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 IEA 2009 World Energy Outlook, the report which informs energy policy for 28 nations, was released on Tuesday in London. The report’s key focus this year was climate change. The Executive Summary states firmly the need to act now to avoid disastrous impacts, saying that a delay of even a few years could put the goal of limiting temperature increase to below 2C out of reach. Another theme of this year’s report is energy security with the assertion that on current trajectories there are serious risks especially with regard to electricity and oil.
Before the report was even released, an exclusive in the Guardian was published questioning its accuracy. The WEO reference scenario sees oil supply figures rise to 105mb/d by 2030; the Guardian piece alleges that a senior source at the agency stated that “Many inside the organisation believe that maintaining oil supplies at even 90m to 95m barrels a day would be impossible but there are fears that panic could spread on the financial markets if the figures were brought down further. And the Americans fear the end of oil supremacy because it would threaten their power over access to oil resources”.
An FT commentary failed to see why the US would want to talk up future oil production prospects which would only show its increasing dependence on imports. This view however fails to take into account the fact that the US is the largest oil consumer in the world and therefore also hugely vulnerable to increasing prices – surely declining production prospects increases the power of exporters over importers.
The IEA of course denied the allegations outright pointing to its recent record of reporting global depletion rates and its energy security warnings. A report by the Uppsala World Energy Outlook however which reviewed the IEA’s 2008 projections does find the reference scenario to be highly optimistic, particularly with regard to assumptions for depletion rates used for fields yet to be developed and fields yet to find, which are about double what history says is normally achieved. Using typical historical rates would result in a shortfall of 20Mb/day on the prediction.
A first for this year’s report is a field by field analysis of gas depletion rates. It concludes that “close to half of the world’s existing production capacity will need to be replaced by 2030 as a result of depletion. This is the equivalent of twice current Russian production.” At the same time it states that “The world’s remaining resources of natural gas are easily large enough to cover any conceivable rate of increase in demand through to 2030 and well beyond, though the cost of developing new resources is set to rise over the long term”.
This summary of natural gas prospects and indeed this year’s WEO report overall follows on neatly from last years. The agency provides plenty of warnings, but their urgency is muted by assertions that it is all about investment – whether it be bringing six new Saudi Arabias on stream, replacing two Russias, or decarbonising energy at current rates of economic activity, everything is described as a question of finance. Given what has happened in the financial system in the last year this ought to strike fear, but instead it gives the impression of there being no limits except of a fiscal nature. One is left with the impression that the report does enough to vindicate the agency in the event of any energy crisis while not doing enough to prevent them.
View our Reports and Resources page
Oil
After the Recession, an Energy Crisis Could Loom
Here’s the bad news about the global recession’s potentially coming to an end: the recovery could spark a massive energy crisis with increased demand for fossil fuels from China and other developing countries, tighter oil supplies and skyrocketing oil prices. And this is just in the near future. The longer-term picture looks even more daunting. If the world continues to guzzle oil and gas at its present pace, global temperatures will rise by an average of 6°C by 2030, causing “irreparable damage to the planet.”
The warning from the International Energy Agency (IEA), an intergovernmental energy watchdog based in Paris, could add extra weight to the negotiations leading up to the climate-change summit in Copenhagen next month, when leaders will attempt to come to an agreement on a successor to the Kyoto Protocol’s limits on greenhouse-gas emissions. “Saving the planet cannot wait,” reads the agency’s annual World Economic Outlook report, which was released on Tuesday. “The time to act has arrived.”…
Key oil figures were distorted by US pressure, says whistleblower
Exclusive: Watchdog’s estimates of reserves inflated says top official
The world is much closer to running out of oil than official estimates admit, according to a whistleblower at the International Energy Agency who claims it has been deliberately underplaying a looming shortage for fear of triggering panic buying.
The senior official claims the US has played an influential role in encouraging the watchdog to underplay the rate of decline from existing oil fields while overplaying the chances of finding new reserves…
Energy body rejects whistleblower allegations of oil cover up
The International Energy Agency has rejected reported allegations from a whistleblower that world oil reserves have been exaggerated to avoid panic buying in the oil market.
A senior source within the IEA is reported to have told The Guardian newspaper that many within the agency believe the body’s prediction for oil supplies “is much higher than can be justified.”…
Did the US pressure the IEA over oil supply forecasts?
Claims that the US has pressured the IEA to put a more optimistic spin on future oil supplies gained a huge amount of attention today. But just how likely a scenario is that?…
Too fearful to publicise peak oil reality
The economic establishment accepts the world soon won’t be able to meet energy demands, but wants to keep quiet about it
It is very hard for the average person in the street to come to a sensible conclusion on peak oil. It’s a subject that prompts a passionate polarisation of views. The peak oilists sometimes sound like those extraordinary Christians with sandwich boards proclaiming that the end of the world is nigh. In contrast, the the international economic establishment – including the International Energy Agency (IEA) – has one very clear purpose in mind at all times: don’t panic. Their mission seems to be focused on keeping jittery markets calm…
Canada’s dirty oil needed on market: UN report
The world needs Canada’s so-called dirty oil, the International Energy Agency said Tuesday even as it called on leaders to make decisive moves to slash greenhouse gas emissions at a United Nations-sponsored negotiating session next month.
“World leaders gathering in Copenhagen next month for the UN Climate Summit have a historic opportunity to avert the worst effects of climate change,” IEA executive director Nobuo Tanaka said in a statement after releasing the agency’s annual World Energy Outlook analysis…
Oil Falls to Four-Week Low on Larger-Than-Expected Supply Gain
Crude oil fell to a four-week low after a government report showed a larger-than-forecast gain in stockpiles as sinking demand pushed refinery operating rates to the weakest level in more than a year.
Supplies of crude oil rose 1.76 million barrels to 337.7 million last week, the Energy Department report showed. Analysts surveyed by Bloomberg News forecast a 1 million-barrel gain. Refineries operated at the slowest pace since September 2008, when units were shut because of hurricanes Gustav and Ike…
Oil heavyweight ponders fast changing landscape
When Khalid al-Falih took over as the head of Saudi Aramco , the world’s most influential state oil company, at the beginning of the year the timing looked inauspicious.
The oil bubble appeared to have burst, with prices crashing to well below $50 a barrel from their historic highs, while the demand outlook seemed bleak as the world’s economies nose-dived into recession. Yet 11 months on, Mr Falih cuts a relaxed figure – and with good reason…
Global oil demand to see growth in Q4 – IEA
Global oil demand will grow in the fourth quarter of 2009, its first year-on-year increase in fuel use since the second quarter of 2008, the International Energy Agency said on Thursday.
In its monthly report, the Paris-based adviser to 28 industrialised economies, raised its global oil demand estimate for 2009 to 84.8 million barrels per day (bpd)…
Gas
World gas glut will weaken ‘Russian grip on Europe’
A looming glut in supplies of natural gas will trigger sliding prices and weaken Russia’s grip over Europe’s energy supplies, the International Energy Agency (IEA) said yesterday.
In its 2009 World Energy Outlook, the IEA said that the surplus in global supplies could hit 200 billion cubic metres per year by 2015 — equivalent to more than three years’ annual gas production from Britain’s part of the North Sea…
Gazprom sees 50% drop in profits
Profits at Russian energy giant Gazprom have halved because of the higher cost of buying gas.
Net profit for the first half of the year fell to 305.8bn roubles ($10.6bn, £6.3bn), down from 609.4bn roubles in the first six months of 2008…
Ukraine ‘pays Russian gas bill’
Ukraine has said it has settled an outstanding gas bill with Russia, calming fears Europe may suffer any further disruptions to gas supplies.
Prime Minister Yulia Tymoshenko blamed President Viktor Yushchenko for blocking payment, causing the delay…
Electricity
Eon agrees €1.1bn long-distance grid sale
Eon, Europe’s biggest utility, on Tuesday announced the €1.1bn ($1.64bn) sale of its long-distance German electricity network to Tennet, the Dutch state-owned operator, ending a long-running competition dispute with the European Commission.
The decision signals a further move by Eon away from tightly regulated markets, freeing up resources for more profitable and less politically sensitive investments…
Nuclear
Huge expansion of nuclear power announced by Government
Ed Miliband, the Energy and Climate Change Secretary, announced the expansion of Britain’s nuclear power capability yesterday in the face of opposition from environmentalists and concern from consumer groups, who warned fuel bills could rise to pay for building programme.
The Conservatives attacked the plans for being “10 years too late.”…
Renewables
Spain’s wind turbines supply half of the national power grid
Spain was celebrating its commitment to renewable energy yesterday after wind turbines dotted across the country produced more than half of all its electricity for the first time.
High winds across Spain on Sunday meant that for over five hours, over 53 per cent of the country’s power came from wind energy. The towering white wind turbines which loom over Castilla-La Mancha — home to Cervantes’s hero Don Quixote — and which dominate other parts of Spain, set a new record in wind energy production…
Nuclear gets fast-track, but renewables left with little
New Government planning rules will shorten the approval process for big power projects like nuclear plants, but do little for the local renewables sector.
The UK’s biggest energy projects will no longer have to negotiate the obstacles of local planning authorities, following announcements made this week…
Investment in renewables falls by 20 per cent in 2009
Governments would need to pump upwards of $10 trillion into energy sector to limit greenhouse gas concentrations in the atmosphere to safe levels
The renewable power sector has been hit by a significant fall in investment over the past year, according to the International Energy Agency (IEA)…
‘Solar panels could solve energy crisis’
IF every south-facing building in the UK fitted solar panels, the country would have all the electricity it needs, an expert has claimed.
Tim Bruton, chief technology officer of the New and Renewable Energy Centre (Narec), in Northumberland, was speaking ahead of a national conference in County Durham that will highlight the business opportunities photovoltaics – solar power – could bring…
EIB sets up £700m fund to help onshore wind farms
The European Investment Bank (EIB) has opened a £700m fund to tackle the lack of finance for the UK’s onshore wind farm developers.
There are 84 wind farm projects – with a 3.4 gigawatts (GW) total capacity equal to the UK’s total installed base – that have stalled because of developers’ inability to raise the debt…
Centrica is latest firm to blow investment into Scottish windpower
Howling gales and rain-lashed seafronts are not usually Scotland’s most attractive features. But the potential for wind, wave and even solar power north of the border — as gas reserves begin to run low and governments place tighter restrictions on electric power generation — has caught the attention of energy companies and placed their Scottish divisions firmly on the map.
So much so, in fact, that Scottish Gas, the Scotland-branded part of the former state-run power company British Gas, has reinstated a new head of Scottish operations after scrapping the post two years ago…
Future of wind farms in doubt
BRITAIN’s biggest developer of offshore wind farms has hired Rothschild to sell stakes in its projects because it cannot afford to build them.
The move by Dong Energy, the Danish power giant, casts fresh doubt on the government’s carbon-reduction plans just six months after it ramped up subsidies to keep the offshore wind sector afloat…
Biofuels
Shanks builds first anaerobic digestion plant to harness potato peel power
Your newspapers and magazines are recycled, your light bulbs are low energy and your weekly bottle collection is embarrassingly better than your neighbour’s.
But there is still one environmental chore that makes even the most die-hard eco warrior wince. Kitchen waste recycling — to compost or not to compost — is messy, smelly and all too attractive to vermin…
UK
The worst is over, says Bank of England Governor
Better-than-expected unemployment figures and a rosier growth forecast from the Bank of England raised hopes yesterday that Britain was beginning to claw its way towards economic recovery.
Analysts tore up previous warnings that unemployment would hit three million next year as official figures showed a significant slowing in the speed at which people are losing their jobs. Though the jobless total rose by another 30,000 to 2.46 million in the three months to September, the rise was much smaller than the 65,000 predicted and represented the lowest quarterly increase for 16 months…
Energy firm ‘may increase prices’
A leading energy supplier has warned it may have to increase prices next year despite announcing a sharp rise in profits.
Profits at Scottish & Southern Energy (SSE) increased by 36% to from £302.6m to £410.5m over the past year…
The firm said avoiding price increases was an “important goal” given the upward pressures on energy prices.
Climate
Watchdog warns of $500bn annual cost of delaying action on climate change
The world is facing a bill of $500 billion (£300 billion) for every year that it delays in reaching a global deal on climate change, the International Energy Agency (IEA) said yesterday.
Fatih Birol, chief economist with the IEA, told The Times that the annual cost of inaction — roughly equivalent to the annual GDP of Switzerland — would result from a steady build-up of additional concentrations of greenhouse gases in the atmosphere as the burning of fossil fuels accelerates…
Transport
Electric cars ‘could harm climate’
Unless changes are made to the way electricity is generated, electric cars are likely to increase emissions and damage the environment, the Environmental Transport Association warns.
A report by the Environmental Transport Association (ETA) said that although there were potential environmental benefits from switching to electric cars they would be counter-productive if energy production does not change…
