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.
This week saw the release of another influential report on peak oil. Fueling the Future Force, by the Center for a New American Security (CNAS), a think tank which allegedly has strong links with the Obama administration, recommends that the Department of Defence transitions entirely away from petroleum by 2040. The publication demonstrates once again that there is a freedom to engage with the issue in military circles which as yet does not exist in mainstream politics.
Germany’s government ratified its controversial energy bill this week, which promises to meet 60% of the country’s energy needs (80% of electricity) with renewables by 2050. The bill is contentious because it also grants operating-life extensions to Germany’s nuclear power plants – a move that critics say will hamper renewables growth, but the government claims will act as a bridge and provide funding via a new nuclear fuel rod tax.
In Britain, just as the world’s largest off-shore wind farm opened near Thanet in Kent, came confirmation that the industry’s costs have soared over the past decade. A report from UKERC called Great Expectations said the reasons include including currency and commodity price fluctuations, shortages, bottlenecks and planning delays. Electricity from off-shore wind now costs 90% more than from gas. But the authors hold out some optimism prices could come down, given the right incentives and the development of a British supply chain.
A policy that could change the economics in favour of off-shore wind was suggested by Dr Myles Allen, head of the Climate Dynamics Group at the University Oxford, speaking at the Sustainable Planet forum in Lyon this week. Dr Allen suggested that rather than tackling emissions via taxes and incentives, that fossil fuel companies should take responsibility for burying all the carbon dioxide emitted by their products as a condition of staying in business. Another novel approach was raised in Ecuador, where the government has asked for international funds to leave oil in the ground. The argument goes that not extracting the oil will protect the Amazon rain forest, while also avoiding emissions from burning it. Interesting ideas both, but don’t hold your breath.
Note: The ODAC newsletter will be taking a one week break next week due to staff vacation. We will be back on Friday October 15th. Thanks for your patience.
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Oil
US Military Needs to Get Off Oil by 2040: Report
The United States military must entirely get off oil by 2040 if it wants to reduce operational vulnerabilities, reduce costs, stop new security risks caused by climate change and avoid the coming peak oil supply crunch. That’s the word from the Center For a New American Security, whose Fueling the Future Force report details the hows and whys of the situation.
Petroleum is 77% of Military Energy Supply
Report authors Christine Parthemore and Dr. John Nagl say, “Reducing dependency on petroleum will help ensure the long-term ability of the military to carry out its assigned missions. Moving beyond petroleum will allow DoD to lead in the development of innovative technologies that can benefit the nation more broadly, while signaling to the world that the United States has an innovative and adaptable force.”…
Crude Oil Rises to Seven-Week High on U.S., China Economic Data
Oil rose for a third day, headed for its biggest weekly gain since May, after economic data from the U.S. and China bolstered optimism that demand is growing in the world’s two biggest consumers of the fuel.
Futures reached their highest level in more than seven weeks after the U.S. government yesterday reported economic growth and a decline in jobless claims that exceeded forecasts. China’s purchasing managers’ index rose in September at the fastest pace in four months, a report today showed…
Questions about what’s next as offshore drilling ban expires
Interior Secretary Ken Salazar is getting ready to take his finger off what he has called the “pause” button on deepwater oil drilling, with environmentalists and oil industry executives alike worried about what comes next.
Thursday, Salazar will receive recommendations from Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, based on information gathered at public forums and private meetings in the wake of the BP oil spill. Salazar could act on the BOEMRE report well before the drilling ban’s expiration date, Nov. 30…
BP ousts exploration chief, vows to boost safety
BP Plc’s incoming Chief Executive Bob Dudley has ousted the oil group’s exploration and production chief following the Gulf of Mexico oil spill and promised to restructure the company to boost safety.
Echoing a move BP made after the Texas City blast in 2005, Dudley also said on Wednesday he was appointing a new safety guru, Mark Bly, who would ensure safe practices across the organization…
Oil firms reap benefit of Iran’s build-up of crude stocks
In March Barack Obama’s argument for tougher international trade sanctions against Iran and its lucrative oil industry was brutally simple. “The long-term consequences of a nuclear-armed Iran are unacceptable,” he said.
The UN, EU and US Congress seemed to agree, passing into law fresh restrictions in June and July aimed at frustrating Iran’s economic development and inhibiting its crude oil exports of 2.2bn barrels-a-day, representing 80% of all its trade abroad…
Oil: Can Ecuador see past the black stuff?
One of the most extraordinary people I have met in 10 days of travelling around Peru and Ecuador has been Alberto Acosta. He’s head of Ecuador’s leading research group now, but until 2007 was the second most powerful man in the country after the president, Rafael Correa. He was not only charged with masterminding the new constitution but was head of the assembly, or parliament, a founder of the ruling political party and minister of energy of the country that depends on oil.
But Acosta will go down in history as the world’s only serving oil minister to have ever proposed leaving a country’s black stuff in the ground. That’s like Dracula renouncing blood, or a sports minister saying it’s better to play hide and seek than football. It just does not happen…
OPEC crude oil production fell to 8 month low
The Organization of Petroleum Exporting Countries’ crude oil output fell to an eight month low in September, led by Iraq, where a pipeline disruption curtailed shipments, a Bloomberg News survey showed.
Production slipped 145,000 barrels, or 0.5 percent, to an average 29.055 million barrels a day, the lowest level since January, according to the survey…
Iraq to announce big rise in oil reserves Monday
Iraq will announce on Monday a “big increase” in its oil reserves, currently 115 billion barrels, a spokesman for the oil ministry said on Thursday.
Iraq’s crude reserves are the world’s third largest but its production lags. The government has signed a series of deals with oil majors to ramp up output capacity to about 12 million barrels per day from around 2.5 million bpd now…
Shell plans rapid North American growth
Royal Dutch Shell is planning a rapid expansion of its North American business to raise production by 40 per cent to 1m barrels equivalent per day in 2014, including gas, Canadian oil sands and deepwater oil.
The strategy, announced in Canada on Tuesday, is part of Europe’s largest oil company’s plan to meet its “aspiration” of producing 3.7m barrels per day in 2014, compared with 3.15m last year…
Obama says energy policy a top priority next year
President Barack Obama said revamping U.S. energy policy would be a top priority next year and may have to be done “in chunks” rather than through one piece of legislation, according to Rolling Stone magazine.
In an interview published on Tuesday, Obama lamented that more progress to fight climate change had not been made since he took office, and blamed the economy for that failure…
Greenpeace banned from intercepting oil-drilling ship
Greenpeace has been banned from intercepting a deep sea oil-drilling ship after the protest group sent “wave after wave” of swimmers into the north Atlantic to stop the vessel from reaching its drilling site.
The US oil giant Chevron was granted a wide-ranging interdict, or injunction, by judges in Edinburgh today, ordering Greenpeace to stop any further direct action preventing the Stena Carron from reaching its destination or impeding its “lawful business”…
Gas
Eni, Mitsubishi Among Companies Bidding to Develop Iraq Natural-Gas Fields
Eni SpA is among international companies interested in bidding to develop natural-gas fields in Iraq, while China National Petroleum Corp. and others reported progress producing oil there, officials and executives said.
Italy’s Eni and Mitsubishi Corp. of Japan are two of 13 companies to have registered to bid on gas contracts that Iraq is preparing to auction next month, Abdul Hadi al-Hassani, vice chairman of the oil and gas committee of the country’s parliament, said today. Together with a dozen oilfield contracts awarded last year, the bidding round for gas rights planned for Oct. 20 marks a step forward in Iraq’s campaign to boost the output of its most valuable commodities…
House passes shale gas production tax
Democrats and environmentalists praised it, while Republicans and gas industry officials pilloried it. But in the end, a bill to create Pennsylvania’s first Marcellus Shale gas severance tax took a step forward Wednesday.
Senate Bill 1155, after being totally rewritten by House Democrats, would slap a hefty levy of 39 cents per thousand cubic feet (MCF) of gas extracted from underground shale throughout Pennsylvania…
Coal
EU to allow Spain coal plan to 2014
Spain will win EU approval this week for a plan that would benefit domestic coal producers over importers until the end of 2014, sources with direct knowledge of the matter said on Monday.
Under a decree passed by the Spanish government, power utilities would be required burn domestic coal instead of imports, which are usually cheaper. The executive European Commission has been examining the scheme to check whether it complies with the European Union’s state aid rules…
Renewables
Germany to wean itself off fossil fuels
The German government has signalled its ambition to wean one of the world’s largest economies off fossil fuels by pledging to generate enough renewable energy to meet 60 per cent of the country’s energy needs by 2050.
Norbert Röttgen, environment minister, said it was “the most ambitious energy programme ever seen, not only in Germany”…
Denmark eyes up fossil fuel-free future
Danish climate commission report predicts the country could switch to renewables by the middle of the century
The falling cost of renewable energy and rising cost of oil and gas will allow Denmark to develop an energy network entirely free of fossil fuels by 2050, according to a report published by the government’s climate commission tomorrow…
Britain’s offshore windpower costs twice as much as coal and gas generated electricity
Off shore wind farms cost twice as much to produce electricity as gas and coal powered stations and will need subsidies for at least 20 years, a major report warns.
Britain’s so-called “dash for wind” means that it is now the biggest off shore generator – producing as much as the rest of the world put together…
Mining and Minerals
UN environment chief urges recycling of rare metals
The UN’s environment chief on Wednesday called for a global drive to recycle rare metals that have hit the headlines in a spat between Japan and China, warning that they are crucial for green technologies.
Achim Steiner, executive director of the UN Environment Programme, said that demand for “rare earth metals” such as lithium and neodymium — used in batteries for hybrid cars or components in wind and solar power — was accelerating fast…
Japan May Spend on Rare Earths After China’s Cut, Ohata Says
Japan may budget measures to secure supplies of rare earths after China curtailed exports of the minerals, said Japan’s Trade Minister Akihiro Ohata.
The Ministry of Economy, Trade and Industry “hopes” to ask for a supplementary budget to secure stable rare earth supplies, Ohata told Jiji Press today. The comments were confirmed by a ministry spokesman, who didn’t want to be identified…
‘Rare earths’ fears spur US review
The US is trying to resume production of raw materials vital for defence equipment and green technology in response to rising fears about Chinese dominance of the sector…
Climate
We can’t use it — so why the heck are we prospecting for new oil?
Forget, for a moment, the fragility of the Arctic environment and the likely consequences of a spill there. Forget the dangers of deepwater drilling in a strait plagued by storms and icebergs, and the difficulties — greater than in the Gulf of Mexico — of capping a leaking well there. There’s an even bigger question raised by a British company’s discovery of oil off the coast of Greenland. It’s the same question that is invoked by the decision the British government is expected to make tomorrow: to allow exploration wells to be drilled in deep waters to the west of Shetland. Why the heck are we prospecting for new oil anyway?..
Climate change crisis ‘can be solved by oil companies’
Climate change can be solved in a snap by making oil, gas and coal companies take responsibility for burying all the carbon dioxide emitted by the fossil fuel products they sell, one of Britain’s leading young climate scientists said yesterday.
Government attempts to try to get millions of people to change their behaviour through taxes and incentives were doomed to fail, said Dr Myles Allen, head of the Climate Dynamics Group at the University Oxford, and an increasingly influential voice in the climate debate…
China seeks binding climate treaty late 2011-report
China wants the world to seal a binding climate change treaty by late 2011, a Chinese negotiator said in a newspaper on Friday, blaming U.S. politics for impeding talks and making a deal on global warming impossible this year.
Li Gao, a senior Chinese negotiator on climate change, said his government would remain unyielding on issues of “principle” in the talks aimed at forging a successor to the Kyoto Protocol. The first period of that key treaty on fighting global warming expires at the end of 2012…
