcm, Vedomosti business daily said, citing Gazprom documents…
Editing by Michael Urquhart
Uzbekistan restores gas supplies to Tajikistan
Uzbekistan has restored natural gas supplies to Tajikistan after its Central Asian neighbour repaid most of its debt, Tajik state gas company Tajiktransgas said on Thursday.
Uzbekistan halted supplies on Tuesday demanding that Tajikistan settled $18 million in debt.
Tajiktransgas said Tajikistan had repaid $10 million and the two countries had agreed it would repay another $7.5 million by supplying electricity to Uzbekistan…
Water worries threaten U.S. push for natural gas
Louis Meeks, a burly 59-year-old alfalfa farmer, fills a metal trough with water from his well and watches an oily sheen form on the surface which gives off a faint odor of paint.
He points to small bubbles that appear in the water, and a thin ring of foam around the edge.
Meeks is convinced that energy companies drilling for natural gas in this central Wyoming farming community have poisoned his water and ruined his health…
Natural Gas Feint Means Prices Poised to Plummet 19%
The steepest rally in natural gas prices since 2006 is coming to an end as the 400 salt caverns, depleted oil fields and aquifers used to store the fuel in the U.S. reach capacity for the first time.
Stockpiles may surpass the record of 3.545 trillion cubic feet by as much as 350 billion cubic feet this fall, Energy Department estimates show. Gulf South Pipeline Co. says its fields in Louisiana and Mississippi are so full that customers will have to pay penalties for exceeding their limits. With no place to go, producers will be forced to dump excess fuel on the market…
Nuclear
India plans to cut carbon and fuel poverty with untested nuclear power
India’s prime minister today signalled a huge push in nuclear power over the coming decades, using an untested technology based on nuclear waste and the radioactive element thorium.
Manmohan Singh, speaking at a conference of atomic scientists in Delhi, announced that 470,000MW of energy could come from Indian nuclear power stations by 2050 — more than 100 times the current output from India’s current 17 reactors…
Renewables
Affordable energy is driven by diamond technology
SCIENTISTS in the North-East have developed groundbreaking diamond-driven technology, capable of making renewable energy affordable on a mass scale for the first time.
Evince Technology Ltd, based in the Printable Electronics Technology Centre, NetPark, Sedgefield, has developed a diode capable of converting electricity, including that from wind turbines and photovoltaics more simply and cheaply than existing devices…
Biofuels
World biofuel use expected to double by 2015
Global biofuel use is expected to increase twofold by 2015 and Brazil will remain the world’s top exporter of biofuel, according to a report released Wednesday by Hart Energy Consulting.
The U.S. is expected to see the largest increase in biofuel use per country, increasing its current consumption by more than 30 percent, according to data from the “Global Biofuels Outlook: 2009-2015” report…
The overall increased use of biofuel in many countries around the world will make a dent in the world’s consumption of traditional gasoline, according to Hart…
Britain’s biggest biomass plant gets approval
The country’s largest biomass power plant that will burn wood chips to generate electricity for half a million homes has been approved, the government said on Wednesday.
The Prenergy power station in South Wales is expected to produce electricity with 50-80 percent fewer greenhouse gas emissions than a typical gas or coal fired power station.
The Environment Agency has for the first time stipulated that all the wood used at the plant comes from sustainable sources. If a new tree is planted for each that is one burnt, there are no overall carbon emissions…
Editing by Keiron Henderson
UK
UK recovery ‘at risk’ from £180bn shortfall
Economic recovery in Britain will be slowed down by a possible credit shortfall of £180 billion next year, caused by the weakness of the banking sector and the state budget deficit, the International Monetary Fund (IMF) warned today.
In its bi-annual Global Financial Stability Report, the IMF concluded that the damage done to banks by the financial crisis was not as great as it had first feared, but also singled out the British economy as being most at risk of restricted funding…
Britons creating ‘more emissions’
Greenhouse gas emissions created by Britons are probably twice as bad as figures suggest, says the government’s new chief energy scientist.
Professor David MacKay told the BBC that reductions in carbon dioxide emissions since 1990 are “an illusion”.
“Our energy footprint has decreased over the last few decades and that’s largely because we’ve exported our industry,” he said…
EU: carbon policy could leave UK in the dark
Britain’s old coal-fired power plants have only six more years to live at the most. Their death sentence has been passed by the European Union, which decreed that the most polluting stations must be retired after a fixed number of hours.
Britain’s old coal-fired power plants have only six more years to live at the most. Their death sentence has been passed by the European Union, which decreed that the most polluting stations must be retired after a fixed number of hours. But experts predict that the phasing out of these reliable but dirty old beasts will leave the UK facing a catastrophic shortage of energy that may lead to power cuts and vastly inflated bills…
Climate
$100bn a year for climate safety
Adapting to impacts of climate change will cost $75-100bn (£47-63bn) per year in the developing world from 2010, a World Bank study concludes.
The bank released preliminary findings from its new global study at the latest round of UN climate talks in Bangkok.
The figures assume that temperatures rise by 2C (3.6F) in the next 40 years…
Obama hails Senate climate bill
US President Barack Obama has welcomed the publication of a bill to combat climate change.
The bill, sponsored by leading Democratic senators, would establish a “cap and trade” scheme to cut greenhouse gas emissions…
E.P.A. Moves to Curtail Greenhouse Gas Emissions
Unwilling to wait for Congress to act, the Obama administration announced on Wednesday that it was moving forward on new rules to regulate greenhouse gas emissions from hundreds of power plants and large industrial facilities.
President Obama has said that he prefers a comprehensive legislative approach to regulating emissions and stemming global warming, not a piecemeal application of rules, and that he is deeply committed to passage of a climate bill this year…
US firms quit Chamber of Commerce over climate change position
The largest American business federation, the US Chamber of Commerce, has suffered a rash of high-profile walkouts as multinational companies become uncomfortable with the organisation’s hard-line opposition to measures tackling climate change.
In a sign of mounting acceptance in the business community of a need for action on carbon emissions, big names including the sportswear manufacturer Nike and the household products empire Johnson & Johnson have attacked the chamber for its refusal to back “cap-and-trade” legislation supported by the Obama administration…
Met Office warns of catastrophic global warming in our lifetimes
Unchecked global warming could bring a severe temperature rise of 4C within many people’s lifetimes, according to a new report for the British government that significantly raises the stakes over climate change.
The study, prepared for the Department of Energy and Climate Change by scientists at the Met Office, challenges the assumption that severe warming will be a threat only for future generations, and warns that a catastrophic 4C rise in temperature could happen by 2060 without strong action on emissions…
India to launch energy-efficiency trading
India plans to launch a domestic energy-efficiency trading scheme as part of its efforts to reduce emissions of greenhouse gases and combat climate change.
Jairam Ramesh, the environment minister, said the ruling Congress party would make amendments to the Energy Conservation Act in the coming months to create a financial mechanism that would help put India on a par with some of the world’s most energy efficient economies. He said India was already as energy efficient as Germany, and had ambitions to match Japan…
Economy
China vows to crack down on industrial overcapacity
China’s cabinet has laid out detailed plans to curb overcapacity in industries such as steel, aluminum, cement and wind power, warning that the country’s economic recovery could otherwise be hampered.
In a reiteration of existing policy targets, the State Council said meeting the government’s long-standing goal of reducing overcapacity was urgent because the result of inaction would be factory closures, job losses and rising bad bank loans…
Additional reporting by Chen Aizhu, Alfred Cang and Fayen Wong; Editing by Tomasz Janowski
Global economy expanding says IMF
The global economy is expanding again and financial conditions have improved significantly, the International Monetary Fund (IMF) has said.
But in its latest World Economic Outlook, the IMF said the “pace of recovery is expected to be slow”.
It added that the recovery is likely to be “insufficient to decrease unemployment for quite some time”…