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 forecast this week that non OECD oil demand overtake OECD demand for the first time next year. The agency advised that economic slowdown is likely to keep a lid on oil prices in 2013, but there was still a chance of “nasty supply surprises”. In China, where growth is slowing as exports decline, the government cut the price of gasoline this week. It has now cut prices 14% since early May in an attempt to revive the economy.
Government intervention in Norway averted the possibility of a strike in the oil sector this week which could have tied up 2mb/d of production. The acute threat of a strike may have been avoided, but the FT reported the long term decline in North Sea oil production threatens to distort pricing of the Brent crude benchmark.
The danger to aquifers from fracking was the subject of a new study released this week. The paper, from Duke University, which studied the Marcellus formation, found that while there was no evidence that brine found in aquifers there had resulted from fracking, there are natural pathways in the rock which “could mean that some drinking water supplies in northeastern Pennsylvania are at increased risk for contamination, particularly from fugitive gases that leak from shale gas well casings…”. The report will add to the controversy around fracking. Industry was critical of the report while welcoming the fact that no evidence of contamination linked to fracking had been found. Environmental groups saw the report as important evidence that fracking is not safe.
One way to reduce the need for gas and oil was highlighted by the IEA this week in their new report on Solar Heating and Cooling. According to the report solar thermal panels could make a significant contribution to low temperature heating and cooling requirements cutting the equivalent of Germany’s annual CO2 emissions.
View our Reports and Resources page
Oil
Economic slowdown could cap oil prices, IEA says
Global economic slowdown could put a lid on oil prices but there is a risk “nasty supply surprises” could reignite a market rally, the International Energy Agency said on Thursday.
The agency, which advises industrialised countries on energy policy, said oil market fundamentals had “clearly eased since the start of the year” and stocks had built up significantly over the last few months…
Norway restarts fields, no strike repeat for 2 years
Norway was restarting some key oil and gas fields on Tuesday after the government ordered to end a strike by offshore workers, still unhappy about pensions and retirement issues but unable to repeat the action for at least two more years.
“We are not going to give up, but now we have to wait another two years before we can take new actions legally,” said Leif Sande, leader of Industri Energi, the biggest of the three unions who went on strike on June 24…
Brent suffers from ‘North Sea syndrome’
Players in the Brent crude market, where the world’s most important oil benchmark is traded, breathed a collective sigh of relief this week after the Norwegian government averted the first national oil shutdown in decades.
Yet the problems for North Sea oil are not over…
China in 3rd fuel price cut since May, demand tepid
China, the world’s second-largest user of fuel, will cut retail prices by around 5 percent from Wednesday, its third reduction in just over two months and a move that leaves refiners in the red but may lure consumers back to the pumps.
Oil demand in China, which still makes up nearly half of the incremental global total, posted its first yearly fall in at least three years in April and edged up just 0.8 percent in May as economic growth slowed…
Shell carbon-capture project gets Alberta nod
A Canadian carbon-capture and storage project backed by Royal Dutch Shell Plc (RDSa.L) was approved by regulators in Alberta on Wednesday, though the company must agree to a number of conditions before the project can proceed.
Alberta’s Energy Resources Conservation Board said Shell’s Quest project, which will capture carbon dioxide from its oil sands upgrader near Edmonton, Alberta, and inject the gas into the ground, is in the public interest…
BP halts Alaska offshore project as safety changes inflate cost
BP has halted plans for an 100m barrel oil development offshore Alaska, after safety standards introduced following the Gulf of Mexico disaster sent costs well above a planned $1.5bn (£1bn).
The British oil major discovered the Liberty field, six miles offshore in the Beaufort Sea, in 1997 and sanctioned its development in 2008.
Enbridge says pipeline safe after NTSB blasts company
Enbridge Inc, stung by a harsh rebuke from regulators over a 2010 spill that dumped more than 20,000 barrels of crude into a Michigan river system, has stepped up inspections and is confident its pipeline network is safe, the company’s incoming chief executive said on Wednesday.
Company President Al Monaco, slated to replace Pat Daniel as chief executive later this year, said Enbridge has boosted spending on safety inspections since the July 2010 spill in the Kalamazoo River…
Gas
Pennsylvania Fracking Can Put Water at Risk, Duke Study Finds
A study that found hydraulic fracturing for natural gas puts drinking-water supplies in Pennsylvania at risk of contamination may renew a long-running debate between industry and activists.
The report by researchers at Duke University, published yesterday in the Proceedings of the National Academy of Sciences, said a chemical analysis of 426 shallow groundwater samples found matches with brine found in rock more than one mile (1.2 kilometers) deep, suggesting paths that would let gas or water flow up after drilling. While the flows weren’t linked to hydraulic fracturing, or fracking, the study found natural routes for seepage into wells or streams…
Marcellus Shale Study Shows Fluids Likely Seeping Into Pennsylvania Drinking Water Supplies
New research has concluded that salty, mineral-rich fluids deep beneath Pennsylvania’s natural gas fields are likely seeping upward thousands of feet into drinking water supplies.
Though the fluids were natural and not the byproduct of drilling or hydraulic fracturing, the finding further stokes the red-hot controversy over fracking in the Marcellus Shale, suggesting that drilling waste and chemicals could migrate in ways previously thought to be impossible…
Can fracking pollute water? Study tries to answer
A new study being done by the Department of Energy may provide some of the first solid answers to a controversial question: Can gas drilling fluids migrate and pose a threat to drinking water?
A drilling company in southwestern Pennsylvania is giving researchers access to a commercial drilling site, said Richard Hammack, a spokesman for the National Energy Technology Laboratory in Pittsburgh…
Renewables
Clean energy investment rebounds strongly during second quarter
Rapid growth in China’s renewables industry led to a rebound in global clean energy investment during the second quarter of the year, according to new figures from analyst firm Bloomberg New Energy Finance (BNEF).
The company’s latest quarterly report today confirmed that investment rose 24 per cent quarter-on-quarter to $59.6bn, defying significant head winds in the form of the eurozone crisis and continued policy uncertainty in key markets…
IEA: Solar thermal could boil away Germany’s carbon emissions
The International Energy Agency (IEA) has called for greater political support for solar thermal power, after a new report found the technology could meet one-sixth of global demand for heating and cooling, saving 800 megatonnes (MT) of CO2 emissions a year by 2050.
The IEA launched a report on Monday outlining ways of boosting the global uptake of solar heating and cooling technologies as a means of replacing fossil fuels…
Biofuels
Guatemala farmers losing their land to Europe’s demand for biofuels
Maria Josefa Macz and Daniel Pascual were called at five in the morning, and asked to come quickly to the Polochic valley in southern Guatemala. Ethnic Maya Q’eqchi communities of smallholder farmers said they were being violently evicted by state security forces from land they had farmed for generations. Helicopters with armed men leaning out were flying overhead, private security guards and paramilitary forces were attacking people, and houses and crops were being burned. The farmers could not speak Spanish and needed help dealing with the police, as well as legal advice on how to stop giant biofuel companies taking their land.
When Macz and Pascual, human rights workers from the Guatemala Campesino Unity Committee (CUC), arrived after a six-hour drive from the capital, Guatemala City, two of the communities had been brutally evicted. Over the next four days, 10 more villages were cleared. By the end of March 2011, around 800 families — about 3,200 people from 14 communities — had been forced off land they believed they had a right to live and work on. Within months, hundreds of hectares of the lush valley in the province of Alta Verapaz were being planted with sugar cane that would be turned into ethanol for European cars, including British ones…
GOP puts biofuels on the chopping block
The biofuels industry is at loggerheads with House Republicans, who are eyeing its funding for elimination in the farm bill.
Biomass and biofuels groups warn that the loss of $800 million in guaranteed federal support would stall progress in developing the fuel source and cause job losses in rural communities that can least afford it…
UK
Up in smoke: how efficient is electricity produced in the UK?
Huge amounts of energy are wasted every day in our gas, coal and nuclear power stations.
Over half of the energy in gas and around two thirds of the energy in nuclear and coal used to produce electricity is lost as waste heat.
Information is Beautiful has created a graphic for Friends of the Earth that illustrates just how much energy is lost in production and compares it to renewables sources, which lose less than 1%…
Falkland Islands: Premier Oil plan leads UK and Argentina to new dispute
Britain put itself on a collision course with Argentina over disputed sovereignty of the Falkland Islands when it gave explicit support to a £600m plan to develop oil reserves in the South Atlantic on Wednesday.
Barely three weeks since the two countries clashed over the issue at a G20 summit and 30 years on from military conflict, the Foreign Office announced the hydrocarbons exploration was a legitimate business…
Study finds waste-fuelled nuclear reactor “feasible” for UK
The prospect of the UK’s first nuclear reactor running on spent fuel edged closer to reality yesterday with the submission of a feasibility study by developer GE Hitachi (GEH).
The next-generation PRISM (Power Reactor Innovative Small Modular) reactor is one of the solutions the Nuclear Decommissioning Authority (NDA) is looking at to deal with the 100 tonnes of plutonium waste being stored in the country…
CBI chief slams government over wind subsidies row
The CBI’s director-general John Cridland has launched a broadside at the government over its “really disappointing” attempts to stimulate growth, urging ministers to approve new infrastructure projects and end the “political row” over renewable energy subsidies.
In what could prove to be a significant intervention, Cridland told the Financial Times that renewable energy investment was being stalled by the long-running stand-off between the Department of Energy and Climate Change (DECC) and the Treasury over the level of subsidy for onshore wind farms…
Centrica criticises policy as seabirds block Docking Shoal wind farm
Centrica has criticised conflicting Government policies after ministers blocked plans for a wind farm to power 400,000 homes because of concerns about seabirds.
The energy giant had applied to build two giant wind farms off the coast of north Norfolk…
Government $1bn deal to controversial Petrobras deep-sea oil drilling
The government has committed $1bn of taxpayer’s funds to support deep-sea drilling in the south Atlantic, despite acknowledging that the controversial project has “significant potential” to damage the environment.
Vince Cable’s export credit guarantee department (ECGD) has agreed a $1bn (£637m) line of credit to help Brazil’s state-owned oil company, Petrobras, drill for oil and gas. This will be in deeper water than the area in the Gulf of Mexico where an explosion on BP’s Deepwater Horizon rig led to 11 deaths and US’s the worst environmental disaster two years ago…
