Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre.
ODAC joins NEF
Today’s Newsletter will be the last from ODAC as an independent charity. After ten years at the forefront of education on Peak Oil, the Trustees of ODAC have decided to wind up the charitable company. But this is not the end for our work on raising public awareness and promoting better understanding of the world’s oil-depletion problem.
nef (the new economics foundation), with whom ODAC has been working on studies of the effect of oil prices on recessions, has generously agreed to take over the Newsletter for an initial period of three months, during which we will explore options for the long-term continuation of ODAC’s work. nef will also take over ODAC’s website to provide a home for the extensive archive that it has built up over the years.
Several members of ODAC’s board of Trustees will form an advisory panel on energy for nef and to see through to publication the joint studies under way.
While we cannot quite raise a banner saying ‘Job Done’, ODAC can justifiably claim a major role in bringing Peak Oil into the heart of debate on the future for energy. From maverick to mainstream is a respectable record.
The Trustees of ODAC wish to express their appreciation of all the support we have received over the years, especially from our generous funders, volunteer newsgatherers and all who have taken up our message and have alerted policy makers to one of the great issues of today and tomorrow.
Thank you all, and while this is goodbye from us, it is also hello from nef.
Chris Patey
Chairman, ODAC
While awareness of peak oil has advanced light years since ODAC was founded over a decade ago, on the evidence of this week the same cannot be said for the conduct of British energy policy. Back in 2000, Tony Blair’s government was blindsided by petrol protests that brought the country to a standstill in 48 hours. Mr Blair bore the scars, and while there was much to criticise in New Labour’s energy policy—not least the invasion of Iraq—he developed emergency plans and did not allow a serious recurrence.
Twelve years on, David Cameron and his colleagues have either blundered into or deliberately engineered (take your pick) an entirely unnecessary run on fuel, prompting panic buying, garage closures and fist fights. With the government under pressure from hostile headlines over the granny tax, kitchen suppers and pasty-gate, Cabinet Office Minister Francis Maude evidently thought it would be a clever diversion to pick a fight with the ‘enemy within’1. His hasty retreat, jerrycan between legs, suggests the entire manoeuvre was not just breathtakingly cynical—the strike threat seemed to be receding in any case—but also spectacularly cack-handed. Either way, would you buy a used-energy policy from these people?
Not if you were trying to develop renewable heat sources, you wouldn’t. The long-awaited Renewable Heat Incentive (RHI) was due to be launched next week, but at the last minute the government has announced the policy will be delayed by at least a year. Given the history of the solar feed in tariff, the government naturally wants to avoid a fresh debacle, but this eleventh hour postponement only adds to the sense of panicky incompetence.
Another of the government’s flagship policies, nuclear renewal, also suffered a significant setback this week, as Eon and RWE pulled out, putting their British nuclear joint venture up for sale. The companies insist the reason is a shortage of cash, following huge losses caused by the German nuclear shut-down and high gas prices, but it may well mean fewer nuclear plants are now built here. Two consortia remain in the game, one made up of French utility EDF and Britain’s Centrica, the other consisting of GDF Suez of France and Spain’s Iberdrola.
Politics were also prominent on the international energy scene this week, where a release from the Strategic Petroleum Reserve (SPR) looked more likely after comments from the French energy minister. Eric Besson told journalists that France had agreed to a US request to support the move, and that they and Britain were now awaiting a decision from the International Energy Agency. For its part, the IEA issued a statement insisting SPR stocks are only ever released in response to a genuine physical shortage, and not simply to douse rising prices. However, with both the US—the IEA’s biggest shareholder—and France embroiled in presidential election campaigns, the Agency’s purism will continue to be tested.
Rising oil prices are not just a problem for importing countries, which will pay a record $2 trillion this year, but also for oil exporters keen not to kill the golden goose—if that is an entirely suitable description of the world economy these days. But there’s not much the producers can do about the problem, it seems. Saudi oil minister Ali Al Naimi wrote in the Financial Times that the market is well supplied and current prices are not justified, and repeated his recent claims of ample spare capacity. An alternative view would be that the Kingdom is pumping at a thirty-year high of more than 10 mb/d, spare capacity is wafer thin by historical standards, and Brent crude at more than $120 per barrel is entirely justified by the fundamentals.
Back in Britain, the need to reduce our fossil fuel dependency was reinforced by figures showing that UK North Sea oil production dropped by 17.5% last year and gas production fell 21%. Some of the slump was due to maintenance, but the underlying decline rate has been steep for over a decade. This year’s production may be further affected by the leak at Total’s Elgin platform, which has also shut down Shell’s Shearwater platform nearby—gas prices firmed as a result. The real question is how long the leak will continue. If a relief well is required and takes 6 months to drill, as Total has suggested, the climate impact of the methane could be significant.
1. http://news.bbc.co.uk/1/hi/3067563.stm
NOTE: There will be no newsletter next week, April 6th, due to the Easter Holiday.
Oil
US, UK and France consider oil release to curb fuel prices
France is in talks with the United States and Britain on a possible release of strategic oil stocks to push fuel prices lower, French ministers said on Wednesday, four weeks before the country’s presidential election.
Earlier in March, British sources said London was prepared to cooperate with Washington on a release of strategic oil stocks that was expected within months, in a bid to prevent fuel prices choking economic growth in what is also a US election year…
Saudi Arabia resorts to Jedi mindtricks
Saudi Arabia’s oil minister Ali Naimi penned a sharply worded piece in the Financial Times on Thursday declaring that high prices are unjustified because “there is no lack of supply.”
But what does resorting to an op-ed in the Financial Times actually tell us about the kingdom’s position?…
World oil import bill heading for record 1.25 trillion pounds
Oil consumer nations are set to pay a record $2 trillion (1.25 trillion pounds) this year for oil imports if crude prices do not fall, the International Energy Agency (IEA) said on Tuesday, undermining economic recovery.
Crude hit $128 a barrel this month, only $20 short of its 2008 peak, and is up more than 15 percent since January, largely because of sanctions against oil producer Iran…
Oil Futures Spark Debate on $100 Level
Oil contracts for delivery in three to five years’ time are trading at their biggest ever discount to spot prices, prompting a debate about whether the era of triple-digit oil prices will be a short-term phenomenon…
U.S. Stymies Iran’s Iraq Oil Plan
U.S. pressure is threatening to quash Iranian hopes of using oil fields it jointly holds with Iraq as a way to evade sanctions, people familiar with the matter say.
The failure of the cross-border plan is the latest example of Tehran’s struggle to find ways to keep its oil revenue out of the reach of measures designed to stop its nuclear program…
Report: Gulf Oil Spill Killed Life Deep Beneath Sea Level
The Deepwater Horizon oil spill may have had a greater impact on the Gulf of Mexico’s ecosystems than previously thought, including damage to life nearly a mile beneath the gulf’s surface, according to a report released Monday.
Researchers say that coral reef seven miles southwest of the spill and nearly a mile beneath water level showed extensive damage about eight months after the spill. Many researchers believed the spill’s ecological damage would be mainly limited to the surface and shallow water, because oil usually floats on the water’s surface…
Shell Sued in U.K. Over ‘Massive’ 2008 Nigerian Oil Spills
A unit of Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, was sued in Britain by 11,000 Nigerians who say their land, rivers and wetlands were spoiled by two “massive” spills in the Niger River delta in 2008.
The lawsuit against Shell’s Nigerian subsidiary was filed in London today by residents of the coastal Bodo community after talks failed to produce a deal, the group’s law firm Leigh Day & Co. said in a statement. While Shell admits liability for the leaks, it claims local people spilled most of the oil…
Gas
Flare still burning on North Sea gas leak platform
A flare is still burning on the North Sea platform that has been leaking gas for the last four days.
Total, the French oil company that operates the platform, first disclosed that the flare was still burning late on Tuesday night. The wind is blowing the gas in the opposite direction but, if it should come into contact with the flare, there is a high risk of explosion…
Total’s Gas Leak Shows Risks of High-Pressure Fields
The five-day battle to stem a dangerous gas leak from Total SA’s Elgin platform in the North Sea highlights the increased risks of exploiting high-pressure and high-temperature oil and gas reservoirs, which are seen as an increasingly important part of the U.K.’s dwindling resource base.
These types of fields are thought to contain a significant proportion of the U.K.’s remaining oil and gas, making them important enough to have been targeted with a specific tax break to encourage development. Yet documents show that the French oil-and-gas producer’s Elgin and Franklin fields off the coast of Scotland—at the extreme end of the spectrum of high-pressure and high-temperature fields—have faced major technical challenges, from their discovery right up until the incident that triggered the gas leak…
Coal
For New Generation of Power Plants, a New Emission Rule From the E.P.A.
The Obama administration’s proposed rule to control greenhouse gas emissions from new power plants — the first ever — could go far toward closing out the era of old-fashioned coal-burning power generation.
The draft rule, unveiled on Tuesday by Lisa P. Jackson, the Environmental Protection Agency administrator, would limit carbon dioxide emissions from new power plants to 1,000 pounds per megawatt-hour…
Nuclear
RWE npower and E.ON halt nuclear plant development
Two of the “big six” energy companies have pulled out of developing new nuclear plants in the UK, in what was described as a “devastating blow” for the Government’s energy policy.
RWE npower and E.ON said they would not proceed with their “Horizon” project, which looked to develop nuclear reactors at Wylfa in North Wales and Oldbury-on-Severn in Gloucestershire…
Probe finds high radiation in damaged Fukushima reactor
The operator of Japan’s crippled Fukushima nuclear plant has said damage to one of the reactors is much worse than previously thought.
A probe inserted into reactor two at the Fukushima Daiichi nuclear plant revealed lethal doses of radiation and that the level of cooling water inside was far lower than expected…
Nearly 200 arrested in India nuclear protest
Police in a southern Indian state said Tuesday they have arrested nearly 200 activists who were protesting the start of work at a long-stalled nuclear power plant.
Engineers resumed working Tuesday on one of two 1,000-megawatt nuclear reactors in Tamil Nadu’s Koodankulam region a day after the local government gave the green light for the resumption of the Russia-backed project…
Renewables
Denmark overhauls green targets and commits to 50 per cent wind power
The Danish government has stepped up its green energy and carbon reduction targets for 2020, hailing the plan as the “broadest, greenest, and most long-term energy agreement” it has ever reached.
Danish Minister for Climate, Energy and Building, Martin Lidegaard confirmed on Friday that parliament had agreed a new set of goals designed to wean the country off oil and gas…
MuckBuster brings “waste-to-energy in a shipping container” to a canteen near you
Offices, hospitals, hotels, and schools could soon generate renewable heat and electricity from leftover food scraps thanks to an innovative new waste-to-energy technology deployed in a standard shipping container.
Developed by Southampton-based SEaB Energy, the MuckBuster uses conventional anaerobic digestion (AD) technology to generate biogas from waste food that can then be used to produce electricity and heat…
UK
Panic-buying of fuel continues despite prospect of peace talks
Hopes of a resolution to the fuel tanker dispute have been raised with the Unite trade union and petrol hauliers edge closer to agreeing peace talks as panic buying continues to grip sections of Britain.
Vehicle queues snaked past petrol stations around Britain as the threat of a national fuel strike panicked motorists into action. By lunchtime on Thursday police in Dorset had asked some forecourts to close altogether…
Fuel strike threat: Petrol stations run dry
Petrol stations in Dorset were asked to close if queuing cars caused traffic hazards as a rise in demand for fuel was seen in parts of England.
Dorset police had asked drivers not to panic buy and said some queues were causing danger to other road users…
Fuel Strike Fears: PM To Hold Cobra Meeting
David Cameron is to chair a meeting of Cobra to discuss contingency plans in case a strike by tanker drivers over the Easter weekend goes ahead.
The Prime Minister will lead the civil contingencies committee later this afternoon as the coalition talks through how it would limit the effects of industrial action…
UK gas imports outstrip production for first time since 1967
The UK imported more natural gas than it produced in 2011 – the first time this has happened since 1967 – while oil production fell to the lowest levels since the 1970s.
A 21pc slump in the UK’s natural gas production levels took them below the volume of gas the UK imported – even though the volume of gas imports actually fell slightly, by 0.9pc…
UK emissions fall seven per cent as renewable energy soars
UK greenhouse gas emissions dropped seven per cent last year as warmer temperatures slashed demand for gas and nuclear and renewable energy increased, government data revealed today.
The country emitted a total of 549 million tonnes carbon dioxide equivalent (MTCO2e) of the six greenhouse gases covered by the Kyoto Protocol, down from 590MTCO2e in 2010. Carbon dioxide, which makes up around 84 per cent of UK emissions, fell eight per cent year on year to 456MT…
Renewable heat incentive scheme delayed for a year
An £865m scheme to financially reward households that generate hot water or heat from renewable sources has been delayed for up to a year in a further embarrassment for government over low carbon energy payments.
The second phase of the renewable heat incentive, seen as the equivalent of the solar feed-in tariff for generating electricity, was announced last year and due to be launched next week. But in a statement on Tuesday, the Department of Energy and Climate Change said that it wanted to conduct further consultations on how to control costs…
The heat map of England
Talk about heat maps, and most people will assume you’re referring to a map with colours used to represent intensity of something like poverty or crime. This new map – published his morning by the Department for Energy and Climate Change – is much more literal than that. It really is a heat map.
Created by the Centre for Sustainable Energy, it mashes together several very detailed datasets to show heat use at building level. It has a pretty specific purpose – local authorities have been mapping heat use to work out which areas would be suitable for local heat networks…
Budget 2012: Oil companies enjoy unintended North Sea tax ‘windfall’
North Sea oil and gas tax breaks designed to boost investment are set to hand windfalls totalling hundreds of millions of pounds to companies that would have been prepared to pay the tax anyway.
Lobbying from the oil and gas industry saw the Chancellor use the Budget to reveal a doubling of tax breaks on certain small oil and gas fields. The new field allowances “should lead to exploration that would not otherwise have happened”, the Treasury said…
Economy
UK heading back into recession, says OECD
The UK has slipped back into recession after the economy contracted in the first quarter of 2012, an influential think-tank warned today.
Gross domestic product (GDP) – a broad measure for the total economy – is on course to have fallen by about 0.1 per cent in the three months to the end of March, the Organisation for Economic Co-operation and Development (OECD) said…
