ODAC Newsletter - 15 April 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.

The IEA reported this week that there are preliminary signs of oil demand destruction due to soaring prices. Goldman Sachs underlined this viewpoint on Tuesday by advising its clients to sell oil, copper, platinum and cotton. Prices fell in response, although concern over conflict in the Middle East and Saudi production saw prices nudging up again by the end of the week.

Even with demand destruction there are significant concerns that oil supply will remain tight. Platts reported that OPEC is struggling to cover the shortfall in Libyan production especially for the high quality grades. The IEA estimates that another 3 million barrels/day of production could possibly be affected by political unrest in the Middle East; while Japan is set to require additional oil imports in coming months to help cover the shortfall in power generation caused by the Fukishima nuclear disaster. 

In Fukishima this week efforts continued to stabilise the damaged reactors where according to U.S. Nuclear Regulatory Commission Chairman Gregory Jaczko, “Significant additional problems” could still occur. The severity of the accident was raised on Tuesday from level 5 to 7, the highest possible rating, and the same as the Chernobyl  disaster. Officials were quick to make assurances that the change in rating was not due to a recent worsening of the situation, but rather reflects the radiation released to date - which is much less than Chernobyl.

With concern growing over future oil supply and nuclear safety, much attention is currently focused on prospects for increasing gas production, via shale gas. The safety of the fracking process used to produce the gas is already the subject of considerable debate, but the industry took another hit this week as a new report from Cornell University claimed that the full life cycle of shale gas production produces more greenhouse gas emissions than coal. The industry has been positioning gas as a low carbon bridge fuel, and the report will no doubt result in heated debate. The uncertainties around gas, and also biofuel - see a report released by the Nuffield Council on Bioethics this week - demonstrate clearly that there is no ready substitute fuel for oil, and that therefore responses will need to address energy demand as well as supply.

In more positive news, this week saw the activation of a new high voltage DC powerline between the UK and Holland. The cable is seen as a first step in connecting European countries to allow for sharing and balancing of power from renewable sources.

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Disclaimers

Oil

IEA: Oil Market to Tighten Further

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OPEC struggles to cover slump in Libyan output

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Goldman Sachs signals end of oil price rises

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Prime Minister of France: Oil production can only decline

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Oil Gains a Third Day After Reports Saudi Arabia Cut Production This Month

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Iraq oil output at highest level for a decade, says IEA

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Oil police struggle to protect Iraq's 'black gold'

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A bloody nose for Sir William Castell at BP's AGM

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BP, Rosneft extend share swap deadline to May 16

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Gas

Studies Say Natural Gas Has Its Own Environmental Problems

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Frack: Is Shale Natural Gas Worse for the Climate Than Coal?

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Senators Question Safety of Water Used in Gas Drilling

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Tymoshenko investigated over gas deal

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Electricity

BritNed power cable boosts hopes for European supergrid

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Knowledge Is Power

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Nuclear

China could ban second-generation nuke projects -official

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Japanese Officials on Defensive as Nuclear Alert Level Rises

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Japan's nuclear clean-up continues to unravel

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Tepco makes Lehman seem a mere bagatelle

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Biofuels

Biofuels targets are 'unethical', says Nuffield report

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Relax biofuel laws to help ease the food crisis, World Bank says

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UK

UK watchdog attacks commodity caps plan

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Out-of-town shopping malls suffer as fuel price deters shoppers

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Transport

U.S. high-speed rail program hit by deep budget cuts

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Disclaimers

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