Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
In a week in which the Leveson inquiry shone a light on the overlap between big business and politics, news that Shell made £2m an hour in Q1 demonstrated only too well why creating the political will to move away from oil appears to be such an uphill battle. Exxon Mobil profits, while still huge, took a hit as a result of plunging US gas prices and falling oil production. Goldman Sachs anticipates that US gas prices will pick up later in the year as companies cut back on production to minimise losses caused by a supply glut.
Shell too has invested heavily in gas, but luckily for them not in the US. The company is now “taking a look at” the potential for UK shale gas. Simon Henry, Chief Financial Officer said that the biggest issue was likely to be that the “fracking” process, would have a “significant impact” on nearby communities and is controversial. A study released this week in Marine and Petroleum Geology journal recommended that regulators set a minimum depth of 600 metres between aquifers and hydraulic fracturing in order to protect water supplies. Meanwhile in the shale rich area of Wyoming, US, 60 people were evacuated from their homes as Chesapeke lost control of a gas well it was drilling there.
In the UK this week the international Clean Energy Ministerial gathering took place in London hosted by Energy Secretary Ed Davey. Davey’s speech hinted at the stand-off within the cabinet on energy and climate policy. “In some quarters the green agenda is painted as an unbearable burden,” he said, but “the low carbon shift promises insulation from volatile fossil fuel prices, and protection from the worse economic impacts of climate change.”
The ‘power’ struggle that is energy policy was underlined by a last minute downgrade of Prime Minister David Cameron’s address from a keynote speech and major intervention, to a few minutes of opening remarks. The Prime Minister delivered warm words about his passion for renewables, but also underlined the importance of “nuclear energy, cleaner coal, oil and gas…including shale gas and carbon capture and storage”.
Policy on nuclear energy looked to have shifted earlier in the week as a government submission to the European Commission made clear that nuclear will qualify for subsidies alongside renewables despite previous assurances to the contrary. Cameron reiterated his claim that his was “the greenest government ever” but with pressure from the right wing of his party to favour shale gas over renewables it is not just the ground in Blackpool that is looking shaky.
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Oil
Shell makes £2m an hour as oil prices soar
Shell has produced a barnstorming profit performance in the first quarter of the year, making more than £2m an hour on the back of soaring crude prices.
The oil group’s chief executive, Peter Voser, said investors and customers stood to gain as the money helped keep up dividend payments and pay for schemes to ensure steady petrol supplies…
Shell profits jump to $7.7bn on higher oil prices
Royal Dutch Shell has signalled its interest in the fledgling UK shale gas market – but admitted significant disruption could be caused to those living near the resources if the controversial industry took off.
The Anglo-Dutch company made the comments as it reported soaring profits for the first three months of 2012, up 11pc to $7.7bn (£4.7bn), on the back of high oil prices…
Exxon Mobil profits hit by lower oil production
The amount of oil the Texas-based company produced in the first three months of the year dropped 7.7pc compared with a year earlier. Oil prices, meanwhile, averaged 12pc higher in the quarter as hopes for the global economy strengthened and tensions over Iran’s nuclear programme escalated.
The decline contributed to an 11pc drop in Exxon’s overall profits in the quarter to $9.45bn (£5.8bn). That fell short of Wall Street’s expectations and helped send the shares down 1.7pc to $85.35 in early afternoon trading…
Crude Oil Futures Fall as Spain Cut Renews Demand Concern
Oil fell from the highest level in almost four weeks in New York, trimming a second weekly gain, after a cut in Spain’s credit rating renewed concern that Europe’s faltering economy may curb fuel demand.
Futures slipped as much as 0.8 percent after New York-based Standard & Poor’s reduced Spain’s rating to BBB+ from A and said the nation may have to provide fiscal support to the banking sector as the economy contracts. Prices also dropped after reaching technical resistance. West Texas Intermediate crude may decline next week after economic confidence in the euro-region fell and more Americans than forecast filed applications for unemployment benefits, a Bloomberg News survey showed…
Mexico Oil Opening First Time Since 1938 Shows Revival: Energy
For the first time in 74 years, Mexico may allow private investment in its oil and gas, the third-largest reserves in Latin America.
Enrique Pena Nieto, the leader in all major polls to win the July 1 presidential election and a member of the party that nationalized the industry in 1938, said April 12 that Mexico’s oil production “can outperform and grow” through private investment. The same day, his closest rival, Josefina Vazquez Mota, proposed to list “a minority stake” in state oil monopoly Petroleos Mexicanos, which has $126 billion in revenue…
Oil spilled in Russian Arctic
An oil spill in the Russian Arctic affected an area of up to 8,000 square meters after workers tried to open an old well, causing oil to gush uncontrollably for 37 hours, officials said Monday.
The spill at the Trebs field started on Friday and continued through the weekend, spurting out up to 500 tonnes of oil per day, the Nenets autonomous district administration said on its website Monday…
Russia blames TNK-BP for massive oil leaks
Russia’s environment minister on Thursday blamed Russian-British oil company TNK-BP for causing massive oil pollution in a resource-rich Siberian region and failing to invest in its infrastructure.
“We looked at TNK-BP’s activities, because… they operate the biggest share of polluted lands (2,200 hectares/5,435 acres),” Yury Trutnev, Russia’s natural resources and environment minister, told Prime Minister Vladimir Putin at a government meeting…
Rethinking peak oil
In recent years, Chinese scholars have been embracing “peak oil” theory in increasing numbers. The idea — first put forward by American geophysicist MK Hubbert in 1949 — is that individual oil fields, oil-producing regions and world oil production will display a “bell curve”: a steep rise in available supplies, narrow peak and subsequent rapid fall.
Proponents argue that world oil supplies will peak in the mid 2020s at an annual output of 40.3 billion tonnes, while China will see domestic oil production peak at 190 million tonnes per year by around 2015…
Gas
Restrict shale gas fracking to 600m from water supplies, says study
Controversial “fracking” for shale gas should only take place at least 600 metres down from aquifers used for water supplies, scientists said on Wednesday.
A new study revealed the process, which uses high-pressure liquid pumped deep underground to split shale rock and release gas, caused fractures running upwards and downwards through the ground of up to 588 metres from their source…
Natural Gas to Climb as Goldman Sees Output Cuts: Energy
U.S. natural gas for delivery this fall is trading at a record premium, signaling the fuel may be poised to rebound from its worst quarter in two years because of production cuts and rising demand from power plants.
Gas futures for delivery in October traded at an all-time high of 48.1 cents per million British thermal units above the May contract on April 11, when prices dropped below $2 per million British thermal units for the first time since 2002. The spread was 19.7 cents on Jan. 30. Near-month gas may rebound to $4 “relatively quickly,” Goldman Sachs Group Inc. said in an April 24 report…
Wyoming neighbors of Chesapeake well leak evacuate
More than 60 residents were evacuated from their homes near a Chesapeake Energy-operated well that leaked natural gas and drilling mud in Wyoming, the company said on Wednesday.
Chesapeake lost control of the well late on Tuesday while installing a casing, which triggered the leak, the company said in a statement. It wasn’t clear how much gas or fluid escaped the well. Local TV reports said the sound of natural gas rushing from the ground could be heard miles away…
Renewables
UK and US ink floating wind turbine alliance
Giant floating wind turbines capable of slashing the cost of offshore wind energy and exploiting deepwater areas that boast stronger and more reliable winds could become a reality thanks to a major new clean energy research partnership between the UK and the US.
The UK and US government are expected to sign a new Memorandum of Understanding on ‘Collaboration in Energy Related Fields’ as one of the centrepieces of this week’s Clean Energy Ministerial in London, which will be attended by energy ministers from 23 of the world’s leading eonomies…
Poll: Nine out of 10 people want more renewables
Almost nine in 10 people want to see the government ramp up the UK’s use of clean domestic energy and reduce the country’s reliance on imported gas, a new YouGov poll reveals.
Just under two-thirds of the 2,884 people questioned on behalf of campaign group Friends of the Earth listed wind, wave, solar, or tidal as power sources they wanted to see playing a greater role in the UK’s electricity mix over the next decade, while just two per cent backed an increase in gas capacity…
UK
Are climate change policies a burden? Ed Davey Vs George Osborne
Last year George Osborne, the Chancellor, made it clear he was not willing to let climate change policies be a burden on British business.
“We should not price British business out of the global economy. If we burden them with endless social and environmental burdens – however worthy in their own right – then not only will we not achieve those goals but the businesses will fail, jobs will be lost and our country will be poorer,” he said…
David Cameron: this is the greenest government ever
The government has achieved its aim of being the “greenest ever”, David Cameron said on Thursday, in his first significant remarks on the environment since reaching office.
“When I became prime minister I said I would aim to have the greenest government ever and this is exactly what we have,” he told energy ministers from the world’s leading nations at a summit in London…
Government aims to ignite biomass industry with new strategy
Accelerating the use of biomass to power homes, businesses, and transport could build a sector capable of supplying 11 per cent of all UK energy by the end of the decade, according to a new government strategy to be released today.
The government committed to producing a new Bioenergy Strategy when releasing its Renewables Roadmap last year, a document that claimed burning wood, waste or agricultural residues could contribute up to 6GW of electricity, more than double the current level, and 50 terawatt hours (TWh) of heat by 2020…
Household bills will help subsidise nuclear plants
A Government submission to the European Commission shows that subsidies introduced as part of electricity market reform will help not only renewables such as wind and solar power but all “low-carbon technology”, which includes nuclear.
By failing to single out renewable energies the Government is effectively allowing the nuclear industry to claim the same sort of public help…
How solar power came to a Brixton council estate
Following a successful share issue, the UK’s first 100 per cent community owned inner-city social housing solar power project went live last month. Mark Briggs visited to find out more
The Loughborough Estate in southwest London is not the most obvious location for an energy revolution. But nestled in among the other 30s, 40s and 50s high rises you find just that, on top of Elmore House. Here is a pioneering inner-city co-operative energy project of152 solar panels owned by 81 different investors…
U.K. Oil Product Demand Fell to Lowest in 10 Years
U.K. demand for oil products declined in February to the lowest level in almost 10 years, according to the Department for Energy and Climate Change.
Consumption dropped to 5.12 million metric tons, the lowest level since July 2002, data published today on the government department’s website show. Demand in the three months to February fell 5.5 percent to 15.5 million tons from a year earlier, according to DECC…
Climate
Governments failing to avert catastrophic climate change, IEA warns
Governments are falling badly behind on low-carbon energy, putting carbon reduction targets out of reach and pushing the world to the brink of catastrophic climate change, the world’s leading independent energy authority will warn on Wednesday.
The stark judgment is being given at a key meeting of energy ministers from the world’s biggest economies and emitters taking place in London on Wednesday — a meeting already overshadowed by David Cameron’s last-minute withdrawal from a keynote speech planned for Thursday…
Mexico Senate approves historic climate change bill
Mexican president Felipe Calderon is poised to approve the world’s latest comprehensive climate change bill, after the country’s Senate yesterday rubberstamped the wide-ranging legislation.
The Senate, which had last year approved an earlier version of the bill, voted through the legislative package after the country’s lower house approved the bill last week…
Geopolitics
China’s Arctic ambitions spark concerns
The Arctic and its vast energy reserves were a key focus of Chinese Premier Wen Jiabao’s recent trip to Europe, fueling concerns about Beijing’s preparations for an ice-free Arctic Ocean.
It may seem surprising that Chinese Prime Minister Wen Jiabao, leader of the world’s most populous nation, should begin his Europe tour with a stop in Iceland, a remote island with a population of just 320,000. But the move is in line with a wider Chinese strategy to gain a strategic foothold in the Arctic. Global climate change is opening up the once inaccessible region for shipping and industrial development…
Iran Says It May Halt Nuclear Program Over Sanctions
Iran is considering a Russian proposal to halt the expansion of its nuclear program in order to avert new sanctions, the country’s envoy in Moscow said.
“We need to study this proposal and to establish on what basis it has been made,” Ambassador Mahmoud-Reza Sajjadi said in an interview at the Iranian embassy in Moscow today. The Russian plan, announced by Deputy Foreign Minister Sergei Ryabkov last week, would let Iran avoid a European Union ban on its crude that is scheduled to come into force in July…
Oil pours from Sudan’s damaged pipeline
The oil pours out of Sudan’s damaged pipeline like blood from a severed vein, and no one knows when production from the country’s main oil region can resume.
Officials allege South Sudanese who occupied the area for 10 days deliberately damaged the pipeline and an adjacent central processing facility and power plant, leaving them partly blackened and burned, with oil seeping onto the ground…
