Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
Approval of hydraulic fracturing for gas in the UK moved a step closer this week as a DECC commissioned report on the seismic impact of drilling at Cuadrilla’s Lancashire operation advised ministers to proceed. The report recommended a tightening of procedures around drilling, including a pre-injection diagnostic phase, and a traffic light warning system halting operations should an earthquake over 0.5 magnitude occur.
While the news led to some ‘drilltastic’ headlines predicting imminent UK energy independence, there remains considerable opposition to the technology and many more questions to answer. The new report was limited in scope, concentrating only on seismic risk from drilling. Yet it turns out that one of Cuadrilla’s two wells sustained casing damage as a result of the seismic activity, although well integrity was not found to be compromised.
Then there is the question of how to handle toxic waste water as the industry grows. A U.S. Geological Survey report has linked injection of wastewater from fracking to a “remarkable increase” in earthquakes in the central United States. Hydraulic fracturing in the US has also been linked to water contamination and increased air pollution. With drilling sites in the UK much closer to areas of high population density, the impact of such pollution here could be far more serious than in sparsely populated areas of the US.
In the US the Environmental Protection Agency introduced new rules this week forcing operators to fit ‘green completion’ equipment to shale wells, to capture so-called fugutive emissions of methane and other gases. These can make the climate impact of natural gas worse than that of coal according to one study. However the EPA appears to have bowed to industry pressure by lengthening the proposed phase-in period from 60 days to two-and-a-half-years, giving drilling companies until 2015 to comply with the strictest regulations.
The arguments against a renewed dash for gas were reinforced by a report from UKERC this week questioning the government’s ability to deliver its target that 10GW of power plants should be fitted with CCS by 2030. Jim Watson, one of the authors, described the technology as “particularly challenging” and still a long way from commercial viability. He awarded the government a “low grade” in its efforts on CCS because of confusion over the details of its financial support package.
Elsewhere, it seems the gathering ‘omni-shambles’ of British energy policy may be damaging investment, as the Korean company Doosan withdrew plans to build wind turbines in the UK. Meanwhile, the government announced another delay, this time to the Green Deal for business, only weeks after putting off the Renewable Heat Incentive for a year. The solar industry renewed its criticism of DECC’s handling of feed in tariff cuts following a dramatic drop in installations in the past 2 weeks.
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Oil
Hague attacks Argentine seizure of Repsol oil assets
William Hague has hit out at Argentina after the country’s government said it was seizing YPF, the South American nation’s biggest oil company which is controlled by Spanish energy group Repsol.
The Foreign Secretary warned that the move by controversial president Cristina Fernandez was part of a wider protectionist agenda…
Oil Trades Near One-Week Low on Outlook for Economy, Iran Talks
Oil traded near the lowest close in seven days, heading for a second weekly decline, on concern that U.S. economic growth may slow and curb fuel demand in the world’s biggest crude consumer.
Futures were little changed in New York after slipping a second day yesterday. U.S. jobless claims exceeded projections and existing-home sales unexpectedly fell, according to reports yesterday. Oil has fallen since April 14, when international talks with Iran over its nuclear program were held for the first time in 15 months. Prices have gained this year amid Iranian threats to disrupt global crude supplies in response to sanctions on its petroleum exports…
US lifts world natgas resource estimate, cuts oil
Regions outside of the United States hold 20 percent more untapped conventional natural gas and about 13 percent less oil than previously estimated, according to a U.S. government report released on Wed nesday.
In its latest world petroleum assessment, the U.S. Geological Survey estimated that about 5,606 trillion cubic feet of technically recoverable conventional natural gas is still undiscovered around the world, excluding the United States…
Exxon dropped from Iraq bidders over Kurdish deal
U.S. oil major Exxon Mobil did not make the final list of 47 pre-qualified bidders for the next round of Iraq energy exploration rights because it had signed a deal with the semi-autonomous Kurdish north, an Iraq oil official said on Thursday.
Exxon, the world’s largest publicly traded energy company, was still on the list in early February but has since been removed, while Syrian General Oil has been added as a pre-qualified bidder, the oil ministry said on its website…
Iraq to lower oil target to more prudent level
Iraq plans to “slightly lower” an official 12 million barrel per day (bpd) capacity target so that its oilfields can pump more for decades to come, its top energy official said on Wednesday.
Deputy Prime Minister for Energy Hussain al-Shahristani said the new production plateau level, to be set by the end of the year, will be “significantly higher” than a previous 8-8.5 million bpd figure suggested by Iraq’s oil minister last year…
Barack Obama cracks down on oil traders
Barack Obama pledged to put more “cops on the beat” to oversee the oil market, as he went on the offensive with a range of curbs to stop traders from driving the oil price higher.
The US cannot afford to let speculators artificially drive up the price of oil, the US President said on Tuesday, revealing plans to boost supervision of the market and tackle manipulation…
BP settles $7.8bn Gulf of Mexico oil spill claims
BP has reached definitive agreements with more than 100,000 private plaintiffs to resolve claims for economic, property and medical damages resulting from the 2010 Gulf of Mexico oil spill.
The oil major said it still believes the cost of the settlement will be $7.8bn (£4.9bn), to be paid from a $20bn trust it had previously set aside…
TransCanada Submits Pipeline Reroute Plan
TransCanada Corp. TRP -0.50% submitted a reroute of its Keystone XL oil pipeline to the Nebraska state government Wednesday, moving a step closer to reviving the project after it was rejected by the U.S. government earlier this year.
The reroute will avoid an environmentally sensitive area in the U.S. Midwest state, and comes a day after Nebraska Gov. Dave Heineman signed a bill allowing the state’s review of the pipeline to continue…
Gas
Gas ‘fracking’ gets green light
Ministers have been advised to allow the controversial practice of fracking for shale gas to be extended in Britain, despite it causing two earthquakes and the emergence of serious doubts over the safety of the wells that have already been drilled.
The advice of the first official British government report into fracking, published on Tuesday, is all but certain to be accepted by ministers, with the result that thousands of new wells could be drilled across the UK…
Can we be sure of shale gas?
Advocates of ‘fracking’ say it will solve all Britain’s energy supply problems — opponents say it is too risky.
The name is, perhaps, unfortunate. And the company hoping to exploit this technology in Britain sounds more like a sci-fi monster than an energy firm. Earthquakes and tales of flame-spewing bath taps do not help. Yet the controversial technique of fracking, which is used to blast hydrocarbon fuels from rock deep underground, promises (say its fans) to solve Britain’s energy crisis, slash our carbon emissions and to turn the Lancashire Riviera into an unlikely new Arabia…
UK Gas Bounty Will Be Tricky to Exploit
The British government may have warmed to fracking. But while shale-gas extraction has put America on the road to energy self-sufficiency, it may be premature to bank on a similar boom in the UK. The country’s shale formations could be enough to meet decades of demand if bullish interpretations of geological data are right. But economics may keep much of the shale bounty under ground…
US fracking rules let drillers flare till 2015
U.S. environment regulators said Wednesday they will give natural gas and oil drillers more than two years of extra time to invest in equipment that slashes unhealthy air emissions from fracking wells, citing a lack of clean technology.
Drillers that use fracturing, or fracking, to extract natural gas and oil will not be required to use the equipment until January 2015, the Environmental Protection Agency said as it finalized long-delayed rules on the smog-forming emissions…
Fracking Wastewater Tied by Scientists to Earthquakes
Government scientists are focusing on the disposal of wastewater from oil and gas drilling as the possible cause of scores of earthquakes that have shaken the central part of the U.S. since 2000, according to a study.
Researchers think the increased seismic activity may be linked to wastewater injected into the ground by oil and gas drilling operators, William Ellsworth, Earthquake Science Center staff director for the U.S. Geological Survey, said yesterday as he discussed the findings at a conference in San Diego…
Argentina expands asset raid to include Repsol gas unit
Argentina has ratcheted up pressure on Spain’s Repsol YPF by moving to take control of its gas unit, days after seizing its oil assets.
Senator Anibal Fernandez, speaking to reporters after senate committees approved a bill to allow the government to nationalise 51pc of YPF, said the bill includes the expropriation of Repsol’s local gas company…
LNG exports: A release valve for U.S natural gas
It may be the beginning of the end of ultra-cheap U.S. natural gas (NG-FT1.91-0.04-2.20%). Less than a week after prices dipped below a decade low of $2 (U.S.) per million British thermal units, American authorities approved the nation’s first big gas export plant in half a century on Monday. Assuming Cheniere Energy (LNG-A17.56-0.34-1.90%) can secure financing, its liquefied natural gas terminal will provide struggling producers a way out of the gloomy domestic market. That may eventually force U.S. consumers and chemical producers to pay more. But it should also create a more stable market.
Global energy markets have been screaming for America’s natural gas bounty. The rise of fracking has caused prices stateside to plunge to about a fifth the level in Europe and about an eighth the Asian price…
Renewables
Setback for UK wind industry as Doosan scraps investment plans
Korean company blames deteriorating confidence for decision to suspend project that would have created 1,700 jobs.
Britain’s nascent wind industry has received a serious setback after a major foreign investor scrapped plans for a research centre and turbine factories that would have created 1,700 jobs — just 12 months after giving them the green light…
Ministers preparing to veto windfarms
The decision to pull back from onshore wind farms comes after more than 100 backbench Conservative MPs mounted a rebellion against turbines blighting rural areas.
Greg Barker, the Climate Change Minister, hinted at a change in policy this weekend when he said that the “the wind we need” in Britain is already being built, developed or in planning…
Wind power: new poll finds 66% of UK public in favour
Two-thirds of the UK public are in favour of wind power according to a new poll, published on the same day as a national anti-wind campaign launches in parliament.
Overall, 66% of Britons were in favour and just 8% against when asked: “to what extent are you in favour of or opposed to the use of wind power in the UK” in the Ipsos Mori poll, commissioned by wind trade body RenewableUK…
Germany Solar Installations May Have Tripled in First Quarter
German solar installations may have more than tripled in the first quarter from a year ago, the country’s deputy environment minister said.
“The first quarter had big installations,” Katherina Reiche said today in an interview during an informal meeting of ministers in Denmark. “It is assumed that nearly 1,800 megawatts were installed.”…
UK
Carbon capture in UK under threat as study raises doubts
Serious doubts have been raised over the prospects for carbon capture and storage in the UK in the first comprehensive investigation into the technology, just two weeks after the government launched a £1bn competition to build the first demonstration CCS plant.
The finding by the government-funded UK Energy Research Council endangers many of the government’s assumptions on tackling climate change, because ministers’ long-term plans rely heavily on making the untried technique work on a massive scale. CCS is designed to lower the carbon emissions of fossil fuel power stations…
MPs warn UK pollution outsourcing
Carbon emissions from goods imported and consumed in the UK are rising faster than the domestic fall in greenhouse gases, MPs say.
‘Outsourcing’ of pollution overseas will tarnish the UK’s record on carbon emissions, experts warned…
DECC urged to delay subsidy cuts after solar market crash
The government has been urged to delay another round of deep cuts to the feed-in tariff for solar electricity, after new figures revealed the number of businesses and homes installing photovoltaic panels has crashed following the latest cuts to incentives on 1 April.
Weekly government figures revealed that solar firms installed an average of 2MW each week since the start of April, marking a sharp decline from the 4.8MW average capacity installed in the same weeks last year…
DECC confirms Green Deal delay for businesses
The government has confirmed that many businesses will be unable to take advantage of the Green Deal loan scheme when it launches in October this year, under new plans for a “managed launch” of its flagship energy efficiency policy.
A spokeswoman for the Department of Energy and Climate Change (DECC) told BusinessGreen that the Green Deal for businesses would be delayed because the requirements for commercial properties would be more complex than for domestic buildings…
Ken Livingstone warns energy firms ahead of London mayoral election
The London mayoral candidate Ken Livingstone has vowed to take big energy companies to court if they try to scupper one of his election promises to set up City Hall as an alternative energy provider.
The former mayor signalled he was prepared to fight companies if they tried to block his vision of running an energy co-operative within the Greater London Authority to cut household energy bills by an average of £130 a year…
Economy
EU: Green economy the solution to Europe’s job crisis
Over 20 million new jobs could be created in Europe’s green economy over the next decade if EU member states adopt Brussels’ new jobs package and make low-carbon industries central to their national employment plans.
The package has been released in response to spiralling unemployment in the EU-27 countries, which hit an all-time high of 10.2 per cent in February…
Transport
Q1 electric car battery prices drop 14 percent on year
The average price of an electric vehicle-grade battery fell 14 percent year-on-year to $689 per kilowatt hour in the first quarter as manufacturing capacity outstripped demand, a report by Bloomberg New Energy Finance said on Tuesday.
Lower battery costs for electric vehicles could improve their commercial uptake, which has been slow. The United States wants to see up to 1 million electric and plug-in hybrids on its roads by the middle of next decade…
China to Give Stimulus for Development of Electric Vehicles
China, the world’s biggest emitter of greenhouse gases, said it will provide financial support and individual subsidies to promote the use and development of electric and plug-in hybrid vehicles.
The government will broaden pilot programs, build recharging facilities and develop a plan to recycle batteries, as part of a drive to have 500,000 such vehicles by 2015, rising to 5 million by 2020, the State Council, or cabinet, said in a statement posted on its website yesterday…
