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.
Global oil consumption fell 300,000 barrels/day in Q4 of 2011 compared to the same period in 2010 according to the IEA’s monthly oil report released this week. This was the first such fall since 2009 and reflects renewed economic weakness. The agency responded by reducing its growth projection for 2012 by 200kb/d to 1.1 million barrels — further downward revisions may well follow. The report also shows inventories remaining tight for the time being. With demand weakness being offset by supply risks from Nigeria, Iraq and Iran, prices are described as stable.
As interesting as this short-term assessment is, of more importance are prospects for the longer term as we move beyond the peak of conventional oil production and the window for action on climate change closes. One view came this week by way of the latest BP Energy Outlook to 2030. BP project a world in which energy demand increases 36% by 2030, and consumption of oil, gas and coal all grow despite growth in renewables and increased energy efficiency. Oil’s overall market share decreases, however liquid fuel supply is still projected to meet a demand of 103mb/d by 2030, thanks largely to a huge rise in output of 12mb/d from OPEC – this assumption implies that OPEC can maintain current output to 2030 as well as grow crude production from Saudi, Iraq and “others” — really? The report anticipates that emissions will increase 28% over the period — well above the 450ppm advocated to keep warming within 2oC.
There has been a shift in messaging from the major oil companies of late from one of acknowledgement that a gradual shift from fossil fuels was inevitable and necessary (for example BPs ‘Beyond Petroleum’ campaign and Chevron’s ‘Will You Join Us’), to one of – if they want it, we must supply it. The story goes that if governments just got regulation out of the way and allowed open season on drilling, companies would find the technology to meet fossil fuel demand for the foreseeable future, and that in natural gas we have a clean fuel (at least compared to coal). The message is a powerful one with politicians desperate for economic growth right now — see the interest this week in building a new London Thames Estuary airport which has to assume both affordable fuel prices and stable sea levels — but is supporting a false sense of security.
View our Reports and Resources page
Oil
Fossil fuel forecast: a huge role
Leaders of BP and ConocoPhillips called Wednesday for greater access to and development of oil and natural gas fields, as a BP report showed fossil fuels will continue to dominate the world’s energy needs for at least the next 20 years.
Renewable energy is growing faster than other sources, at about 8.2 percent annually, but will make up only 6 percent of energy use by 2030, according to the forecast released Wednesday by BP. Oil, natural gas and coal will still account for 80 percent of global energy use…
Uncertainty troubles Nigeria after fuel subsidy strike is halted
An uneasy calm returned to Nigeria’s cities Tuesday, a day after two Nigerian labor groups suspended their nationwide strike over the elimination of the country’s fuel subsidy.
In suspending the strikes, the Nigeria Labour Congress and the Trade Union Congress cited successes gained by demonstrators, including an announcement Monday by President Goodluck Jonathan slashing fuel prices…
Oil demand falling, IEA warns
The IEA warned in its monthly report on Wednesday that mild weather, high oil prices and a rising likelihood of a global recession will depress demand in 2012, Reuters reported.
Although worries about disruptions to Iranian oil exports have supported prices, consumption fell in the last quarter of 2011 year-on-year due to mild winter weather in the northern hemisphere and the overriding fears about an impending recession in the euro zone, the IEA said…
Saudi Arabia says no big deal to ramp up oil output
Saudi Arabia, the world’s top oil exporter, said on Monday it can pump more oil at a moment’s notice, the day after Iran warned Gulf oil producers not to compensate for any disruption to Iranian output.
Saudi Oil Minister Ali al-Naimi, in an interview with CNN, said Riyadh could increase production by about 2 million barrels per day (bpd) “almost immediately”…
Obama administration rejects Keystone pipeline
President Obama, declaring that he would not bow to congressional pressure, announced Wednesday that he was rejecting a Canadian firm’s application for a permit to build and operate the Keystone XL pipeline, a massive project that would have stretched from Canada’s oil sands to refineries in Texas.
Obama said that a Feb. 21 deadline set by Congress as part of the two-month payroll tax cut extension had made it impossible to do an adequate review of the pipeline project proposed by TransCanada…
Revealed: Europe’s plan to penalise Canada’s tar sands goes Dutch
Following in the UK’s footsteps, the Netherlands is now working to derail a European Commission proposal to officially designate fuels from Canada’s vast tar sands fields as highly polluting and discourage their use.
A secret proposal, which I have seen, means that instead of companies being responsible for curbing the overall carbon emissions of the transport fuels they sell, countries would be responsible. That would lead to the ludicrous and legally laughable situation that when one company pumps more filthy fuel into the system, every other company is somehow responsible for cutting their carbon footprint to compensate…
NZ ‘likely Texas of the south’
An oil exploration company wants to turn the East Coast into the “Texas of the south”, writing of the potential to build thousands of oil wells in the largely untouched region of New Zealand.
TAG Oil, which recently sparked controversy by expanding its operations in Taranaki, has told investors in North America the East Coast is “literally leaking oil and gas”…
Gas
Gazprom Price Retreat Offers EON Hope as Euro Crisis Cuts Demand
OAO Gazprom (GAZP)’s decision to cut prices for five customers signals a weakening position for Russia in Europe’s gas market as the economic crisis erodes energy demand.
Russia’s gas-export monopoly said yesterday it revised the price formula for clients including Germany’s Wingas, GDF Suez (GSZ) SA of France and Sinergie Italiane Srl to reflect “changing gas market conditions.” Germany’s largest utilities EON AG and RWE AG are embroiled in arbitration with Gazprom over prices and volumes after losing billions of euros buying fuel at above- market rates…
Bulgaria bans shale gas drilling with ‘fracking’ method
Bulgaria has become the second European country after France to ban exploratory drilling for shale gas using the extraction method called “fracking”.
Bulgarian MPs voted overwhelmingly for a ban on Wednesday, following big street protests by environmentalists…
Unlocking the Secrets Behind Hydraulic Fracturing
Starting Feb. 1, drilling operators in Texas will have to report many of the chemicals used in the process known as hydraulic fracturing. Environmentalists and landowners are looking forward to learning what acids, hydroxides and other materials have gone into a given well.
Expanded coverage of Texas is produced by The Texas Tribune, a nonprofit news organization. To join the conversation about this article, go to texastribune.org…
Nuclear
Japan’s push to restart nuclear plants sparks public anger
Japan’s push to restart nuclear reactors shut for maintenance by proving their safety through stress tests and plans to let them operate for as long as 60 years have sparked an angry response from the public, wary of atomic power in the aftermath of the Fukushima disaster.
In a rare protest, a group of citizen observers delayed for hours a hearing at the trade ministry on Wednesday, at which the nuclear watchdog presented to experts its first completed review of stress test results for two reactors from Fukui prefecture’s Ohi nuclear power plant…
Renewables
Analysis: New technology focuses the sun to cut solar’s cost
A fledgling but fast-growing solar technology that multiplies the sun’s power up to many hundreds of times promises to deliver cheaper electricity than traditional panels and has received the backing of some major industry players.
Called concentrating photovoltaic solar, or CPV, the technology is best suited for very sunny, desert-like locations and could face some near-term challenges. Those include a sharp drop in the price of its top competition — mainstream solar panels — and a financing environment that can be skittish about new technology bets…
Re-Evaluating Germany’s Blind Faith in the Sun
The costs of subsidizing solar electricity have exceeded the 100-billion-euro mark in Germany, but poor results are jeopardizing the country’s transition to renewable energy. The government is struggling to come up with a new concept to promote the inefficient technology in the future.
The Baedeker travel guide is now available in an environmentally-friendly version. The 200-page book, entitled “Germany – Discover Renewable Energy,” lists the sights of the solar age: the solar café in Kirchzarten, the solar golf course in Bad Saulgau, the light tower in Solingen and the “Alster Sun” in Hamburg, possibly the largest solar boat in the world…
Five things we’ve learnt at the World Future Energy Summit 2012
Around 26,000 people have passed through the Abu Dhabi National Exhibition Centre during the past week, attracted by the presence of some of the largest and most innovative green (and not so green) companies on the planet exhibiting at the annual World Future Energy Summit.
Here are five key lessons for delegates at the summit, plus one warning…
Biofuels
GM microbe breakthrough paves way for large-scale seaweed farming for biofuels
The ancient art of seaweed farming could provide a solution to a 21st-century energy dilemma, with the creation of a genetically engineered microbe that turns the algae into low-carbon biofuel, scientists said on Thursday.
Biofuels have been touted as low-carbon replacements for petrol and diesel, but those made from crops like corn and sugar have been blamed for increasing global food prices and delivering only modest benefits…
UK
Exclusive: Ministers slammed over fracking
The Government has been accused of “appalling complacency” after it emerged that not a single minister has met with the Environment Agency’s experts to discuss the hugely controversial gas exploration technique known as fracking.
Despite earthquakes in Blackpool, growing concerns about poisoning of the water supply and demonstrations around the world, the Government still appears not to be taking the potential dangers of fracking seriously enough, critics said. At the weekend, anti-fracking demonstrations were held in London, Paris, Copenhagen and Bulgaria…
MoD radar breakthrough promises green light to 4GW of wind farms
The Ministry of Defence (MoD) has signed a deal that could unlock more than 4GW of wind farms currently stuck in the planning system, after successfully trialling a radar system that can ignore the spinning blades of turbines.
The MoD announced late last week that contractor SERCO had installed and successfully tested a Lockheed Martin TPS-77 Air Defence Radar at Trimingham on the Norfolk coast, which allows it to conditionally scrap its objections to five offshore wind farms in the Greater Wash…
Government rejects latest “flawed” report on cost of renewable energy policies
Patience is obviously wearing thin. Following the release today of the third major report in the last two months criticising the cost of the Department of Energy and Climate Change’s (DECC) renewable energy policy, officials have hit back branding the latest report from the Policy Exchange thinktank as “flawed” and “not credible”.
The report from the Policy Exchange — which follows a similar analysis on the cost of wind energy this month from Civitas and a highly controversial report last year on the cost of green policies from KPMG — estimates that full cost to households of the government’s renewable energy policies will reach an average of £400 a year by 2020…
Green deal suffers setback as loft insulations set to plummet
The government’s flagship green policy to transform the energy efficiency of 14m homes and create 65,000 jobs appears doomed to fail, with the revelation of its own figures showing the number of lofts being lagged is set to plummet by 93%.
The green deal is at the heart of the government’s ambition to be the “greenest ever” as it will deliver large cuts in climate-warming carbon emissions, as well as curbing high energy bills by making houses warmer and less expensive to heat…
E.ON warms to renewable heat revolution
Hidden behind a series of non-descript doors on a quiet street near Spitalfields Market lies one of London’s best-kept secrets. No, it is not the latest achingly cool Clerkenwell drinking den. It is a 62MW power station, hidden in plain view in the centre of the capital.
Concealed in a building that used to be owned by the Port of London Authority (pictured), the facility is the “jewel in the crown” of energy giant E.ON’s fast-expanding Sustainable Energy division, according to managing director Michael Woodhead…
Boris Island airport: economy trumps environment once again
Aviation has been the most potent symbol of carbon excess for the environmental movement, which is why it greeted with such delight the Conservative party’s election promise to cancel a third runway at Heathrow and rule out expansion at Gatwick and Stansted.
But times have changed. The government is now utterly desperate for economic growth at, it seems, any environmental price. David Cameron’s slogan – “vote blue to go green” – has rarely looked more cynical. If the Thames estuary airport, for which a consulation was announced today, goes ahead then “Boris Island” will once again put planes on the frontline of the fight against global warming…
Communities urged to apply for green funding competitions
The government has this week announced funding awards to 82 local green energy projects, at the same time as urging other potential initiatives to apply for a share of the £10m Local Energy Assessment Fund (LEAF).
The deadline for the second round of funding applications lapses at the end of this week, with the government calling on community groups and charities interested in renewable energy or energy efficiency projects to put themselves forward for funding…
Threat to oil sector from tough regulations and green policies
The Petroleum Industry Association (PIA) has told the Energy Department that British regulations are now the toughest in Europe and could impose an extra £1bn a year burden on British refiners and make it more difficult to fund new investment.
Ten refineries have closed in Britain in the last 40 years while both BP and Shell have sold plants because of poor returns and competition from bigger and more sophisticated units in the Far East…
Climate
Phasing out fossil fuel subsidies ‘could provide half of global carbon target’
Such a move could save the equivalent of Germany’s annual emissions by 2015, says chief economist at the IEA
Eliminating subsidies for coal, gas and oil could save as much as Germany’s annual greenhouse gas emissions each year by 2015, according to one of the world’s leading energy experts…
Growing Doubts in Europe on Future of Carbon Storage
The European Union’s long-term energy plans to abate global warming while still burning fossil fuels hinge on proposals to capture carbon dioxide emissions and store them in deep underground rock formations. Yet weak support for the untested technology is putting Europe in the rear ranks of its development.
Two carbon capture and storage projects in Germany and Britain were canceled last quarter, and many of the remaining projects will probably share that fate this year, imperiled by a mix of regulatory objections, a lack of money, public opposition to the possible geological risks and broader uncertainty about strategies to slow climate change…
