Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
Thursday saw the long awaited UK energy bill finally presented to parliament. Energy and Climate Change Secretary Ed Davey described the bill as "good for the British economy, good for consumers, and good for the planet". So what is it good for?
The bill has been largely welcomed by the energy industry for setting an investment framework for the next decade. Nuclear and renewables get support via the new Contracts for Difference mechanism, though the contract amount and terms are yet to be set. The framework makes it pretty certain that the UK will meet its commitment for 30% of UK electricity to come from renewables by 2020. Davey claims the economy should get a boost of £7.2bn net.
There is considerable uncertainty on how hard the bill will hit domestic energy users. The government has capped the amount that can be added to bills at £7.6bn up to 2020. Davey claims that this would result in average price increases of £95/household, but that with energy efficiency measures bills will actually fall by 7% — this calculation however contains many unknowns about the real cost of new build in nuclear and renewables and the future price of gas.
There were clear wins for the Treasury, however, including support for unconventional gas, the go ahead for unabated new gas builds, and the decision to postpone a new power decarbonisation target. The fact that gas policy is Chancellor George Osborne’s baby was made all the more obvious by the fact that the Gas Generation Strategy will be published alongside his Autumn Statement. The decarbonisation target may still be addressed in this parliament if sufficient Conservative and Liberal MPs are prepared to side with Labour in what might be shaping up into a rebellion. Tim Yeo, chair of the energy and climate change select committee, claimed that an amendment was "a real possibility". The lack of a clear direction on decarbonisation sends mixed signals to investors and leaves the door open for a growth in unabated gas power.
One of the few unexpected items in the announcement was a consultation paper on energy efficiency. Given the scale of the cost of new energy supply, and the challenge in lowering emissions, reducing energy use or investment in ‘negawatts’ is a logical step. Ideas include payments to companies for saving energy, and financial incentives for businesses and homeowners to make energy saving appliance upgrades. Damien Carrington writing in The Guardian points out that "By 2050, Germany projects a 25% drop in electricity demand: the UK projects a rise of up to 66%." Clearly this is an area with significant potential.
One energy security issue which really gets no space in the Energy Bill is of course peak oil. In the UK oil is primarily used in transportation rather than in the power sector — in that sense it might be logical for the government to work on a transport security bill. Since this is vanishingly unlikely, how about including oil in the energy efficiency planning? The fuel duty escalator looks politically beyond repair, so how about introducing incentives to reduce business flights — that should free up capacity at Heathrow — and to run public transport on biogas?
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Oil
Oil spills likely in the Arctic, admits Shell executive
Oil will probably be spilt by companies drilling in the Arctic, Royal Dutch Shell’s executive in charge of the company’s Alaskan operations has admitted.
Shell is one of a handful of companies exploring in Arctic waters and began drilling off Alaska this year…
Oil Heads for First Monthly Gain Since August on Economic Growth
Oil headed for its first monthly gain since August in New York amid signs of economic growth in the U.S. and China, the world’s biggest crude consumers.
West Texas Intermediate futures were little changed after climbing 1.8 percent yesterday, the most since Nov. 19. The U.S. economy expanded more than previously estimated last quarter, the Commerce Department said in Washington. China’s economy will improve or remain stable, according to most respondents in a Bloomberg quarterly survey this week. Oil has also advanced on concern that violence in the Gaza Strip and Egypt will spread and disrupt Middle East crude supplies…
U.S. will not surpass Saudi Arabia’s oil production by 2020
Will the U.S. overtake Saudi Arabia as the world’s top oil producer by 2020?
That’s what every headline blared after the release of the International Energy Agency’s World Energy Outlook (IEA WEO) on November 12…
High demand means world needs all of Canada’s oil: IEA
Global demand for crude is growing so strongly that the world needs "every single drop of Canadian oil," the International Energy Agency’s chief economist said on Monday, playing down fears that growing U.S. production could hit Canadian exports.
Fatih Birol said that even if U.S. output rises as much as the agency expects, the country would still need to import four million barrels a day and that Canada is an obvious supplier…
Oversupply to depress oil prices next year
Oil prices are expected to fall slightly over the next year as high production feeds softening demand at a time of slowing global economic growth, a Reuters poll shows.
Reuters’ monthly oil price survey of 29 analysts forecasts North Sea Brent crude oil will average $107.50 per barrel in 2013, down $1.30 from the forecast in the October poll and compared with an average of around $111.90 so far in 2012…
BP banned from winning new US government contracts
BP has been temporarily banned from winning new contracts with the US government, as regulators accused the British oil giant of a "lack of business integrity" over its handling of the Gulf of Mexico oil spill.
BP, which pleaded guilty to criminal charges relating to the 2010 spill, will be prevented from winning new contracts until the oil giant can demonstrate it meets business standards set by the government, the Environment Protection Agency (EPA) said on Wednesday…
Gas
China planning ‘huge fracking industry’
China is ratcheting up its fracking ambitions with virtually no regard for groundwater protection or other environmental safety measures, according to a new investigation by the independent publication Caixin. The report points to an 24 October white paper on energy development released by China’s top cabinet which "calls for ramping up the industry and pumping 6.5 billion cubic meters of natural gas from underground shale formations by 2015."
"The model for China’s anticipated success is the US shale gas sector," the article states. "Geologists estimate the nation’s recoverable reserves at about 25 trillion cubic meters, on par with the United States."…
Energy secretary says shale exploration won’t lead to era of cheap gas
Ed Davey, the energy and climate change secretary, has warned supporters of shale gas that it may take many years for substantial exploration in the UK, and predicted it would not lead to an era of cheap gas.
Davey was speaking to the Guardian before the publication of the energy bill on Thursday and promised he had weapons he could use if there was a danger his policies were locking too much gas into the energy mix…
Study says methane emissions from shale wells lower than thought
A new study by MIT researchers finds the actual amount of methane emissions caused by production of natural gas in shale formations has been greatly exaggerated in previous studies, particularly a controversial Cornell University study released last year.
The MIT researchers found that the potential methane emissions per well in the Barnett and Haynesville shales were 273 metric tons and 1,177 metric tons, respectively. However, when the researchers took into account actual gas handling practices in the field, they found that actual emissions were reduced to about 35 mt of methane per well from an average Barnett well and 151 mt from an average Haynesville well. This compares with potential emissions of 252 mt of methane emissions per well in the Barnett and 4,638 mt per well in the Haynesville, reported in the study by a team of Cornell University researchers led by Robert Howarth…
Renewables
Severn’s renewable energy capacity could be larger without a barrage
The Bristol Channel could provide as much as 14GW of low carbon energy capacity without resorting to a large scale tidal barrage across the Severn Estuary, a report will claim today.
A series of lower impact tidal fences and turbines deployed in conjunction with wave and wind power systems would generate more electricity than the controversial barrage scheme, according to not-for-profit Regen SW and consultancy Marine Energy Matters…
UK
Davey hails ‘once-in-a-generation’ green transformation of energy market
Ed Davey has today published the government’s long-awaited Energy Bill, hailing that landmark legislation as "good for the British economy, good for consumers, and good for the planet".
Speaking in the House of Commons, the Energy and Climate Change Secretary said the Bill would enable a "once-in-a-generation transformation of the energy landscape to bring on massive private-sector investment which will boost the economy, create jobs, and power Britain towards a prosperous low-carbon future"…
Yeo: the fight for a decarbonisation target is not over yet
The government may be forced to review its controversial decision to delay a proposed decarbonisation target for the power sector, after it emerged that a cross-party group of MPs may table an amendment to the Energy Bill that would impose a target for 2030.
Many green businesses and NGOs were dismayed when Energy and Climate Change Secretary Ed Davey last week confirmed he had failed to strike a deal with the Treasury to set a binding goal to decarbonise the electricity sector by 2030, as recommended by the Committee on Climate Change (CCC)…
Energy saving finally gets serious as alarm bells wake ministers
It’s better late than never: serious energy efficiency measures have finally made it into the government’s energy plans, albeit only as a consultation. But after the vicious fight over the energy bill, published today, we should be grateful for small mercies.
In tackling the energy trilemma – cost, carbon and continuity of supply – nothing beats saving energy. It is the cheapest of all measures, curbing the gas-fuelled soaring of energy bills, it is by definition completely free of climate-warming carbon emissions and it means less electricity has to be generated in the first place…
Ed Davey: my long battle for a ‘grand energy bargain’
There can have been few negotiations so highly charged, so important to every household in the country as well as a multi-billion-pound industry, held against such a bizarre backdrop of political infighting and conspiracy, as the months-long battle inside the coalition over the future of UK energy policy.
Late on Wednesday a deal was finally struck that gives the energy industry the framework it sorely needs to press ahead with £110bn of investments. It is a multi-layered deal that required recourse to both David Cameron and Nick Clegg…
Industries to be shielded from green energy costs as household bills to soar
Energy-intensive industries will be shielded from subsidising new nuclear power plants and wind farms, under Government plans that will see other businesses and consumers paying billions of pounds more for electricity.
Ministers will on Thursday unveil the long-awaited Energy Bill, intended to encourage £110bn of investment in low-carbon generation this decade…
Europe
France’s love affair with nuclear cools
For decades, the elite engineers turned out by Paris’s grand Corps des Mines academy were faithful followers of the pro-atomic creed that transformed their country into the most nuclear-reliant nation in the world.
But a new generation of Mines graduates is starting to question that policy. It is a change of mindset that could aid efforts by President Francois Hollande to cut reliance on nuclear power from 75 percent to 50 percent of the electricity mix by 2025…
Germany legislates to help prevent power blackouts
Germany passed legislation designed in part to help prevent blackouts as the country moves towards relying on renewable energy and out of nuclear power.
Following the Fukushima disaster in Japan, Germany embarked on a costly retreat from nuclear and an expansion of green power sources such as solar and wind, but this is placing strains on the grid because such renewable sources are intermittent…
Greeks turn to the forests for fuel as winter nears
It is early Sunday. The sun has barely risen above the chestnut forest that lies somewhere near the crest of Mount Pelion, but loggers’ pick-up trucks are already streaming through the muddy slush, their cargo bouncing in the back. Theirs are rich pickings, much in demand as winter envelopes the villages and towns of an increasingly poverty-stricken Greece. As they pass, they do not look up because many do not have permits to do what they have just done.
From their new home a little further on, Yiannis Chadziathanasiou and Natasa Rempati watch the ebb and flow of this traffic. So, too, do the residents of Tsagarada, the picturesque hamlet where the sound of chainsaws pierces the morning air. "Things are getting desperate," says Chadziathanasiou, who clothed Greek celebrities before he moved to the countryside. "You hear all the time of people illegally clearing forests for firewood. It’s horrible if you’re a green like me."…
