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.
OPEC head Abdullah El-Badri warned European leaders on Wednesday against imposing sanctions on Iranian oil, stating that the 865,000 barrels a day which goes mostly to Southern Europe would be difficult to replace. Global supply is already tight and oil prices remain stubbornly high despite the chronic Euro-crisis — still not fixed after last night’s summit deal, if market reaction is any guide. Saudi Arabia, which claims to be producing at a recent record of 10.047 barrels/day, even felt confident enough this week to raise its official selling prices to Asia.
Bloomberg reports that the prospect of oil topping $150 a barrel within a year has become the biggest bet in the options market. Anti-Iranian rhetoric is now showing eerie echoes of the build up to the Iraq war, and with indications this week that covert action might already be going on — Iran reported shooting down a US drone aircraft in its air space – there are worrying signs that this could escalate.
This week’s black swan event was the outbreak of anti-Putin protests in Moscow following elections for the Russian parliament. As yet there is no sign that the unrest is likely to topple Putin, however Presidential elections are scheduled for next March with Putin back on the ballot paper to replace Dmitri Medvedev. The way things look now there is a real possibility of upheaval. The recent IEA World Energy Outlook 2011 highlighted just how important Russia is to meeting world energy demand — the previous era of turmoil in Russia in the 90s saw a significant fall in oil production.
One organisation taking the issue of oil depletion seriously is the US Navy (and this despite optimistic reports of a new boom for US oil production). This week the Navy secured deals to purchase 450,000 gallons of biofuels. The US military has been looking into peak oil for a number of years and warned in a 2010 Joint Forces Command report that “By 2012, surplus oil production capacity could entirely disappear, and as early as 2015, the shortfall in output could reach nearly 10 million barrels per day”.
The role of bioenergy in the UK energy picture was the subject of a report released this week by the independent Climate Change Committee. The Committee saw bioenergy as important to meeting UK climate coals and energy needs, while warning that safeguards needed to be in place before setting long-term targets, in order to ensure that fuel sources were sustainable. As well as providing a hierarchy of the appropriate use of the limited resources available, the Committee included a sharp warning to the government that without CCS in place there should be no role for biomass in electricity production. The committee also recommended abolishing subsidies for building new large scale biomass power stations when existing coal plants could be converted. The government’s response will come early next year in its bioenergy strategy.
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Oil
OPEC’s Badri hopes EU doesn’t ban oil imports from Iran
OPEC Secretary General Abdalla el-Badri said Wednesday he hoped that the European Union would not agree an oil import embargo on Iran over its controversial nuclear program.
Badri said a threat against any member of the oil producer club could affect oil supply to world markets and that an EU ban on oil imports from OPEC member Iran would remove a large volume of crude that would be difficult to replace…
Iran Oil Ban Gets Little Traction
The European Union’s proposal to ban imports of Iranian crude oil as a sanction against the country’s nuclear program showed little traction Wednesday among senior government officials from other major countries, despite a new push from the European Commission to garner wider support.
The EU still has not formally enacted an embargo on Iran, but EU Energy Commissioner Günther Oettinger said Tuesday that there was a consensus within Europe behind the policy and that the EU was seeking support from other large countries, including Russia…
Oil at $150 Becomes Biggest Options Bet on Iran
The prospect of oil topping $150 a barrel within a year has become the biggest bet in the options market as the U.S. and Europe work to limit Iran’s crude sales.
The number of outstanding calls to buy oil at $150 next December has jumped 29 percent since a Nov. 8 United Nations inspectors’ report on the Persian Gulf country’s nuclear program, to more than any other option on the New York Mercantile Exchange. The contracts equate to about 38 million barrels of oil, or 43 percent of daily global demand, based on data from the U.S. Energy Department…
Has the world reached economic peak oil?
Whisper it. Oil production in the US is increasing. The country where output peaked in 1970 and then shrank by 40 per cent over four decades, has turned some kind of corner. Between 2008 and 2010, production rebounded by 800,000 barrels per day to 7.5 million barrels per day, and analysts forecast more growth to come. Goldman Sachs predicts that by 2017 production in the US could reach almost 11 mb/d, just shy of its all-time high, restoring the country to its former glory as the world’s biggest producer.
One reason is a sharp increase in production of “shale oil”. In North Dakota,Texas and Oklahoma, companies are using hydraulic fracturing, or “fracking” — a controversial technique that has revolutionised US natural gas production — to extract a range of liquid hydrocarbons from non-porous shale that used to be thought unworkable…
This article was first published in the 3 December print edition of New Scientist and online at energyrealities.org.
Saudi Arabia pumps oil at highest rate for decades
Saudi Arabia said on Wednesday it was pumping oil at the highest rate for decades in a signal to fellow producers and buyers just a week before an OPEC meeting that it intends to meet customer demand with more output if necessary.
The announcement, which was greeted with some skepticism by analysts, comes at a time when the European Union is discussing imposing a ban on oil from OPEC member Iran, a move that could put further upward pressure on oil prices…
Obama stands firm on Keystone XL oil pipeline
US President Barack Obama has refused to speed up a decision on the proposed $7bn oil pipeline to link Canada’s oil sands with refineries in Texas, rejecting calls from Republicans to tack the project on to renewal of a soon-to-expire payroll tax cut.
Speaking to reporters after meeting Canadian President Stephen Harper at the White House, Obama said it was important the potential environmental impact of the 1,700 mile Keystone XL pipeline was thoroughly examined before a decision is made…
Oil’s Growing Thirst for Water
Water has always been a concern for 65-year-old Joe Parker, who manages a 19,000-acre cattle ranch here in South Texas. “Water is scarce in our area,” he says, and a scorching yearlong drought has made it even scarcer.
Mixing Oil and Water
What has Mr. Parker especially concerned are the drilling rigs that now dot the flat, brushy landscape. Each oil well in the area, using the technique known as hydraulic fracturing, requires about six million gallons of water to break open rocks far below the surface and release oil and natural gas. Mr. Parker says he worries about whether the underground water can support both ranching and energy exploration…
Russian Oil Frontier: Nowhere Land
There’s the middle of nowhere, and then there’s here.
The place is Verkhnechonsk, an oil field in eastern Russia operated by TNK-BP Ltd. that is one of the remotest spots on the planet. To get there you have to fly to Siberia, take an aging turboprop plane deep into the taiga, or subarctic forest. Then hop on a helicopter heading north. From Moscow, the journey takes a day, including layovers—longer if there are snowstorms…
BP says Halliburton ‘destroyed evidence’
BP has accused Halliburton of destroying evidence that could be used to show that the US oil services company shares the blame for the Gulf of Mexico oil spill.
Halliburton “intentionally” got rid of test results of the cement that was used to seal the Macondo well, lawyers for BP said in a court filing in New Orleans on Monday…
Nuclear
Fukushima Daiichi operator considers plans to dump treated water into sea
The operator of Japan’s crippled Fukushima nuclear power plant has said it is considering dumping water treated for radiation contamination into the ocean as early as March, prompting protests from fishing groups.
Tokyo Electric Power (Tepco), the utility operating the Fukushima Daiichi plant, which was hit by a powerful tsunami in March that caused the world’s worst nuclear accident in 25 years, said it was running out of space to store some of the water it had treated at the plant because of an inflow of groundwater…
Setback to nuclear power plans
Britain’s plans for a new generation of nuclear power stations have suffered another setback after being delayed by at least a year.
The first of the new plants will not be built until 2019 because of extra safety checks following Japan’s atomic disaster…
Renewables
Institutional Investors Give Europe Wind Projects a Needed Lift
Europe’s ambitious plans for offshore wind projects have some important new backers: pension funds and other institutional investors.
The European Union’s member states aim to have more than 43 gigawatts of wind-power capacity in place by the end of the decade, or about 4% of estimated EU electricity consumption at that point. But there’s a long way to go—only about four gigawatts of capacity will be installed by the end of this year…
An unfair fight for renewable energies
More energy from the sun hits Earth in one hour than all the energy consumed on our planet in an entire year.
In those terms, it is absurd that our federal government spends tens of billions of dollars annually subsidizing the oil industry, which pulls diminishing resources from underground, while the industry focused above ground on wind, solar and other renewable energies is derided in Washington…
Why aren’t we investing more on improving energy storage technology?
I’ve just had this response from Peter J. Hall, professor of energy storage at the University of Strathclyde…
The ability to store and release energy is important to every carbon-free energy future. Scenarios with a massive contribution from renewables are the most frequently discussed because of the well-known intermittent or stochastic nature of renewables. However, a scenario in which nuclear fusion becomes an economic reality will have an even greater reliance on storage technologies because the size of such fusion generators (several GW) is likely to dwarf current coal and nuclear plants (~GW). Given the scale and nature of fusion energy, the electrical output will not be able to follow fluctuations in demand. Additionally, since the UK will only need a few fusion generators, the effects of outage of such a plant would utterly be catastrophic. It is noteworthy that the UK’s largest pumped storage facility, Dinorwig, was originally constructed as a back up for nuclear generators…
Paint-on power, the saviour of solar
SO YOU want to offset your electricity bill by tapping the most widely available, free source of energy in the world, the sun? Right now, you’d need to shell out a lot of money for a specialist to come to your home and install inefficient solar panels on your roof. Now imagine taming the sun minus the specialist, the empty wallet and the panels. What if taking your home off the grid required only a trip to the shops, a bucket of paint, an afternoon on the roof with a brush and a couple of beers, and an electrician to hook your new roof up to your power supply?…
Biofuels
Navy’s Big Biofuel Bet: 450,000 Gallons at 4 Times the Price of Oil
The Navy just signed deals to buy 450,000 gallons of biofuels — arguably the biggest purchase of its kind in U.S. government history. The purchase is a significant step for Navy Secretary Ray Mabus’ plans to transform the service into an energy-efficient fleet. But at approximately $15 per gallon — nearly four times the price of traditional fuel — the new fuels won’t come cheap.
The $12-million purchase, expected for months, will all be used this summer off the coast of Hawaii. There, supersonic F/A-18 jets will launch from the deck of an aircraft carrier, powered by fuels fermented from algae. A 9,000-ton destroyer and a cruiser will join it on a voyage across the Pacific, using fuel made from fats and greases. (The carrier itself runs on nuclear power.) It’ll be the first demonstration of the so-called “Great Green Fleet” — an entire aircraft-carrier strike group relying on alternative energy sources…
Biomass is the next biofuel ‘land grab’ on tropical forests, warn campaigners
Just as biofuels have gobbled up farmland that should have been growing food so the push on biomass by Monsanto, Cargill and others will see an ‘unprecedented’ grab on land, plants and biodiverse-rich forests
The world is on the brink of a new land grab, with companies like Cargill and Monsanto part of a wider attempt to ‘grab’ control of the productive capacity of the planet, argues a new book ‘Earth Grab’…
Branson predicts aviation could be among ‘cleanest’ industries within 10 years
Half the fuel used by airlines could be sustainably sourced biofuels by the end of the decade, according to Sir Richard Branson.
The Virgin Atlantic founder and serial entrepreneur made the claim at the launch yesterday of RenewableJetFuels.org, a website rating around 40 companies producing green aviation fuels based on their economic viability, scalability and sustainability…
UK
Climate Committee: Biomass has “no role” in electricity production without CCS
Large-scale biomass power plants have “no appropriate role” in future electricity generation without carbon capture technology the government’s emissions reduction advisors will say today, prompting further criticism of the decision to delay a promised £1bn of support for a large scale carbon capture demonstration project.
A new report from the influential Committee on Climate Change (CCC) will say that meeting the UK’s overall 2050 emissions targets will be difficult unless bioenergy increases it share of the country’s energy mix from two per cent to 10 per cent…
MPs demand clarity on carbon capture funding
The head of an influential committee of MPs has expressed his shock at the decision to reallocate funds away from developing carbon capture and storage (CCS) technology and demanded to know when the government envisages the technology being up and running.
Tim Yeo, chair of the energy and climate change committee, today issued an open letter to Chris Huhne after last week’s Autumn Statement siphoned off the £1bn earmarked for the UK’s first CCS demonstration programme to finance a new set of infrastructure projects…
Local councils turn to the bond markets to pay for infrastructure projects
Local authorities are considering revamping the municipal bond market to finance the road, light rail and school projects that are key to the Government’s plans for £250bn of infrastructure investment.
Authorities including Wandsworth, Birmingham and Guildford have got themselves credit ratings over the last two months as part of the necessary preparation for potential bond issues as other sources of finance are cut or become more expensive…
Climate
Lord Stern: rich nations should stop subsidising fossil fuel industry
If rich nations were to stop subsidising fossil fuels to the tune of billions of dollars a year, the money raised could go a substantial way to providing the cash needed to help poor countries develop a “green” economy and cope with the effects of climate change, one of the world’s leading economists said.
Lord Nicholas Stern, former World Bank chief economist and author of the landmark report for the previous Labour government on the costs of climate change, told the Guardian that rich economies waste money and disadvantage renewable energy by giving away tax breaks, loans and other subsidies to the fossil fuel industry. If governments were to cut these out, and dedicate the savings to helping poor countries, that could raise about $10bn a year towards helping the poor on climate change…
Carbon Emissions Show Biggest Jump Ever Recorded
Global emissions of carbon dioxide from fossil-fuel burning jumped by the largest amount on record last year, upending the notion that the brief decline during the recession might persist through the recovery.
Emissions rose 5.9 percent in 2010, according to an analysis released Sunday by the Global Carbon Project, an international collaboration of scientists tracking the numbers. Scientists with the group said the increase, a half-billion extra tons of carbon pumped into the air, was almost certainly the largest absolute jump in any year since the Industrial Revolution, and the largest percentage increase since 2003…
