ODAC Newsletter - 25 March 2011
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.
Bombing raids began on Libya this week as western powers combined to enforce the UN mandated no fly zone. The offensive has succeeded in its initial aim of slowing down Gaddafi’s forces, but the precise remit is unclear and a protracted conflict in the country is still highly likely. Oil prices continue to be highly sensitive to the Libyan conflict and to the ongoing political unrest in the Middle East. In Yemen foreign nationals are being advised to evacuate following an escalation of violence which saw 50 protestors killed in demonstrations last Friday. Increased violence was also seen in Syria where protestors were shot dead by security forces this week.
As Japan struggles to cope with the effects of the tsunami, the world continues to watch the ongoing emergency at the Fukishima nuclear plant. While work to stabilise the facility continues commentators on both sides of the argument are using the emergency to underpin their positions on the safety of nuclear power. The most likely outcome for the global nuclear industry appears to be a delay in new build as governments conduct safety reviews. A key issue to surface from the disaster however is the unanswered question of how to safely dispose of spent fuel.
In the UK this week the government’s direction on energy and environmental policy was up for scrutiny as the Chancellor George Osborne delivered his first budget. The outcome demonstrated a canny eye for political expediency and headlines, while generally under delivering on the kind of measures which would demonstrate a real commitment to reducing oil and fossil fuel dependency.
On the positive side, the creation of the long awaited Green Investment Bank was broadly welcomed as a step in the right direction, albeit it a baby step given the borrowing restrictions, and the amount of money available in the face of the task at hand. The carbon floor price was also announced – it will be £16/tonne from 2013, escalating to £30/tonne in 2020. ODAC welcomes the mechanism but initial reaction points to the price being too low to really drive the required investment.
The headline news however was that fuel duty is to be cut by 1p, the automatic price escalator cancelled for the rest of this parliament, and the money recouped by an increase in tax on the UK oil and gas industry. Add to that the freeze in air passenger duty, and the absence of any measures to support modal change in travel and it looks like a small amount of political capital is being won at the cost of bigger problems around the corner.
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Oil traded near a two-week high in New York as continued fighting in Libya fanned concern that unrest in the Middle East will further disrupt supply.
Futures on the New York Mercantile Exchange, at about $105 a barrel today, are heading for their first weekly gain in three as Allied warplanes renewed strikes against ground forces loyal to Libyan leader Muammar Qaddafi. JPMorgan Chase & Co. raised its forecast for London-traded Brent crude to $118 a barrel, citing the conflict in North Africa in a report today...
State oil giant Saudi Aramco said rising oil demand from its largest crude buyer, China, will offset declining consumption elsewhere.
"I believe increased Chinese demand offsets declining consumption in the OECD nations," Khalid Al Falih, chief executive officer of Aramco said in a speech posted on the firm's website...
"[It] is essential to encouraging necessary investment in exploration as well as oil production, refining and transportation capacity, which ultimately benefits all petroleum consumers," Falih said.
While the world's attention has been fixed on the nuclear crisis in Japan, we're fast coming upon the one-year anniversary of another major environmental disaster: the BP Gulf of Mexico oil spill. Though opinions are still divided on just how much damage the spill has caused—and may continue to cause—the Gulf community is beginning to recover, and fishing boast have gotten back in the water.
Which means it must be time for a new spill for the star-crossed region. Yesterday, days after an oil slick was first seen near southern Louisiana's Grand Isle, Houston-based Anglo-Suisse Offshore Partners accepted responsibility for what seems like a minor oil spill. (The story was first broken by the New Orleans Times-Picayune.) State agents traced back the oil to an Anglo-Suisse well about 30 miles southeast of Grand Isle that had been plugged for permanent abandonment. It's not clear how much oil leaked from the well, but it's surely more than the 5 gallons Anglo-Suisse originally told the Coast Guard had leaked. That was on March 18, but a few days later officials found company employees still trying to shut the well remotely. Though the company reported that the well has been successfully shut on Tuesday night, there is still evidence of oil along the coast...
Royal Dutch Shell has won approval to drill the first new deepwater oil wells in the Gulf of Mexico almost a year after a spill by rival BP halted the industry's expansion.
US authorities have given the green light to the Anglo-Dutch company's plan to drill three wells to a depth of about 2,950 feet in a field 130 miles off the coast of Louisana...
Western oil companies operating in Libya have privately warned that their operations in the country may be nationalised if Colonel Muammer Gaddafi’s regime prevails...
Natural gas may be having its day, as its rival energy sources come under a cloud.
The serious problems at the nuclear power plant in Japan have raised new doubts about the safety of nuclear energy. New exploration has yet to resume in the Gulf of Mexico after last year’s blowout of a BP oil well. Andcoal plants have been under a shadow because of their contribution to global warming...
Wintershall, the energy subsidiary of the chemicals giantBASF, has agreed to join Russia in building the South Stream natural gas pipeline, becoming the first German company to join a project that will compete directly with the European Union’s planned pipeline, Nabucco.
The Russian prime minister, Vladimir V. Putin, participated in the signing ceremony for the memorandum of understanding on the deal, which took place just outside Moscow late Monday. Mr. Putin praised Jürgen Hambrecht, chief executive of BASF, for agreeing to take a 15 percent stake in the offshore section of the 940-kilometer-long pipeline...
Federal land in Wyoming holding roughly 750 million tons of coal will be leased to mining companies, the Interior Department announced. The leases will generate $13.4 billion to $21.3 billion, with roughly half of the proceeds going to the State of Wyoming, according to federal estimates.
The leases cover 7,400 acres in Wyoming’s coal-rich Powder River Basin, the nation’s top coal-producing region. The tracts are the “first of more than a dozen” coal leases in the region that are to be auctioned off in the next three years, the Interior Department said...
The restoration of power to the stricken plant, 140 miles north of Tokyo, had led to hopes that the threat of a meltdown and major radiation leak was past.
But scientists say they are not out of the woods yet and they still face some of the most difficult and dangerous tasks...
The French energy minister on Tuesday strongly defended the use of nuclear energy, highlighting a widening rift in Europe over the future of the technology since the crisis at reactors in Japan.
The energy minister, Éric Besson, said it was his “profound conviction that nuclear energy will stay in Europe and the world one of the core energies in the 21st century.” He was speaking in Brussels after a meeting of European Union energy ministers to discuss the safety of the 143 reactors across the Union’s 27 member states...
In the aftermath of the accident at the Fukushima nuclear plant, German Chancellor Angela Merkel made an astounding political U-turn. She went from being an enthusiastic supporter of nuclear energy to arguing for phasing it out as soon as possible. Many feel her new course is not credible, and it is legally, financially and politically risky.
When German Chancellor Angela Merkel stepped out of her official vehicle in Offenburg in southwestern Germany last Wednesday, she got the usual reception from the anti-nuclear protesters gathered there. "Shut them down!" they chanted...
Italy's government will announce a one-year moratorium on site selection and building of nuclear power plants following the crisis at a Japanese plant, Industry Minister Paolo Romani said on Tuesday.
"Tomorrow the cabinet will announce the declaration of a one-year moratorium on procedures for installing and identifying nuclear sites," Romani told reporters at the margins of a Senate hearing...
The threat of the release of highly radioactive spent fuel at a Japanese nuclear plant has revived a debate in the United States about how to manage such waste and has led to new recriminations over a derailed plan for a national repository in Nevada.
Pools holding spent fuel at nuclear plants in the United States are even more heavily loaded than those at the Japanese reactors, experts say, and are more vulnerable to some threats than the ones in Japan. However, utility companies have taken steps since the 9/11 terrorist attacks to make them safer...
Britain may scale back its plans to build a new generation of nuclear plants in the wake of the Japanese disaster, the Energy Secretary indicated on Sunday.
Chris Huhne said that the meltdown at Japan's Fukushima nuclear plant had "undoubtedly" cast a "shadow over the renaissance of the nuclear industry"...
Britain's solar industry was in uproar yesterday, branding the Government's proposed changes to the feed-in tariff (FIT) subsidy scheme as "nonsensical", "disgraceful" and "a horrendous strategic mistake".
The furore over the future of the nascent solar photovoltaic sector – which one industry group described as "strangled at birth" by the changes – comes against the backdrop of growing concerns about plans for new nuclear power stations given the crisis in Japan...
Soaring food inflation is the result of "immoral" policies in the US which divert crops for use in the production of biofuels instead of food, according to the chairman of one of the world's largest food companies.
Peter Brabeck-Letmathe, the chairman of Nestlé, lashed out at the Obama administration for promoting the use of ethanol made from corn, at the expense of hundreds of millions of people struggling to afford everyday basics made from the crop...
George Osborne reiterated today the UK government’s “determination to be the greenest government ever”. But given what we already knew, most of the new information contained in Wednesday’s Budget seems to be set against that agenda...
The government has tried to woo the "Ford Focus family" and head off a summer of discontent among lorry drivers by imposing a levy of up to £10bn on the oil industry to pay for lower prices at the pump.
The surprise move comes amid rising anger at record oil prices as political instability in Libya and the Middle East pushes the cost of crude to $116 a barrel...
Business leaders, campaigners and investors slammed George Osborne's flagship green policy on Wednesday, reacting angrily to his decision to severely limit the powers of the new green investment bank.
The bank – to be funded with £1bn from taxpayers and up to £2bn from sales of government assets – is the centrepiece of ministers' claims to be "the greenest government ever". It would invest in projects such as renewable energy and the development of new low-carbon technologies, filling the gaps left by private sector investors...
The UK will become the first country in the world to introduce a carbon price floor for the power sector to encourage investment in all forms of renewable energy, including controversially, new nuclear power.
The measure is among several announced by the George Osborne, chancellor, to boost investment into low-carbon energy and improve what he described as Britain’s “dilapidated infrastructure”...
Foreign oil and gas producers are pulling staff out of Yemen while the French energy group Total, the country's biggest energy investor, has warned of possible force majeure affecting exports of liquefied natural gas (LNG).
Unrest in the country could lead to supply disruptions, a Total spokeswoman told customers of Yemen LNG, a group the company leads...
At least 15 people are known to have died in clashes between security forces and protesters in Syria on Wednesday, medical officials and activists say.
There are fears the final toll could be much higher after a day of violence in the southern city of Deraa...
The no-fly zone and multinational military campaign in Libya should continue until Libya ends hostilities with rebels, U.N. Secretary-General Ban Ki-moon said.
The U.S.-led campaign -- which focused Thursday on wiping out Gadhafi regime military units besieging two cities pivotal to the rebel movement -- should not be an open-ended military operation, Ban told Global Viewpoint Network, a commentary and interview news service, ahead of a Thursday briefing Ban will give the U.N. Security Council on the Libyan crisis...
EU leaders gather in Brussels on Thursday, after Portugal's parliament rejected an austerity budget, prompting the resignation of PM Jose Socrates.
The vote means an international bail-out, similar to those accepted by Greece and the Irish Republic last year, is now far more likely...
The European Commission plans to step up its battle against oil- and gas-fuelled cars, and is drawing up strict targets to halve their urban usage by 2030 and "phase them out by 2050," according to an EU road map on transport to be published on Monday (28 March) and seen by EurActiv.
These objectives will play an instrumental role in achieving the more comprehensive target of cutting CO2 emissions from transport by 60% by 2050. Currently, a quarter of EU greenhouse gas emissions come from transport...
27-29 April 2011 | Brussels, Belgium
The 9th conference of the Association for the Study of Peakoil & Gas (ASPO) is the only international conference exclusively dedicated to fossil fuel depletion and its economic and social consequences. Providing an excellent opportunity to join 250 conference delegates and 45 speakers to discuss and exchange knowledge about “European Energy Policy in an era of expensive energy". ASPO 9 will take place in Brussels, Belgium during April 27-29, 2011 with two extensions at the Belgian Walloon parliament (April 26) and European parliament (May 3rd).
Click here for the conference website program overview with the latest information
Join ASPO 9 to gain fresh insights from 45+ speakers on:
• Impacts of 100+ dollar per barrel oil prices on energy markets and the economy.
• Long term availability and cost developments of oil, gas, and coal markets.
• Influence of recent geopolitical events in Arab countries on oil markets.
• Deepwater oil, shale gas, and underground coal gasification developments.
• Global oil export developments and consequences for the European Union.
• Potential and policies for a full scale transition to renewable energy sources.
• The effect of rising oil price on food prices and production.
• The potential to develop an agricultural system without fossil fuels.
• The integration of renewable energy sources in the European electricity grid.
• Energy Policy options in an era of expensive energy facing long term oil import declines.
• The Modeling of Energy, Transport, and Material requirements for an energy transition.
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