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.
According to The Times, Iraq’s oil ministry is to reset its oil production target for 2017 reducing it down from 12 million barrels per day to between 6.6-7 mb/d. The news is of no surprise to anyone (with the possible exception of Donald Trump), the IEA for example estimated in its World Energy Outlook 2010 that Iraq would catch up with Iran (currently at 3.66 mb/d) by around 2015, with production rising to 7mb/d by 2035. The IEA global oil production scenario used in the report does however rest precariously on the assumption that OPEC production will rise continually out to 2035, with most of the new production coming from Iraq and Saudi Arabia. Always optimistic, the scenario looks even more insecure in the light of the ongoing political shifts and upheavals in the region. As recently as February this year Fatih Birol of the IEA said that “Global oil markets cannot afford not to see a significant increase in Iraqi oil production in the medium term.”
It appeared this week that the reality of peak oil might be starting to hit home at least with the European Commission’s Director-General for Transport and Mobility Policy, Marjeta Jager. She said in a speech that “If action is delayed, in the not-too-distant future we may be forced to drastically reduce all our mobility and import technological solutions from other parts of the world”. Not sure what the technological solutions are—maybe more bikes—but it demonstrates a real challenge for a department which in its 2011 white paper on transport stated that “Curbing mobility is not an option”. The speech was at a European Parliament meeting following on from the 2011 ASPO conference in Brussels. Presentations from the conference are available online.
In the UK this week the stand-off over tax hikes continued between the North Sea oil and gas industry and the government. The industry claims that the changes would seriously damage the investment environment, and that the Department of Energy and Climate Change wasn’t consulted by the Treasury before the changes were made. Energy Secretary Chris Huhne defended the tax increases at a meeting on Wednesday with MPs and the oil and gas industry. So far the government is standing by the change, which was introduced to fund a cut in fuel duty, but it is possible they might make a concession on gas where the risk of rig closures is greater.
Better news for UK energy companies came this week in a report from the Carbon Trust on the economic potential of Marine Renewables. According to the report the global industry could be worth £460 billion by 2050, with the U.K. pulling in a sixth of the market.
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Oil
Iraq halves oil output as reality replaces ambition
Iraq is preparing to halve its official production target, forcing oil companies including BP and Shell to renegotiate their contracts.
The Times has learnt that the country’s Oil Ministry, with backing from the Prime Minister Nouri al-Maliki, will set a new target to produce between 6.5 million and seven million barrels per day by 2017, down from original plans to pump 12m barrels, according to industry insiders..
Libya faces fuel crisis as oil supplies dwindle
Police officers in riot gear and armed with wooden staves have been manning fuel pumps at a petrol station in Tripoli as long queues of cars caused traffic chaos in western Libya, amid fears that the Gaddafi regime is running out of its most precious commodity.
Queues of vehicles, sometimes five or six deep, stretched up to half a kilometre from some petrol stations last week, most of which are shut behind makeshift barriers. Two men in a queue near the city of Zuwara said they had been waiting for five days in the hope of a fresh delivery…
Act now on peak oil or curtail mobility, says Commission
The European Commission’s director-general for transport and mobility policy has warned at a conference on peak oil that it would be a “fatal mistake” for the EU to postpone measures to reduce oil dependency.
“If action is delayed, in the not-too-distant future we may be forced to drastically reduce all our mobility and import technological solutions from other part of the world,” Marjeta Jager told a Green Party conference in the European Parliament…
Oil Advances After Biggest Decline in Two Years; Down 12 Percent This Week
Oil climbed from the lowest in almost two months in New York, trimming the biggest weekly decline in a year, on speculation a drop below $100 a barrel was exaggerated.
Futures increased as much as 1.2 percent after sliding 8.6 percent yesterday following worse-than-expected U.S. economic data. Oil broke through the lower Bollinger Band, a technical signal which typically indicates prices are poised to rise. A Labor Department report today may show the U.S. generated fewer jobs in April than in March…
Shell sued over oil spill in Niger Delta
Royal Dutch Shell has been hit with a class-action lawsuit in London by the Bodo community of Nigeria, which suffered a “devastating” oil spill when a key pipeline burst in the summer of 2008.
The community filed a lawsuit last month at the High Court against both Royal Dutch Shell and Shell Petroleum Development Company of Nigeria, raising the possibility of a drawn-out legal battle for compensation…
Shell Tries to Calm Fears on Drilling in Alaska
Shell Oil will present an ambitious proposal to the federal government this week, seeking permission to drill up to 10 exploratory oil wells beneath Alaska’s frigid Arctic waters.
The forbidding ice-clogged region is believed to hold vast reserves of oil, potentially enough to fuel 25 million cars for 35 years. And with production in Alaska’s North Slope in steep decline, the oil industry is eager to tap new offshore wells…
BP pays out $25m to settle Alaska spills claims
Oil giant BP has agreed to pay a $25m (£15m) fine and toughen up inspections of its oil pipelines in Alaska as part of a settlement over spills in one of America’s biggest remaining wildernesses.
The settlement followed two spills on Alaska’s North Slope in March and August 2006. The first saw 5,054 barrels leak, while the latter deposited just 24 barrels of oil…
Canada faces fight over oil sands
Investment in Canada’s oil sands is picking up after falling during the depths of the global economic recession. However, mounting environmental concerns threaten exports and Canada’s next government will have a growing fight on its hands to promote the industry, as Jonah Engle reports.
April has been a difficult month for Canadian oil sands producers…
Analysis: 100 years after boom, shale makes Texas oil hot again
A century after a gusher at the Spindletop field in Beaumont, Texas, ushered in the first U.S. oil boom, a quieter oil craze is underway 300 miles west in a chain of counties more famous for cattle than crude.
Over the past two years, some 30 companies have moved in to a shale prospect in South Texas called the Eagle Ford that could add 420,000 barrels per day (bpd) to U.S. crude oil production, nearly matching the output of OPEC member Ecuador…
Energy Information Agency Feels Budget Axe
The federal government’s ability to gather and analyze energy data and produce market forecasts will be significantly impaired by the recently enacted budget cuts, the administrator of the Energy Information Administration said.
The agency’s 2011 funding levels were cut by 14 percent, or $15.2 million, in a short-term budget deal signed into law earlier this month. Since the fiscal year is more than half over, the cuts will effectively run twice as deep…
Oil Price Controls Are Advocated by UN in Proposal for G-20, OPEC Accord
The Group of 20 nations should negotiate a benchmark “fair” cost of oil with the Organization of Petroleum Exporting Countries and limit price movements within a band, the United Nations said.
The G-20 needs to “act decisively to moderate the volatility of oil and food prices,” the agency said in a statement as it released an annual report on Asia and the Pacific in Bangkok today…
Gas
Chevron Expands in Marcellus Shale
Chevron Corp. is doubling down on a big natural-gas bet by expanding its reach into a large swath of Pennsylvania.
Three months after completing its acquisition of gas producer Atlas Energy, Chevron is buying drilling and development rights for another 228,000 acres in the Marcellus Shale, a rock formation underlying several states in the Northeast that has become one of the most prolific sources of natural gas in the U.S…
Ukraine Looks to Texas for an Energy Path
This former Soviet state in Eastern Europe is betting that the path toward energy independence runs through Fort Worth.
By drilling in the scrubland and vacant lots in and around the city of Fort Worth, American energy companies have demonstrated that they can produce natural gas economically from shale — a form of sedimentary rock previously considered all but worthless…
Nuclear
Nuclear Tests Draw Scrutiny in EU
Differences among European Union countries on whether to test the safety of nuclear plants in the case of an airplane crash surfaced Tuesday, just days before the EU is expected to make public new safety criteria under “stress tests” imposed after the Japanese nuclear crisis.
Günther Oettinger, European commissioner for energy, said EU members had reached no consensus on whether to include airplane crash criteria in the criteria. “The question is open,” Mr. Oettinger said on the sidelines of a an energy summit with energy representatives of the 27 EU governments…
Despite Bipartisan Support, Nuclear Reactor Projects Falter
In an effort to encourage nuclear power, Congress voted in 2005 to authorize $17.5 billion in loan guarantees for new reactors. Now, six years later, with the industry stalled by poor market conditions and the Fukushima disaster, nearly half of the fund remains unclaimed. And yet Congress, at the request of the Obama administration, is preparing to add $36 billion in nuclear loan guarantees to next year’s budget.
Related
Even supporters of the technology doubt that new projects will surface any time soon to replace those that have been all but abandoned…
Renewables
Global Marine Power Industry May Be Worth $760 Billion by 2050, U.K. Says
The global marine power industry could be worth as much as 460 billion pounds ($760 billion) by 2050, with the U.K. comprising a sixth of the market, Carbon Trust said today.
Power generated from the waves and tides could bring 76 billion pounds to the British economy, including 68,000 jobs created over four decades, the government-funded trust said. Those jobs would be due to growing export markets in countries such as Chile, the U.S. and European nations on the Atlantic, it said in an e-mail…
Total Buys Stake in Solar Firm
In a deal that highlights the rapid maturation of the solar industry, French oil major Total SA said Thursday it would spend $1.37 billion to buy a controlling stake in SunPower Corp.
The deal weds a solar company that industry observers say has an attractive technology to make high-quality, high-efficiency panels with a traditional fossil-fuel company that has access to cash and credit needed to accelerate solar deployment around the world…
Biofuels
European biofuel dispute splits the industry
A divisive debate over the green credentials of biofuels has stalled investment and threatens the future of some producers, but could also create lucrative opportunities, according to European companies.
After a two-year investigation, the European Commission has decided that the complex issue of ‘indirect land use change’ (ILUC) — or displaced deforestation — can lessen carbon savings from biofuels…
UK
Huhne clashes with MPs over tax rise
Government ministers clashed with MPs on the energy select committee and North Sea operators today as they sought to head off criticism that budget changes would stop oil investment and raise consumer gas prices.
Chris Huhne, the energy secretary, refused to say whether he had been consulted about George Osborne’s windfall tax, which aims to raise £2bn to ease pressure on petrol pump prices…
North Sea oil and gas confidence slumps (but it’s still positive)
Oil and gas operators in the North Sea have ramped up their lobbying efforts to persuade the government to reverse, or at least dilute, its tax hike on those companies to pay for the cut in fuel duty.
Early on Wednesday Oil & Gas UK, the industry’s lobby group, produced figures showing confidence among producers in the area had slumped…
Fresh North Sea oil fears for safety of offshore workers
Oil and gas workers in the British sector of the North Sea are more at risk of death and suffering serious accidents than Norwegian workers a few miles away, according to Norway’s equivalent of the Health and Safety Executive.
Magne Ognedal, director-general of the Petroleum Safety Authority (PSA), also warned that Britain and Norway were at risk of their own Deepwater Horizon, which last year killed 11 workers and cost BP an estimated $41bn (£25bn) to clean up the Gulf of Mexico…
North Sea oil leak cap ‘may fail’ in deep waters
Britain’s new multi-million-pound wellhead capping device to prevent oil leaks may not be strong enough to tackle blowouts on wells in the deepest waters around the British Isles, it is claimed.
The cap was commissioned in the wake of BP’s Gulf of Mexico oil spill to calm fears about drilling, especially waters west of the Shetlands…
Scotland toasts new whisky-powered bioenergy plant
It is the spirit that powers the Scottish economy, and now whisky is to be used to create electricity for homes in a new bioenergy venture involving some of Scotland’s best-known distilleries.
Contracts have recently been awarded for the construction of a biomass combined heat and power plant at Rothes in Speyside that by 2013 will use the by-products of the whisky-making process for energy production…
Surge in solar panel installations on UK household roofs
Householders rushing to put solar panels on their roof in order to take advantage of government subsidies have more than tripled the amount of solar power in the UK over the past year, figures published on Thursday show.
The lure of making nearly £1,000 a year has led to a record 11,314 people, largely homeowners, installing solar panels in the first three months of this year. The ‘solar gold rush’ appears to have been driven by the introduction of feed-in tariffs (Fits) last year, which pay businesses, groups and individuals for generating green energy…
Tax hike may mean Centrica gas field stays shut
Centrica, the owner of British Gas, has said it may keep part of Britain’s largest gas field closed in response to Chancellor George Osborne’s windfall tax on North Sea oil and gas producers’ profits.
The company shut two of its Morecambe gas fields — Rivers and Morecambe Bay North — for a month’s planned maintenance yesterday and said its older South Morecambe field, due to be closed for planned works this month, could stay shut as higher taxes render it uncommercial…
Climate
Connie Hedegaard seeks renewable energy targets for 2030
The EU’s climate chief is seeking to extend the bloc’s renewable energy targets, in a move apparently designed to protect the green energy sector from an intensifying attack by the gas industry.
This is the first time the European commission has raised the issue of mandatory targets beyond 2020, when the current commitment — to generate 20% of energy from renewable sources — expires…
