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Three things you shouldn’t miss this week
- Commentary: America’s Feel-Good Oil Bonanza -What the EIA says matters—regardless of its veracity or substantiation. In this light, let’s take a look at what the EIA is now saying in AEO 2014.
- Commentary: 6 reasons why there’s no community in fracking – Fracking is too capital intensive to allow communities to set up and run their own wells, even if they wanted to…Income such as is being proposed is only one small part of the bigger picture of thinking about what a resilient community needs.
- Commentary: In brief: The EU’s new 2030 climate and energy package – The European Commission today announced new energy and climate targets for the EU.
The UK is to go all out for shale gas and David Cameron is asking British people to get on board, with a package of sweeteners for communities. These include 1% of any profits from the process, a previously announced payment of £100,000, and 100% of business rates from fracking for participating Councils. The government was quickly accused of “bribing” communities and over-hyping the potential benefits. Rather than the £2.4-4.8 million potential community benefits from their own recently commissioned study by AMEC, government sources quoted figures of £5-10 million – a higher estimate from an Institute of Directors study sponsored by fracking firm Cuadrilla. The announcement puts the UK’s climate commitments in question, with even BP warning that shale gas won’t reduce emissions.
Wednesday saw the release of the EU’s 2030 energy and climate proposals, in a markedly different atmosphere to that of 2006 when Stern warned of the economic cost of inaction. Following tense negotiations the bloc agreed to a new emissions reduction target of 40% by 2030. Commission President Jose Manuel Barroso spoke of the target being "ambitious and affordable", though he warned that there will be "more pressure to put it down than up" before the agreement is ratified. Environmental commentators attacked the deal for its lack of ambition, and attention to recent climate science. On renewables, the EU is proposing to target 27% of power from renewable sources by 2030, but after much lobbying from member states – including the UK – there will be no specific country targets to see it through. Ironically, the EU released a study on Wednesday demonstrating how renewables and energy efficiency are helping keep the region competitive. The EU is hugely reliant on fossil fuel imports and so highly vulnerable to oil and gas supply shocks.
The risk of oil shocks remains an issue even in the US where production is booming, according to a new report by a commission of former US generals and officials. International Energy Agency (IEA) figures show that global oil demand grew faster than supply in 2013. Growth in both demand and supply were led by the US, challenging the oft-quoted theory that developed nations are reaching peak oil demand. As things stand the US shale boom is providing a thin supply cushion, but serious questions about how long that will last remain. US Energy Information Administration (EIA) predictions for new production are apparently based on highly optimistic estimates, according to a recent report on the Monterey shale by geologist David Hughes
. A recent Transatlantic Energy Security Dialogue convened by US Army official, Lieutenant Colonel Daniel L. Davis and Jeremy Leggett warned of declining exports from OPEC due to rising domestic demand, soaring costs of new discovery and production, and 6.2% observed decline rate in mature fields.
One city taking a different approach to energy security is Hamburg in Germany. Following a popular vote the city is to buy its power supply back from Vattenfall. The city has also set a target to become car free in twenty years.
Related Reports and commentary
Tags: climate change, climate change policy, Energy Policy, EU, Fracking, peak oil, peak oil demand