Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre at nef dedicated to raising awareness of peak oil.
G8 leaders meeting last weekend in Camp David will have been cheered by the recent slide in oil prices—albeit that the weakening in price is largely a consequence of the increasingly dire economic news. Nevertheless the group issued a statement to the effect that should the price start heading back in the other direction they will be calling on the IEA to take action—presumably via the Strategic Petroleum Reserve. The most likely reason for this would be a heightening of tensions over Iran’s nuclear programme.
In the UK this week the big news was the release of the draft Energy Market Reform bill. The bill received a fairly rough reception with no one really happy. New nuclear looked even more uncertain this week as the Office for Nuclear Regulation announced that it has approved a plan to extend the lives of existing nuclear plants, which under the new bill will see financial benefits from being a low carbon energy source without all the investment risks of new build. Meanwhile the renewables industry is frustrated that the Contracts for Difference incentive mechanism of the new bill will be less effective and more complex to operate that the current ROC system.
There were signs this week that the government has not as yet been bamboozled by promises of abundant cheap energy by way of shale gas. The Independent on Sunday took recent comments from Energy Secretary Ed Davey on shale and ran with the headline “Government backtracks on fracking“. The report quoted Davey saying that a recent Downing Street meeting with energy experts made “clear that it would take time for shale gas to be exploited in the UK” and that the reserves “are not quite as large as some have been speculating”. Promoters of shale gas jumped on the report quickly establishing that nobody from Cuadrilla Resources, the leading shale gas company in the UK, had been at the Downing Street meeting. Energy Minister Greg Barker clarified later in the week that there had been no reversal of the government position, but rather that it “remained cautious but balanced”.
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Oil
Statement by G8 leaders on global oil markets
Following is the text of a statement on global oil markets from the Group of Eight leaders gathered at the presidential retreat in Camp David, Maryland. The text was issued by the White House.
There have been increasing disruptions in the supply of oil to the global market over the past several months, which pose a substantial risk to global economic growth…
New and Frozen Frontier Awaits Offshore Oil Drilling
Shortly before Thanksgiving in 2010, the leaders of the commission President Obama had appointed to investigate the Deepwater Horizon oil spill in the Gulf of Mexico sat down in the Oval Office to brief him.
After listening to their findings about the BP accident and the safety of deepwater drilling, the president abruptly changed the subject.
“Where are you coming out on the offshore Arctic?” he asked…
Oil Advances From Seven-Month Low as Drop May Be Overdone
Oil rebounded after closing below $90 a barrel for the first time in seven months amid speculation the drop was exaggerated and signs China will accelerate efforts to spur economic growth.
Futures rose as much as 1 percent in New York after reaching long-term technical support. China, the world’s second- biggest oil consumer, will intensify “fine-tuning” of policies, according to the second government statement in four days signaling a commitment to growth as domestic demand slows. Talks with Iran aimed at averting military action against OPEC’s second-biggest crude producer were scheduled to resume today…
Gas
Government backtracks on fracking
The Government has rejected shale gas technology as a solution to Britain’s energy crisis, conceding it will do little to cut bills or keep the lights on.
Supporters of the fracking technology—which blasts water, sand and chemicals at extreme pressures to release gas trapped deep in rock—argue it could be the single greatest factor in transforming Britain’s energy market, reducing our reliance on foreign imports and dramatically reducing costs…
Fracking ‘presents huge challenge’
The extraction of shale gas through controversial hydraulic fracturing, or “fracking”, presents “huge opportunities” but also “some big challenges”, a Government minister has said.
Energy and Climate Change Minister Gregory Barker told MPs during a Westminster Hall debate on fracking that the Government’s position remained “cautious but balanced”…
Investor’s concerns lead to calls for fracking changes
A top-10 investor in BP and Shell calls for end to emissions of the greenhouse gas in production of shale hydrocarbons…
Biofuels
U.N. warns agrofuel growth may breach human rights
Large-scale crop plantations are expanding at a rapid pace across southeast Asia, with multinational firms often benefiting the most at the expense of local communities and the environment, two U.N. rights experts warned on Wednesday.
Demand for agrofuels, such as those derived from sugar cane and palm oil, has boomed thanks in part to the United States, Europe and other rich economies seeking alternative ways to fuel their cars and homes in order to reduce their carbon emissions…
UK
Government announces biggest energy reforms in 20 years
The biggest reforms to the UK energy sector in two decades were set out on Tuesday, prompting warnings from consumer groups and green campaigners that they would raise bills and penalise renewable energy while boosting nuclear power.
The sweeping reforms, detailed in the draft energy bill, grant the government powers to intervene in the market on a scale not seen since the industry was privatised…
Nuclear reactor reprieve puts UK energy plans in doubt
Britain’s ageing nuclear reactors, which were due to close in the next decade, are set to be kept open under a plan approved by the industry’s regulator.
In a move that could have far-reaching implications for the government’s energy policy, the Office for Nuclear Regulation has told the Guardian it is working with the country’s dominant nuclear operator, the French-owned company EDF, to extend the life of its eight nuclear power stations in the UK, and that it is “content for the plants to continue to operate”, as long as they pass regular safety tests…
Draft energy Bill may deter investment, Citigroup warns
The draft energy Bill, intended to attract £110bn investment in new power generation, may actually deter investors, a leading analyst has warned.
Peter Atherton, Citigroup’s head of European utility sector research, said he was “surprised” the Government had published Tuesday’s draft Bill when it still appeared to be very uncertain as to how key proposals would work…
UK delays solar subsidy cut by a month to August
Britain will delay a planned cut to subsidies for solar power projects until August 1, a month later than initially planned, after low demand for panels in March and April, Energy Minister Greg Barker said on Thursday.
“Following detailed consultation with industry and consumers, the government is introducing a range of changes to the FITs (feed-in tariff) scheme with effect from 1 August to provide better value for money and allow businesses and householders to plan with confidence,” Barker said…
Atlantis set to plunge down the cost of tidal power
A team led by Atlantis Resources has won a government-backed contract worth up to £13.2m to investigate ways of driving down the cost of tidal power, as part of plans that could see the fledgling industry supply up to 27GW of capacity in the UK by 2050.
The Energy Technologies Institute (ETI) officially launched its Tidal Energy Converter System Demonstrator project yesterday, after signing a deal with a consortium on Monday consisting of Atlantis Resources, Black & Veatch, and Lockheed Martin…
U.K. Climate Plan Set To Curb Impact Of Oil Shocks, Report Shows
U.K. efforts to switch to low-carbon power sources may lessen the negative impact of an oil-price shock, a study found before the government publishes its plans to attract investors in clean-energy generation.
The country’s proposed climate policies would reduce the effect of jumps in energy prices on disposable household income by half by 2050, research group Oxford Economics said today in a government-commissioned report. They’d also mitigate the impact on business investment, inflation and unemployment, it said…
Europe
Merkel Tightens Grip on Energy Overhaul as Progress Lags
German Chancellor Angela Merkel is tightening her grip on the biggest energy overhaul in the country’s history, assigning a party enforcer to speed the transition amid signs her 12-month-old policy shift has stalled.
Peter Altmaier, the chief whip and deputy floor leader of Merkel’s Christian Democratic Union, tomorrow is set to take the environment minister post. The following day he’ll begin negotiating with leaders of Germany’s states at a meeting with Merkel after they rejected a government bill in the upper house that would have cut solar-power subsidies by a record this year…
Busting the carbon and cost myths of Germany’s nuclear exit
With the UK taking another step towards supporting new nuclear power on Tuesday—at either no extra cost to the consumer if you believe ministers, or substantial cost if you believe most others—it’s worth taking a look at what actually happens when you phase out nuclear power in a large, industrial nation.
That is what Germany chose to do after the Fukushima nuclear disaster, closing eight plants immediately—7GW—and another nine by 2022. The shrillest critics predicted blackouts, which was always daft and did not happen…
How a green investment bank really works
Business secretary Vince Cable, responsible for the UK’s Green investment bank (GIB), visits the German development bank KfW today, a day after the law establishing the GIB was published. It will be an interesting visit.
When I met Leon Macioszek, director of KfW in Berlin on Tuesday, I pointed out that the GIB can’t actually borrow. This rendered him speechless as his mind wrestled hopelessly with the contradiction…
Norway Wants to Become Europe’s Battery
Because wind and solar energy are inconsistent, energy managers are looking for ways to fill in the gaps when it is dark outside and the air is still. A Norwegian company wants to turn hydroelectric power stations in the north into Europe’s battery packs.
For Christian Rynning-Tønnesen, a feeling of amazement came first, and then came the shudder. Like the head of the Norwegian energy company Statkraft, anyone who takes the tiny red funicular from the research base at Ny-Ålesund to the nearby Zeppelin Mountain has a breathtaking view of the Spitsbergen island in the northernmost part of Norway. Everything is white. Between the snow-covered peaks glaciers are visible in the Kongs Fjord. The research centers lying far below look like children’s toys…
Geopolitics
Iran nuclear talks to continue
Tough negotiations between Iran and world powers over Tehran’s nuclear programme have ended with a plan to meet next month for another round of talks but agreement on little else.
The open channels between Iran and the six-nation bloc – the five permanent Security Council members plus Germany – are seen as the most hopeful chances of outreach between Washington and Tehran in years. They also could push back threats of military action that have shaken oil markets and brought worries of triggering a wider Middle East conflict…
Climate
Global CO2 emissions hit record in 2011 led by China-IEA
China spurred a jump in global carbon dioxide (CO2) emissions to their highest ever recorded level in 2011, offsetting falls in the United States and Europe, the International Energy Agency (IEA) said on Thursday.
CO2 emissions rose by 3.2 percent last year to 31.6 billion tonnes, preliminary estimates from the Paris-based IEA showed…
Transport
Stagecoach: Green Peak Oil Stock Expanding in North America
What’s the budget-conscious way to travel in the US?
If you buy in advance, flying is still reasonably priced, but increased security and wait times mean that it’s quicker to drive for shorter trips…
