ODAC Newsletter - July 1 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 fallout from the IEA’s recent decision to release 60 million barrels of oil reserves continued this week. OPEC members criticized the IEA for “breaching its own principles” and interfering with the market. Traders too seemed little impressed with the move as prices recovered last week’s losses, as Greece drew back from the brink. After all, 60 million barrels is less than a day’s global consumption.

Abdalla Salem El-Badri Secretary General of OPEC, claimed Saudi and Kuwait were not given long enough to increase production, but an IEA statement maintained the Agency had been in close contact with Saudi Arabia before the decision. So, as ever, the reality is opaque. We will have to wait until the second half of the year to see whether production can really be ramped up. If not, it will support the argument that the IEA’s move was not simply driven by American politics, but that the Agency is more worried than it lets on that Saudi  - and therefore OPEC as a whole - cannot deliver.

More doubts were raised about the shale gas revolution in a series of articles in the New York Times. The paper revealed internal industry documents and e-mails claiming that reserves and production estimates are likely to be overstated, and comparing the shale gas boom to a Ponzi scheme. The overstatements were made possible by recent changes in Securities and Exchange Commission rules, which now allow companies to book reserves as proved in areas where they have not yet drilled, solely on the basis of modelling. The productivity of different plays varies significantly and it seems estimates are sometimes made using numbers from the most productive wells, giving an overly rosy picture. The shale gas industry has dismissed the criticism, but a press release from industry giant Chesapeake Energy fails to rebut the specific allegations.

In the UK this week the Committee on Climate Change warned that meeting the government’s fourth carbon budget will still require a “step change”. Despite the weak economy, emissions rose 3% last year instead of falling by that amount, as required by the government’s strategy. Unusually severe winter weather didn’t help, but even stripping that out, emissions were only flat. According to the report, insufficient progress is being made in domestic insulation retrofits, smart travel choices, and renewables investment. DECC figures show that in the first quarter of this year higher gas prices prompted a rise coal burning for power generation.  Energy Secretary Chris Huhne keeps saying we need to get off fossil fuels, but the pressure on the government will continue to grow as fuel costs increase and the economy continues to flounder.


Disclaimers

Oil

OPEC Acts to Avoid Oil Releases

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Iran Accuses IEA of Breaching 'Principles'

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Peak oil is 'getting closer' but the world is not ready

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Crude Down In Profit Taking; But Eyes US Data

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BG Group doubles estimate of Brazil Santos Basin oil reserves

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Gas

S.E.C. Shift Leads to Worries of Overestimation of Reserves

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Insiders Raise Alarm Amid a Rush for Natural Gas

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China enters shale gas era with tender offer

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Norway launches carbon capture and storage scheme

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Influential MEP calls for shale gas regulation

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Electricity

DECC warned it could 'blow' £11.3bn smart meter budget

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Eon takes up Merkel move to go green

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Nuclear

Plans for UK's 'legacy' of nuclear waste unveiled

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Los Alamos nuclear lab: New Mexico fire forces closure

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A Long Road Ahead for a Flooded Reactor

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Don't believe the spin on thorium being a greener nuclear option

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Nicolas Sarkozy makes €1bn commitment to nuclear power

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Dozens of countries queue up to go nuclear

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Biofuels

In Bioenergy Villages, Power to the People

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The Difference Engine: The beef about corn

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UK

UK emissions flat-lining, warns climate committee

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Electricity companies switch from gas to coal

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Switch flicked on UK's "first solar business park"

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Transport

Spike in Metal Theft Imperils German Railways

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Disclaimers

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