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.
As dozens of ships at the BP spill site are forced to head for harbour by the approach of Tropical Storm Bonnie, work to plug the well permanently could be delayed by up to two weeks. But eight days on the temporary cap is still holding, and officials are now ‘encouraged’ by the results. Earlier this week they were concerned that seepage near the well might be evidence of damage from the disaster that could lead to a further leak.
The damage to BP’s reputation continued this week with further revelations of alleged safety failures in the lead up to the disaster including that they ignored warnings of a leak in a critical safety device. In the meantime Prime Minister David Cameron, visiting President Obama this week, did his best to reject claims from a group of US senators that BP had anything to do with the early release of Lockerbie bomber Ali Al-Magrahi, though he condemned the decision.
Another off-shore oil accident was in the news this week following a pipeline explosion in the Chinese port of Dalian. The spill, while small in comparison to the Deepwater Horizon disaster, still counts as China’s largest reported oil slick in recent memory. It has also apparently shown up a lack of planning to deal with such an incident, with accounts of equipment shortages and some distinctly low-tech clean up operations. Sound familiar?
The spill came in the same week that the IEA announced that China has overtaken the US as the largest energy consumer in the world. While the IEA’s claim was denied by the Chinese authorities, keen to concentrate on their clean energy accomplishments rather than fossil fuel consumption, it is an inevitable milestone given the growth rate of the Chinese economy. At the same time, it is worth remembering that Chinese per capita energy use remains only 20% of that in the US.
The IEA forecasts in its recently published medium term report that growing global demand will be met by new OPEC capacity. This claim is called into question this week by a report from Wood McKenzie which predicts an 85% increase in energy demand in the Arabian Peninsula between now and 2030, much of it to be met by oil, removing 1.5 million bpd of oil equivalent from export markets.
The impact of rising oil prices as a result of such increased demand and supply pressures was the topic of a report released this week by power engineering giants Siemens. The Economic Impacts for Ireland of High Oil and Gas Prices presents three price scenarios and reports on their likely impact on the Irish, UK, European and US economies. The study then goes on to suggest a ‘wishlist’ aimed at policy makers which includes electrification of public and private transport, as well as a call to modernize the public procurement process by taking into account full life cycle costs. The report clearly reflects Siemens’ commercial interests, and ODAC finds the scenarios somewhat optimistic, but we welcome the publication of a serious report on the energy crisis at a time when fiscal policies around the world depend on highly questionable growth projections.
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Oil
Ships evacuated from Gulf as tropical storm advances
Dozens of ships in the Gulf of Mexico have been ordered to leave the site of the BP oil spill by the US government as Tropical Storm Bonnie gathers pace.
Incident commander Admiral Thad Allen said the well would remain capped while ships evacuated the Gulf…
BP oil spill: seepage ‘not a threat to capped well’
Concerns about oil and gas seepages around BP’s newly capped well in the Gulf of Mexico appear to have eased after the US government said they were not “consequential”.
Thad Allen, the official appointed by Barack Obama to lead the government’s response to the disaster, said leaks detected over the weekend did not threaten the well…
BP accused of ignoring internal report of Deepwater leak
BP came under fresh attack last night amid accusations that it had ignored internal safety reports of a leak on the Deepwater Horizon rig and had not used industry best practice for avoiding oil spills.
The news comes just as BP officials were hoping that their long nightmare was starting to be over as the new cap on the leaking oil well appeared to be holding firm and working well…
Workers on Doomed Rig Voiced Concern About Safety
A confidential survey of workers on the Deepwater Horizon in the weeks before the oil rig exploded showed that many of them were concerned about safety practices and feared reprisals if they reported mistakes or other problems.
In the survey, commissioned by the rig’s owner, Transocean, workers said that company plans were not carried out properly and that they “often saw unsafe behaviors on the rig.”…
Oil spill proves wake-up call for China
Black oil is washing ashore, at least one person has drowned in the viscous slick, and efforts to clean up the mess are floundering.
That might sound like the Gulf of Mexico but is actually happening along the coast of Dalian, where China is grappling with its largest reported oil spill in recent memory. China’s rapid economic growth has come at great environmental cost but this appears to be the first time that oil has caused so much natural damage…
China Passes U.S. as World’s Biggest Energy Consumer, IEA Says
China overtook the U.S. as the world’s biggest energy user last year, emphasizing that developing nations are driving global growth, according to the International Energy Agency.
China consumed 2,252 million metric tons of oil equivalent in 2009 in the form of crude, coal, natural gas, nuclear power and renewable sources, IEA Chief Economist Fatih Birol said yesterday. That exceeded the 2,170 million tons used by the U.S…
Gulf energy demand surge to sap oil exports
An energy demand surge in the Gulf will be largely met by oil fired generation, removing an estimated 1.5 million barrels of oil equivalent per day (boepd) otherwise available for export, Wood Mackenzie said in a report.
Energy demand in the Arabian Peninsula has more than doubled in the past 10 years and is forecast to increase by 85 percent by 2030, compared with 2008 levels, Wood Mackenzie’s Energy Markets Service Insight division said in a report released to the press on Monday…
Siemens warns growth could fall 7.5pc if energy prices rise
ECONOMIC growth here could fall by as much as 7.5pc if there is a sudden rise in oil and gas prices, according to a report published yesterday.
Ireland — which imports more fossil fuels than almost anywhere else in Europe and which generates less energy from renewable sources — would suffer more than neighbouring countries if energy prices were to spike, according to the report by the environmental consultants AP EnvEcon…
Study for Prosperity Beyond Peak Oil
A ground-breaking study into how Tasmania can overcome the challenge of peak oil and oil price fluctuations has been announced in today’s State Budget.
The Minister for Sustainable Transport and Alternative Energy, Nick McKim, said $250,000 had been earmarked for the study…
Oil spill: BP sells $7bn of assets to Apache as Cameron warns against unfair legislation
BP struck a deal to sell $7bn (£4.6bn) of assets to Apache late on Tuesday, as David Cameron said he would oppose any US legislation that directly targets the British oil giant.
The embattled oil giant announced the disposal hours after putting $1.7bn of Vietnamese and Pakistani properties on the auction block…
4 Oil Firms Commit $1 Billion for Gulf Rapid-Response Plan
Four of the world’s biggest oil companies said on Wednesday that they were committing $1 billion to create a rapid-response system to deal with deepwater oil spills in the Gulf of Mexico, seeking to restore public confidence in the industry after the BP disaster painfully exposed how unprepared the industry was for a major accident…
BP oil spill: BP says Tony Hayward to stay as chief executive
A BP spokesman said Mr Hayward “remains in place and has the support of the management and the board”.
BP’s share price rose 3pc to just over 400p by lunchtime…
BP chief Tony Hayward to outline strategy that restores firm’s fortunes
BP boss Tony Hayward will next week launch a fight back against the wave of criticism that has engulfed him and BP following the Gulf of Mexico oil spill. Hayward is set to outline a new corporate growth strategy in a bid to reassure shareholders and, at the same time, cement his position as chief executive…
Oil Is Near 11-Week High as Equities Rise, Storm Heads for Gulf
Crude oil headed for a weekly gain, trading near the highest in 11 weeks, as rising equity markets signaled improved prospects for an economic recovery in the U.S. and Tropical Storm Bonnie headed for the Gulf of Mexico.
Oil has risen 4.6 percent this week as global stock markets rallied on growing optimism about the world’s economy. Bonnie is forecast to move into the Gulf of Mexico, where it’s already delaying efforts by BP Plc to permanently plug its wrecked Macondo well, according the National Hurricane Center…
Iraq
America lowers the flag: Iraq’s unquiet peace
On 14 June, this year an interpreter for the US army called Hameed al-Daraji was shot dead as he was sleeping in his house in Samarra, a city 60 miles north of Baghdad.
In some respects there was nothing strange about the killing, since 26 Iraqi civilians were murdered in different parts of the country on the same day. As well as working periodically for the Americans since 2003, Mr Daraji may have recently converted to Christianity and unwisely taken to wearing a crucifix around his neck – a gesture quite enough to make him a target in the Sunni Arab heartlands…
Nuclear
Gap Plugged in Nuclear Fusion Project
A project to prove the viability of energy from nuclear fusion at a site in the south of France won a reprieve this week from the European Commission after costs ran significantly over budget.
The commission announced proposals to plug the hole in the project’s finances with an injection of 1.4 billion euros (about $1.8 billion) from research funds and unused money from other parts of the union’s budget. The money would be made available for 2012 and 2013. European Union governments and lawmakers must sign off on the plan…
KPMG says nuclear power ‘won’t happen’
The study, commissioned by RWE npower, says it is still uneconomic for utility companies to invest billions of pounds in nuclear power.
The Government has offered to impose a minimum price on carbon permits – which would raise the cost of fossil fuel generation and make low-carbon nuclear more attractive. It has made a promise not to offer any direct subsidies…
Britain’s Nuclear Renaissance in Doubt under New Government
Britain’s previous government had visions of a nuclear renaissance for the country. But the new energy minister in London is an atomic energy opponent and utility companies, including two based in Germany, fear he may derail their plans.
Volker Beckers in an electric company man, through and through. For the past 17 years, he has worked for the German energy giant RWE. For the past seven, he has been in Swindon, England, where as the head of the RWE British subsidiary npower, he has been pushing for a renaissance in nuclear power on the island. The company is planning two new nuclear power plants in a joint venture with its German rival E.on. The Germans have already purchased the property at two locations in Wales, and they have invested millions…
Biofuels
British Airways, Solena Plan to Create 1,200 London Jobs at Biofuels Plant
British Airways Plc and Solena Group Inc. plan to build a waste-to-biofuels plant in east London, creating 1,200 jobs, sending less trash to the landfill and reducing jet emissions of greenhouse gases.
Solena, which will spend as much as $300 million on the site, has identified two potential locations near Dagenham, east of London, Solena Chief Executive Officer Robert Do said in an interview at the Farnborough Air Show in southern England. About 1,000 construction jobs will be created, with 200 employees needed to operate the factory, he said…
UK
Climate change: buyers face tax penalty for poorly insulated homes
Ministers are examining introducing new stamp duty penalties to force property owners to make their homes more energy efficient.
It could apply to millions of homes with old heating boilers, draughty windows or insufficient loft insulation…
UK government axes its sustainability watchdog
The UK government is to stop funding the Sustainable Development Commission (SDC), its independent environmental watchdog and advisory body.
Set up by the Labour government in 2000, the SDC is among a number of green bodies to be abolished…
Loss of BP’s payout blows big hole in pockets of investors in UK plc
The cancellation of BP’s dividend was responsible for an 8 per cent fall in payouts to shareholders in British companies in the second quarter of this year…
Funding cuts will finish Britain’s clean energy race
In the 1970s the UK invested about 0.15% of GDP each year in research and development (R&D) into providing cheaper and cleaner energy. Britain was putting more public money into nuclear power and other new sources of electricity than almost any other economy.
From the mid-1980s the amount invested each year has fallen almost continuously. The figure today is about 0.01%, one 15th of what it was a generation ago. We now sit at the bottom of the international league. The US, for example, spends three times as much as a percentage of its GDP, Japan nine times as much…
Buncefield companies fined £5.35m for oil depot blaze
Companies owned by oil giants BP, Shell and Total were fined a total of £5.35m today for their involvement in the Buncefield oil storage depot explosion and fire – the worst of its kind since the second world war.
The relatively modest nature of the fines were immediately attacked as “insulting” by the local Conservative MP for Hemel Hempstead, Mike Penning, while solicitors acting for residents said it was “hardly even a slap on the wrist” for businesses that had endangered the lives and livelihoods of so many…
Economy
Bernanke’s bearish outlook rattles US investors
The chairman of the Federal Reserve went on to hint however that although the American central bank “remains prepared” to take action should the nascent US economic recovery falter, such action remains a long way off.
Nonetheless the admittedly bearish comments from the Fed chairman unsettled investors on Wall Street, with the benchmark Dow Jones index — which at one stage had traded up by as much as 40 points — closing down 109.43 points — or 1.07pc — at 10,120.53…
