ODAC Newsletter - 11 May 2012


Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.

Fears of a new phase in the European debt crisis, a decline in oil imports to China in April, and the prospect of a new round of international talks on Iran’s nuclear programme have seen oil prices drop back from recent highs in the past two weeks. Despite all this however, and reports from OPEC that it bolstered supply by 320,000 barrels in April, Brent oil still stands around $112/barrel.

A new paper from the IMF ‘The Future of Oil: Geology versus Technology’ released this week provides some interesting reading on oil price forecasting. The paper, which is intended to provoke discussion rather than reflect an IMF view, compares the success of different oil forecasting methods. The geological method represents the typical peak oil model – for example Colin Campbell’s forecast, while the economic/technological model reflects that of the EIA. The report found that a combination of the two approaches created the most accurate model of recent trends. A forecast to 2020 using this composite model sees oil supply growth contracting from 2005 levels, and “requires a large increase in the real price of oil, which would have to nearly double over the coming decade to maintain an output expansion that is modest in historical terms.” For a useful summary see commentary by Gail Tverberg.

In the UK this week the Queen’s speech set out the government’s legislative programme for the coming year. From an energy perspective the big and much awaited announcement was the reform of the electricity market. The passing of the bill will be a test of the government’s resolve on investment in clean energy and meeting emission reduction targets. There have already been noticeable cracks between DECC and the Treasury on the cost of green measures, and the debate and lobbying accompanying this bill will heighten these tensions as Tory back benchers take on renewables, and Liberals fight the not very well hidden nuclear subsidy. In the meantime expect considerable pressure from the shale gas lobby looking to sell a story of cheaper clean energy ahead – though, even with the many other risks aside, the carbon capture and storage required from this is still a pipe dream.

The political pressure to pursue the shale gas dream became more apparent this week as chairman of the Environment Agency, Lord Smith of Finsbury declared his qualified support. As to the question of the environmental impact of shale gas, Lord Smith commented that "The answer is complex, and is something like 'up to a point',”  "But, with careful use of the drilling technology, with rigorous monitoring and inspection, and with the development of a major programme of carbon capture and storage for gas-fired power generation, then shale gas could be a truly useful part of our energy mix."—so hardly a ringing endorsement.

And finally, some interesting news from Wales. A White Paper released this week on Active Travel is looking to achieve a “cultural change similar to that of smoking” with regard to travel by enabling people to get out of their cars and travel in healthier more sustainable ways. Measures are to include compulsory provision of safe and integrated routes for walking and cycling. Maybe one for the next Queen’s Speech?

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Disclaimers

Oil

Oil Rises for First Time in Seven Days on Jobless Claims

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IMF releases new research paper concerning oil and the global economy

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Insight: Canada's oil sand battle with Europe

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Libya's vast oil potential is still in the grip of flux

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BP may get second chance in Arctic through Rosneft tie-up with TNK-BP

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Gas

Chesapeake's deepest well - Wall Street

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Czechs eye moratorium on shale gas exploration

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Obama Warms to Energy Industry by Supporting Natural Gas

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Renewables

Largest onshore windfarm in England and Wales gets go-ahead

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Industry: Solar most installed energy source in Europe last year

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UK

The Queen's Speech: Electricity market overhaul bids to bridge energy gap

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The Energy Bill is coming

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Greater use of fracking is backed by UK's environment watchdog

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Shale Gas Explorer Says U.K. Production May Start in 2014

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British Gas owner Centrica warns of higher energy bills

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Climate

Norway opens major facility to test carbon capture

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Transport

Wales gets tough over green travel

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Electric cars in China: Not yet

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Disclaimers

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