ODAC Newsletter – July 22

The International Energy Agency on Thursday said it sees no current need for a second release of oil from emergency stocks, but stands ready for further action should market conditions require it in the future.

The decision means the IEA, which represents major energy-consuming countries, avoids the barrage of criticism generated by its release of almost 60 million barrels of oil from emergency stocks a month ago…

Saudi Arabia, the world’s largest oil producer and exporter, which last month pumped 9.7m barrels a day, the second highest level in three decades, could soon become one of the top oil consumers.

The emergence of Saudi Arabia as an important consumer sets a critical new trend that could have profound implications for oil prices over the next few years. As the kingdom’s oil demand surges, the exportable surplus narrows, tightening global oil markets…

China’s refined oil product stocks at the end of June increased nearly 1 million tonnes from a year earlier and were at a normal level, after fuel consumption slowed down since mid-April, a government report showed on Tuesday.

Fuel consumption averaged 665,000 tonnes a day in the second quarter, off a record daily rate of 701,000 tonnes in March, the National Development and Reform Commission (NDRC) said in a report on its website…

Oil slipped, heading for its first weekly decline in three weeks, as concern U.S. debt ratings may be downgraded outweighed prospects for economic expansion in the world’s biggest crude user.

Futures have declined 2.5 percent in London and 1 percent in New York this week. Treasury Secretary Timothy F. Geithner said yesterday that there’s no possible extension to the time limit to raise the debt ceiling, while Standard & Poor’s joined Moody’s Investors Service in reviewing the U.S. rating. Crude may rebound next week, according to a Bloomberg News survey of traders and analysts…

A US congressional committee on Wednesday voiced support for an extension of a Canadian oil pipeline, saying it offered a stable source of energy despite concern by environmentalists.

The Republican-led House Foreign Affairs Committee voted 30 to 14 to approve a text saying that Secretary of State Hillary Clinton “should promptly authorize” the 1,661-mile (2,673-kilometer) Keystone XL project…

I’m standing in a field next to Montana’s Yellowstone River, a gentle breeze swaying the pasture grass and tempering the 85-degree heat. White fluffs from a cottonwood tree drift slowly across the sky like cartoonish snowflakes. It would be an idyllic scene, if it weren’t for the strong smell of crude oil and the guys in hazmat suits patrolling the farm next door.

It’s two weeks to the day after ExxonMobil’s Silvertip pipeline ruptured under the Yellowstone, spilling an estimated 42,000 gallons of oil into the raging waters in Laurel, Montana. When the spill started late in the evening of July 1, the river had overflowed its banks, pushing water out into the surrounding fields. This meant that the oil, too, flowed in, and when the floods receded they left a ring of black crude around this particular field, and the thick gunk still clung to the blades of grass. Most of the damage was within 50 miles of the site of the break, though oil has been reported as far as 240 miles away…

BP reported yet another pipeline leak at its Alaskan oilfields, frustrating the oil giant’s attempts to rebuild its reputation after the Gulf of Mexico oil spill. BP has said that a pipeline at its 30,000 barrel per day Lisburne field, which is currently closed for maintenance, ruptured during testing and spilled a mixture of methanol and oily water onto the tundra.

The company has a long history of oil spills at its Alaskan pipelines — accidents which have hurt its public image in the US, where around 40% of its assets are based…

A judge has stopped the transport of giant oilfield equipment across scenic roads in Montana, in a victory for campaigners against Alberta’s tar sands.

The injunction granted by a district judge in Missoula bars Imperial Oil, a Canadian subsidiary of ExxonMobil, from going ahead with their plans to transport the over-sized mining equipment across the state…

China’s state-owned Cnooc has agreed to acquire Opti Canada, a bankrupt Calgary-based oil sands producer, for $2.1bn, including debt, underscoring the growing role of Chinese companies in the Alberta industry.

Opti filed for credit protection a week ago after failing to find a buyer…

A lawsuit against BP representatives in Russia has laid bare the continuing tensions over TNK-BP, the British oil giant’s joint venture with four oligarchs.

TNK-BP was earlier this year racked by a row between its two main owners, BP and four Russian billionaires. The oligarchs managed to stop BP doing a £10bn deal with Russian state oil company Rosneft. However, they were unsuccessful in trying to replace BP with TNK-BP as the main vehicle for the transaction…

An oil company has been granted an injunction to stop Greenpeace posting photographs of an occupation of the company’s offices on Twitter and Facebook.

Cairn Energy was given an interim interdict against a number of Greenpeace campaigners after they entered their Edinburgh headquarters on Monday…

Some of the protesters were dressed as polar bears.

Royal Dutch Shell PLC said Friday it plans to sell its stake in a long-stalled, C$16.2-billion (US$17 billion) natural-gas production and pipeline project in Canada’s far north, as well as its other assets in the region.

The fate of the Mackenzie Gas Project, which envisions bringing natural gas from fields bordering the Arctic Ocean to markets in North America, has long been in doubt. But Shell’s departure from the project marks the surprise capitulation of one of the project’s oldest and biggest partners. Consortium members have weathered years of regulatory review and roller-coasting gas prices, betting that the region’s gas trove would one day be economical…

Russian President Dmitry Medvedev said OAO Gazprom should export more natural gas to Germany after Chancellor Angela Merkel decided to close all of the country’s nuclear-power plants by 2022.

Russia, the biggest supplier of gas to Germany, will “focus more on natural gas exports” after Merkel decided in June to accelerate plans to phase out nuclear power, according to the text of a Medvedev speech distributed today in Hanover, Germany. Russia also aims to woo German utilities in “asset exchanges and ecologically clean technology transfers,” according to the text…

Extra safety measures and two deadly accidents have delayed EDF’s flagship French nuclear plant by another two years, raising fears about the delivery of its first two stations in Britain.

The UK is relying on EDF to build the first nuclear power stations for a generation in Suffolk and Somerset by 2018…

Nuclear companies have cleared another hurdle in their quest to build new UK power stations, after parliament approved planning laws allowing plants to be built more quickly.

There had been concern that nuclear power plants planned for 2018 and 2020 could be held up for years in lengthy local planning inquiries. It took a four years and 16m words of evidence for Sizewell B to be approved, after a record inquiry in 1985…

Demand for biofuels in the US is driving this year’s high food prices, a report has said. It predicts that food prices are unlikely to fall back down for another two years.

The report, produced by Purdue University economists for the Farm Foundation policy organisation, said US government support for ethanol, including subsidies, had fuelled strong demand for corn over the last five years…

View report

Households will be able to apply for substantial grants towards the cost of renewable heating systems, worth up to £1,250 for the biggest installations, starting from August 1.

Biomass boilers burning wood pellets, solar thermal panels for hot water heating, and both air and ground source heat pumps can all be installed with the grants, taking the form of government vouchers. The £15m scheme is part of the ministers’ renewable heat support plans, and will provide funding for up to 25,000 households…

Dozens of new fossil-fuelled power stations are being planned by energy companies, triggering concerns among green campaigners of a new “dash for gas” that could crowd out wind and other cleaner energy projects, the Guardian can reveal.

Friends of the Earth is calling on MPs to block the government’s prime energy policy statement, which comes before parliament on Monday amid a deluge of new planning applications or consents. Some plans are already queuing up in the public planning system. Scottish Power wants to construct a 1.2GW station at Avonmouth, near Bristol, while RWE npower is building a 2GW gas plant at Pembroke, south Wales, and a 2.4GW station at Willington in Derbyshire. It is also looking at a smaller facility at Fawley, near Southampton. Smaller schemes include ones by Welsh Power, which wants to construct an 850MW plant at Fleetwood in Lancashire, and Trafford Peaking Power is developing one in Manchester…

Rejoice, the boom is back! After a drought of investment, last week BP announced that it was spending £3bn to redevelop fields in the deep waters to the west of Shetland. The government was delighted: this shows, it says, that its policies are working. It promised to “continue to work alongside oil and gas companies to support growth and jobs in the UK”.
Illustration by Daniel Pudles
Great. But hold on a minute, didn’t the government tell us, just two days before, that its priority is to decarbonise the economy? Well it depends who you’re talking to, and at which point in the cycle of crashing contradictions you catch them…

At a time of eye-watering energy price hikes, turning our homes into mini-power stations means we can cut bills and carbon emissions by generating a significant proportion of our heating and hot water needs ourselves.

To find out which renewable heat technology works best, the latest Ethical Consumer magazine Buyers’ Guide looked at the three main options — ground source heat pumps, biomass boilers and solar hot water…

The government has been warned it risks harming investor confidence in the UK’s emerging “negawatt market”, after failing to reveal how it will administer payments for back-up plants and demand management schemes as part of the wide-ranging electricity market reforms whitepaper released last week.

The Department of Energy and Climate Change (DECC) confirmed last week that it will develop a specific “electricity systems policy” designed to enhance grid resilience and flexibility, and address the challenge of meeting high electricity demand at times when weather conditions mean low levels of renewable energy are being generated…

The Australian government is pointing to the coal sector’s $70 billion investment in new projects as proof that the powerful coal industry isn’t as spooked by Prime Minister Julia Gillard’s carbon tax as it claims.

“I can assure coal miners that their industry has a bright future under a carbon price,” said Climate Change Minister Greg Combet, who is Gillard’s top deputy charged with shepherding a climate bill through Parliament and making the case to a wary public…

A special meeting of the United Nations security council is due to consider whether to expand its mission to keep the peace in an era of climate change.

Small island states, which could disappear beneath rising seas, are pushing the security council to intervene to combat the threat to their existence…

Republicans claimed to have struck a blow for freedom on Friday when the House of Representatives voted to strip all funding from government programmes promoting energy-saving lightbulbs.

The measure, brought as an amendment to an energy spending bill by the Texas Republican Michael Burgess, bars the federal government from using any funds to enforce improved lighting efficiency standards…