Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
The IEA poured oil on troubled waters, so to speak, in its April Oil Market Report this week, suggesting a possible “turning of the tide for market fundamentals“. The agency said supply is ahead of demand for the first time since 2009, though geopolitical threats remain. The possibility of new talks with Iran over their nuclear programme, slowing growth in China, and the European sovereign debt crisis are also dampening prices.
While some predict a possible fall in the price of oil, its rising environmental cost was much in the news this week. Lloyds of London, a key player in global insurance markets warned of the extreme risks of drilling in the Arctic. Richard Ward, Lloyd’s chief executive, urged companies not to “rush in [but] step back and think carefully about the consequences of that action”. Meanwhile BP continued to feel the fallout of the Deepwater Horizon disaster at its AGM on Thursday, as shareholders challenged CEO Bob Dudley’s £4 million pay package—the meeting was also disrupted by climate change protestors, while other activists berated the management over safety.
The Gulf of Mexico was back in the news this week as investigators attempted to find the cause of an oil sheen near two Shell rigs. Shell said it was confident it is not to blame — while admitting that operational oil spills from its activities in Nigeria had doubled in 2011.
As Total continued efforts to stop the Elgin gas leak in the North Sea, the IEA warned that the decommissioning of oil rigs in the area meant that similar blowouts are a significant risk for companies working there. The news could lend support to EU moves to increase the level of financial liabilities required to gain a license for maritime drilling — a development that could result in smaller operators reducing their activity in the region and possibly accelerating its decline.
Fracking came in for more flack as the U.S. Geological Survey announced that an increase in low level seismic activity in central US states was “almost certainly” manmade, and probably due to the oil and gas production technique. The American Petroleum Institute meanwhile fought a rearguard action against the introduction of new air pollution standards for fracking operations. The industry group claims there is not enough time for companies to comply. The rule change comes at a time when plunging US natural gas prices have made much of the industry uneconomic.
While evidence of the environmental damage caused by oil and gas production was everywhere this week, one form of renewable energy received a good report. A joint study by naturalists and ornithologists from the RSPB, Scottish Natural Heritage and the British Trust for Ornithology (BTO) found that wind farms did not cause long-term damage to bird populations, although some species could be harmed during construction. So, it’s official: wind turbine bird slaughter stories are…a canard.
At last there was some good news on UK energy policy, as Energy Minister Charles Hendry visited Iceland to discuss plans to import electricity from Iceland’s geothermal power plants through a 1500 kilometre undersea cable. The move is part of a broader plan for a European supergrid to help accommodate increasing amounts of intermittent renewable generation and reduce the need for fossil-fired back-up.
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Oil
Agency Sees Easing in Oil Market
The oil market has broken a two-year cycle of tightening supply conditions, the International Energy Agency said Thursday, as demand softens and Saudi Arabia increases output in response to tensions with Iran.
The agency said in its monthly report that there had potentially been a rise in global oil stocks of 1 million barrels per day over the last quarter, and the impact on prices had not yet been fully realized…
Arctic oil rush will ruin ecosystem, warns Lloyd’s of London
Lloyd’s of London, the world’s biggest insurance market, has become the first major business organisation to raise its voice about huge potential environmental damage from oil drilling in the Arctic.
The City institution estimates that $100bn (£63bn) of new investment is heading for the far north over the next decade, but believes cleaning up any oil spill in the Arctic, particularly in ice-covered areas, would present “multiple obstacles, which together constitute a unique and hard-to-manage risk”…
BP executives have their ‘snouts in the trough’, claim shareholders
At an annual meeting disrupted by climate change protesters, BP also saw a revolt against its chairman Carl-Henric Svanberg, with more than 8pc of shareholders declining to support him.
BP’s chief executive Bob Dudley was last month awarded a pay package for 2011 worth up to $6.8m (£4.5m), almost four times his pay for 2010, when he received no bonus in the wake of the Gulf of Mexico disaster…
Shell Confident It’s Not Source of Gulf of Mexico Sheen
Royal Dutch Shell Plc (RDSA), Europe’s largest oil company, said its operations aren’t the source of a Gulf of Mexico sheen it estimated was fewer than six barrels.
Shell’s inspection found “no sign of leaks” and “no well control issues” in the area, according to a statement today. The Hague-based company continues to monitor what it called “an orphan sheen” discovered yesterday that covers 10 square miles in an area between its Mars and Ursa (RIGBP163) platforms…
Shell’s Nigerian oil spills soar
Royal Dutch Shell Plc said on Thursday that oil spills at its facilities in Nigeria soared last year, as it faces lawsuits in the UK regarding earlier spills.
Shell said in its annual Sustainability Report that the number of operational spills onshore increased to 63 in 2011, from 32 in 2010…
North Sea decommissioning heightens risk of leaks
The North Sea’s dwindling oil and gas reserves will make abandoning wells increasingly common, exposing operators to similar challenges facing French major Total when decommissioning work triggered a blowout, the International Energy Agency (IEA) said on Thursday.
“The problem that Total encountered as it decommissioned an old well at the field is likely to portend difficulties at other mature fields in the medium term,” the IEA said in its latest oil market report…
Sudan oil war heats up, north mobilizes
The oil conflict between Sudan and newly independent South Sudan is flaring dangerously after the infant state accused the Khartoum regime of building an illegal pipeline into its oilfield and the north declared a general mobilization.
There have been frequent clashes between the Christian and animist south and the northern Muslim Arab regime in Khartoum, which fought a three-decade war up to 2005, since South Sudan became independent last July…
Iraq Progresses toward a Future Built on Oil Wealth
When the US toppled Saddam Hussein in 2003, few people imagined that it would take another decade before the Iraqi oil industry was rebuilt. Now, progress is finally being made, and the country’s massive reserves could bring untold wealth. But before that happens, Baghdad needs to improve security and get corruption under control.
There’s a fine line between being snubbed and humiliated — and no one in Iraq knows this better than Hussein al-Shahristani…
Argentina ‘satisfied’ by BP’s Falklands rejection letter
Argentina has claimed a bizarre victory in its bid to stop British companies exploring for oil off the Falkland Islands, proclaiming “satisfaction” that BP had written to say it had no plans to enter the region.
The Argentine Embassy issued a press release hailing the development – despite BP’s insistence it never had any plans to explore near the islands anyway…
Fuel to Burn: Now What?
THE reversal of fortune in America’s energy supplies in recent years holds the promise of abundant and cheaper fuel, and it could have profound effects on what people drive, domestic manufacturing and America’s foreign policy.
The Eagle Ford basin in Texas produced 30.5 million barrels of oil in 2011…
Gas
Earthquake Outbreak in Central U.S. Tied to Drilling Wastewater
A spate of earthquakes across the middle of the U.S. is “almost certainly” manmade, and may coincide with wastewater from oil or gas drilling injected into the ground, U.S. government scientists said in a new study.
Researchers from the U.S. Geological Survey said that for the three decades until 2000, seismic events averaged 21 a year in a central U.S. region. They jumped to 50 in 2009, 87 in 2010 and 134 in 2011…
Industry asks for more time to comply with drilling pollution mandates
The oil industry’s leading trade group today implored federal regulators for more time to comply with a looming rule for cutting air pollution from hydraulic fracturing and natural gas wells.
There isn’t emission-cutting equipment go around and satisfy the mandates slated to be imposed next week, said American Petroleum Institute president Jack Gerard in a letter to Environmental Protection Agency Administrator Lisa Jackson…
Natural gas slump hammers producers
A warm winter, sluggish demand and stubbornly high supply have sent the price of natural gas tumbling to its lowest point in a decade, putting small Canadian energy companies in peril and threatening the balance sheets of their bigger counterparts.
Natural gas (NG-FT1.990.0020.10%) dropped to $1.984 (U.S.) per million British thermal units by the end of Wednesday, marking the third day in a row that the price dipped to a fresh 10-year low. Supply is outpacing demand, even as some energy companies slow, or stop, production at some wells and shift their attention to more lucrative commodities like oil and butane…
Renewables
Iceland’s volcanoes may power UK
The volcanoes of Iceland could soon be pumping low-carbon electricity into the UK under government-backed plans for thousands of miles of high-voltage cables across the ocean floor.
The energy minister, Charles Hendry, is to visit Iceland in May to discuss connecting the UK to its abundant geothermal energy. “We are in active discussions with the Icelandic government and they are very keen,” Hendry told the Guardian. To reach Iceland, which sits over a mid-ocean split in the earth’s crust, the cable would have to be 1,000 to 1,500km long and by far the longest in the world…
Windfarms do not cause long-term damage to bird populations, study finds
A major new study has quashed fears that onshore windfarms are causing long-term damage to bird populations, but found new evidence that some species are harmed when windfarms are built.
The study by conservationists into the impacts on 10 of the key species of British upland bird, including several suffering serious population declines, concluded that a large majority of species can co-exist or thrive with windfarms once they are operating…
UK
UK clean energy investment tops $9bn in 2011
UK clean energy investments rose by 35 per cent during 2011 to $9.4bn, driven by exponential growth in the solar sector as developers rushed to beat deadlines for controversial subsidy cuts.
The surge in investment takes the UK up to seventh in a ranking of the G20 countries compiled by US-based The Pew Charitable Trusts, rising from 13th last year, when investment levels plummeted to $7bn…
Communities urged to ‘crowd fund’ green energy schemes
Community groups hoping to install renewable energy technologies such as solar panels and wind turbines are being offered the chance to win £5,000 from a series of social networking sites backed by TV celebrity chef Hugh Fearnley-Whittingtsall.
Renewable energy networking site EnergyShare yesterday launched a £25,000 fund, which it intends to give to the first five renewable energy projects that raise £5,000 via the crowd funding website peoplefund.it…
Austerity has not made people care less about the environment
A few days ago, in a stuffy, close-windowed meeting, I stared at a projection of Powerpoint slides, featuring graphs, rhetorical questions and stock photos. All these slides dealt with public perception of the environment. Things didn’t start well. In answer to a slide asking “what is the most important issue facing Britain today?”, top of the pile was our old friend the economy. Followed by jobs. Down the list we went. Immigration, crime, inflation, petrol prices, equality. Spluttering in at the bottom with 3% of the vote was pollution/environment. If it had been an election, the environment would be lucky to get its deposit back…
• Alastair Harper is a senior policy adviser at Green Alliance. Green Alliance’s new report, What people really think about the environment, is available here.
