|
||
NLPWESSEX, natural law publishing |
nlpwessex.org |
|
|
||
| PEAK OIL AND ENERGY CRISIS NEWS | ||
| To Go Direct To Current Energy Crisis News Reports - Click Here | ||
Peak Oil and Energy Crisis News Reports |
".... a series of crises in oil supply is likely over the
coming decades. The first, related to the
peak and decline of non-OPEC production, is practically upon us and underpins the
currently high oil prices...... The
imminent inability of non-OPEC production to meet incremental demand and its decline after
2010 precipitates the second crisis as OPECs diminishing spare capacity (even with
Iraqs production back to preinvasion levels) becomes less and less able to
accommodate short-term fluctuations.....The third crisis, due to OPECs incremental
supply being unable to meet incremental demand, follows in the first half of the next
decade. This assumes that OPECs reserves are as published. .....These crises will have global economic and geopolitical
significance: The oil price will be high and volatile, and
demand growth will have to be curtailed..." Oil Supply Challenges - 2: What Can OPEC Deliver? Oil and Gas Journal, 7 March 2005 "The scarcity of energy supplies and the energy imbalance between
nations is a threat to our prosperity and national security. As resources contract,
oil-hungry economies will compete for dwindling supplies of hydrocarbons. Competition for
fossil fuels will increase.... Energy resources have long been a major strategic concern:
access to secure sources, control over supply lines: these are issues of national
security.... The energy challenge is now more pressing than ever.... Global oil production is apparently nearing its peak.... current estimates seem to be converging on some point between 2010 and 2020....
[there] are five factors which are changing the energy landscape: rising demand; dwindling
supply; greater concentration of resource in the hands of a few; limited spare capacity;
and the environmental impacts of energy use.....This
is not a problem that can wait ten years." "If you speak to people in the industry, they will
conceed that whatever my company may say publicly, we understand that we are facing
decline in our own production and worldwide, we are not going to be able to produce more
fuel liquids or crude oil in the near future... I was recently at a conference in New
Mexico, sitting next to one of the recent CEOs of a major oil company and he, in response
to a question from the audience, said 'of course I am a peakist, it is just a question of
when it is coming' and I think that that is illustrative of once one is retired as a CEO,
one is freer than one was in position to say I am a peakist. And what
you hear privately from almost all people is we are coming to it.... I
think that many of these politicians will ultimately find that the public blames them for
its failure to warn them. Of course in a sense the public is responsible because it is the
present public attitude to which politicians play up, and tell them what they want to hear
but when the view of the world changes, what the public wanted to hear some time ago is no
longer what they want to hear in the future." "The global economy is tanking, U.S. forces remain
tied up in Iraq, Afghanistan is on a downward spiral -- one might wonder why anyone would
want to be U.S. president during these trying times. Recently, the nation's chief
intelligence officer weighed in, painting an even more somber picture of a far more
complicated world. National Intelligence Director Mike McConnell looked beyond the
immediate future, focusing on what his analysts are telling him about the challenges the
world community is likely to face by 2025. It isn't pretty. Speaking to an annual
conference of intelligence officials and contractors, McConnell said demographics,
competition for natural resources and climate change will increase the potential for
conflict. President-elect Barack Obama may get a glimpse of some of those challenges on
Thursday. McConnell is expected to lead Obama's first top-secret intelligence briefing,
according to U.S. officials familiar with the process. According to McConnell's outlook,
economic and population growth will strain resources. 'Demand
is projected to outstrip the easily available supplies over the next decade,' he said at
the annual conference. The intelligence community's forecast indicates oil and gas
supplies will continue to dwindle and production will be concentrated in unstable areas,
he said. And there appears to be no relief at hand. McConnell said studies have shown that new
energy technologies -- such as biofuels, clean coal and hydrogen -- generally take 25
years to become commercially viable and widespread." "The
world will never be able to
produce more than 89m barrels a day of oil, the head of Europes third largest energy group has warned ....Christophe de Margerie, chief executive of Total, the French oil and
gas company, said he had revised his forecast for
2015 oil production downward by at least 4m barrels a day because of the current economic
crisis and the collapse in oil prices....Delays and
cancellations in projects to extract oil from Albertas tar sands and
Venezuelas Orinoco belt both expensive and environmentally difficult
operations in which Total is active will cut 1.5m b/d of supply that would have
come on stream had oil prices remained strong. ...Meanwhile, Mr de Margerie now expects a faster decline in production at older fields, such as those in the North Sea. At lower price levels, companies will
find it harder to justify the greater cost of keeping such fields pumping." "Bankers
and the financial sector may have displaced energy from the front pages of the newspapers
right now, but Energy Security
remains at the top of the global political and economic
agenda....The need to balance energy security, jobs
and economic development while addressing the problem of climate change all contributed to
the challenge politicians faced in Copenhagen. And
that challenge means that energy security will dominate politics and policy for the next
12 months and considerably beyond.... Reliable and
affordable supplies of hydrocarbon energy were taken for granted through much of the 20th
century and laid the foundation for the worlds extraordinary economic progress. When
concerns arose, it tended to be at times of war or turbulence, notably in the Middle East,
or, closer to home, with industrial action. Whats
different now is that energy security has become a defining issue for the 21st
century, as one element in a complex energy challenge with
strategic, economic and environmental dimensions....
Opening access to a range of potential operators encourages the most efficient solutions,
and often involves partnerships that provide new combinations of skills. Iraq is a very
good example. BP is teaming up there with CNPC of China and Iraqs South Oil Company
to drive a major investment programme that will nearly triple production from the
super-giant Rumaila field. With this and the other agreements concluded with national and
international oil companies in the last six months, Iraq has the potential to contribute 10mmb/d to global supplies in the next
10-15 years. Thats a big piece of the additional
resource we need....The current debate about
Copenhagen and sustainability add new urgency and importance to the broader discussion of energy security. The
challenge of creating a low-carbon economy is far from easy, requiring
the wholesale re-engineering of the global economy over time." "Global
production of crude probably peaked in 2006, and
increasing demand will have to be met from more-difficult-to-extract forms of oil such as
tar sands, International
Energy Agency Chief Economist Fatih Birol said. 'The age of cheap oil is over,' Birol said at a conference in Madrid today.... The depletion of crude reserves
may benefit countries such as Canada and Venezuela, which have tar sands that yield oil. Those resources are more expensive to extract and only become
economical when the price of oil rises." "With the end of a 200-year resource glut, and the shift of economic power from West to East, you have a
global system groaning under the pressure of unresolved tensions and problems.... " The Energy Challenge Of The Post 9/11 Period "The U.S. needs energy lots and lots of energy
and 37.1% of it is currently supplied by oil. As the population expands and the
policy decisions and technological innovations needed to make the switch to green,
renewable energy sources lag, thirst for the stuff is only going to grow. Critics have long lamented that when it comes to energy policy, 9/11 was an opportunity for the country to have an honest debate about the
choices it needs to make if it's ever going to break its addiction to oil. 'We need to address the underlying
issue,' says Lisa Margonelli, director of the New America Foundation's Energy Policy
Initiative, 'and that's our dependence on oil.'
Having a national conversation now an adult one is the only way
forward." "In the 21st century, we know that the future of our
economy and national security is inextricably linked with one challenge: energy. In the
next few years, the choices that we make will help determine the kind of country and world
that we will leave to our children and our grandchildren. All
of us know the problems that are rooted in our addiction to foreign oil. It constrains our economy, shifts wealth to hostile regimes, and leaves
us dependent on unstable regions.... For over three decades, we've listened to a growing
chorus of warnings about our energy dependence. We've heard president after president
promise to chart a new course. We've heard Congress talk about energy independence, only
to pull up short in the face of opposition from special interests. We've seen Washington
launch policy after policy, yet our dependence on foreign oil has only grown, even as the world's resources are disappearing. This time has to be different. This time we cannot fail, nor can we be
lulled into complacency simply because the price at the pump has for now gone down from $4
a gallon. To control our own destiny, America must develop new forms of energy and new
ways of using it. And this is not a challenge for government alone; it's a challenge for all of us." |
|
| MORE ENERGY INFORMATION 'ENERGY UPDATE' BULLETINS SOLAR ENERGY NEWS |
||
| Contact | 'We Need A New Way Of Thinking' - Consciousness-Based Education |
| PEAK OIL AND ENERGY CRISIS NEWSBITES |
| 2012 |
"Thanks to new shale oil drilling in North Dakota and offshore
production in Alaska and the Gulf of Mexico, U.S. production has picked up recently and is
at about 6 million barrels of oil per day. But thats still way down from 1970, when
production peaked at 10 million barrels per day...The United States has historically been
able to increase oil production by finding new areas to drill. First there were
Pennsylvania and New York in the 1850s and 60s, then Ohio, then West Virginia, then
big plays in Texas, the Gulf of Mexico and Alaska, and so on. Eventually, however,
production from all those locations peaked and went into decline. Companies have now moved
on to North Dakota and deepwater exploration. Right now, North Dakota is the only state
setting all-time records for production in the wake of new fracking techniques for
recovering oil from the Bakken shale formation. But while that development is hugely
important for North Dakota, its modest in the larger scheme of things. 'The 138
million barrels produced in North Dakota and Montana in 2010,' Hamilton writes, 'is about
half of what the state of Oklahoma produced in 1927 and a fifth of what the state of
Alaska produced in 1988.' Obama has also proposed opening up the Outer Continental Shelf
in the Atlantic and Pacific oceans for further oil exploration, but, according
to an Energy Information Administration analysis, that would boost oil production by just
182 million barrels in 2030 again, less than Oklahoma produced in 1927. That doesnt mean the recent uptick in oil production has no
benefit. As the EIAs Energy Outlook 2012 noted,
the recent boom is helping the United States curb its dependency on foreign crude. But
thats mainly because Americans are also reining in their oil use. The EIA projects
gasoline consumption to be flat in the years ahead, thanks to new fuel-economy standards
on cars and light trucks. The fact that Americans are using less oil is a key part of the
dynamic here." |
"The global production of oil
has remained relatively flat since 2005 and peaked in 2008, declining ever since even as
demand has continued to increase. The result has been wild fluctuations in the price of
oil as small changes in demand set off large shocks in the system. In Wednesdays
issue of Nature, James Murray of University of Washington and David King of Oxford
University argue
this sort of volatility is what we can expect going forward, and were likely to
face it with other fossil fuels as well. The notion
of peak oil is fairly simple: Oil is a finite resource and at some point we simply
wont be able to extract as much as we once did. There is no getting around that
limit for any finite resource. The issue that has made peak oil contentious, however, is
the debate over when we might actually hit it. Murray and King are not the first to
conclude that weve already passed the peak. Even
as prices have climbed by about 15 percent per year since 2005, production has remained
largely flat. The strongest argument against this being a real peak is the increasing
volume of petroleum reserves many countries are reporting. Even assuming those estimates
were reliable (which Murray and King arent certain of), those reserves clearly have
not brought increased production. In the United States, for example, production as a
percentage of total reserves has dropped from 9 percent to 6 percent during the last three
decades. 'We are not running out of oil,' the authors argue, 'but we are running out of
oil that can be produced easily and cheaply.' This creates significant delays before new
reserves can be tapped, and limits the amount of oil that can be economically extracted
from them. Non-conventional sources like oil sands have the potential to contribute to the
global supply but so far havent done so and current production estimates indicate
they wont anytime soon. The struggle to mobilize supplies has taken place against a
backdrop of falling production and rising demand. Most established sources of oil are
seeing declines in the area of 5 percent annually. Given that decline, it will be
extremely difficult to meet demands projected for 2030 in fact, wed have to
add the equivalent of our total current production. In a fit of understatement, the
authors deem this 'very unlikely to happen.' What
are the consequences of being stuck at or near peak oil? The authors have produced a graph
showing that, while supply is elastic enough to meet demand, prices stay stable. Once
demand consistently exceeds supply, prices swing wildly. Murray and King term this a
'phase transition' and suggest well be in the volatile phase from here on out. That
has some significant consequences. Of the 11
recessions the United States has experienced since World War II, 10 have been preceded by
a sudden change in oil prices. The United States isnt alone, either. Italys
entire trade deficit, which has contributed to its financial troubles, can be accounted
for by the rise in imported oil. The world, it seems, has allowed its economies to become
entirely dependent upon fossil fuels. 'If oil production cant grow, the implication
is that the economy cant grow either,' the authors write. 'This is such a frightening prospect
that many have simply avoided considering it.' And its not just oil that poses
problems. U.S. coal production peaked in 2002, and the global peak has been predicted to hit
as soon as 2025. The last time global coal reserves were evaluated, in 2005, the total
was cut by more than half compared to previous estimates. Fracking has boosted the
production of natural gas dramatically, but even here the authors find reasons for
concern. Recent reports suggest shale gas reserves have been overestimated, and many
fields that have been in production awhile have experienced large declines in production. The commentary concludes that we simply cant rely on any fossil
fuel to provide a stable and economic source of energy for more than a couple of decades.
And, given the economic shocks that result from rapid changes in energy prices,
thats a serious problem. 'Economists and politicians continually debate policies
that will lead to a return to economic growth,' the authors note. 'But because they have
failed to recognize that the high price of energy is a central problem, they havent
identified the necessary solution: weaning society off fossil fuel.' This weaning will
require a large deployment of efficiency measures, nuclear power and renewable energy
sources. This will take time, which is why efforts need to be started now, the authors
argue. (Not mentioned, but equally true, is the probability that taking these measures
will smooth out the impact of reaching peak fossil fuel production.) Unfortunately, since
most governments are unwilling to admit the prospect of indefinite economic stagnation due
to our reliance on fossil fuels, theyve been unable to generate the political will
to even begin these efforts. Murray and King clearly hope their commentary will help get
the ball rolling." |
"... the refineries that make
our gasoline, diesel, heating oil, etc. are dropping like flies. In today's economy, these refineries are simply losing so much money
that their owners who are not major oil companies that make billions from oil production
are having put them up for sale or close them down. In recent years we lost refineries in
Westville, NJ, and Yorktown, Va. A large refinery in southeastern Pennsylvania was shut
down in December as was one in New Jersey. A third large Philadelphia refinery is up for
sale and will be closed in July if no buyer can be found....When refinery closings come
together with the traditional winter-spring increase in gasoline prices we could be
looking at some never-before-seen gasoline prices in the $4-5 a gallon range before the
year is out. Five dollar gasoline means diesel could be well north of $5 when the effect
of the global diesel shortage is considered. This will certainly not do much for economic
recovery later this year and would certainly roil the political pot. Alternatively, the EU
may encounter such serious problems later this year that gasoline prices will go
down." |
"In his State of the Union address last night, President Barack Obama
spoke of the United States' unaccustomed new impact on global energy-- in addition to its
habitual role as a world-class oil glutton, the U.S. is delivering a growing volume of oil
and natural gas that has already shaken assumptions, and looks likely to roil geopolitics
in a way favorable to Americans. The speech put a spotlight on a new trend of plenty in
the U.S. oil patch: On Monday, the U.S. Energy Information Administration reported
thatthe U.S. is in the midst of a dramatic turnaround -- by the year 2035, U.S. demand for imported oil will have fallen by 18 percent, to
some 7.36 million barrels a day, or a respectable
1.6 million barrels a day less than last year's volume....For its part, the EIA skips the
politics and the glad assertion of freedom from Middle East oil. It lays out in cool
language a more modest yet remarkable U.S. energy reversal of fortune. It says that U.S. oil production will rise by 21 percent over the
next decade -- from a current 5.5 million barrels a day to 6.7 million barrels a day in
2020; then production will fall off to 6.1 million barrels a day, and stay there through
2035. This includes 1 million barrels a day from the various new sources, such as oil
shale and new Gulf of Mexico production, adjusted for natural depletion; plus an
additional 1 million barrels a day of biofuels (the more optimistic scenarios suggest some
4 million barrels a day in additional biofuel production, mainly corn and sugar ethanol).
U.S. oil demand will rise a bit over the period, the EIA says, yet by 2035, net imports
will fall to 36 percent of total U.S. consumption from 49 percent in 2010." |
"Just as hydraulic fracturing is transforming the outlook for oil and
gas supplies in coming decades, it is also revolutionising the context for emissions
control policies and climate change. In the mid-2000s, policymakers could draw on the
prospect of shrinking oil reserves, medium term shortages, and rising prices to make the
case for aggressive action to promote efficiency, clean energy and behavioural changes to
cut energy consumption. Now policymakers must make the same case in a world where supplies
have been substantially enhanced and prices could be flat or even falling in the medium
term.... The best way to appreciate the magnitude of the problem is to examine how market
expectations for medium-term oil and gas prices have shifted in the last four years. In
July 2008, five-year forward oil futures contracts implied that the
market expected prices to be around $140 per barrel in 2013. Obviously that expectation
looks unlikely, barring geopolitical upheaval. In the short term it has been mostly
invalidated by the recession. But profound shifts in both consumption (from ethanol
blending and efficiency) and supply (fracking and deepwater drilling) have done more to
change the medium-term outlook. Mostly as a result of
the fracking revolution, the market now expects oil prices to be as low as $90 in 2017
based on five-year forward prices. The shift in
expectations for North American natural gas has been even more dramatic. Five-year forward
gas prices have more than halved from $10.50 per million British thermal units (mmBtu) in
2008 to just under $5. There is no guarantee the market's current five-year forecasts will
prove any more accurate than those in 2008. However, neither markets, nor policymakers,
now expect serious shortages of oil and gas in the next decade.... By taking away the spectre of peak oil and gas, fracking has
cruelly undercut one of the most important (complementary) arguments for curbing carbon
emissions. Policymakers can no longer hide behind
the market to tackle emissions. In future, they will have to make the case for curbs
directly, based on climate effects. Past experience suggests it is difficult to catalyse
sustained and aggressive reductions in emissions based on climate effects alone but
fracking means politicians and environmental campaigners have no other choice." |
"A nuclear expert gave uranium
supply three more years - at most - before it seriously falls behind demand from the
nuclear power industry. '2016: We have to have supply in the market or the lights will
gradually go out in the nuclear system,' said Thomas Drolet, the president of Drolet &
Associates Energy Services, during a presentation at Cambridge House's Vancouver Resource
Investment conference on Monday. A uranium supply crunch is widely anticipated to hit the
nuclear industry starting next year as Cold War era sources of uranium dry up. To illustrate the severity of the shortage that the nuclear industry
faces, Drolet highlighted 2010 uranium production from mining - 118 million pounds -
versus consumption: 190 million pounds. 'You can do the delta difference yourself,' Drolet
said, referring to how much of a supply gap miners will have to make up for in coming
years. That uranium is 'going to have to come from somewhere,' he said. The Fukushima
nuclear disaster in Japan, Drolet argued, only delayed the onset of the coming pinch on
uranium supply. But even in his 'downside' analysis
the uranium deficit still comes by 2015. While Japan
has idled most of its 50 nuclear reactors in the wake of Fukushima, Drolet wagered that
the country would have no choice but to bring online at least 30 of the reactors or suffer
brutal economic consequences." |
"The International
Energy Agencyexpects nominal crude prices to reach $247 a barrel by 2035, almost twice
the $133 assumed by the Organization of Petroleum Exporting Countries, even as
expectations for demand converge....The IEA expects
nominal Brent crude
to fall from $109 a barrel in 2011 to $91 a barrel in 2016, while OPEC predicts oil will
remain at $85 to $95 a barrel to 2020." |
"Natural gas prices have declined to below $3.00/mcf, levels not seen
for years, yet the EIA posted the highest gas production ever in October, 2011. U.S. gas
production is growing despite annual well completion rates that are half that at the peak
of the drilling boom in 2008, when gas price topped $12.00/mcf. Proponents of shale gas as
a 'game changer' suggest that, despite the well known high decline rates of shale gas
wells, their productivity is sufficient to grow production with far fewer wells at
historically low prices. Others, such as Arthur Berman, claim that shale gas plays require
much higher prices to be economic. The answer may lie in the gas produced in association
with oil drilling, which is near all-time historical highs....U.S. natural gas production
has reached production levels of 4.6 percent above the previous 1973 peak, and nearly 16%
above the recent 2001 peak. While some of this increase is likely due to delayed tie-ins
from the 2008 drilling boom, and some due to the high initial productivities of shale gas
wells, these are not likely the whole story. Hydraulic fracturing has certainly changed
the game with respect to gas production from shales and tight rocks, albeit with widely
reported collateral damage including methane leakage into groundwater, pollution from
produced frackwater disposal on the surface, induced earthquakes from frackwater injection
into disposal wells and the environmental footprint of industrialized landscapes. Equally
important is the game changing nature of applying hydraulic fracturing to producing oil
from shales..... Large amounts of natural gas are produced in conjunction with the
production of hydraulically fractured shale oil and in association with conventional oil
drilling. Given the price differential between oil and gas at present many companies have
changed their focus to shale oil or liquids rich shale gas to enhance economic returns.
Although much associated gas in the production of shale oil is simply flared, as in the
Bakken play in North Dakota, much is also produced into the market even at current low
prices. Thus the apparent 'too- good-to-be-true' statistics showing growing gas production
with declining drilling are simply that too- good-to-be-true. The record drilling for oil, and its contribution to gas
production, is masking the high drilling rates required to grow gas production in the EIA
statistics (which classify a well as either 'oil' or
'gas' depending on its principal product).... Production
decline rates in both shale gas and shale oil wells are very high first year
declines in Barnett shale gas wells are in the order of 65% and are higher in Haynesville
wells. Similar decline rates are observed in shale oil plays. Thus new wells must
continually be drilled to offset depletion in existing wells. ... footage drilled is near all-time historical highs. And it can be
argued that a hydraulically fractured foot, drilled in 2012, required much higher inputs
of energy and capital investment than a foot drilled in 1980, as the deposits targeted are
so much more challenging (or marginal, depending on your perspective). In addition, the
average depth of a well is 40 percent deeper than it was in 1990. This reflects the
declining EROEI ['Energy Return On Energy Invested'] associated with domestic U.S. oil and
gas production, which can only be expected to decline further going forward. So, despite
vocal industry proponents to the contrary, there is no such thing as a free lunch. Growing, or even maintaining, U.S. oil and gas production will
require an increasing level of inputs in terms of the number of wells drilled, the footage
drilled, the capital investments required, and, likely, the large amounts of collateral
environmental damage incurred." |
"The U.S. Energy Department cut
its estimate for natural gas reserves in the Marcellus shale formation by 66 percent,
citing improved data on drilling and production.
About 141 trillion cubic feet of gas can be recovered from the Marcellus shale using
current technology, down from the previous estimate of 410 trillion, the department said
today in its Annual Energy Outlook. About 482 trillion cubic feet can be produced
from shale basins across the U.S., down 42 percent from 827 trillion in last years
outlook. 'Drilling in the Marcellus accelerated rapidly in 2010 and 2011, so that there is
far more information available today than a year ago,' the department said. The estimates
represent unproved technically recoverable gas. The daily rate of Marcellus production
doubled during 2011. The estimated Marcellus reserves
would meet U.S. gas demand for about six years, using 2010 consumption
data, according to the Energy Department, down from 17 years in the previous outlook....Shale gas will probably account for 49 percent of total U.S. dry gas
production in 2035, up from 23 percent in 2010, the Energy Department said today.... The
department also said the U.S. may become a net exporter of liquefied natural gas in 2016
and a net exporter of natural gas in 2021...U.S. LNG exports may start with a capacity of
1.1 billion cubic feet a day in 2016 and increase by an additional 1.1 billion cubic feet
per day in 2019, the department said." |
"Growth in shale oil and gas
supplies will make the US virtually self-sufficient in energy by 2030, according to a BP report. In a development with enormous geopolitical
implications, the country's dependence on oil imports from potentially volatile countries
in the Middle East and elsewhere would disappear, BP said. BP's energy outlook forecasts a
growth in unconventional energy sources, 'including US shale oil and gas, Canadian oil
sands and Brazilian deepwater, plus a gradual decline in demand that would see [the US]
become almost totally energy self-sufficient' in two decades. The chief executive of BP,
Bob Dudley, said: 'Our report challenges some long-held beliefs. Significant changes in US
supply and demand prospects, for example, highlight the likelihood that import dependence
in what is today's largest energy importer will decline substantially.' The report said the volume of oil imports in the US would fall
below 1990s levels, due to rising domestic shale oil production and ethanol replacing
crude. The US would also become a net exporter of natural gas. Overall, global energy demand will surge in the next 20 years, fuelled by
economic and population growth in China and India, but at a slowing annual rate, due to
advances in energy efficiency and growth of renewables. China
will leapfrog the US to become the biggest energy importer. By 2030, China and India will be the world's largest and third-largest
economies and energy consumers, accounting for about 35 per cent of global population,
gross domestic product and energy demand. World
energy demand is likely to grow by 39 per cent over the next two decades, or 1.6 per cent
annually, almost entirely in non-Organisation for Economic Co-operation and Development
countries. Consumption in OECD countries is expected to rise by just 4 per cent.... Global carbon dioxide emissions are likely to rise by about 28 per
cent by 2030 - slower than the current rate of energy demand growth, due to the rapid
expansion of renewables and natural gas. If more aggressive policies are introduced,
global carbon dioxide emissions could begin to decline by 2030." |
"The huge reserves of coal, oil
and gas held by companies listed in the
City of London are 'sub-prime' assets posing a systemic risk to economic stability, a
high-profile coalition of investors, politicians and scientists has warned Bank of England's
governor, Sir Mervyn King. In an open
letter on Thursday, they tell King that the global drive to reduce carbon emissions could
mean billions of pounds of fossil fuel reserves will rapidly lose value and cause a 'major
problem' for institutional investors and pension funds. At the most recent UN
climate change summit in December, 194 of the world's nations agreed to enact legally
binding curbs on greenhouse gas emissions within three years to limit global warming to
2C. But meeting this limit would mean just 20% of
existing fossil fuel reserves could be burned, according to recent research. 'These
high-carbon assets pose significant strategic challenges for the future prosperity of
Britain that just can't be ignored,' said investment manager James Cameron, who is a
member of the prime minister's business advisory group. 'Investors continue to pour cash
into unsustainable assets without understanding the risks associated with these
investments, such as climate change, local
pollution, fossil fuel price volatility, political risk and
catastrophes such as Deepwater Horizon.' The letter is also signed by the government's
former chief scientific adviser Sir David King, Zac Goldsmith MP, former environment
minister John Gummer and 17 others. It urges action to investigate the risk of the 'carbon
bubble'." |
"Saudi Arabias endorsement
of an oil price of $100 a barrel increases OPEC unity over a triple-digit price
aspiration, making agreement on policy easier and adding support for the market. Ali al-Naimi, oil minister for the worlds top oil exporter, said in
an interview with CNN last week that he hoped to stabilize oil prices at 'around $100' for
an average of crudes worldwide. Other members of the Organization of Petroleum Exporting
Countries (OPEC) such as price hawks Iran and Venezuela have long called for prices to be
at or above $100 -- but not Saudi Arabia, its largest producer and most influential
member. 'All in all, all OPEC countries will be more than happy with a $100 price,' said
Shokri Ghanem, the head of Libyas OPEC delegation for many years until he defected
in May 2011. 'This is a change in the Saudi view.' Brent oil prices were trading around
$111 a barrel last Thursday, down from a 2011 peak of $127 and an all-time high of $147
reached in 2008. Last years annual average for Brent around $111 was the highest
ever.... Before last Monday, Riyadh had not specified
a preferred price level since it said it favored $75 a barrel in November 2008, although
Mr. Naimi later said that was no longer valid....Oil
revenue needs in OPEC countries have risen sharply following announcements of increased
social spending on their growing populations as they seek to counter Arab Spring unrest.
And oil industry costs are rising as companies work on more complex projects. BP Plc Chief Executive Bob Dudley said in October more people were
pencilling in $90 to $100 when asked what price BP needed to make money from new ventures." |
"Bulgaria has become the second
European country after France to ban exploratory drilling for shale gas using the
extraction method called 'fracking'. Bulgarian MPs
voted overwhelmingly for a ban on Wednesday, following big street protests by
environmentalists. Bulgaria has revoked a shale gas permit granted to US energy giant
Chevron. Critics say shale gas drilling can poison underground water and even cause earth
tremors. Industry experts say correct drilling is safe." |
"Oil demand is falling for the
first time since the global economic crisis of 2008-2009, the International Energy Agency
said, warning that mild weather, high oil prices and a rising likelihood of a global
recession will depress demand in 2012. Although
worries about disruptions to Iranian oil exports have supported prices, consumption fell
in the last quarter of 2011 year-on-year due to mild winter weather in the northern
hemisphere and the overriding fears about an impending recession in the euro zone, the IEA said in its
monthly report on Wednesday.... The IEA reduced its
2012 demand growth forecast by 220,000 barrels per day (bpd) from its previous monthly
report to 1.1 million bpd. Further downgrades to global GDP estimates will trigger cuts in
estimates of global oil consumption, it said, adding that a one-third cut to GDP growth
would see this year's oil consumption unchanged at 2011 levels." |
"Leaders of BP and
ConocoPhillips called Wednesday for greater access to and development of oil and natural
gas fields, as a BP report showed fossil fuels will continue to dominate the world's
energy needs for at least the next 20 years.
Renewable energy is growing faster than other sources, at about 8.2 percent annually, but
will make up only 6 percent of energy use by 2030, according to the forecast released
Wednesday by BP. Oil, natural gas and coal will still account for 80 percent of global
energy use.... Technology improvements have allowed drillers to access natural gas in
deep, dense shale rock economically for the first time. That has led to a rush on North
America's shale gas fields, leaving a glut of low-priced natural gas in the U.S. market.
'Our entire understanding of North American energy potential is changing,' Mulva said.
'Everyone is having to cast aside some old assumptions, such as the one about domestic
fossil fuels being in short supply. They are not.' He said the technology that fueled
shale gas production has begun driving a rapid increase in the development of domestic oil
fields, too. With natural gas prices low, producers are moving more rigs into fields
containing higher-priced crude and natural gas liquids, including the Eagle Ford shale in
South Texas and the Bakken shale in North Dakota. BP
said that the increase in world energy demand will occur mostly in emerging nations such
as China and India as they look to cheap fossil fuels to power their growth.... Globally, coal's share of the fuel market will continue growing for a
few more years, but the trend will start to reverse by 2020, as a significant portion of
power generation shifts from coal to cleaner-burning natural gas, BP said." |
"Four out of 10 people are
worried they cannot afford their next energy bill, according to research commissioned by Citizens Advice.
The charity, which helped clients with more than
96,000 fuel debt problems in 2011, also found that one in three people do not know that
energy companies are offering support to insulate homes. It released the findings at the
start of its Big Energy Week, which aims to
help people save money on their bills. In recent days, four of the six
major energy companies have announced price cuts, but the reductions, some of which do
not come into effect until March, do not reverse the double-digit increases seen in 2011.
Citzens Advice's chief executive, Gillian Guy, said: "Day in day out our bureaux help
people who can't afford their fuel bills. 'We are worried that some people are struggling
unnecessarily because they are not on the best deal, live in homes that haemorrhage heat,
or are not getting all of the financial help available to them.' The study found that 43%
of people are worried they cannot afford their next fuel bill, while one in two say energy bills will put a strain on their
finances this year....The charity said that in November 2011 eight times as many people
visited its website for advice on cutting their fuel bills compared to the previous
November." |
"The Government has been accused
of 'appalling complacency' after it emerged that not a single minister has met with the
Environment Agency's experts to discuss the hugely controversial gas exploration technique
known as fracking. Despite earthquakes in Blackpool,
growing concerns about poisoning of the water supply and demonstrations around the world,
the Government still appears not to be taking the potential dangers of fracking seriously
enough, critics said. At the weekend, anti-fracking demonstrations were held in London,
Paris, Copenhagen and Bulgaria. The extent of the Government's failure to prioritise the
issue came in the answer to a parliamentary question tabled following The Independent's
revelations last month that the US environment agency had established the first clear link
between fracking and water poisoning." |
"The world's biggest oil
exporter, Saudi Arabia has signed an agreement with China for cooperation in the
development and use of atomic energy for peaceful purposes, which will help to meet the Kingdom's increasing demand for energy and
cut its growing dependence on depleting oil resources. The deal was signed in the Saudi
capital Riyadh on Sunday in the presence of King Abdullah and visiting Chinese Prime
Minister Wen Jiabao." |
"The European
Unions long-term energy plans to abate global
warming while still burning fossil fuels hinge on proposals to capture carbon dioxide
emissions and store them in deep underground rock formations. Yet weak support for the
untested technology is putting Europe in the rear ranks of its development. Two carbon
capture and storage projects in Germany and Britain were canceled last quarter, and many
of the remaining projects will probably share that fate this year, imperiled by a mix of
regulatory objections, a lack of money, public opposition to the possible geological risks
and broader uncertainty about strategies to slow climate change. By 2020, Europe will have at most six, and more probably four, of the 12
demonstration plants that were supposed to be running by 2015, experts and officials
say." |
"Saudi Arabia, the worlds largest oil exporter, is able to boost production to its
officially-announced peak of 12.5 million barrels a day, according to PFC Energy. Proposed European Union sanctions to block imports from Iran have raised
the prospect that other suppliers may need to make up any shortfall. Oil Minister Ali
al-Naimi, who has said the kingdom can reach a level of 12.5 million, said last month that
its pumping at about 10 million a day. 'The market always questions how much spare
capacity Saudi Arabia actually has,' Jamie Webster, an analyst at the consulting company,
said by phone from Washington. 'Their total productive capacity including the neutral zone
is around 12.5 million barrels.' Saudi Arabias sustainable oil production capacity
was estimated by the International Energy Agency, in its December 13 Monthly Oil Market
report, at 12.04 million barrels a day. The agency defines this as capacity levels that
'can be reached within 30 days and sustained for 90
days.' |
"Starting Feb. 1, drilling
operators in Texas will have to report many of the chemicals used in the process known as
hydraulic fracturing. Environmentalists and
landowners are looking forward to learning what acids, hydroxides and other materials have
gone into a given well. But a less-publicized part of the new regulation is what some
experts are most interested in: the mandatory disclosure of the amount of water needed to
frack each well. Experts call this an invaluable tool as they evaluate how
fracking affects water supplies in the drought-prone state." |
"The government's flagship green
policy to transform the energy efficiency of 14m
homes and create 65,000 jobs appears doomed to fail, with the revelation of its own
figures showing the number of lofts being lagged is set to plummet by 93%. The green deal is at the heart of
the government's
ambition to be the 'greenest ever' as it will deliver large cuts in climate-warming
carbon emissions, as well as curbing
high energy bills by making houses warmer and less expensive to heat. The disclosure
is the most startling yet about the green
deal programme, which starts in October and has been billed by ministers as the most
ambitious national refurbishment scheme in the world. Britain's homes are old and leaky by
international standards and millions of lofts and cavity walls remain poorly insulated.
These home energy efficiency measures are
seen as the cheapest way to cut bills and carbon emissions....But the new data, obtained
by Building magazine and from Department of
Energy and Climate Change's (Decc) own impact assessment, throws the government's grand
ambition into serious doubt. Current government schemes that subsidise insulation have
resulted in just over 1m lofts a year being lagged in recent years, yet this will plunge
to just 70,000 a year under the green deal, according to Decc figures. This is also far
below the 2m per year required to meet climate targets. For cavity walls, the current
510,000 a year being filled will fall to 170,000, a drop of 67%, and again far below the
1.4m a year required. Existing insulation schemes subsidise the cost of insulation with,
for example, energy company E.on
this week offering free loft and cavity wall insulation plus a £100 incentive. The
funding comes from a levy of £25 a year on all bills and from government coffers. The
green deal, by contrast, offers no subsidy for these measures and instead provides
a loan enabling the up-front costs to be paid back using the savings made on heating
bills. However, the new Decc figures show that the take-up of the green deal is expected
to be very low. In December, in an unprecedented intervention, the government's official
independent advisers warned in an open letter that
the green deal was set to fail, reaching just 2-3m households of the 14m targeted....
The government's plans, currently
undergoing a public consultation, do include an Energy
company obligation, funded by a levy on all bills. But as it stands that will only be
available to so-called 'hard-to-treat' homes, in effect those with no cavity wall and
hence needing solid wall insulation." |
| "British
oil and gas tax revenues could rise by billions of pounds this year as high oil prices
boost earnings and tempt operators into
opening new fields after a decade of sharp declines, industry data and Reuters research
showed. The past two years of investment have set the
stage for a landmark shift in the North Sea, following exceptionally dismal data in 2011
when oil and gas production in the third quarter slumped at the fastest rate since records
began in the mid-1990s, research by consultancy Wood Mackenzie suggested.... 'As of 2012 we expect production declines to halt for liquids
(including crude oil) and gas, and we expect that to continue for a few years until the
decline starts again,' Lindsay Wexelstein, an analyst at energy consultancy Wood Mac, told
Reuters....Analysts said the main downside risk for government revenues is that a renewed
recession could pull down energy prices. They also
said the halt in declining North Sea production would only be for a few years. North Sea oil and gas output passed its peak at the start of the last
decade as the larger and easier-to-tap deposits were pumped out. That peak remains out of
reach to this day, Wexelstein said." UK oil and gas decline to halt as investment booms Reuters, 13 January 2002 |
"China
tripled its solar energy generating capacity last
year and notched up major increases in wind and hydropower, government figures showed this
week, but officials are still struggling to cap the growth in coal
burning, which is the biggest
source of carbon dioxide emissions in the world. The
latest evidence of China's promotion of renewable energy has been
welcomed by climate activists, but they warn that the benefits are being wiped out by the
surge in coal consumption. After burning an extra 95m tonnes last year, China will soon
account for half the coal burned on the planet.... coal continues to account for close to
70% of the nation's power supply. The government is trying to bring this proportion down
below 65%, but it is not making progress fast enough." |
"UK North Sea oil and gas investment is set to mark an all-time high
in 2012 as high oil prices entice investors to boost production, showing that the
government's surprise tax on output introduced last year has not jeopardised
profitability. Edinburgh-based consultants Wood Mackenzie said in a report on Tuesday that
energy company investments were expected to exceed last year's record of 7.5 billion
pounds in 2012, which also found that investments should stay consistently high until at
least 2014. The findings reflect increasing appetite for UK exploration acreage after
Britain awarded 46 new oil and gas exploration licenses in December, surpassing some
earlier licensing rounds and helping counter a decade-long decline in production. Oil and
gas production in the UK North Sea has passed its peak as the larger and easier-to-tap
deposits have been pumped out. But geologists say there are still billions of barrels left
to produce in smaller accumulations....Wood
Mackenzie's annual North Sea investment report also found that the economic crisis setback
development programs in 2011, with just five new fields starting production." |
"While the US military has
formally ended its occupation of Iraq, some of the largest western oil companies,
ExxonMobil, BP and Shell, remain. On November 27, 38
months after Royal Dutch Shell announced its pursuit of a massive gas deal in southern
Iraq, the oil giant had its contract signed for a $17bn flared gas deal. Three days later,
the US-based energy firm Emerson submitted a bid for a contract to operate at Iraq's giant
Zubair oil field, which reportedly holds some eight million barrels of oil. Earlier this
year, Emerson was awarded a contract to provide crude oil metering systems and other
technology for a new oil terminal in Basra, currently under construction in the Persian
Gulf, and the company is installing control systems in the power stations in Hilla and
Kerbala. Iraq's supergiant Rumaila oil field is already being developed by BP, and the
other supergiant reserve, Majnoon oil field, is being developed by Royal Dutch Shell. Both
fields are in southern Iraq. According to the US Energy Information Administration (EIA),
Iraq's oil reserves of 112 billion barrels ranks second in the world, only behind Saudi
Arabia. The EIA also estimates that up to 90 per cent of the country remains unexplored,
due to decades of US-led wars and economic sanctions. 'Prior
to the 2003 invasion and occupation of Iraq, US and other western oil companies were all
but completely shut out of Iraq's oil market,' oil industry analyst Antonia Juhasz told Al
Jazeera. 'But thanks to the invasion and occupation, the companies are now back inside
Iraq and producing oil there for the first time since being forced out of the country in
1973.' Juhasz, author of the books The Tyranny of
Oil and The Bush Agenda, said that while US and other western oil companies have not yet
received all they had hoped the US-led invasion of Iraq would bring them, 'They've
certainly done quite well for themselves, landing production contracts for some of the
world's largest remaining oil fields under some of the world's most lucrative
terms.'" |
| "Gas prices are the highest ever
for this time of year, and analysts predict that motorists will be digging deep in 2012 to
fuel their vehicles. Not only are we worrying about
the end of the world in 2012 thanks, Maya calendar makers but this also may
be the year of the gas-pocalypse, analysts warn. That's because gasoline prices are the
highest ever for the start of the year, and they're on the rise, supercharged by expensive
oil and changes in refinery operations. In California, the average price of a gallon of
regular gasoline was $3.666 on Thursday, up 8.1 cents from a week earlier and up 33.1
cents from a year earlier, which had been a record price for this time of year, according
to the AAA
Fuel Gauge Report. Nationally, a gallon of regular was averaging $3.319, up 6.5 cents from
a week earlier. That topped 2011's record-setting start by 24.2 cents a gallon.... And
2011 showed that when prices start out high, it doesn't take a huge percentage increase to
add to consumer woes. Average prices rose 29% nationally in 2011, a jump of 89.5 cents a
gallon to the year's peak of $3.965. California prices also rose 29% last year, for a
95-cent rise to the high of $4.257." Gasoline prices start the year at a high and rising Los Angeles Times, 6 January 2012 |
| "The returns are in and we now
know that world price of a barrel of oil averaged $111 in 2011. This was up 14 percent
from last year and well above the previous high of $100 set in 2008. The average barrel of
oil that we bought last year cost $15 more than the year before. Here in America, we burn about 6.7 billion barrels of the stuff each
year. Therefore, our collective oil bill for 2011 was about $100 billion higher for the
same amount of energy that we burned in 2010. This $100 billion created few new jobs here
in the USA. Much of it went overseas and into the coffers of people who don't like us very
much. Last year's news was dominated by the Arab spring and its derivatives which spread
from Wall Street, to Moscow, to villages in China as the revolution in communications
technology coalesced in the hands of a new generation making dissidence against
governments everywhere far easier to organize. By the way, the latest count of cell phones
shows that in excess of 5 billion have been produced. Not all of these are still active,
of course, but for a world of 7 billion people, many of whom are too young to talk much
less carry a mobile phone, that is an impressive number. It is clear the world is changing
in ways we cannot yet comprehend. The peak oil story changed little last year. Global oil
production hung in around 88 million barrels a day (b/d) despite the Libyan uprising which
took nearly 1.6 million b/d out of production for several months. For much of last year
global oil production was below consumption resulting in a gradual drawdown of world
reserves. With OECD stockpiles of about 2.6 billion barrels, plus the new reserves being
accumulated in China, a slight shortfall in production is not a problem for the time
being. During 2011 it became apparent that the demand for diesel is becoming a worldwide
problem. While the demand for gasoline has been falling, at least in the OECD nations, the
demand for diesel has been increasing. As electricity production falters around the world
mainly due to droughts, aging equipment, and unaffordable fuel prices, the demand for
diesel generated backup electric power has surged. Vital uses for electricity such as in
hospitals, public safety, and water pumps will continue no matter what the cost. It should be noted that much of the increase in 'oil' production
in recent years has been made up of natural gas liquids and ethanol which are not commonly
used to produce diesel, leaving the quantity of feedstock for diesel production stagnant.
The year ended with little change in the assessment for the prospects for global oil
supplies. Despite all the hype concerning new oil finds and technological breakthroughs in
oil production, these developments still are not contributing enough new oil to offset the
annual decline of 3 million b/d from existing fields and the annual increase of circa 1
million b/d of new demand. The bottom line among those following this issue is that global
oil production likely will start to decline in the next one to five years as depletion
gets ahead of very-costly-to-produce new sources of 'oil.' Keep in mind the phenomenon of
falling net exports. As oil exporting countries grow larger and wealthier, they are
consuming an increasing share of their own oil production leaving less and less to export.
Most of us really don't care how much oil in
produced in the world; the real issue for most countries is how much is available that can
be imported for domestic use. Jeffrey Brown, a Texas geologist and one of the leading
students of net exports, notes that if you leave out the oil going to two growth
powerhouses - China and India - then for the last five years the oil available for import
by the rest of the importing nations has been dropping at the rate of 2.8 percent each
year. Brown estimates that if current trends
continue, the oil available for import by most of the world will fall by 5 to 8 percent
each year for the rest of the decade. Much of the
burden of this decline in exports is falling on poorer nations, many of which are already
being priced out of purchasing some of the fuel necessary to run their electric power
stations. In a certain sense, oil available for
import has already peaked. Note the 14 percent
increase in price last year. In America, we still seem to be able to import as much as we
need, but an increasing share of our refined products are now being exported as domestic
consumption is falling." The Peak Oil Crisis: Closing Out the Year Falls Church News-Press, 4 January 2012 |
"Russian oil production rose
1.25 percent in 2011 to a record level for the post-Soviet era, as companies in the
worlds largest crude-producing nation took advantage of higher prices and boosted
output at new projects. Production grew to an
average of 10.27 million barrels a day, according to preliminary data from the Energy
Ministrys CDU-TEK unit. Output in December slipped to 10.32 million barrels a day
from 10.35 million in November, the data showed. Prime Minister Vladimir Putin,
who will seek re-election as president in March, has called for Russia to pump more than 10
million barrels a day for at least the next decade. Taxes on oil and exports are the
biggest contributor to the national budget. The average price for Urals crude,
Russias benchmark grade, for delivery to Northwest Europe jumped 40 percent to
$109.30 a barrel, according to data compiled by Bloomberg. Demand for Urals rose after the
revolution in Libya halted
crude exports from that nation and the Fukushima nuclear disaster inJapan led many countries to
reconsider use of atomic energy." |
"NY crude closed out the
year quietly at $98.83 a barrel, eight percent higher than where it opened 12 months
earlier. For 2011, NY crude averaged $95 a barrel as
compared with $79 in 2010 and $62 in 2009. Brent
crude averaged $111 for the year, $11 a barrel more than the previous high set in 2008." |
| 2011 |
"BP PLC said it will end its 13-year alliance with Russian
state-owned oil company OAO Rosneft to explore for oil and gas in Sakhalin, due in part to
the economics of the Far East project." |
| "Outside OPEC, things are clear:
of 40 million barrels per day (mb/d) of conventional petroleum extracted from existing
fields, we face an annual decline on the order of 1 to 2 mb/d.... [Inside OPEC] Its more difficult to say; the data are still
opaque. We are stuck in a haze. Nevertheless, I note that Barclays and Goldman Sachs banks
estimate that the spare production capacity of OPEC, more particularly that of Saudi
Arabia, is significantly lower that what is officially claimed....There are new projects
off the coasts of Brazil, Ghana and Guyana. The Gulf of Mexico is far from being depleted.
The Arctic is far less certain, but there is real
potential for natural gas there. Nevertheless, we must still expect a decade before seeing
eventual and significant production of petroleum.....We will certainly remain below 95 mb/d for the combined totals of
conventional and non-conventional oil.... It is
always delicate to project a precise date[for global peak production]. The recovery rate
of existing fields is increasing. The US on-shore production is declining very slowly (and
one must add that they are drilling in a frenzy over there). It is an error to
underestimate the know-how of drilling engineers....The
production of oil has already been on a plateau since 2005 at around 82 mb/d. [NB: with
biofuels and coal-to-liquid, we approximate 88 mb/d for all liquid fuels.] It appears to me impossible to go
much higher. Since demand is still on an increasing trajectory (unless, possibly, the
economic crisis engulfs the emerging economies), I expect to see the first tensions
arising between 2013 and 2015.... Afterwards, in my view, we will have to face a decline of the
production of all forms of liquid fuels somewhere between 2015 to 2020. This decline will not necessarily be rapid, however, but it will be a
decline, that much seems clear.... This will all depend on
the speed at which streams of non-conventional oil will be able to be developed.
Conversion of coal and natural gas to liquid fuels will remain infinitesimal. For
first-generation biofuels, I believe we are already approaching the maximal limit. As for
second-generation biofuels, we are still at the stage of industrial pilot projects. It
should take another quarter century before we achieve a significant production on a world
scale, lets say around 2.4 mb/d." Olivier Rech, former energy analyst at the Interantional Energy Agency Interview with Le Monde, 30 December 2011 |
"Afghanistan on Wednesday signed
an oil deal with China which could earn the war-torn country $7 billion over 25 years. Afghanistan's first major oil exploration contract will see state-owned
China National Petroleum Corporation develop three oil fields in the relatively peaceful
north of the country along the Amu Darya river." |
"Oil prices climbed around 14 per cent in 2011 and traded in a narrow
$20 range for most of the year - but the relatively modest activity hid tumultuous
geopolitical events that created great instability, and which promise to hold the key for
crude prices in 2012. Brent crude prices grew from
around $94 a barrel at the start of the year to around $108 now. Crude spent most of the year within the $100 to $120 range, spiking to
$126 in April. Price movements this year have been shaped by government action, and
inaction, social unrest and natural disasters.... 2012 starts with predictions of lower
oil demand among leading economies. Fears of a new recession in Europe, including the UK,
remain and analysts at the Centre for Global Energy Studies (CGES) have predicted an
average Brent price of $111 for 2012 as a whole. While this would be a record annual
average, it puts oil prices only slightly ahead of their current level and CGES said that
the average could slump as low as $76 should falls in demand among the leading economies
not be offset by growth in emerging nations. Morgan Stanley has said Brent crude could
trade below $90 for the first half of 2012 if the crisis in the eurozone leads to a
painful recession. But any fall in demand is likely to be met with a reduction in
production by Opec that would prevent very sharp falls in the oil price. A significant
uncertainty in 2012 will be Iranian oil supply. A deterioration of the relationship
between Iran and the West has led to sanctions against the oil exporter." |
"Nearly half of the landowners
who have leased their ground to shale gas developers in the north-east of America regret
doing it, despite the money, according to a new report by Deloitte.In findings that will intensify opposition to the controversial process of
hydraulic fracturing, some 47 per cent of respondents in the 'new shale' states of
Pennsylvania and New York, who have rented out their land, said they wouldn't repeat the
experience. Meanwhile, 48 per cent said they would advise family and friends against
leasing their land for 'fracking', a process which blasts sand, chemicals and water into
shale rocks to release the oil and gasthey contain. Fracking has become increasingly
controversial in recent months, as the process was found to have caused earthquakes in
Oklahoma in the US and near Blackpool inthe UK. A report by the US Environmental
Protection Agency (EPA), disclosed in The Independent last week, linked fracking and water
pollution for the first time, prompting the shadow Energy Minister, Tom Greatex, to demand
a full investigation into the technique. But analysts say the Gasland documentary, which
was nominated for an Oscar this year, has probably done the most to inflame opposition. In
one scene, residents of Dimock, a small community in the heart of Pennsylvania's fracking
industry, blamed the process for polluting their tap water with so much methane that they
could light it. Fracking has been banned in New York, although the move is being reviewed,
but the practice continues in Pennsylvania." |
"[The US] began producing more crude oil in 2008 than the year before
and accelerated that upswing 3% in the first nine months of this year compared with the
same period in 2010. That production has helped reduce U.S. imports of crude oil by about
10% since 2006. 'It's dramatic. It's transformative,' Edward Morse, a former
senior U.S. energy official who now directs global commodities research at Citigroup, says
of the historic shifts. He says the U.S. is importing a smaller share 49% in 2010,
down from 60% in 2005 of the oil it uses, adding: 'We're moving toward energy
independence.'... Perhaps the bigger impact is on American foreign policy. The U.S. oil
boomlet has amplified concurrent shifts in the global oil market. Today, half of net U.S.
petroleum imports come from the Western Hemisphere,
and half of that (or a quarter of the total) comes from Canada. Only 12% came from Saudi
Arabia last year, down from nearly 19% in 1993. 'What's occurring is a rebalancing of
the world oil supply,' says Daniel Yergin, energy
historian and author of The Quest: Energy, Security, and the Remaking of the Modern World.
He says Brazil's newly produced offshore oil, which he calls 'presalt' because it's
beneath a thick layer of salt, will further tip the scales. 'The importance of the Middle
East has decreased for us,' says Michael Klare, author of the forthcoming The Race for
What's Left: The Global Scramble for the World's Last Resources. 'That's a dramatic change
in the geopolitical equation.' What's driving the boomlet is increased production of two
resources that previously weren't considered economically viable to develop. 'It's a
double-barreled development, pardon the pun,' says Martin Tallett, president of EnSys
Energy, a Massachusetts-based oil industry consulting firm. He did a study for the Department
of Energy on the proposed $7 billion Keystone pipeline, which would carry oil or tar
sands from Canada through six U.S. states to the Gulf Coast. This heavy crude a
mixture of sand, water, clay and a viscous oil known as bitumen is found primarily
in Canada's Alberta province. It's increasingly being exported to the U.S., where it's
refined into petroleum products, many for export. Its production surpassed 1.1 million
barrels per day in 2005 and is expected to nearly triple by 2015, according to Canada's
National Energy Board. The other resource is
sometimes called 'shale oil' but more accurately 'tight oil,' because it comes from shale
and other rock formations. (It's different from 'oil shale,' which contains the oil
precursor kerogen but remains costly to develop.) Tight
oil, produced mostly from the Bakken shale formation in North
Dakota and Montana and the Eagle Ford one in Texas, is extracted in much the same way
as natural gas pumping pressurized water, sand and chemicals underground to
fracture the rock and break loose the oil so it can flow to the surface. This process is
often called 'fracking.' 'It's the new, new thing,' Yergin, the energy historian, says of
tight oil. He says its U.S. production could skyrocket to 2.9 million barrels per day by
2020. North Dakota, which accounts for the vast majority of this oil, produced 488,066
barrels per day in October 2011, up from 90,196 in January 2005, according to the state's
Department of Mineral Resources. 'When shale gas worked, people said, 'Maybe this works
for oil, too,' ' Yergin says, noting that oil brings a higher return than natural gas. The
result? A surge in production within the last two years. Yergin says this has produced
needed jobs in an overall weak U.S. economy and, by expanding the global oil supply, has
helped prevent or offset price spikes. Tallett says the U.S. has been able to capitalize
on that production because it has a flexible and efficient refinery network. 'We have some
of the better refineries in the world certainly the most complex,' he says, adding
they can handle different types of crude oil and shift their product line quickly to meet
demand. He says they've upped production of diesel fuel, which is in great demand
worldwide, and reduced that for gasoline, now in surplus. Other factors contributing to
the U.S. net export of petroleum products is the federally mandated use of ethanol, which
has boosted its production and reduced demand for regular gasoline. Gasoline demand is
also down because Americans are driving less. They've been driving fewer miles every month
since March, according to a USA TODAY analysis of data from the Federal
Highway Administration..... Environmentalists are concerned that the higher production
of these unconventional, harder-to-reach oil resources carries increased dangers for air
and water quality. The NRDC's Casey-Lefkowitz says the development of tar sands produces
more greenhouse gas emissions than that of regular crude oil, and if spilled, the heavy
crude can be more difficult to clean up because of its viscosity. She says its production
has taken off without regard to safety. 'My fear is that the same is happening with tight
oil deposits,' she says. 'Whenever you fracture shale to get at oil,' she says, 'you're
flaring off methane.' The process wastes natural gas and uses huge volumes of water. On
Dec. 8, the U.S. Environmental Protection Agency said fracking might cause groundwater
pollution. It said compounds likely associated with fracking chemicals had been detected
in the groundwater beneath Pavillion, in central Wyoming. Rifkin says the production of
unconventional oil resources may provide a temporary boost, but it won't last in
the U.S. or worldwide. Citing a 2010 report by the International
Energy Agency, a Paris-based organization, he says global peak production of crude oil
probably occurred in 2006. 'We're now in the early stages of a volatile end game,' he
says, especially as China and India continue to develop and increase their energy
consumption. 'There's no easy way to drill our way out of this.'" |
"Soaring gas prices are
contributing far more to increases in household energy bills than policies designed to
support renewable energy and the other elements of the green economy, the Committee on
Climate Change (CCC) will say today. New analysis
from the independent body finds the majority of homes have seen their annual bills rise
from £604 in 2004 to £1,060 last year. But almost two thirds of that increase was down
to rises in the wholesale gas price, compared to just a seven per cent increase resulting
from renewable energy subsidies. The report breaks down the £455 increase in bills,
concluding that rising gas prices accounted for £290, transmission and distribution costs
accounted for £70, VAT added £20, and £75 was the result of policies to reduce carbon
emissions. The cost of low carbon policies equated to £30 a year to support investment in
renewable energy and £45 for energy efficiency schemes, which in turn help reduce energy
consumption." |
"The Organization of the Petroleum Exporting Countries agreed on
Wednesday to increase its production target for the first time in three years, a move that
appeared to signal that Saudi Arabia and Iran had put aside their recent differences on
oil policy, at least temporarily. The move should
have little lasting effect on oil prices because the production target of 30 million
barrels is closely in line with the current output by the organization, and targets were not set for individual countries. But the agreement had
symbolic value coming six months after a meeting of OPEC
ministers ended in disarray when they failed to reach a consensus to lift
production." |
"One of the world's leading
nuclear power developers, Areva, has today confirmed a major reorganisation that will see a
series of projects suspended in the wake of significant financial losses. The company announced yesterday that operating losses for this year could
reach 1.6bn, primarily as a result of the Fukushima disaster on the value of its
uranium mining operations." |
"The great Iraqi oil rush has
started to exacerbate dangerous communal tensions after a major oil company ignored the
wishes of the central government in Baghdad and decided to do business with its main
regional rival. The bombshell exploded last month when Exxon Mobil, the world's largest
oil company, defied the instructions of the Baghdad government and signed a deal with the
Iraqi Kurds to search for oil in the northern area of Iraq they control. To make matters worse, three of the areas Exxon has signed up to explore
are on territory the two authorities dispute. The government must now decide if it will
retaliate by kicking Exxon out of a giant oilfield it is developing in the south of Iraq.
Political leaders in Baghdad say the company is putting the unity of their country at
risk." |
"Large-scale biomass power
plants have 'no appropriate role' in future electricity generation without carbon capture
technology the government's emissions reduction advisors will say today, prompting further
criticism of the decision to delay a promised £1bn of support for a large scale carbon
capture demonstration project. A new report from the influential Committee
on Climate Change (CCC) will say that meeting the UK's overall 2050 emissions targets
will be difficult unless bioenergy increases it share of the country's energy mix from two
per cent to 10 per cent. But it warns that in order to maximise emissions reductions
carbon capture and storage (CCS) technology will have to be fitted to biomass power
plants, in a move that would effectively remove carbon from the atmosphere. The committee advises that if CCS proves unfeasible the UK must ditch
biomass power plants and focus its biomass resources on heat generation, assuming that
technological breakthroughs, such as algae-based fuels, do not emerge and provide sustainable biomass materials.
The report calculates that deploying biomass power plants without CCS could force the UK
to roll out large numbers of such facilities in order to meet its emission reduction
requirements, risking increased emissions elsewhere as a result of the deforestation and
land use changes that could be required to provide sufficient biomass feedstocks." |
"Water has always been a concern for 65-year-old Joe Parker, who
manages a 19,000-acre cattle ranch here in South Texas. 'Water is scarce in our area,' he
says, and a scorching yearlong drought has made it even scarcer. What has Mr. Parker especially concerned are the drilling rigs
that now dot the flat, brushy landscape. Each oil well in the area, using the technique
known as hydraulic fracturing, requires about six million gallons of water to break open
rocks far below the surface and release oil and natural gas." |
"Cameco Corp., the world's
largest uranium producer, said some investors underestimate the potential for supply
shortfalls to spur higher prices for the nuclear fuel. Disruptions in mine production, the
difficulty faced by development companies in raising funds for new mining projects, and
the end of a Russian deal to supply uranium from scrapped atomic warheads may help create
a supply deficit, chief executive Tim Gitzel said in an interview. 'People don't focus so much on the supply side,' he said. 'They take every
possible project, think it's going to operate to perfection, and add it up and say
'there's lots of supply,'' Gitzel said. 'It's easier said than done.' Uranium prices have
slumped 24 per cent since a magnitude-9 earthquake and tsunami struck Japan on March 11
caused a partial meltdown at Tokyo Electric Power Co.'s Fukushima Dai-Ichi nuclear plant.
The crisis at Fukushima led to Germany's declaration in May that it would close its
reactors by 2022. Cameco, which is based in Saskatoon, in August cut its full-year global
uranium demand estimate to 175 million pounds (79,400 metric tons) from 180 million
pounds. Global mined uranium supply was 53,663 tons in 2010, according to the World
Nuclear Association. That's not enough to cover global demand, and so some utilities also
use fuel recovered from Russian warheads under the Highly Enriched Uranium agreement,
which has run since the 1990s. Gitzel said Russia
will withdraw from the HEU accord by the end of 2013, removing 24 million pounds of
supply. 'There's a lot, and I spoke to some of them
this week, who think the HEU agreement is still going to be around,' Gitzel said. 'We
don't.'" |
"The debate over whether the world's reserves of hydrocarbons have
now peaked and are in decline has lost relevance over recent years as new technology
allows oil companies to find and exploit new hydrocarbon sources, the CEO of Repsol
Antonio Brufau said Tuesday.Brufau said progress made in exploring and developing
ultra-deepwater areas, unconventional oil and gas sources and the move into remote areas
such as the Arctic, have been key to growing global reserves of oil and gas.... Last
month, Repsol said it has continued to more than replace its proven oil and gas reserves
outside Argentina this year and will accelerate output from 2015 onwards as it converts
contingent resources into proven reserves. Brufau pointed to developments in the US shale
gas industry and highlighted Repsol's own plans to develop a huge shale oil and gas area
in Argentina. Repsol has said it estimates the cost of fully developing its Vaca Muerta
shale oil and gas discovery in Argentina at some $20 billion. The discovery covers nearly
1 billion equivalent barrels of recoverable shale oil at the Loma La Lata field. Brufau said Repsol's shale reserves in Argentina are currently
profitable to develop at $30/barrel finding, development and operating cost." |
"Whisper it. Oil production in the US is increasing. The country
where output peaked in 1970 and then shrank by 40 per cent over four decades, has turned
some kind of corner. Between 2008 and 2010, production rebounded by 800,000 barrels per
day to 7.5 million barrels per day, and analysts forecast more growth to come. Goldman Sachs predicts that by 2017 production in the US could
reach almost 11 mb/d, just shy of its all-time high, restoring the country to its former
glory as the worlds biggest producer. One reason is a sharp increase in production
of 'shale oil'. In North Dakota,Texas and Oklahoma,
companies are using hydraulic fracturing, or 'fracking' a controversial technique
that has revolutionised US natural gas production to extract a range of liquid
hydrocarbons from non-porous shale that used to be thought unworkable....Companies are now
exploring to the ends of the earth from the Falklands to the Arctic and are
drilling reservoirs that are deeper, hotter and higher pressure than ever, all of which
raise new engineering challenges. That has pushed costs up massively, with effects that
have yet to be widely understood. Offshore, companies are working at ever greater depths.
During the 1980s and 1990s, for instance, Petrobras, Brazils state oil company, made
most of its offshore discoveries beneath about 3 kilometres of sea and rock. In 2007, it
found the Lula field, about 7 km down. Drilling Lula needed 4 km more specialist steel
pipe at a time when steel prices were soaring because of higher energy costs. Even
onshore, costs are rising. Shale-oil fracking wells typically run horizontally and need
four times as much steel as a vertical well. According to analysts at JPMorgan, such
inflation is rampant throughout the industry. Exxons
production investments, for instance, soared from $15 billion per quarter in the 1990s to
more than $100 billion in the second quarter of 2008 while the amount of oil and
gas it produced scarcely changed. Some of the most costly oil comes from the tar sands of Canada,
with its vast open-cast mines and energy-intensive production processes. According to
investment bank Barclays Capital, new projects here need to earn as much as $90 a barrel
just to break even. Saudi Arabia, the only country with meaningful spare production
capacity, could have produced oil more cheaply a few years ago, but not now. It has
increased public spending following the Arab Spring, and now needs $95 per barrel to
balance its budget. These pressures, says Paul Horsnell, director of commodities research
at Barclays, mean that oil prices are unlikely to fall below these levels unless the
economy collapses. He forecasts $137 per barrel in
2015, and $185 in 2020. So if there is lots of oil down there but it is much more costly
to produce, can we have as much as we want if we are prepared to pay for it? Well, that
depends on what you judge to be enough and who you mean by 'we', says Steven Kopits, US
managing director of energy consultants Douglas Westwood. The
trouble is, high oil prices dont just encourage oil companies to innovate, they also
damage national economies although some countries are more resilient than others. A
penetrating analysis by Kopits found that historically the US goes into recession whenever
it spends more than about 4.5 per cent of its GDP on oil. Today, that would equate to $90
a barrel. That level also holds for others in the OECD club of wealthy nations, says
Kopits. But the evidence suggests that China is willing to pay more; it only cuts back on
oil purchases when they account for more than 6 per cent of its GDP, equivalent to about
$110 per barrel. The disparity, says Kopits, arises
because Chinese society assigns more value to a barrel of oil. Gaining a barrel can
transform the lives of Chinese people allowing them to travel by car for the first
time, for example. In the west, losing a barrel merely means trading in a gas-guzzler for
a more fuel efficient model. But oil is so useful that nobody cuts back voluntarily,
meaning prices must rise to excruciating levels to force rich western consumers to
economise. The first 'peak oil recession' started in
2009, says Kopits. It took oil at $147 a barrel and the deepest recession since the 1930s
to prise oil from the grip of consumers in OECD countries. Since early 2008, OECD oil
consumption has fallen by 4 mb/d, while non-OECD consumption mainly inChina
has gained 6 mb/d. Global oil production rose 2 mb/d during that period, so developing
countries have consumed all the additional supply plus that given up by industrialised
economies. 'China
is bidding away the OECD oil supply,' says Kopits, 'and recessions are the mechanism by
which that oil is being transferred from weaker economies to faster growing economies.' With China embarking on rapid 'motorisation' car sales in China
leapfrogged those in the US in 2010 the outlook is for repeated oil price spikes
and recessions. We appear now to be entering the second peak oil recession, says Kopits,
and others will follow. For the time being this is a problem for the west, but prices
could rise to levels that are unsupportable even for China. On this view, peak oil is as
much an economic construct as a geological one." |
"Obama came through big-time
last month. He backed his great E.P.A. administrator, Lisa Jackson, and Department of
Transportation secretary, Ray LaHood, in producing a deal with all the top U.S.-based
automakers that will go into effect in 2017 and require annual mileage improvements of 5
percent for cars, and a little less for light trucks and S.U.V.s, until 2025
when U.S. automakers will have to reach a total fleet average of 54.5 miles per gallon.
The current average is 27.5 m.p.g. This deal will
help Americas cars and trucks approach the mileage levels of Europe and Japan and
spur innovation in power trains, aerodynamics, batteries, electric cars and steel and
aluminum that will make cars lighter and safer. The E.P.A. and the Transportation
Department estimate that these new innovations will gradually add about $2,000 to the cost
of an average vehicle by 2025 and will save more than $6,000 in gasoline purchases over
the life of that car savings that will go into the rest of the economy. And all
that assumes that gasoline prices will only moderately increase and there are no
innovation breakthroughs beyond what we anticipate. If gasoline prices soar higher and
innovation goes faster both highly likely the savings would be even more.
The new vehicles sold over the life of the program including its first phase
between 2012 and 2016 are expected to save a total of four billion barrels of oil
and prevent two billion metric tons of greenhouse gas pollution." |
"Britain's plans for a new
generation of nuclear power stations have suffered another setback after being delayed by
at least a year. The first of the new plants will not be built until 2019 because of extra
safety checks following Japans atomic disaster. Ministers originally hoped to get
the first nuclear power station built by 2017, before revising this to 2018. Now there has been a further slippage, after an updated timetable showed
the first station in Somerset is not expected until nearer the end of the decade." |
"A $1bn (£640m) bet by a
British firm to find commercial quantities of oil in the Arctic has ended in failure
and there is now mounting speculation there will be no more drilling by Cairn Energy next year. The controversial
exploration off Greenland was physically opposed by Greenpeace but Cairn has been
forced to retreat by complex geology and growing criticism in the City. Shares in the
business, which was set up by the former Scottish rugby star Sir Bill Gammell, fell by as
much 6% at one point today to make it the biggest faller in the FTSE-100 index of leading
companies after admitting no significant finds with its two latest wells off Greenland. Simon Thomson, Cairn's
chief executive, said the company remained optimistic about the region generally but was
looking for partners to take on some of the risk. Well
placed sources admitted there may be no drilling in 2012. Cairn made spectacular discoveries in Rajasthan, India which were
sold off, partly to fund a new drive into the Arctic but the City is now losing
patience. Angus McPhail, an oil analyst at the investment bank Investec, said: 'They've
drilled four wells they haven't found anything. I think the company probably needs
to refocus on another area, like Sri Lanka or [the] east Mediterranean.'" |
"Drivers reserve their worst curses for when gasoline spikes above $4
a gallon. But when that happened in 2008, it didn't last long. Far more insidious is the
situation now, with nominal prices not quite as high but consistently strong. One way to account for that stronger-for-longer factor is to look
at fuel prices on a 12-month rolling average. On this measure, consultancy JBC Energy
points out that oil price strength has actually surpassed 2008 levels." |
"The IEA says that the Middle
East and North Africa will need at least $100 billion a year in new investment for the
foreseeable future even in a place where oil is still cheap to exploit. The problem,
however, is that the rising expectations of Arab Spring is rapidly shifting oil revenues
from investment in more oil production to the kinds of social spending that will keep
people happy and out of the streets. In the closest the IEA comes to predicting peak oil,
Birol says that without major increases in investment (an increasingly unlikely
occurrence), Middle Eastern oil production will fall by 3.4 million barrels a day (b/d) by
2015 and 6.2 million by 2020. Should this happen, we
will have oil prices in excess of $150 a barrel - until of course demand slumps from the
high prices." |
"Mexico's state oil company Pemexsaid on Friday that oil production
rose to 2.553 million barrels per day in October from 2.489 bpd in September. Mexican
monthly oil output has been little changed since 2009 as Pemex
has slowed the rate of natural decline at its giant Cantarell oil field in the southern
Bay of Campeche. Oil production has fallen off since a peak of 3.4 million bpd in 2004, damaging government finances since Mexico
depends on oil revenues to fund around a third of its budget. Mexico, the world's No. 7
oil producer, has to import around 40 percent of its gasoline needs because of a lack of
in-country refining capacity." |
"With debt crises either side of
the Atlantic, Europe flirting with recession and Libyan oilfields returning to production,
it is tempting to be bearish on oil. Despite all the financial and economic gloom, 2011
has been a record year for oil with Brent crude at its highest-ever average above $110 per
barrel, and few analysts forecast a big drop in price, even those who expect an economic
slowdown. Rising demand for fuel from China and
other emerging economies, declining output from traditional suppliers including the North
Sea and interruptions to production in key exporters such as Libya have kept the oil
market tight. And unless the United States, the world's biggest oil consumer, slips into a
double-dip recession, oil prices are likely to stay strong, at least until the end of the
northern-hemisphere winter.... Global oil demand is likely to have increased by about
900,000 barrels per day (bpd) this year to more than 89 million bpd, according to the
International Energy Agency (IEA), which advises major industrialised economies on energy
policy. Next year, world demand for oil will rise
even faster, by about 1.3 million bpd, the IEA forecasts, as China, India, Brazil and
other emerging economies all use more. While headlines are full of ... the spectre of recession, it is
easy to overlook the fact that oil demand has resumed its growth path and 2011 levels are
the highest in history,' said David Wech, head of
energy studies at consultancy JBC Energy. While demand has increased, supply has been
inconsistent, with the uprising against former dictator Muammar Gaddafi removing up to 1.6
million bpd of high quality Libyan oil this year and hiccups in production in Russia,
Britain, Norway and Nigeria. Other factors are also supporting oil." |
"Google Inc has abandoned an ambitious project to make renewable
energy cheaper than coal, the latest target of Chief Executive Larry Page's moves to focus
the Internet giant on fewer efforts. Google said on
Tuesday that it was pulling the plug on seven projects, including Renewable Energy Cheaper
than Coal as well as a Wikipedia-like online encyclopedia service known as Knol." |
| "Saudi Arabia's state energy company said on Monday that its
dominant role in world oil supply had been altered by large new reserves in North America,
sapping the urgency to develop the kingdom's own reserves. The speech by Saudi Aramco's
chief executive was the first from the globe's top oil exporter to acknowledge that
unconventional oil was set to shift the energy balance of power and cut U.S. dependence on
Middle East crude. 'The abundance of resources and
the more 'balanced' geographical distribution of unconventionals have reduced the
much-hyped concerns over 'energy security' which once served as the undercurrent driving
energy policies and dominated the global energy debate,' Khalid al-Falih said. For years
oil markets, nervously watching pressure on limited spare production capacity, have
obsessed over Saudi Arabia's supply cushion as the last defense against prices spiraling
higher. 'A few years ago, much of the global energy debate was based on the premise of
acute resource scarcity and its economic and political ramifications,' Falih said.... Falih said in early October he saw no reason for Aramco to
significantly increase its oil production capacity in the mid-term because of rising
conventional output from countries like Brazil
and Iraq. Weak U.S. economic data, mounting euro-zone sovereign debt and concern about the
exposure of major banks to it raised 'the specter of a double-dip global recession,' he
told the conference in the Saudi capital on Monday. 'All that makes spending on aggressive
energy programmes unlikely,' he said, adding that abundant affordable hydrocarbon supplies
challenged investment in renewable technologies. As a result, Saudi Aramco had no plans to
increase its oil production capacity to 15 million barrels per day, Falih said.... OPEC expects global output of non-conventional oil to rise 3.4
million bpd by 2015, still dominated by oil sands, to 5.8 million bpd by 2025 and to 8.4
million bpd by 2035 when tight oil would be playing a much bigger role. In 2035, the group
of conventional oil exporters expects the United States and Canada to still be dominating
unconventional oil production with 6.6 million bpd, but China could be producing 1.1
million bpd of its own unconventional oil by then. OPEC estimated in a recent report that
global reserves of tight oil could be as high as 300 billion barrels, well above current
estimates of Saudi Arabia's conventional reserves of around 265 billion barrels." Saudi sees threat of shale oil revolution Reuters, 21 November 2011 |
"Chevron's oil spill off the
Brazilian coast exposes the major environmental risks of tapping the country's new oil
wealth and could further delay development by fuelling nationalistic oil politics. The
accident, for which the U.S. oil company has taken responsibility, has quickly become
politicized at a time when Rio de Janeiro and a handful of other 'producer' states are
campaigning bitterly against a proposal in Congress to spread the oil wealth more widely.
By drawing attention to the environmental risks of exploring at such massive depths, the
spill could further delay the concession of new exploration areas and increase the power
of state-controlled Petrobras at the expense of other oil companies, both national and
foreign.... Chevron says the leak, which was caused
by its underestimation of pressure in an offshore oil reservoir and overestimation of the
surrounding rock's strength, totalled about 2,400 barrels and that it has plugged the
rupture." |
"The race to deliver stockpiles
of oil from Oklahoma to the worlds largest refining centre in Texas tightened
Wednesday with rivals Enbridge Inc. and TransCanada Corp. both offering strategies that
helped push the price of oil above $100 a barrel. Pipeline capacity envisioned by the
Calgary firms will connect abundant oil supplies from the storage hub of Cushing, Okla. to
Gulf Coast refineries and promises to narrow the price discount U.S. crude has fetched
this year against the global benchmark. That discount reached $28 US a barrel last month,
eating into the profits of North American energy firms....U.S. benchmark West Texas
Intermediate climbed more than three per cent to $102.60 US a barrel Wednesday, topping
the $100 mark for the first time in more than five months. Combined with pressure on U.K.-based Brent, which closed down 30 cents at
$111.88 a barrel, the differential between benchmarks narrowed to $9.28 a barrel." |
"After 11 years and $39 billion
of investment, Exxon Mobil Corp., Royal
Dutch Shell Plc (RDSA) and their partners have yet to sell a drop of oil from what was
touted as the worlds biggest discovery in four decades. Centered on a man-made
island 70 kilometers (44 miles) from Kazakhstans coast, the Kashagan
project is just months away from completion, $15 billion over budget and 8 years behind
schedule. As the milestone of first oil nears, the Kazakh government is pressuring the
group for a commitment on an even-bigger second phase, a project the oil companies are
undecided on and one analyst says may not make money. 'The biggest worry is whether the
project can ever be profitable given the huge cost escalation and start-up delays,'said
Julian Lee, a senior analyst for the Centre for Global Energy Studies in London. It may be
'impossible for investors to earn a return on any investment in a second phase before
their contract for the field expires' in 2041. Kashagan, which may hold enough oil to supply the world for six
months, has become a cautionary tale for oil companies worldwide as they spend an
estimated $20 trillion through 2035 finding supplies in ever more difficult places.
Expenses mounted as engineers underestimated the complexity of drilling under a region of
the Caspian Sea
thats frozen almost half the year. The government accused the partners, which are
allowed to recoup spending before sharing the oil, of inflating costs. ... Kashagan has proved potentially lethal as well as complicated. The
crude oil, locked 4,200 meters (2.6 miles) below the seabed in a highly pressurized
reservoir, has a high concentration of poisonous 'sour gas,' according to North Caspian
Operating Co., or NCOC, the venture formed to manage the project.... The geology, islands
and ice and have inflated costs for the first phase to $39 billion from $24 billion
estimated by the government in 2008. The prize for the five main partners is as much as
252,000 barrels of crude a day each from peak output once the second phase is running.
That kind of production is growing harder to find worldwide as existing fields age and
governments in theMiddle
East, Russia and
Latin America reserve control for state companies." |
"On October 14, Secretary of State Hillary Rodham Clinton announced
that the Department of State is establishing, for the first time, a Bureau of Energy
Resources (ENR). As the Secretary noted, 'You
cant talk about our economy or foreign policy without talking about energy. With a
growing global population and a finite supply of fossil fuels, the need to diversify our
supply is urgent.' The Energy Resources Bureau is
now operational and will ensure that all our diplomatic relationships advance our interest
in having access to secure, reliable, and ever-cleaner sources of energy. .... The creation of the new Bureau emphasizes the important role
played by energy in U.S. foreign policy, and energys complexity and importance. The
U.S. has a long-standing interest in the secure supply of energy resources, as well as in
the sustainability and diversification of those resources." |
"Investment in renewable power
generation may double to $395 billion a year by 2020, led by growth in offshore wind and
solar energy projects, Bloomberg New Energy Finance forecast. The total may rise further
to $460 billion a year in real terms by 2030 from $195 billion last year, according to the
research unit of Bloomberg LP. The investments would boost clean energy as a portion of
total world generation capacity to 15.7 percent within 20 years from 12.6 percent last
year. The findings suggest wind, solar and biofuel
industries will continue quick growth through stumbling economic growth and a lack of
commitment from the U.S. and China
to restrain pollution blamed for global warming. 'Last years record renewable energy
investment was no one-off despite the recent economic gloom,' Guy Turner, director of
commodity market research at London-based New Energy Finance, said in a statement today.
In 2014, China will likely take the lead over Europe in terms of money
spent on clean energy projects, with annual outlays of almost $50 billion. The U.S. and Canada together will reach
the same amount by 2020. The most rapid spending growth, ranging from 10 percent to 18
percent, will come in India,
the Middle East and Africa, the report said. 'Big winners over the next 20 years will be
the emerging renewable energy hubs in Latin America, Asia, the Middle Eastand Africa
- by 2020 the markets outside of the European Union, U.S., Canada and China will account
for 50 percent of global annual investment in renewable energy capacity,' Turner said.
Offshore wind investment will grow fastest in terms of technologies, reaching $140 billion
in 2020 compared with $82 billion last year. Solar installations will reach 1,137
gigawatts by 2030, compared with 51 gigawatts last year." |
"David Cameron is facing a fresh backbench revolt as Conservative MPs
accused the Government of 'destroying rural communities' with soaring petrol taxes. Around
80 Tories, out of a total 116, have signed a motion urging the Government to take action
on rising fuel prices. During a fiery debate in the House of Commons, MPs called for next
year's 3p increase in fuel duty to be scrapped. They also want more help for people in the
countryside who pay more for their petrol. Robert Halfon, the Conservative MP who sparked
the debate, told fellow MPs that scrapping fuel tax increases was an 'issue of social
justice'. 'This is especially true in rural communities which are being destroyed by fuel
taxes,' he added. ... The Treasury has insisted that there are several key measures to
help drivers in last years Budget, including a 1p cut in fuel duty. However,
motoring groups are warning that petrol prices could actually rise 8p per litre next year,
with increases to VAT and inflation adding to the January increase of 3p. Petrol prices
are still not far off their record high of 137.43p reached in May this year, after the oil
price spiked because of unrest in energy-rich Middle Eastern countries. This summer petrol prices were an average of 17.5p a litre higher
than the year before and 19.7p more expensive for diesel, according to the AA. This means
the typical family spent about £240 more on petrol over the summer than last year." |
"Libyas oil production
remains at about 40 percent of the level that it was before the revolution began. But none
of the countrys 40 critical oil and gas fields were seriously damaged in the war,
according to Libyan officials and international oil experts. Now, most of the important
oil ports and refineries, virtually idled by international sanctions and months of
fighting, are ramping back up. Officials boldly predict that by June, the country will
once again be pumping 1.6 million barrels of oil a day, although independent experts say
that is conceivable only if the country can avoid a relapse into violence. ... Over all, only about 20 of the 2,000 foreign oil workers who provided
critical technical functions for exploration and production before the war have returned,
according to officials at the National Oil Company, which partners with foreign
companies.... With proven reserves of 46.4 billion
barrels the largest in Africa Libya is a great prize. But historically the country has been a disappointment for foreign oil
companies. During his long rule, Colonel Qaddafi granted foreigners drilling rights on
small patches of fields and made them sign agreements that gave the regime most of the
profits and left them with most of the bills. Decades of Western sanctions also kept most
companies away until 2006. Now, a new era could be dawning for a country that 50 years ago
produced three million barrels a day roughly double the output of recent years
and that might return to such lofty levels with ample investment and new
technologies to exploit old and still-to-be-discovered fields deep in the Sahara. Mr.
Scaroni, the Eni chief executive, is already angling for more business. His company, which
produced 280,000 barrels of oil and gas a day in Libya before the war, was by far the
biggest foreign producer and counted Libya as an important source of profits in recent
years. Mr. Scaroni visited the rebel leadership in Benghazi last April, flying in via
helicopter from an Italian warship, and has been shuttling in and out of Libya. 'The
countries that have been involved in helping the new government in throwing out Qaddafi
will have a strong relationship with the country,' he said. 'Libya remains a country where
we want to be, to stay, and we want to grow our production. |
"Australia's Prime Minister
Julia Gillard signaled on Tuesday an end to a decades-long ban on selling uranium to
India, a move aimed at taking advantage of demand for cleaner-burning fuels and to offset
a potential drop in sales to Japan following this year's earthquake. The policy shiftoutlined by Gillard in a newspaper editorial on
Tuesdaycomes despite India's continued refusal to sign an international treaty aimed
at preventing the spread of nuclear weapons. Uranium is widely used in the generation of
nuclear power, but can also be enriched for use in warheads." |
"The British government and
former BP boss Tony Hayward yesterday waded into the legal battle over control of the oil
in Kurdistan, calling on Baghdad to stop obstructing the development of the region's
hydrocarbon reserves. The calls came as Baghdad renewed its threat to throw Exxon Mobil
out of the country after the US giant cut a deal to explore for oil and gas in the rocks
of its arch resources rival, the semi-autonomous Kurdistan Region of Iraq....The UK Government entered the quagmire yesterday when Michael Aron,
British ambassador to Iraq, called on Iraq to 'resolve its differences [with KRD] and
reach an agreement over hydrocarbon laws and revenue sharing'. Speaking at the
Kurdistan-Iraq Oil & Gas conference in Erbil, Mr Aron said: 'The British Government
would like a climate where British companies can work in and exploit the opportunities,
with the Iraqi government and the KRG, across the whole of Iraq. 'Mr Hayward added: 'The
British embassy was imploring both sides to resolve this issue and I would support that
request.'....Baghdad has been keen to curb Kurdistan's oil development, partly because it
fears that additional revenues will make it more powerful and increase its claim for
greater autonomy." |
"It may seem strange in an era
of cyberwarfare and drone attacks, but the newest front in the rivalry between the United
States and China is a tropical sea, where the drive to tap rich offshore oil and gas
reserves has set off a conflict akin to the gunboat diplomacy of the 19th century. The
Obama administration first waded into the treacherous waters of the South China Sea last
year when Secretary of State Hillary Rodham Clinton declared, at a tense meeting of Asian
countries in Hanoi, that the United States would join Vietnam, the Philippines and other
countries in resisting Beijings efforts to dominate the sea. China, predictably, was
enraged by what it viewed as American meddling. For all its echoes of the 1800s, not to
mention the cold war, the showdown in the South China Sea augurs a new type of maritime
conflict one that is playing out from the Mediterranean Sea to the Arctic Ocean,
where fuel-hungry economic powers, newly accessible undersea energy riches and even
changes in the earths climate are conspiring to create a 21st-century contest for
the seas. China is not alone in its maritime
ambitions. Turkey has clashed with Cyprus and stoked tensions with Greece and Israel over
natural-gas fields that lie under the eastern Mediterranean. Several powers, including
Russia, Canada and the United States, are eagerly circling the Arctic, where melting polar
ice is opening up new shipping routes and the tantalizing possibility of vast oil and gas
deposits beneath. 'This hunt for resources is going
to consume large bodies of water around the world for at least the next couple of
decades,' Mrs. Clinton said in a recent interview, describing a global competition that
sounds like a watery Great Game.... 'Underlying all of this is the recognition that an
increasing share of oil resources is offshore,' said Daniel Yergin, an energy expert and
author of a new book, 'The Quest: Energy, Security, and the Remaking of the Modern World.'
'When you have energy resources on land,' he said, 'you know where things stand. When
theyre offshore, things can get murkier.' Twenty-nine million barrels of oil a day,
one-third of global production, now come from offshore fields, Mr. Yergin said, a share
that will rise steadily. The South China Sea alone is estimated to have 61 billion barrels
of petroleum oil and gas plus 54 billion yet to be discovered, while the
Arctic is projected to have 238 billion barrels, with possibly twice that in undiscovered
sources." |
"This year, for the first time
ever, we imported more gas whether piped from Norway or shipped from Qatar
than we pumped from our own continental shelf.... We
dont yet know the full extent of the shale gas in the UK. We dont know how
economically or environmentally viable it will be to extract. At best, it is years away.
As last weeks report on the Lancashire earthquakes showed, there remain issues to be
addressed about hydraulic fracturing, or 'fracking'. And Britain is not the US. Our
planning and regulatory frameworks, and our land ownership laws, are quite different: in
particular, underground oil or gas does not belong to the landowner, but to the
Crown." |
".. a team of UK scientists reckon they may have found an extremely
useful application for urine by turning it into electricity. Dr
Ioannis Ieropoulos and his team of scientists at the University of the West of England,
Bristol, published
research this week investigating whether urine could be used in microbial fuel cells.
The paper concludes that urine is rich in chemicals that can effectively be used in the
cathode half of a fuel cell to react with bacteria in the anode. The initial tests
confirmed that urine-powered fuel cells are technically feasible, and the team now hopes
to scale up a prototype system capable of powering homes, businesses or even a small
village. The researchers are particularly interested in using the 38 billion litres of
urine produced each day by farm animals, which can have an adverse effect on the
environment if not properly managed. The fuel cells
would effectively clean the urine so that it could be safely discharged into the
environment, removing the need for costly and energy-intensive treatment by
wastewater companies." |
"The oil price could soon spiral
to an all-time high of $150 (£94) a barrel without enough investment in production, the
International Energy Agency (IEA) has warned. The scenario could arise if investment in
the Middle East and North Africa falls just a third short of the annual $100bn needed
before 2015, the energy watchdog said. High oil prices are already undermining world
economic growth, according to the IEA, which yesterday released its World Economic
Outlook. 'In
2011, $102 is the average price through to today, which means the global economic recovery
is at risk,' said Fatih Birol, the IEA's chief economist. 'We are in the danger zone for the global economy at current levels. 'Oil
prices by 2015 may go to $150 in real terms and $176 in nominal terms [if investment is
too low].'" |
"Saudi Arabia will overtake
Russia as the world's largest crude oil producer in about 2015 as output at new Russian
fields fails to offset fast decline at mature deposits, the International Energy Agency
(IEA) said on Wednesday. In its World Energy Outlook the IEA also said Russia would
eventually start to supply natural gas to China, becoming a major source of the fuel
despite gas export monopoly Gazprom's failure so far to secure a supply deal after five
years of talks. Russia overtook Saudi Arabia as the top producer of oil when the
Organisation of the Petroleum Exporting Countries cut crude output during the economic
crisis in 2009. But while Russia's output will plateau at 10.5 million barrels per day,
Saudi Arabia's will rise to match Russia's in roughly 2015, and hit 14 million bpd by 2035.... The government forecasts steady output of roughly 10 million barrels
per day until 2020. IEA figures are likely to be higher due to a difference in the basis
for its calculations. Russia - where production
peaked at 11.41 million barrels per day (bpd) in 1988 under Soviet rule - has driven
output to post-Soviet highs above 10 million barrels per day by bringing new fields on
stream but these will not prevent decline from setting in later this decade. 'Russian fiscal policy is a key determinant of when and how quickly
Russian production will decline. Current terms limit the incentive to invest when prices
rise; our projections assume sympathetic evolution of taxation,' the IEA said. By 2035,
Russia will still be the world's largest gas producer and natural gas exports should more
than double to 330 billion cubic metres (bcm) due to new deliveries to China. Russia aims
to start gas export to China by 2016 of as much as 68 bcm per year, equal to nearly half
of Europe's intake. But Gazprom officials have conceded that an agreement on Chinese
supplies will not be concluded this year, implying a delay to the planned start to
deliveries." |
"The European
Union is expected to overtake the United States as the worlds biggest oil
importer in 2015, the International Energy Agency said Wednesday in its annual report. Oil
imports to the United States are expected to decline significantly over the coming years
because of new efficiency standards for cars and trucks and an increase in domestic oil
and natural gas production, said Fatih Birol, chief economist of the agency. By 2020,
China should overtake the European Union to become the worlds biggest importer of
oil, according to the Paris-based agency, which acts as a policy adviser to governments. 'The U.S. would be less and less vulnerable to oil price shocks,' Mr.
Birol said at a news conference in London. 'But increasing reliance on oil imports
elsewhere heightens concerns about the cost of imports and supply security.'....
Oil-importing nations will increasingly rely on a small number of producing nations, the
agency said. Oil production is expected to grow mainly in Iraq, Saudi Arabia and Brazil.
More than 90 percent of growth will come from the Middle East and Africa, the agency said.
Greater dependence on oil imports in Asia, where demand is rising because more people are
buying cars, could raise concerns about the reliability of oil supply. Much of world oil
supplies are transported via vulnerable routes in the Gulf, the Malacca Straits and
elsewhere, the energy agency said. The agency said it
was unclear whether production from the Middle East and North Africa would actually grow
as expected because some nations, including Libya, might find it difficult to find the
necessary investment in exploration and production. 'After the Arab Spring there might be
different priorities,' Mr. Birol said. 'If they were investing a third less, then 2015 oil
prices may go up to $150 per barrel.' Global oil demand is expected to rise to 99 million
barrels a day in 2035 from 87 million barrels a day last year, mainly because of a growing
transport sector in China and other faster-growing economies, the agency said." |
"On 5 November an earthquake
measuring 5.6 rattled Oklahoma and was felt as far away as Illinois. Until two years ago
Oklahoma typically had about 50 earthquakes a year, but in 2010, 1,047 quakes shook the
state. Why? In Lincoln County, where most of this past weekend's seismic incidents were
centered, there are 181 injection wells, according to Matt Skinner, an official from the
Oklahoma Corporation Commission, the agency which oversees oil and gas production in the
state. Cause and effect? The practice of injecting water into deep rock formations causes
earthquakes, both the U.S. Army and the U.S. Geological Survey have concluded. The U.S. natural gas industry pumps a mixture of water and assorted
chemicals deep underground to shatter sediment layers containing natural gas, a process
called hydraulic fracturing, known more informally as 'fracking.' While environmental
groups have primarily focused on frackings capacity to pollute underground water, a
more ominous byproduct emerges from U.S. government studies that forcing fluids
under high pressure deep underground produces increased regional seismic activity. As the
U.S. natural gas industry mounts an unprecedented and expensive advertising campaign to
convince the public that such practices are environmentally benign, U.S. government
agencies have determined otherwise.... It seems likely that Washington will eventually be
forced to address the issue, as the U.S. Army and the USGS have noted a causal link
between the forced injection of liquids underground and increased seismic activity. While
the Oklahoma quake caused a deal of property damage, had lives been lost, the policy would
most certainly have come under increased scrutiny from the legal community. While polluting a local communitys water supply is a local
tragedy barely heard inside the Beltway, an earthquake ranging from Oklahoma to Illinois,
Kansas, Arkansas, Tennessee and Texas is an issue that might yet shake voters out of their
torpor, and national elections are slightly less than a year away." |
"Global oil demand is expected
to peak before 2020 as a 'perfect storm' of regulation promotes energy efficiency, new
technology and biofuel use across the world, according to a new study. The report, by
respected industrial consultancy group Ricardo, challenges the widespread view that 'peak
oil' will come as soaring emerging market demand causes oil supplies to diminish. The
report concludes that the peak in demand will be no more than 4pc above the record set in
2010, when the world consumed 87.4m barrels of oil a day. Demand in 2035 is expected to be
3pc below the 2010 level. 'The world is nearing a
paradigm shift in oil demand,' said Peter Hughes, managing director of the energy practice
of Ricardo Strategic Consulting. 'The drivers working against oil demand growth are
increasing in number and intensity, with the world's
consuming nations increasingly focused on their need to reduce their dependency on oil,
supported by an ever stronger legislative framework.' Mr Hughes said that even emerging
countries will attempt to limit consumption, as energy security moves up the agenda
following supply shocks in the Arab Spring. He also cited the undesirability of price
volatility seem in the market." |
"Ricardo today announced the results of a landmark multi-client
research study conducted by Ricardo Strategic Consulting in association with Kevin J.
Lindemer LLC, and involved participation of some of the world's leading energy and
technology companies and organizations. The research challenged the concept that 'Peak
Oil' will be a supply side phenomenon and predicts that the demand for oil may well peak
before 2020 and then fall back to levels significantly below 2010 demand by 2035. The
study findings suggest that there is a strong chance of oil demand reaching its peak
before 2020, at no more than about 4 percent above 2010 levels, before falling into a
long-term decline trend, with demand in 2035 back down to some 3 percent below 2010
levels. This would also involve significant changes in the geographic distribution of
demand and the mix of refined products required by the market. After incorporating a
greater take-up of first generation biofuels, demand for hydrocarbon oil by 2035 may
actually be more than 10 percent below its 2010 level, and its share of global energy
demand fallen below 25 percent (from circa 33 percent today). Regional differences and
legislation: Oil demand growth will have its limits
in every country. Ricardo believes that there has been a general underestimation of the
future impact of government policies to improve fuel efficiency and promote alternatives
to oil. This will be the case everywhere, including, very importantly, in China, where
although demand is projected to grow by nearly 60 percent in the meantime, the study
assesses that a peak could be reached as early as 2027, before starting to fall back
thereafter. The effect of fuel-efficient technology: Evolutionary change in the automotive
sector will bring about a revolutionary change in fuel demand. The transportation sector
will continue to see significant growth in the vehicle fleet, increasing by over 80
percent from 2010 to 2035. However the results of a detailed modeling exercise drawing on
Ricardo's deep expertise in this field suggest that efficiency improvements in the
internal combustion engine will more than offset the rise in fuel demand deriving from the
increase in the number of vehicles. Although new technologies, such as the battery
electric vehicle, will be introduced and will have an increasing impact over time, the
projected reduction in road transport oil demand does not derive primarily from the rapid
penetration of such technologies." |
| "In light of recent events such as the Arab Spring and Occupy Wall
Street I thought it would be pertinent to review Hubbert's Third Prophecy about the
cultural crisis he expected. He wrote about it in the article entitled 'Exponential
Growth as a Transient Phenomenon in Human History'. In case you are not familiar with
Hubbert's first two prophecies, he predicted both the US and world oil peak very
accurately. In 1956 Hubbert predicted the US oil peak would be sometime between 1969 and
1971. For this he was ridiculed and laughed off the face of the earth (almost). Turned out
the US oil peak was in 1970. This is something the drill-baby-drill, it's all the
environmentalists' fault, ditto heads don't know anything about. Next in 1974 Hubbert
predicted the world oil peak to happen about 1998. However he DID say that if OPEC were to
restrict the supply, then the peak would be delayed by 10-15 years which would put it at
2008-2013, or exactly right. Here is what Hubbert's prediction (to scale by MBPD) looks
like overlayed onto a reasonably close estimate of the actual global oil peak which
started in 2005 and has continued as a plateau up to now.... Hubbert said, 'The third
curve (on the left) is simply the mathematical curve for exponential growth. No physical
quantity can follow this curve for more than a brief period of time. However, a sum of
money, being of a nonphysical nature and growing according to the rules of compound
interest at a fixed interest rate, can follow that curve indefinitely...Our principle
constraints are cultural...we have evolved a culture so heavily dependent upon the
continuance of exponential growth for its stability that it is incapable of reckoning with
problems of non-growth...it behooves us...to begin a serious examination of the...cultural
adjustments necessary... before unmanageable crises arise...'.... Debt can continue to increase indefinitely, while oil can't. And since our entire money system is based on debt with interest attached
there is no way to escape it. All money is debt because we have allowed banks and the fed
to create all our money through interest-bearing loans by using the fractional reserve
system. The details are unimportant, the main point is that our money supply is created by
interest-bearing loans of banks and the fed. Therefore, the economy must always grow in
order to pay back the interest. When the economy can't grow anymore...collapse.....As we
all know, we had a stock market crash, a housing crash, an oil price spike and crash, and
an employment crash. Because we don't have a real economy any more we have papered over
these problems by creating more debt. The taxpayers bailed out the criminal fraudsters on
Wall St., taking on more government debt, and the fed bailed out many bankrupt banks
internationally ($12 Trillion), indenturing the taxpayers for future debt. Since debt
represents ultimately a claim on real assets, debt cannot continue forever if growth of
the real resource based economy has stopped. This is
Hubbert's Third Prophecy: When economic growth cannot continue due to the lack of
affordable oil, then we will have a cultural crisis. The
solution of the powers that be? Create more funny money through the fed's 'quantitative
easing program'. The solution of the Keynesian economists? Take on more government debt
through interest bearing loans by selling Treasury bonds to the fed, China, and other
parties (stimulus). The solution of the right-wing 'deficit hawks'? Cut government
(social) spending to the bone to 'cut the deficit' which they created through monstrous
military spending, and tax cuts to themselves. Guess what. None of these are going to
work. The solution is structural in the monetary system itself. When all money is debt,
there is always interest to pay and growth is required. Hubbert didn't mention one other
notable feature of a debt-money system. It systematically pumps wealth from the bottom 80%
of the population in wealth to the top 20%. The bottom 80% pay interest while the top 20%
collects it, and of course most of the interest is collected by the top 10%. When all
money is debt, that's a lot of money going to the top. The Occupy Wall Street people
aren't stupid. They know the game is rigged." Gary Flomenhoft - Hubbert's third prophecy Cluborlov.com, 5 November 2011 |
"Global energy markets stand at a crossroads. The big themes that
dominated the opening years of the century (prosperity, markets, peak oil, global warming
and clean technology) are giving way to a different set of concerns centred on inequality,
affordability, regulation and techniques for extracting oil and gas from tight rock
formations and ever-deeper below the surface. Some changes have come from outside the
energy industry. The financial crisis has diminished confidence in free markets. Falling
real incomes and rising unemployment in the advanced economies have pushed climate
concerns into the background in favour of a focus on jobs and cutting household bills.
Other changes have come from within the energy markets. A
decade of soaring real oil prices is at last beginning to transform the long-neglected
supply side of the industry, encouraging widespread employment of technologies such as
ultra-deepwater drilling and hydraulic fracturing to extend conventional oil and gas
reserves. High prices have begun to concentrate consumers' minds on cutting consumption.
But they are also sapping support for expensive policies to remake the electricity
industry by switching from burning coal and natural gas to alternatives such as solar and
wind. In the emerging world, rising oil and gas prices have brought an enormous influx of
wealth for producing countries, though in many cases the inequitable distribution of
income is contributing to political unrest. For consuming countries, however, the mounting
financial burden, mostly aimed at the middle class, is straining government budgets and
may prove unsustainable in the long run....politicians and voters want both: cheap energy
and environmental responsibility. But it may not be possible. For now, voters' preferences
seem to be shifting from consciousness about the environment towards worries about
affordability.... Will higher prices spur a faster
rise in conventional oil supplies or will price increases be swallowed up by increasing
costs? Dramatic price rises have so far failed to
produce a faster increase in non-OPEC output. Lack of spare capacity has left the market
permanently worried about disruptions such as Libya and production problems in the North
Sea. But there is now a significant increase in investment and exploration and production
activity. The question is how quickly that will translate into enhanced volumes of oil and
gas, and at what sort of costs and prices? Costs have risen tremendously across the
industry, but there are also signs of technological innovation, rising capacity and
learning-by-doing that may bear down on costs in future.... Will hydraulic fracturing and
horizontal drilling be allowed to revolutionise the global oil and gas industries?
Fracking has already transformed the North American gas market and has resulted in an oil
boom in North Dakota. But elsewhere the technology is running into increasing opposition. France has banned its use. In the United Kingdom and in the United States
it has been blamed for triggering (small) earthquakes. Fears about groundwater
contamination and the visual and environmental impact of surface facilities could also
limit political acceptability and the widespread deployment of the technology. The
reserves and the technical ability to get at them are there, but the political
acceptability is questionable." |
"An influential military
thinktank is urging America to cut its oil use by 30% over the next decade,
as a national security imperative. In its report, the Military Advisory Board said the US
should aim to drastically reduce its energy imports over the next
decade or else risk exposing the economy to devastating oil price shocks. 'This is a national security threat that grows ever year, and we as a
nation need to recognise is at such,' said vice admiral Dennis McGinn, a former deputy
chief of naval operations, and one of the authors of the report. 'This isn't just about
the volatility of gas prices at the pump. This isn't just about big oils vs the
environment. This is a national security problem, manifesting itself economically,
diplomatically and militarily, and it is not just going to go away.' The report, entitled Ensuring America's Freedom of
Movement: a National Security Imperative to Reduce America's Oil Dependence, describes
America's reliance on imported oil as the 'Achilles heel of our national security'. It
deploys strong language to describe the consequences of this dependence. "Our
reliance on this single commodity makes us vulnerable
We are held hostage to price
fixing by a cartel that includes actors who would do our nation harm, and we are too often
called upon to risk the lives of our sons and daughters to protect fragile oil supplies
form this very cartel,' the report says." |
"Belgium's main political
parties have agreed on a plan to shut down the country's two nuclear power stations, but
they have not yet set a firm date. A new coalition
government is being set up and the nuclear shutdown will be on its agenda, officials say.
If alternative energy sources are found to fill the gap then the three oldest reactors
will be shut down in 2015." |
"Saudi Arabia, one of the
world's largest oil producers, may soon cut oil production....We believe Saudi Arabia now
requires oil at $92 a barrel to break even fiscally, up from $60 a barrel in 2008, on
higher post-Arab Spring spending," Deutsche Bank oil analyst Paul Sankey wore in a
research note earlier this month. The Saudis 'will cut production to defend $92.' Sankey thinks that the production cut already began in September. Saudi
Arabia was producing about 9 million barrels of oil a day before hostilities broke out in
Libya, according to the U.S. Energy Information Administration. When the Libyan civil war
shut down nearly all of that country's 1.6 million barrel-a-day production, the Saudis
increased output to nearly 10 million barrels a day. But now Libya's oil is beginning to
come back online. It's thought the country is producing between 300,000 and 500,000
barrels a day. That might rise to a million barrels a day by the middle of 2012. Iraq has
also been steadily increasing its production, if slowly. That country, which holds
enormous oil reserves, has seen production grow by about 300,000 barrels a day in the
last year, according to EIA. It's now producing about 2.6 million barrels a day." |
"The Energy Trap is a project of the New America foundation, a
non-partisan think tank funded by the Rockefeller Foundation, which recently conducted a
survey on just how the American public is holding up under the high cost of energy. The
idea of the trap is that an increasing number of Americans are caught between the cost of
gasoline and a systemic inability to stop driving their cars. In the last 60 years America
has become a "motorized society" in which most of our citizens have become
totally dependent on daily travel by car for their existence. Take away our cars and most
of us would be hard pressed to reorganize our lives to provide for the essentials of life
- earn an income, and provide food, shelter, and education for ourselves and our families.
The current recession has compounded the troubles, forcing many to travel further afield
to find employment - often in more than one underpaying job. The Energy Trap study found
cases in which more than 50 percent of a family's income was going into paying for and
fueling the car. What is most alarming is that 30
years ago the spike in gasoline led to a 12 percent reduction in the demand for gasoline
as consumers drove less, switched to smaller cars, and sort of adhered to the 55 mph speed
limit that had been put in place to save gasoline. It is now more than three years since
the $4+ price spike of 2008 and demand has only fallen some 3 percent. The problem starts
with the nation's collective gasoline bill which is on track to reach a new high of nearly
$500 billion this year. This, of course, is only for gasoline; if we add in the other oil
products we burn here in America each year - diesel for trucks and trains, jet fuel for
planes, propane for heating, and numerous other uses the total is in the vicinity of $1
trillion. It is looking as if this year's fuel bill
will be on the order of $100 billion higher than last for gasoline and another $100
billion for other oil consumption. If we have to spend an additional $200 billion just to
keep even, it is not hard to understand that the $200 billion increase in the cost of
energy is coming out of other family expenditures. There are geographic and income level
differences in the impact the energy trap is having on families with rural and lower
income families bearing more of the burden. When gasoline was over $4 a gallon three years
ago the average family in NY and Connecticut was spending 8 percent of its incomes on
transportation, while in Montana it was over 19 percent. Drivers in Mississippi go twice
as far each year as those in NY where many have easy access to buses, commuter trains and
subways. As could be expected, families earning under $25,000 a year are spending around 9
percent of their incomes on transportation vs. 3.6 percent for those earning $75-85,000
per year...The long term solution to all this is rather straight forward -- better public
transit, far more efficient cars, housing closer to work. But these are all long term
solutions, expensive and years to implement. All indications are that the energy trap can
only get worse, perhaps much worse, in the next few years." |
"China's thirst for oil will
squeeze prices higher and destroy demand in developed economies if world oil supply growth
does not exceed current trends, said senior commodity fund managers who did not expect
fast oil output rises in Libya and Iraq. 'In the last 12 months China's demand for diesel
for power generation has been one of the major drivers (of the market),' Tony Hall, chief
investment officer of the Duet Commodities Fund, said at a conference in London on
Tuesday. 'They do tend to step in and stockpile,' he said. Hall did not see any prospect of the much-debated economic 'hard landing'
in China and said supply would not be able to
keep pace with the fast-expanding economy's need for oil. 'We are not seeing any
significant squeezes yet but this is a supply side story - if we carry on with this
current trend we will have some problems in the light, sweet products,' he said. He
highlighted a projection of global oil demand growth of 1.4 million barrels per day for
next year. 'I don't believe supply can keep pace.' Hall's comments were supported by Todd
Gross, chief investment officer of Hudson Capital Group, which runs an energy-focused
fund. With spare capacity at just two million barrels
per day, he saw little slack in the system. 'That's a critical level,' said Gross. He
argued that Iraq's production increases would have to accelerate to make sure the market
was balanced. 'It's likely that prices will just go higher and ration demand at some
point, largely in the OECD (Organisation for Economic Co-operation and Development)
countries.' Michael Rothman, president of Cornerstone Analytics, a research firm, said oil
is used differently today than in the 1970s, when some 30 percent of the barrel went into
heating and power and it was relatively simple to substitute oil with coal or gas. Now
transport is a much bigger part of the barrel and there are few alternative fuels. As a
result, a much higher oil price will be required to ration demand, and that demand
destruction is likely to be felt in the OECD rather than nations where oil is subsidised. All three panellists, who were speaking at the World Commodities Week
conference, expressed doubts that Iraq would meet its targets and that Libya would be able
to ramp up production quickly. 'The amount of crude coming out of Iraq will be
disappointing,' said Hall. 'And Libya won't come back for six months to a year.' Rothman said that even though ousted leader Muammar Gaddafi had
been killed, the biggest concern in Libya was still civil war. 'The companies that have a strong vested interest in maintaining their
presence there are putting on a hopeful face but the reality is that things will be
slower.' Even if Libya were able to get to one million barrels per day by the middle of
next year, the effective OPEC spare capacity would still be between zero and 1 percent, he
added. With Iraq, he said anyone who argued there
would be a sharp rise in oil output was being unrealistic. 'They are still producing less
oil than they were before the war,' he pointed out. 'They were supposed to be at 3.5
million by 2005, 5.5 million by 2008 and 8.5 million by next year. We're at 2.7 million
and over the last several months we have seen arms flowing in from Iran.' With the U.S. troop presence dropping
to zero next year, he said there was a high risk of civil unrest." |
"By the time the costs of gas,
insurance, tolls, parking, and car payments are added up, the average American family
spends more on driving than on health insurance or taxes. And for the bulk of
societythose who use cars every day to commute, drop the kids off at school, and run
errandsit seems impossible to trim the high costs of transportation in any
substantial way. These are the main findings of 'Energy Trap,' a new study
conducted by the non-partisan New
America Foundation. Generally speaking, consumers scale back on purchasing products
and services as they get more expensive. What
weve seen over the past few years, however, indicates that people need gasoline so
badly, and driving is incorporated so deeply into every part of modern-day American life,
that demand remains quite high even when gas prices spike. When gas prices hit $4 in 2008, demand dropped by just 3%.... One part of the problem can be traced back to the real estate bubble.
As housing prices soared, more workers were forced to move further and further away from
the workplace. Gas prices remained subdued, and at some point over the past decade or so,
living in the distant exurbs and commuting 90 minutes each way to work became fairly
commonplace. Even though gas prices have receded from the $4-per-gallon summer, they remain high. The study estimates that a family earning $50,000 to
$60,000 per year pays around $10,000 annually in automobile costsincluding gas,
insurance, and other related expenses. According to the Department of Commerce, that
family is paying more for transportation than health insurance or taxes." |
"Four months ago, the world's
energy watchdog took historic action to reduce oil prices. Since then, the financial
outlook has considerably worsened and some Libyan oil has returned to the market. But the
price has remained above $100 a barrel. Releasing 60m barrels of reserves was meant to
dampen the high price of $113 per barrel, attributed to lost ouput from war-torn Libya and
worries that the Arab Spring could spread to more oil producers. The International Energy
Agency (IEA) made no secret of the fact it was worried that oil above $100 was
unsustainable and damaging to the global economy. Since then, the world's financial
outlook has considerably worsened and about 430,000 barrels of Libyan oil have returned to
the market. Surely, amid the doom and gloom, plus extra production, the natural direction
of oil ought to be down? However, the price, though volatile, has remained stubbornly
above the $100 level. And last Monday, Brent crude even returned to the $113 per barrel
level seen before the emergency release of supplies. Data
on oil speculation also shows that more traders are betting on higher prices. At the end
of last week, data from the US Commodities and Futures Trading Commission (CFTC) showed an
increase in long positions in oil futures. From a macro viewpoint, such continued support
for oil doesn't appear to make sense given the number of predictions that the world is on
the brink of another recession, tipped over the edge by a volatile eurozone. From America
to Europe, countries are struggling with sovereign debt. And even China is not immune,
with demand for oil at its lowest level so far this year. There is no doubt that the pace
of consumption is slowing. Opec, the cartel of
producers, the IEA, the Energy Information Agency and numerous companies all say the
economic downturn is taking its toll on world oil demand. This leaves the most plausible
explanation for such high prices as tight supply, counteracting the economic gloom.
According to Bank of America Merrill Lynch, the extra culprits on top of Libya's lower
output are North Sea maintenance and pipeline attacks in Nigeria. ... Adam Sieminski of Deutsche Bank also mentions 'slower than expected
ramp-up of new production and unplanned outages' from non-Opec producers. There is a
similar picture in America, where stockpiles of its benchmark WTI crude are remarkably
low. This has turned out to be a function of lower imports rather than increased
consumption. While supply remains problematic, only one thing is going to cause a collapse
in prices even lower demand in the face of a full blown economic crisis. It appears
that the market is not pricing this in just yet. ... For
the moment, lower oil prices are only going to come at the expense of lower growth
and nobody's rooting for a recession." |
"Almost three quarters of
councils have already reduced street lighting in their area, or are considering doing so.
The blackouts are being rolled across thousands of streets in rural areas, suburbs and
city centres in almost every county in the UK,
despite concerns from residents and police that the moves will lead to an increase in
traffic accidents and crime. In total, 98 out of 133 local authorities who responded to a
survey said were scaling back street lighting, or were looking into doing so." |
"The boom is no more in the
Barnett Shale. Drilling in the natural gas-rich North Texas field has sunk to its lowest
level in more than seven years and is barely more than one-quarter of its 2008 peak. Meanwhile, new drilling booms focus on oil and natural gas liquids in
other areas of Texas, such as the long-standing Permian Basin in West Texas and the
up-and-coming Eagle Ford Shale in South Texas. Those 'oily' plays are sending the U.S. and
Texas drilling rig counts soaring. Oil production nationally and in the Lone Star State is
increasing, a phenomenon that many industry veterans thought they might never again see
after a steep decline in oil output that has been nearly 40 years in the making. Amid the
new craze for crude, the Barnett Shale rig count plummeted to 53 active rigs Oct. 14, the
fewest since June 11, 2004, according to information compiled by RigData. That's barely
more than one-fourth of the peak count of 203 active Barnett rigs on Sept. 5, 2008, a year
when gas prices soared above $13 per million British thermal units. Prices began plunging
in the latter part of 2008, have generally been in a funk since and have recently been in
an anemic range of $3.50 to $4. Barnett Shale gas
drilling has been discouraged by the fact that prices for oil, condensate and natural gas
liquids such as ethane, propane and butane are much more attractive for energy producers,
causing them to divert rigs to the liquids-rich areas. Oil prices have been in a healthy
range of $80 to $110 much of this year. While Barnett Shale drilling languishes, the Texas
and U.S. rig counts are at vigorous levels and, for the first time in 16 years, more rigs
in America are drilling for oil than gas. The
horizontal drilling and hydraulic fracturing technologies, vastly improved in the Barnett,
are greatly boosting production in the 'oilier' areas now in drilling booms. 'If you look
at the drilling rig count for crude oil, compared to natural gas, it gives you a strong
visual of what's happening in the industry,' said Alex Mills, president of the Texas
Alliance of Energy Producers. 'There's just an oversupply of natural gas right now and
that has kept gas prices soft. That has made the industry divert the rigs from looking for
natural gas to crude oil.' Union Drilling Co., a Fort Worth-based oil and gas drilling
contractor, is a prominent example, having moved most of its Texas rigs from the Barnett
Shale to the Permian Basin. 'We had only one rig out of our Texas fleet that was running
in West Texas back in early 2010,' Union CEO Christopher Strong said. 'Now we have 16 over
there and only four running in the Barnett. It's been a huge shift.' The reason is
obvious, Strong said: 'the relative value of oil compared to natural gas.'" |
"A much-trumpeted partnership of one of today's most celebrated
scientists and the world's largest publicly traded oil company seems stalled in its aim of
creating mass-market biofuel from algae, and may require a new agreement to go forward.
The disappointment experienced thus far by scientist J. Craig Venter and ExxonMobil is
notable not only because of their stature, but that many
experts think that, at least in the medium term, algae is the sole realistically
commercial source of biofuel that can significantly reduce U.S. and global oil demand.
Venter, the first mapper of the human genome and creator of the first synthetic
cell (pictured above), said his scientific team and ExxonMobil have failed to find
naturally occurring algae strains that can be converted into a commercial-scale biofuel. ExxonMobil and Venter's La Jolla, Ca.-based Synthetic Genomics Inc., or
SGI, continue to attempt to manipulate natural algae, but he said he already sees the
answer elsewhere -- in the creation of a man-made strain. 'I believe that a fully
synthetic cell approach will be the best way to get to a truly disruptive change,' Venter
told me in an email exchange." |
"Controversial gas drilling did
cause a series of earthquakes along the Lancashire coastline, a report today confirmed.
Gas company Cuadrilla Resources, which is extracting shale gas in the region, commissioned the independent study after two tremors shook Fylde
coastline in April and May this year. Energy chiefs have now sent a stark warning to the
firm - either stop the earthquakes or be shut down." |
"The International Energy Agency, responding to statements by
officials of Saudi Aramco, said it is 'very important' that oil producers in the Middle
East and North Africa (MENA) continue to invest in increasing their oil production
capacity. 'In the next 10 years, more than 90% of the
growth in global oil production needs to come from MENA countries,' said IEA Chief
Economist Fatih Birol. 'There are major risks if this investment doesnt come in a
timely manner,' he said. 'Oil demand is set to increase.' Birols comments came just
days after Saudi Arabian Oil Co. Chief Executive Officer Khalid Al Falih told the Wall
Street Journal that his country had no plans to increase oil production capacity to 15
million b/d, given the expansion plans of other producers such as Brazil and Iraq. 'There is no reason for Saudi Aramco to pursue 15 million b/d [of output
capacity],' said Al-Falih, whose remarks ended speculation that arose in 2008 when Saudi
Arabias Oil Minister Ali I. Al-Naimi said his country could boost its capacity by
another 2.5 million b/d to 15 million b/d." |
"The International Energy Agency
Wednesday once again trimmed its forecast for oil demand due to the worsening economy, but
said production will likely fall by a similar amount, leaving the supply balance largely
unchanged. The IEA also highlighted data that are
potentially bullish for oil prices, including an unusual reduction in oil held in storage
in August and a larger forecast for the amount of oil that world markets will need from
the Organization of Petroleum Exporting Countries in the fourth quarter. Despite a more
optimistic outlook for Libyan oil production and a greater risk of a slowdown in the world
economy, the IEA warned OPEC not to prematurely cut back its oil output. '[Oil] demand has
continued to run ahead of supply by an average of 0.6 million barrels a day so far in
2011,' and oil inventories are well below their five-year average, the IEA said in its
monthly oil market report. IEA said this expected decline in output in 2012 will largely
match the expected drop in demand, meaning the supply-demand balance in the market is
largely unchanged. For this reason, 'calls by other OPEC members, including Iran, Iraq and
Venezuela, for Saudi Arabia to rein in supplies now that Libyan output has restarted may
be premature,' it said. 'The group's output is still running 300,000 barrels a day below
pre-Libyan crisis levels of 30.5 million barrels a day.' Saudi Arabia cut its production
by 200,000 barrels a day in September and, 'sent the clearest signal yet that it intends
to protect revenues, despite declining output, with its decision to raise prices to record
levels for Arab Light for Asian buyers for November,' the IEA said." |
"Sir Richard Branson aims to introduce a 'green aviation fuel' on Virgin Atlantic aircraft
within three years claiming 'one
of the most exciting developments of our lifetime and a major breakthrough in the war on
carbon'.. His company hopes to help convert waste
gases from industrial steel production into a jet propuslion that could ultimately account
for nearly a fifth of the present annual global consumption of aviation fuel. A demonstration flight is planned within 12-18 months, the airline
announced on Tuesday." |
"Oil
prices have tumbled on world exchanges raising hopes among consumer groups that one silver
lining from the eurozone crisis will be lower petrol prices. Brent crude dropped below
$100 a barrel while US crude oil prices fell to $75 a barrel, levels not seen since late
September 2010 and marking a nearly 35% decline from 2011 highs hit in early May. Goldman Sachs, which has been typically bullish for commodities, sounded another
note of caution as it cut its 2012 forecast for Brent by $10, to $120 a barrel. Stock
markets also reacted to the lack of decision-making inside the EU with steep falls that
took the US markets in the early hours of trading into bear territory. Analysts said the 20% drop in values that marks a bear market
reflected the poor economic data coming out of Europe and the US and the inability of EU
leaders to agree a rescue package for Greece." |
"The French government on Monday
canceled all three exploration permits on shale-gas fields after oil major Total SA
and U.S.-based Schuepbach Energy LLCwhich hold the rightsmaintained their
intention to drill the potential fields using hydraulic fracturing, a controversial
technique that was banned in the country earlier this year. In a joint statement, France's energy minister, Éric Besson, and
environmental minister, Nathalie Kosciusko-Morizet, said that the three permits, which
represent all of the country's potential shale-gas fields, had been cancelled after the
companies submitted a mandatory report about their drilling techniques in which they
maintained their plans to use hydraulic fracturing, or 'fracking.'." |
"Former Japanese prime minister Naoto Kan concluded in March that
nuclear power was no longer worth the risk after the world's worst nuclear accident in 25
years. His successor seems less convinced. Prime Minister Yoshihiko Noda's month-old
government let a panel of experts begin debate on Japan's energy policy on Monday, but
Noda has already signalled that nuclear power could play a role for decades. Six months after an earthquake and tsunami crippled the Fukushima
plant, which is still leaking radiation, critics say powerful pro-nuclear interests are
quietly fighting back." |
"Smart meters are billed as the key to solving Britain's looming
energy crisis. But while a live display of energy costs and consumption may help parents
bribe teenagers to spend less time in the shower, the results of a key trial indicate the
meters will barely affect overall power consumption.... The idea is that, by observing
their usage, people will realise how wasteful they are and reduce their electricity and
gas consumption, lowering their bills and carbon dioxide emissions. In some trials, the
meters provided information parents needed to give their children extra pocket money
or reduce housekeeping payments from working offspring in return for turning
the heating down and the lights off. But in many other cases, they yielded negligible
savings and often at the expense of family unity, with people bickering over energy
usage, says Tom Hargreaves, of the University of East Anglia's School of Environmental
Sciences. Separately, the biggest trial of smart meters so far, conducted in 18,000
households by energy regulator Ofgem, reveals how difficult it would be for many people to
reduce their power consumption. The two-year trial
found that participating households used only 3 per cent less energy than they would have
without the smart meter. This figure is higher than the 2.8 per cent reduction in
electricity consumption and the 2 per cent fall in gas use that the Government expects the
smart meters to facilitate. But there is one huge qualification the trial was
conducted among a group of volunteers, not imposed upon a cross-section of the population
in the way that smart meters will be from 2014." |
"Scottish and Southern Energy
(SSE) has confirmed it will withdraw from plans to develop nuclear power, deciding that
wind farms provide a better investment.... The
utility company will sell its 25pc stake in the NuGen consortium to its partners GDF Suez
and Iberdrola. NuGen is only at the very preliminary stages of an investment in nuclear,
having bought an option to purchase land near Sellafield for £19.5m two years ago. It
would not have a fully completed power station for at least a decade. SSE is still in
favour of nuclear power as part of the UK's mix of generation, but it concluded that the
process would consume too much management time. Alistair Phillips-Davies, generation and
supply director, said 'our core investment in generation should be in renewable
energy'." |
"Britain's oil production from
the North Sea has fallen by 16pc since last year in a drastic drop that will cost the
Treasury millions of pounds in lost taxes. Officials
from the Department for Energy and Climate Change put the unexpectedly large fall down to
'maintenance and other production issues' on top of the long-term trend of declining
output. Oil platforms only pumped 947,000 barrels of oil per day in July, down from
984,000 barrels per day in June and more than 1m barrels per day in May. The Health and
Safety Executive has warned that only one in 30 of the UK's North Sea oil rigs is in a
good condition. A number of large platforms have closed for major maintenance this
year.... However, the business climate may also have something to do with the drop in oil
output. Producers have been unhappy that the Treasury raised taxes by 12 percentage points
to between 70pc and 82pc depending on the size of the fields at the Budget this spring.
This has added millions of pounds to the tax bills of big producers. Whatever the cause,
the fall is likely to have a substantial impact on the Chancellor's tax revenue from the
the oil industry, which amounted to £9bn last year. Malcolm Webb, chief executive of
industry group Oil & Gas UK, said: 'On the face of it, a production decline of this
magnitude is extremely worrying and we need to investigate and fully understand what has
happened here.....' The UK used to produce 2.7m
barrels a day but its output has been declining since 1999. This is the first time output
has been below 1m for two consecutive months. Experts
believe smaller owners could rejuvenate older fields and extract more difficult oil, as
the energy majors look to sell off their most mature assets. However, the cost of
decommissioning is a major hurdle to fields changing hands. Earlier this month, BG Group,
BP, Total, Shell and TAQA Bratani highlighted the problems associated with winding down
old infrastructure, with executives calling on ministers to clarify the Government's role
in helping meet the costs." |
"Renewable electricity
contributed an all time high of 9.6 per cent of the UK's grid mix in the second quarter of
this year, statistics
released today by the Department of Energy and Climate Change have revealed. The 7.86TWh (terawatt hours) contributed by green energy generators
represented a 50 per cent rise on the same time last year. The surge in green energy was
led by the wind energy sector, which saw output rise 120 per cent year on year, and
hydroelectricity where output rose 75 per cent year on year. Dr Gordon Edge, director of
policy at trade group RenewableUK, said wind is now providing enough power to supply
nearly three and a quarter million homes in the UK." |
"North America appears headed
for an oil renaissance, with crude production expected to hit an all-time high by 2016,
given the current pace of drilling in the U.S. and Canada, according to a study released
by an energy research firm this week. U.S. oil production in areas including West Texas'
Permian Basin, South Texas' Eagle Ford shale, and North Dakota's Bakken shale will record
a rise of a little over 2 million barrels per day from 2010 to 2016, according to data
compiled by Bentek Energy, a Colorado firm that tracks energy infrastructure and
production projects. Canadian crude production is expected to grow by 971,000 barrels per
day during the same period, with much of the oil headed for the U.S. Combined, the U.S.
and Canadian oil output will top 11.5 million barrels per day, which is even more than
their combined peak in 1972. Goldman Sachs has estimated the U.S. could move from being
the No. 3 oil producer behind Saudi Arabia and Russia to the No. 1 spot by 2017. It's a
reversal of the steady downward production trend that started after 1971, when U.S. oil
production peaked around 9.5 million barrels per day. And the pace of production now has
caught quite a few people by surprise, says Joseph
Pratt, a historian at the University
of Houston who has written extensively about the oil and gas industry. 'We have this momentum out there to set about doing what we said we wanted
to do back in the 1970s: reduce the flow of imports from volatile regions,' Pratt said.
'It was like the Holy
Grail back then. And suddenly it seems possible.' The surge is fueled by the same
drilling and production techniques that opened up natural gas production in recent years -
the combination of horizontal drilling and hydraulic fracturing - as well as the success
of deep-water Gulf of Mexico projects and the ramp-up of Canadian oil sands projects. The
natural gas glut has kept its price low, prompting producers to focus more effort on oil
and natural gas liquids, which fetch better prices. Earlier this year, the number of land
and offshore oil rigs working in the U.S. exceeded the number of natural gas rigs for the
first time in 18 years, according to data compiled by IHS-CERA. And Texas oil and gas
industry employment returned to its pre-recession highs in June, according to the Texas
Petroleum Index, topping the last boom that peaked in October 2008, thanks largely to oil
drilling." |
"Experts have cast doubt on claims of a giant shale gas find in
northwest England, leaving opponents to accuse the company behind it of painting an
excessively rosy picture to win political support for the controversial project. Cuadrilla
Resources is owned by Australian drilling company AJ Lucas and private equity firm
Riverstone, and has former BP Chief Executive John Browne on its board, said on Wednesday
it had found 200 trillion cubic feet of gas in place at its licenses in Lancashire. The
announcement made front page news in the UK, with one national newspaper predicting that
Blackpool, the fading seaside resort nearby, would become another Dallas, and a local
journal celebrating a 'gas gold rush' and 'jobs bonanza'. Even discounting the find to
allow for the fact that typically only around 20 percent of gas locked in shales -- rocks
with low permeability which require considerable coaxing to give up their treasure -- is
recoverable, the find would classify as one of the biggest gas discoveries in the world in
the past decade. The news was welcomed by some politicians who see the project as a boost
to UK energy security, with North Sea reserves declining sharply. But it was met with
dread by environmentalists who say the drilling process behind shale gas --known as
fracking -- can pollute ground water. Yet the excitement may be premature. The resource estimate has not been independently verified and the
company has so far only drilled two wells in the basin. Even though it says it has taken account of data from another three
wells drilled 10-15 years ago by another company, which chose not to develop the area,
some experts are not convinced. 'It seems an awfully large number to extrapolate (from so
few wells),' said Jeffrey Callard, Assistant Professor at Mewbourne School of Petroleum
and Geological Engineering, at the University of Oklahoma. Steve Holditch, Professor of
Petroleum Engineering at Texas A&M University said one would need to drill dozens of
wells to come up with a reasonable estimate of resources." |
"Libyan oil workers and officials say damage to ports and oil
terminals is so severe and security so poor that the large-scale resumption of exports to
Western markets could be delayed longer than some officials had predicted. The Ras Lanuf
oil terminal in eastern Libya was attacked by Gadhafi loyalists on Sept. 12, leaving 15
people dead. At Brega, also in eastern Libya, extensive damage and the presence of
unexploded missiles have blocked the start of operations. The Zawiya refinery in western
Libya and the massive Es-Sider terminal in central Libya are also damaged. Those four
terminals account for about one million barrels a day of Libya's prewar export capacity of
1.5 million barrels a day, suggesting considerable obstacles ahead as Libya takes steps to
revive its oil industry following the toppling of Col. Moammar Gadhafi by rebel forces
after months of fighting. 'There will be some [export] bottlenecks,' said Shokri Ghanem,
Libya's former oil head, who defected in May from Col. Gadhafi's regime.'Some oil ports
have lots of damage and there are mines' at these facilities, he said. Mr. Ghanem estimated it will take up to two years to restore
Libyan output to prewar levels." |
"In the name of fighting
pollution, China has sent the price of compact fluorescent light bulbs soaring in the
United States. By closing or nationalizing dozens of the producers of rare earth metals
which are used in energy-efficient bulbs and many other green-energy products
China is temporarily shutting down most of the industry and crimping the global
supply of the vital resources. China produces nearly
95 percent of the worlds rare earth materials, and it is taking the steps to improve
pollution controls in a notoriously toxic mining and processing industry. But the moves
also have potential international trade implications and have started yet another round of
price increases for rare earths, which are vital for green-energy products including giant
wind turbines, hybrid gasoline-electric cars and compact fluorescent bulbs.General
Electric, facing complaints in the United States about rising prices for its compact
fluorescent bulbs, recently
noted in a statement that if the rate of inflation over the last 12 months on the rare
earth element europium oxide had been applied to a $2 cup of coffee, that coffee would now
cost $24.55." |
"Researchers at the Royal Institute of Technology (KTH) in Stockholm
have managed to prove that fossils from animals and plants are not necessary for crude oil
and natural gas to be generated. The findings are revolutionary since this means, on the
one hand, that it will be much easier to find these sources of energy and, on the other
hand, that they can be found all over the globe....'Using our research we can even say
where oil could be found in Sweden,' says Vladimir Kutcherov, a professor at the Division
of Energy Technology at KTH. Together with two research colleagues, Vladimir Kutcherov has
simulated the process involving pressure and heat that occurs naturally in the inner layers of the earth, the process that
generates hydrocarbon, the primary component in oil and natural gas. According to Vladimir
Kutcherov, the findings are a clear indication that the oil supply is not about to end,
which researchers and experts in the field have long feared. He adds that there is no way
that fossil oil, with the help of gravity or other forces, could have seeped down to a depth of 10.5 kilometers
in the state of Texas, for example, which is rich in oil deposits. As Vladimir Kutcherov
sees it, this is further proof, alongside his own research findings, of the genesis of
these energy sources that they can be created in other ways than via fossils. This
has long been a matter of lively discussion among scientists." |
"Tony Hayward has outlined plans
to dominate the vast reserves of newly accessible oil in the semi-autonomous Kurdistan
region of northern Iraq. The former BP chief executive said his $2.1bn (£1.3bn)
acquisition of Genel Enerji was just the beginning of his activities in the region. Potential targets are understood to include Gulf Keystone, the Aim-listed
oil explorer focused on Kurdistan, which is rumoured to be preparing for a sale, as well
as other operators in the region. The group, which has enough cash to finance an estimated
$4bn of further acquisitions, has also identified Libya as a potentially rich source of
business, putting operators in the country on its list of possible targets....Mr Hayward said: 'The Kurdistan region of Iraq is undoubtedly one
of the last great oil and gas frontiers. Arguably, it is the last big onshore 'easy' oil
province available for exploration by private companies anywhere in the world.' He said Genel's cash reserves provided the opportunity 'to participate
aggressively in the significant consolidation we expect to see in the [Kurdistan] region
over the next few years and to expand elsewhere if good opportunities arise'." |
"Tony Hayward has outlined plans
to dominate the vast reserves of newly accessible oil in the semi-autonomous Kurdistan
region of northern Iraq. The former BP chief executive said his $2.1bn (£1.3bn)
acquisition of Genel Enerji was just the beginning of his activities in the region. Potential targets are understood to include Gulf Keystone, the Aim-listed
oil explorer focused on Kurdistan, which is rumoured to be preparing for a sale, as well
as other operators in the region. The group, which has enough cash to finance an estimated
$4bn of further acquisitions, has also identified Libya as a potentially rich source of
business, putting operators in the country on its list of possible targets....Mr Hayward said: 'The Kurdistan region of Iraq is undoubtedly one
of the last great oil and gas frontiers. Arguably, it is the last big onshore 'easy' oil
province available for exploration by private companies anywhere in the world.' He said Genel's cash reserves provided the opportunity 'to participate
aggressively in the significant consolidation we expect to see in the [Kurdistan] region
over the next few years and to expand elsewhere if good opportunities arise'." |
"UK oil production fell below 1
million barrels per day (bpd) for only the second time in more than 30 years this summer
as maintenance exacerbated a decline in output from depleted North Sea oilfields. The
British sector of the North Sea pumped 984,000 bpd of oil in June, down from just over 1
million bpd in May and a peak of more than 2.7 million bpd in 1999, industry data show.
'The decline is worrying,' said Mike Tholen, economics director of industry lobby Oil
& Gas UK. Britain first produced commercial
quantities of oil in 1975 and the country has enjoyed billions of dollars in revenue over
the last 35 years as its light, high quality grades of crude oil have become a benchmark
for the international spot market. It was a net oil exporter until 2005. But British oil
reserves, mostly deep below inhospitable waters far offshore, are gradually running dry
and cost more and more each year to maintain and operate as the large, easily accessible
oilfields are exhausted. Oil & Gas UK says there are still billions of barrels of
hydrocarbons in the UK Continental Shelf (UKCS), but much of these reserves are in the
form of natural gas and lie in very difficult areas to explore. 'The figures for the
quarterly decline in production of oil and gas highlight the need to focus on investing in
the UKCS and on long-term trends in the basin,' Tholen said. Michael Wittner, head of commodities research at Societe
Generale in New York, said Britain would still be an oil producer for many years but the
trend lower would continue. 'The long-term decline will not be reversed,' Wittner
said." |
"Libyan oil exports are unlikely
to return to their pre-war level before 2013, the new head of the International Energy
Agency said on Thursday. 'Our experts think that 2013 or beyond will most probably show
the complete full restoration of the Libyan supply to the market, but not before that,'
Maria van der Hoeven told AFP in an interview.
Libya, a key African oil exporter, produced about 1.6 million barrels per day (bpd) before
the rebellion against Moamer Kadhafi broke out in mid-February, and then slowed to a
trickle. Around 85 percent of Libyan oil output was exported to Europe, with the
disappearance of its high quality light sweet crude from the market one of the reasons why
Brent crude from the North Sea has been trading much higher than oil quoted on US
exchanges. Just how quick Libyan oil will return to the market remains one of the key
questions of the post-Kadhafi era, not only for European consumers but for Libya's new
rulers who badly need oil export revenue to fund reconstruction. Western oil groups that
had been present in Libya, Italy's Eni, France's Total and Spanish Repsol have sent or are
preparing to send staff to begin repairing damaged facilities despite the security
situation remaining a concern." |
"At the height of a new round of
quarreling between Russia and Ukraine over natural gas prices, Russian Prime Minister
Vladimir Putin on Tuesday launched a major pipeline that will start pumping gas to Western
Europe next month, bypassing Ukraine. With the click of a computer mouse in front of
flashing cameras, Putin opened the valve to let the gas into the first Nord Stream
pipeline at the Portovaya compressor station at the Russian-Finnish border, a stone's
throw from his hometown of St. Petersburg. According
to the Russian state-controlled gas-and-oil giant Gazprom, the 765-mile long Nord Stream
pipeline -- costing more than $12 billion -- directly links Russia with the European Union
via the Baltic Sea bed. 'The amount of energy that will be delivered to Germany is
comparable to the combined output of 11 nuclear-power plants," Putin said. "This
is a solid contribution not only to the European but also to the world energy sector.'...
For the next 50 years, Nord Stream will supply an annual 55 billion cubic meters of gas
not only to Germany but to France, the United Kingdom, the Netherlands and Denmark, Putin
said. Putin said the launch of the Nord Stream means
Ukraine is finally losing its exclusive status as a transit country for Russian gas to
Europe. 'Any transit country has always the
temptation to take advantage of its transit status,' he said. 'That exclusivity is now
disappearing,' he said." |
| "Long before it understood the
value of oil, the desert kingdom of Saudi Arabia knew the worth of water. But the leading
oil exporter's water challenges are growing as energy-intensive desalination erodes oil
revenues while peak water looms more ominously than peak oil -- the theory that supplies
are at or near their limit, with nowhere to go but down. Water use in the desert kingdom
is already almost double the per capita global average and increasing at an ever faster
rate with the rapid expansion of Saudi Arabia's population and industrial development. Riyadh in 2008 abandoned what was in retrospect clearly a flawed plan to
achieve self-sufficiency in wheat and aims to be 100 percent reliant on imports by 2016.
'The decision to import is to preserve water,' said Saudi Deputy Minister of Agriculture
for Research and Development Abdullah al-Obaid. 'It's not a matter of cost. The government
buys wheat at prices higher than in the local market.' Critics complain the policies are
still not joined up, however, and say the risk is that Saudi farmers will turn to even
thirstier cash crops. Saudi Minister of Water and Power Abdullah al-Hussayen said in May
the nation's demand for water is rising by more than 7 percent each year and that more
than 500 billion riyals ($133 billion) of investment in the water and power sector will be
required over the next decade.Consultancy Booz and Company estimates Saudi water use is
around 950 cubic metres per capita each year, compared with a world average of 500 cubic
metres. Agriculture is the single biggest user, absorbing 85-90 percent of the kingdom's
supplies, according to Saudi's deputy minister of agriculture for research and
development. Of that, almost 80-85 percent came from underground aquifers. With average
annual rainfall around 100 mm (4 inches), Saudi's ancient underground aquifers are its
lifeblood. But just as peak oil theorists believe the world's conventional oil supplies
are at or near their peak, proponents of the peak water view have said the resource has
been irreversibly drained. Booz and Company has said some of the region's aquifers -- also
referred to as 'fossil water' as they contain rain that fell thousands of years ago --
have become too salty to drink. Injecting water into
oilfields has also had an impact, although sea water is now generally used to maintain
reservoir pressure. The alternative to desalination -- the energy-intensive process of
converting salt water to fresh water -- robs Saudi Arabia of its other precious resource,
oil, by eating up both fuel and fuel revenues....By burning up energy, desalination
reduces the amount of crude available for lucrative export markets. Takekoh estimated
energy represented between 45 and 55 percent of unit production costs. The International
Energy Agency and analysts at HSBC bank estimated Saudi Arabia's rate of direct crude
burning more than doubled from 2008 to 2010 because of a rapid rise in power demand and a
shortage of natural gas. How much of that went to
desalination is not known but experts believe it is significant. Industry officials and
experts say the fact that Saudi Arabia is adjusting its agriculture policies shows it is
aware of the challenges but like the rest of the world, it needs to move fast." Saudi Arabia's water needs eating into oil wealth Reuters, 7 September 2011 |
"It's the melting of the Arctic
ice, as the climate warms, that makes it possible and you can understand why
they're all piling in. In July 2008, the US Geological Survey released the first ever
publicly available estimate of the oil locked in the earth north of the Arctic Circle. It
was 90 billion barrels, representing an estimated 13 per cent of the world's undiscovered
oil resources. If you're an oil company, or an oil-hungry economy, that's more than enough
to make your mouth water. But wait. Less than a year later, the geologists involved in the
programme, known as Cara, the Circum-Arctic Resource Appraisal, had radically revised
their estimate upwards. Now in June 2009 they said the Arctic might
in fact hold as much as 160 billion barrels, which would amount to more than 35 years of
US oil imports, or five years of total global oil consumption, and be worth, at current
prices, more than 18 trillion dollars. Forget
mouthwatering. Think drooling. In the historic opening-up to exploitation of the frozen
north, hydrocarbons are the greatest prize (there is likely to be even more natural gas
than there is oil.) No matter that the polar regions are the most inhospitable parts of
the whole globe. And no matter, either, that the Arctic constitutes the world's most
untouched ecosystem. The oil industry's motto has always been 'Can Do', and in the Arctic,
it's already doing. Cairn Energy, an Edinburgh oil exploration company founded by the
former Scotland rugby player Sir Bill Gammell, was the first in: it is now in the process
of drilling four test wells in Baffin Bay, off the west coast of Greenland (it began last
year with three wells, none of which struck oil). Next year Cairn will be followed into
the high north by Shell: the Anglo-Dutch giant has already spent more than $2bn (£1.24bn)
on seabed leases and hopes to start a massive programme of oil exploration in July 2012,
with up to ten wells in the Beaufort and Chukchi seas off the north coast of Alaska, a
region that, according to US Geological Survey estimates, holds 25bn barrels of oil. Shell
will be followed in turn by the biggest of all the oil "supermajors", and the
world's largest company ExxonMobil." |
"Nearly seven miles below the Gulf of Mexico, oil company BP has
tapped into a vast pool of crude after digging the deepest oil well in the world. The
Tiber Prospect is expected to rank among the largest petroleum discoveries in the United
States, potentially producing half as much crude in a day as Alaska's famous North Slope
oil field. The company's chief of exploration on Wednesday estimated that the Tiber
deposit holds between 4 billion and 6 billion barrels of oil equivalent, which includes
natural gas. That would be enough to satisfy U.S.
demand for crude for nearly one year. But BP does not yet know how much it can extract.... The Tiber well is about 250 miles southeast of Houston in U.S.
waters. At 35,055 feet, it is as deep as Mount Everest is tall, not including more than
4,000 feet of water above it. Drilling at those depths shows how far major oil producers
will go to find new supplies as global reserves dwindle, and how technology has advanced,
allowing them to reach once-unimaginable depths. Deep-water operations are considered to
be the last frontier for pristine oil deposits, and the entire petroleum industry is
sweeping the ocean floor in search of more crude. BP needs to invest years of work and
millions of dollars before it draws the first drop of oil from Tiber. Such long waits are
not uncommon. Three years after announcing a discovery at a site in the Gulf called
Kaskida, BP has yet to begin producing oil there.... 'Early indications are that it's a
significant positive discovery,' said Matt Snyder, lead analyst with Wood MacKinzie's Gulf
of Mexico research team. Exploration companies recently have been pushing drilling
operations farther from shore because of technological improvements that allow them to
handle extreme depths and pressure, Snyder said. It's an expensive process. A production platform costs more than $1 billion to build.
Drilling a deep-water well can add another $100 million, and if crude is located, it could
cost another $50 million to bring the oil to the surface. 'And when they finally get down
there, it's very hot,' said Leta Smith, a director with Cambridge Energy Research
Associates' Global Oil Supply Group. 'It could be upwards of 250 degrees Fahrenheit. The
pressures can be the most challenging aspect of it. These rocks are over-pressured, which
means you need to have a lot of special equipment.' For an ambitious project like Tiber to
pay off, experts say crude must cost at least $70 to $75 per barrel, though lower prices
have never slowed the industry. When crude prices
fell below $20 per barrel in the late 1990s, exploration and Thunder Horse never slowed.
'They're not swayed by daily price swings when it comes to planning deep-water
exploration,' Priest said." |
"The starting pistol has been
fired on bids by Britain and other western powers to secure a slice of the oil
prize in Libya when France said it was 'fair and
logical' for its companies to benefit. Alain Juppé, the French foreign minister, planted
his flag in the sand as the Guardian was told that BP was already holding private talks
with members of Libya's interim government. Libya is
a vital energy producer, and BP had previously committed itself to spending more than $1bn
on exploration plans under Muammar Gaddafi's government. Shell was also becoming active
before the civil war broke out, as was Total of France, but the conflict over the past few
months has brought the country's existing oil production of 1.6m barrels a day 2%
of the world's total to a halt. Rebel leaders had already made clear that countries
active in supporting their insurrection notably Britain and France should
expect to be treated favourably once the dust of war had settled. But they were anxious to
shut down any suggestion that firm promises had already been made to carve up the
country's only real wealth-providing industry with foreign powers or companies. The new
Tripoli government has denied the existence of a reported secret deal by which French
companies would control more than a third of Libya's oil production in return for Paris's
support for the revolution. The French foreign minister said he was also unaware of the
letter referring to the reported deal, which was dated 3 April and published on Thursday
in the French daily newspaper Libération. It purported to show an undertaking by the
National Transitional Council (NTC) to reserve '35% of total crude oil in exchange for the
total and permanent support for our council'. The document was addressed to the Qatari
government, which Libération described as acting as an intermediary between Libya and
France, and says the NTC authorised "brother Mahmoud" to sign the deal with
France a reference to Mahmoud Shammam, the interim government's information
minister, according to Libération." |
"Last month Wards Auto published
a story pointing out that the world's motor vehicle count was now over 1 billion. As could
be expected, registered vehicles in China grew by 27.5 percent to 78 million last year.
Don't worry; the U.S. is still well ahead in the who-has-the-most-cars race with 240
million registered vehicles, but I am afraid that the Japanese have fallen into second
place. The thought occurred, that if we squeezed a
bit, all seven billion of us currently inhabiting the earth with a little organization
might be able to climb aboard a car, truck or bus and go for a simultaneous ride - just
before the fossil fuel age comes to an end. I was curious as to whether Wards could draw
any profound conclusions from this milestone, but other than mentioning that it took 24
years to go from 500 million to a billion vehicles and that the global vehicle fleet grew
by 35 million last year, there was little of note. Those 35 million new gas tanks that hit
the road last year should give peak oil doubters some insight into why it will become
increasingly difficult to keep up with new demand for oil. This milestone, however, is a
good opportunity to ponder just where transportation is going in the next 25 years and
beyond. There are of course many unknowns to this question, but trends are already in
place. The most important development affecting the automobile over the next quarter
century will be the amount of economic growth that can take place in an era of shrinking
natural resources - minerals, food, water, good climatic conditions. While some corners of
the globe should be able to grow for a while, these situations are likely to have very
short half-lives. For most of mankind, the next 25 years and beyond will be an era of
contracting economies and smaller pies. In the United States, we have reached the stage
where there is a motor vehicle for every 1.3 people and at least one for every licensed
driver. This situation is unlikely to obtain in an era of little or no economic growth,
limited employment opportunities and undreamed of energy costs. It is highly unlikely that
there will be anything approaching 240 million registered vehicles in the U.S. 25 years
from now. From the vantage point of 2011, it seems probable that many will not be able to
afford to own and operate personal motor vehicles of the size and types we have today. The
configuration and energy consumption of vehicles are likely to undergo more changes in the
next 25 years than they have in the last 100. After all, the car and truck of 1910 was not
all that much different than what we have today. Given what we now think of as high gas
prices, vehicle manufacturers are falling all over themselves in efforts to produce much
more fuel efficient vehicles. In the U.S. we are now facing standards requiring that cars
achieve an average of 54.5 MPG 15 years from now. First will come all sorts of weight
reductions, such as eliminating spare tires, and adding more plastic and aluminum parts.
Engines will become more efficient and car bodies will become more aerodynamic. All this
will be good for another five or maybe 10 miles per gallon, but to get to savings
envisioned in the new regulations, we are going to see a widespread change to more hybrid
or all electric vehicles. The most efficient of these vehicles, such as the Toyota Prius,
are already meeting the standards envisioned for 2025. Although these changes will be
costly, it does not take much arithmetic to conclude that if energy costs are three or
four times higher than they are today then mileage will become the key factor by which
motor vehicles are judged. Detractors of these new mileage standards are usually people
who have little grasp, or prefer not to think about where real energy costs are going to
be 15 years from now. They point out the advanced materials required to build a low-weigh,
high mileage, vehicles will be so great that it will push cars beyond what many, if not
most, can afford. There is probably a lot of truth in this if one thinks of cars only in
the manner that most of us do - hulking things with 4,6, or more seats that are in most
cases rarely used. The message here is that an all-purpose motor vehicle that can move
6-10 people 300 miles in exquisite comfort in any weather is what we will no longer be
able to afford. Specialized motor vehicles ranging from electric bicycles and tricycles
through one or two passenger cars can be manufactured and operated for a tiny fraction of
the average car on the road today. The folks over at Volkswagen say they are about to
announce a single seat electric car that will be powered only by renewable energy. They have already demonstrated a two passenger car capable of 260
miles per gallon. In short the form factor for cars and trucks has got to change to
something more efficient." |
"OPEC oil output is expected to
rise in August to its highest in almost three years due to higher Nigerian exports and
smaller increases from Saudi Arabia and other Gulf producers, a Reuters survey found on
Tuesday. Supply from all 12 members of the
Organisation of the Petroleum Exporting Countries is expected to average 30.15 million
barrels per day (bpd) this month, up from 30.07 million bpd in July, the survey of sources
at oil companies, OPEC officials and analysts found. The survey indicates no sign, yet,
that Saudi Arabia and other Gulf countries are cutting back on the extra supplies they
provided to help cover the loss of Libyan output. August's total is expected to be OPEC's
highest since October 2008 based on Reuters surveys." |
"Not since the grim period after
World War II has Germany had significant blackouts, but it is now bracing for that
possibility after shutting down half its nuclear reactors practically overnight. Nuclear
plants have long generated nearly a quarter of Germanys electricity. But after the
tsunami and earthquake that sent radiation spewing from Fukushima, half a world away, the
government disconnected the 8 oldest of Germanys 17 reactors including the
two in this drab factory town within days. Three months later, with a new plan to
power the country without nuclear
energy and a growing reliance on renewable energy, Parliament voted to close them
permanently. There are plans to retire the remaining
nine reactors by 2022. As a result, electricity producers are scrambling to ensure an
adequate supply. Customers and companies are nervous about whether their lights and
assembly lines will stay up and running this winter. Economists and politicians argue over
how much prices will rise. 'Its easy to say, Lets just go for
renewables, and Im quite sure we can someday do without nuclear, but this is
too abrupt,' said Joachim Knebel, chief scientist at Germanys prestigious Karlsruhe Institute of Technology. He characterized
the governments shutdown decision as 'emotional' and pointed out that on most days,
Germany has survived this experiment only by importing electricity from neighboring France
and the Czech Republic, which generate much of their power with nuclear reactors." |
"An explosion of designs for
harvesting wave energy could make the process competitive at last and they're
heading out to the ocean for testing Wringing electricity from the sea is no small task.
But as firms start to test their wave-energy harvesters in the open ocean that could be
about to change. Heaving water holds 40 times more
energy than air moving at the same speed, and sea states change more slowly than breezes,
making it easier for utilities to predict the availability of energy. Yet the tools needed
to make use of the sea's energy are gargantuan.... Last month, Aquamarine Power finished
the construction of its second full-scale wave power device, the Oyster 800. This consists
of a hinged flap that sticks out of the water and is pushed shut with each passing wave.
When the flap moves, it drives hydraulic pistons that deliver high-pressure water via a
pipeline to an onshore turbine. With an output of 800 kilowatts, the device is built to be
2.5 times as powerful as its predecessor (see
'The ocean is your oyster'). 'If you can get that sort of level of performance
improvement then the economics suddenly start to look a lot more favourable,' says Stephen
Wyatt, head of technology acceleration at The Carbon Trust, a UK-government-funded
organisation charged with catalysing a low-carbon economy. A study published by The Carbon Trust in July estimated the cost of
energy harvested from waves at 43 pence per kilowatt-hour, or almost three times the cost
of offshore wind. To become cost competitive with other sources of renewable energy,
companies will have to find ways to squeeze more power out of their devices, says
Wyatt." |
"China
has 'vastly increased' the risk of a nuclear accident by opting for cheap technology that
will be 100 years old by the time dozens of its reactors reach the end of their lifespans, according to diplomatic cables from the US embassy in Beijing. The
warning comes weeks after the government in Beijing resumed its ambitious nuclear
expansion programme, that was temporarily halted for safety inspections in the wake of the
meltdown of three reactors in Fukushima, Japan. Cables released this week by WikiLeaks highlight the secrecy of
the bidding process for power plant contracts, the influence of government lobbying, and
potential weaknesses in the management and regulatory oversight of China's fast-expanding
nuclear sector." |
"Among the energy targets in
China's 12th Five Year Plan, released this year, is a scheme to significantly boost
production of coalbed methane (CBM) which is found not in pockets, like natural gas, but
actually absorbed into the coal at a molecular level. Fortune Oil, a China-focused oil and gas explorer listed in London, is
among a small clutch of foreign companies hoping to profit from a coming expansion in CBM
production, which is being backed at central government level. Although final targets have
yet to be publicly confirmed, industry analysts say China aims to increase CBM production
tenfold to 10bn cubic metres a year by 2015, a target that some describe as 'very
aggressive'....Michael Jones, Fortune's technology and development director who quit oil
giant BP after 24 years to join a far smaller, but much nimbler, outfit, says the size of
the China CBM is vast when set against the country's dizzying demand. 'In China only about
3.7pc of the energy mix is currently provided by gas, but its total consumption is already
110bn cubic metres. To put that into perspective, the UK gets 37pc of its energy from gas,
and the European average is 25pc,' he says, looking out over a flaring test well. 'The
Chinese target is to have 10pc of its energy provided by gas by 2020, which would equate
to 200bn cubic metres, and the word in the industry is that the government is pushing to
hit that target even earlier now. The potential in those numbers is obvious.'" |
"Beijing used to be famous for the millions of bicycles thronging its
streets. But it is the success of the motor car there and in other Chinese mega-cities
that has now tipped the number of cars in the world over the 1bn mark. According to a
report by the trade journal Ward's, 35m new cars
and lorries were sold worldwide last year the second-biggest increase ever
recorded. That is 95,500 extra vehicles being added to the global traffic jam every day. Almost
half of the new growth is in China, which recently overtook the US as the world's
biggest car market thanks to the sales of 13.8m new passenger vehicles. Despite the surge in sales, car ownership in China
is still only half the global average. But hopes that the country will also become a
pioneer in the shift towards "clean car" technology have suffered a setback as
the Chinese show little sign of interest in electric and hybrid vehicles despite ambitious
government plans. Last year, Toyota managed to sell only one Prius the world's most
commercially successful hybrid car in the fastest-growing market. Sports utility
vehicle sales, by contrast, are surging." |
"When Brazil discovered huge offshore crude
reserves four years ago, state oil company Petrobras (PETR4.SA)
sketched out plans to become a regional fuel exporter. That plan has since been turned
upside down. Rapid domestic economic growth and rising fossil fuels use has turned it into
a recurrent fuels importer, with occasional gasoline purchases in 2010 evolving into
regular imports that may not cease until the end of the decade. This leaves Brazil following the path of other emerging markets such as China, which upended the oil products
markets ten years ago with explosive demand, and the Middle East, where rising incomes
have spurred demand growth. With few signs that Brazil in the short term will be able to
boost supply of sugar cane ethanol, which supplies almost half the fuel for its cars, the
country is shaping up to be a demand center that energy markets will watch more closely. 'In
2006 and 2007 the focus of our discussion was adding value to Brazilian petroleum and
exporting products. We were going to have a surplus of products. But in 2010 the world
changed,' said Paulo Roberto Costa, Petrobras refining chief. 'The rule was that fuel
demand grew slower than GDP, but this changed,' he said, adding Petrobras will likely
maintain its dependence on foreign fuel markets. Petrobras says gasoline imports will
reach 3.2 million barrels by the end of August, an amount almost equal to the total
imported in 2010. It is likely to rise by the end of the year on the seasonal demand
increase." |
"China's largest oil and gas
producer has shut down six major projects in war-torn Libya, Syria and other restive
nations because of political instability, state media said Tuesday. The decision came as Libyan leader Moamer Kadhafi's regime appeared close
to collapse after rebels took over the capital Tripoli, and as other countries in the
Middle East and Africa experienced bouts of unrest. The projects in Libya, Niger, Syria
and Algeria were run by Great Wall Drilling Co (GWDC), a subsidiary of the state-owned
giant China National Petroleum Corp (CNPC), the Beijing Times newspaper reported....the
state-run Beijing Times said experts had warned Chinese companies to be cautious about
investing in politically turbulent areas, citing the risks involved." |
"Oil companies active in Libya
before the war began gearing up for the challenge of resuming operations in the country on
Monday as rebel forces moved closer to taking over Tripoli. While significant uncertainty
remained about when conditions would be stable enough to return, at least one company said
it already has made contact with Libyan rebels to help gauge the condition of its
operations. A rebel victory could pave the way for restoring the North African nation's
production, which hit 1.8 million barrels of day of oil and petroleum products in 2010,
according to U.S. figures. But there remain major
hurdles, including potential damage to infrastructure and the risk of persistent unrest.
Houston-based Marathon Oil
Corp. has had 'preliminary discussions' with rebels over the condition of facilities where
it has interests, with a goal of making a plan to restore production, a company spokesman
said. A BP PLC
spokesman said Monday the company was committed to returning to Libya 'as soon as
conditions allow,' though it had no time frame. Royal Dutch
Shell PLC, Total SA
and Repsol YPF
SA, also previously active in Libya, declined to say when they might begin production.
With the largest proven oil reserves in Africa and its major role in export markets,
Libya's importance to the oil industry and its potential future production present a big
lure to international oil companies that have increasingly grown accustomed to operating
in politically perilous conditions around the world. The rebel council said in July that
it would honor oil contracts made y Col. Gadhafi's regime, at least during the country's
transition to democracy. But it is still unclear how a new regime in Libya will develop,
and that could influence how oil firms view the opportunity in Libya and how soon they
would be able to restore prior production levels or try to boost output further. Libya has
'upside potential,' said Lawrence Eagles, an analyst at J.P. Morgan Chase & Co. But he
added, 'We are still talking about a situation where no one can say with any clarity what'
the governance will be. 'We essentially have a blank sheet in front of us.'" |
"With the regime of Moammar Gadhafi on the verge of collapse,
international oil companies began preparing Monday for what they hope will be a quick
return to production in Libya, a move thats expected to reduce the global price of
crude and help drive down U.S. gasoline prices. Companies, most
of which withdrew their expatriate staffs when fighting began in February, said that Libya's oil installations appeared largely undamaged from
months of warfare and that once peace was restored, production and exports should resume
quickly. 'Our people are ready to go back to work when the conflict is resolved. From that
point forward, they can return to production in four weeks or less,' said Carmen Herrero,
a spokeswoman in Madrid for the Spanish oil company Repsol. Before the war, Repsols
joint venture with the National Oil Corp. of Libya was producing about 35,000 barrels of
oil daily at the El Shararah oil field in the central Libyan desert near Ubari. The last
word Repsol officials had from their Libyan staff, in late July, was that the fighting
hadn't affected the installations.... Before
the war, Libya provided about 1.1 million to 1.6 million barrels per day, roughly about 2
percent of the worlds daily oil demand. But while that production made Libya only the world's 17th largest
oil producer, it has the largest proven reserves in Africa and it played an outsized role
in supplying Western Europe, where refineries easily process its lighter grade of crude.
Saudi Arabia stepped into produce more oil, but Saudi oil is more difficult for European
refineries to process. 'There is a great incentive
for the Europeans to get this oil back on line quickly because theyve been hurt,'
said John Kilduff, a veteran oil expert for Again Capital, an energy-trading hedge fund in
New York. The conflict in Libya sparked a spike in energy prices in the spring, as traders
fretted that the civil war could spread to other oil-producing nations. Economists now
think that price spike significantly slowed U.S. economic activity in the first half of
the year. Kilduff said American consumers should see the impact of the return of Libyan
oil in lower gasoline prices, even if the oil wasn't directly distributed in the United
States. 'There should be a decent decline as a result of this oil coming back on line,' he
said. Once you start to see the first
exports, you will see further
(downward) pressure on prices rapidly.' Gadhafi and the opposition appear to have spared
most of the nations oil and natural gas infrastructure, viewing oil as a cash cow
that must be preserved." |
"Power transmission companies
want to be able to charge households an extra £13 per year on their energy bills by 2021
to cover the cost of connecting wind farms and other new generation to the national
grid.Scottish Power, Scottish & Southern and
National Grid collectively want to spend £21bn over the next eight years on improving
their systems, mostly to prepare for new wind farms coming on to the grid. Transmission
currently accounts for about £17 of the average £424 per year electricity bill. National
Grid estimates that its £14bn of major projects will be cost consumers another £10 each
by 2021, increasing by about £1 every year. Scottish and Southern Energy said £4bn of
investment will add £2.37 by that time. But Scottish Power believes its £3bn investment
ought only to cost the average household an extra £1 per year by 2021, increasing by just
13p per year. Costs are rising because the companies are having to build more electricity
substations and overhead power lines, especially in Scotland, to accommodate wind
farms." |
"Is the west falling out of love with the car? For environmentalists
it seems an impossible dream, but it is happening. While baby boomers and those with young
families may stick with four wheels, a combination of our ageing societies and a new
zeitgeist among the young seems to be breaking our 20th-century car addiction. Somewhere
along the road, we reached 'peak car' and are now cruising down the other side. Peak car
takes several forms. Sales of new cars have almost halved in the US, down from nearly 11
million in 1985 to about 5.5 million in 2009. We shouldn't take much notice of that,
though. Cars last longer these days, and sales go up and down with the economy. But we
have hit peak car ownership, too. And, more to the point, peak per-capita travel. The
phenomenon was first recognised in The Road... Less Traveled, a 2008 report by the Brookings
Institution in Washington DC, but had been going on largely unnoticed for years. Japan
peaked in the 1990s. They talk there of 'demotorisation'. The
west had its tipping point in 2004. That year the US, UK, Germany, France, Australia and
Sweden all saw the start of a decline in the number of kilometres the average person
travelled in a car that continues today. In Australia, car travel peaked in every city in
2004 and has been falling since (World Transport Policy and Practice, vol 17, p 31). It is a similar
picture in the UK, where per-capita car travel is down 5 per cent since 2004. What could
be driving us off the road? Fuel costs and rising insurance premiums may be a factor. And urban gridlock, combined with an absence of parking places and
congestion charging, makes the car a dumb way to move around in cities where there are
public transport alternatives. In the US, however, the decline of the car is most dramatic
not in the gridlocked city centres but in the car-dependent suburbs. In sprawling cities
like Atlanta and Houston where the automobile is king, driving is down by more than 10 per
cent. Of course the end of the love affair with the car may just be a sign of the economic
times: the much-discussed 'hollowing out' of the middle classes, with jobs available at
the top and bottom of society, but less so for the white-collar workers. Still, a study by
Lee Schipper of the Global Metropolitan Studies unit at the University of California,
Berkeley, found that while rising wealth correlates with more travel up to a per-capita
income of $30,000, beyond that the link breaks down (Transport
Reviews, vol 31, p 357). Demographics is a more likely explanation. It is surely no
accident that peak car happened first in Japan, which has the world's oldest population.
Pensioners do not drive to work, and many don't drive at all." |
"If history is any guide,
another oil-induced recession may be just around the corner, at least for the United
States and some of the other developed economies. Every time that the cost of oil relative
to global economic output has hit current levels - and that's even after sharp falls in
spot prices this month - it has heralded a slump. And while economists and analysts say a
serious slowdown can still be avoided, many add that unless oil and energy prices fall
much further and -- most important -- stay down, the world economy could be in serious
trouble. 'We are in a danger area for the world
economy,' said Christophe Barret, global oil analyst at Credit Agricole. The warning
signal flashing is what economists call the "oil expense indicator': the share of oil expenses as a proportion of worldwide gross
domestic product (GDP) (oil prices times oil consumption divided by world GDP). Since
1965, this has averaged roughly 3 percent of GDP, and it has only exceeded 4.5 percent
during three periods: in 1974, between 1979 and 1985 and in 2008. Each period has seen
severe global recessions. In 1973/74, during the first global 'oil shock,' oil prices
rocketed after an Arab oil embargo in response to an Arab-Israeli war disrupted oil flows
and triggered panic buying. In 1979, revolution in Iran knocked out much of the country's
oil output and was followed by a long Iran-Iraq war, bringing a second 'oil shock.' In
2008, propelled by a housing bubble, speculative buying of new debt instruments and a
commodities boom, oil prices exceeded $100 per barrel for the first time and soared to a
record high above $147, helping trigger financial crisis and the worst slump since World
War II. This time, oil prices have soared following
the loss of around 1.6 million barrels per day (bpd) of Libyan oil, uprisings across the
Middle East and North Africa and rapid economic growth in China, India and other
developing economies. Using the oil expense
indicator, economists say Brent crude, the international oil benchmark, would need to be
in the low $90s per barrel to be under the 4.5 percent danger mark. In fact, Brent hit a
two-and-a-half-year high of more than $127 per barrel in April and, with the exception of
an intra-day dip on Tuesday, has been over $100 for six months. Even after a fall of more than $20 from its early-August high on worries
over a slowdown in the developed economies, Brent is still not far off $110 per barrel. Oil is a key global cost because it is crucial to every part of
the economy, powering manufacturing and the production of food and other commodities,
fuelling transport as well as being a building block for industries such as plastics and
electronics. If it is too high for too long, the results are dramatic. 'The last two times
that energy as a share of global GDP neared ... the current level, the world economy
experienced severe crises: the double dip recession of the 1980s and the Great Recession
of 2008,' Merrill Lynch analysts led by Francisco Blanch said in a note to clients. Economists reinforce their warnings over the possibility of an impending
slowdown with data showing that oil demand has begun to shrink in some countries in
response to high prices. Oil data lags, but the latest US figures, for May, show a drop of
4.7 percent year-on-year in US gasoline demand. Deutsche Bank analyst Adam Sieminski says
he is concerned by a trend toward lower US oil demand evident since last summer: 'The last time US oil demand was falling was in 2007 and early
2008,' Sieminski said in a note written with analyst Michael Lewis. 'This was a leading
indicator of the economic troubles that would hit the US in the middle of 2008.....most economists argue there is a level at which fuel input costs become
incompatible with continuing economic growth. James
Zhang, an analyst at Standard Bank, says the danger level comes with the oil expense
indicator at around 5 percent: '$100 per barrel represents about 5 percent for the 'oil
expense indicator', which we think would be a threshold on an annual average level to
potentially kill off global growth,' he said....Barret said record high oil and commodity
prices were putting unsustainable pressure on household expenditure, and while he like
other economists is reluctant to predict recession, he thinks the warnings should be
heeded: 'There is still a chance that oil prices will go down very significantly, and that
could be a strong support to the economy. But if prices stay near $110 per barrel until
the end of the year, we will have a major problem by the start of 2012,' he said. 'We
either get sharply lower prices or a recession that will bring down prices. Either way,
oil prices must come down.'" |
"US farmers are growing the
first corn plants genetically modified for the specific purpose of putting more ethanol in
gas tanks rather than producing more food. Aid organisations warn the new GM corn could worsen a global food
crisis exposed by the famine in Somalia by
diverting more corn into energy production.... The corn,
developed by a branch of the Swiss pesticide firm Syngenta, contains an added gene for an
enzyme (amylase) that speeds the breakdown of starches into ethanol. Ethanol plants
normally have to add the enzyme to corn when making ethanol. The Enogen-branded corn is
being grown for the first time commercially on about 5,000 acres on the edge of America's
corn belt in Kansas, following its approval by the US Department of Agriculture last
February. In its promotional material Syngenta says it will allow farmers to produce more
ethanol from the corn while using less energy and water. Meanwhile, campaigners say the
corn will heap pressure on global food supplies and contribute to environmental
degradation. They argue Enogen will lead to an increase in the amount of food crops going
to fuel, leaving less for human consumption and leading to food price rises." |
"The IMF forecast Kuwaits oil production at around 2.41 million
barrels per day in 2011, below the peak output of
2.68 million bpd in 2008. But its figures showed
crude prices in 2011 would exceed those in 2008 as it forecast them at $104.1." |
"Oil fell in New York, heading for a third weekly decline, on concern that
volatility in financial markets will worsen an economic slowdown. Futures slid as much as 1.7 percent today, ending a two-day climb.
Crude has traded from $75.71 a barrel, a 10-month low, to as high as $85.97 in intraday
trading this week. Reports today may show
manufacturing stalled in the euro region and Greeces economy shrank. Prices surged
yesterday after applications for U.S. unemployment benefits unexpectedly slid to the
lowest in four months. 'The biggest downside risk is that all this volatility cripples
confidence,' said Ben
Westmore, a minerals and energy economist at National Australia Bank Ltd. in
Melbourne, who predicts oil in New York will average $98 a barrel in the third quarter.
'There are continued concerns around Europe and sovereign debt and when you overlay that on weaker than
expected macro data, it can cause people to fear for the worst.' |
| "OPEC, source of more than a third of the world's oil, cut its
forecast for global oil demand growth this year as a worsening economic outlook curbs
consumption in developed economies. The revision from the Organisation of the Petroleum
Exporting Countries in a report on Tuesday follows reductions by other forecasters, such
as investment bank Barclays Capital, as slowing growth hits consumers and
businesses....World oil demand will increase by 1.21 million barrels per day (bpd) in
2011, OPEC said, 150,000 bpd less than expected last month. Growth next year was lowered
only marginally, by 20,000 bpd to 1.30 million bpd....According to secondary sources cited
by the OPEC report, OPEC supply rose by 405,000 bpd in July to 30.07 million bpd. That is
the same total as a Reuters estimate published on July 28. There is no sign, yet, that
Saudi Arabia is rethinking its supply policy. The kingdom has left supply to Asian and
European customers unchanged in September despite the fall in prices, industry sources
said on Tuesday. An OPEC delegate told Reuters earlier this week that while the economic
picture and slide in oil prices was a worry, there was no plan for the group to hold an
emergency meeting. Despite the reduced demand
forecast and higher production, OPEC's economists still forecast a gap between supply and
demand in the second half of the year. Tuesday's report implied the supply gap had
narrowed to 810,000 bpd in the second half from 1.25 million bpd in July. It expects
demand for OPEC crude to rise next year to 30.2 million bpd - 100,000 bpd less than
expected last month - from 30 million bpd in 2011. Harry Tchilinguirian, head of commodity
markets strategy at BNP Paribas, said it was significant OPEC was still pumping less than
its own economists forecast the world will need, and demand outside the OECD remained
largely on track. 'OPEC has reduced its demand
forecasts but the estimate of the 'call' on its crude oil in the third quarter still
remains above the cartel's current production,' he said." OPEC cuts oil demand amid economic gloom Reuters, 9 August 2011 |
"Failing to locate any oil in the first of four wells to be drilled
off Greenland this year saw shares in Cairn Energy fall by 5pc yesterday....Cairn has
placed all its hopes on finding oil off Greenland, after selling most of its Indian assets
to Vedanta for $9bn (£5.5bn). It will return some money to shareholders and use the rest
to fund its drilling programme. The company has found
oil in previous Greenland wells but not enough to make them worth developing. In this well it has only found 'oil-prone rocks'." |
"A sharp slowdown in economic
growth, particularly in the United States, is hitting oil consumers and companies, forcing
analysts to slash estimates for global oil demand. In
a report to be published in the next few days, Barclays Capital has cut its estimates of
world oil demand growth for this year and 2012 to reflect the dramatic economic slowdown. The investment bank, which had been one of the most bullish
forecasters of oil prices this year, now sees global oil demand increasing by 1.1 million
barrels per day (bpd) this year to 88.68 million bpd. Barclays Capital previously forecast
a rise in oil demand this year of 1.56 million bpd and two months ago expected the
increase to be as much as 1.7 million. The sharp
reduction would take it from one of the most bullish on growth to one of the most bearish,
according to a Reuters poll two months ago." |
"A cap on Chinese energy
consumption is expected to be the highlight of a comprehensive low-carbon plan to be
issued later this year, but it might not be as tough
as expected, experts say. Capping energy use will form the cornerstone of China's efforts
to curb surging greenhouse gas emissions, the world's highest and making up a quarter of
the global total. China
is using the fight against climate change to make its economy more efficient and kick-start emissions trading schemes over the next five years." |
"Political disarray over Japan's
energy policy will make it tough for Tokyo to avert a total nuclear shutdown next summer
and presents a long-term threat to the world's third-largest economy. The March 11 earthquake and tsunami triggered a meltdown at the Fukushima
power plant that shattered the public's confidence in the safety of the country's nuclear
fleet. Scandals over the government's cozy relationship with the power industry have
exacerbated the concern. Japan
sacked three officials over the scandals on Thursday, but it was unclear if this was
enough to help repair public confidence in Tokyo's ability to govern the industry. The
disasters look to have dealt a definitive blow to the future of nuclear energy in Japan.
Prime Minister Naoto Kan has called for gradually weaning Japan off its dependence on
nuclear power, a U-turn on the 2010 energy policy that sought to boost nuclear capacity to
supply 50 percent of Japan's energy needs by 2030. In that plan, nuclear was seen as a
cheaper and cleaner alternative to fossil fuels." |
| "Lost in the furor over the debt crisis last week came the news that
the U.S. economy expanded at an annual rate of only 0.4 percent in the first quarter and
1.3 percent in the second. As these numbers were well below what economists were
expecting, the revelation that the US was not coming out of the 'great recession' was
quite a shock for those who have not been paying attention.... Precedent suggests that
when the next revision to the GDP numbers is issued in the summer of 2012, it will show
that the 1.3 annual growth rate being claimed for the second quarter of 2011 is likely to
be overstated as badly as previous preliminary estimates.
What is most interesting in the commentary surrounding the precipitous drop in GDP growth
is that a few in the main stream media are beginning to look at high gasoline prices as
one of the primary factors restraining economic growth. The U.S. burns about 19 million barrels or 800 million gallons of oil in
the form of gasoline, diesel, jet fuel, propane, fuel oil, etc. each day. About half of
this is in the form of gasoline that goes into our 250 million cars and light trucks. Twenty years ago we were paying about $1.20 a gallon for our
gasoline and somewhat less for other grades of fuel. Ten years ago this price of gasoline
still averaged only $1.44 a gallon. Then things started happening. In 2004 gasoline prices
climbed to an average of $1.98. Four years later the average for 2008 was $3.31 with a
brief high in June and July well above $4 a gallon followed by a collapse that took the
average price of a gallon all the way down to $1.83 by January of 2009..... The collapse
in prices was short lived for by the end of 2009 we were back up to $2.67 with the average
for the year coming in at $2.40 - nearly a dollar a gallon less than the average for 2008.
If we burn 800 million gallons of oil a day, then a dollar increase or decrease in the
price amounts to about $800 million more or less money going to fill our gas tanks.
Multiply this by 365 and you can see that about $300 billion per year in consumer spending
power is either taken away by the gas pump or can be used for other expenditures. Now consumption of fuel does drop as prices go up. U.S. oil consumption
actually peaked back in August of 2005 at 671 million barrels for the month. When gasoline
was at an all-time high in the summer of 2008, and selling for nearly double the 2005
price, and the economy was contracting rapidly, consumption fell to 597 million barrels
during August -- the peak of the driving season. This was about an 11 percent drop from
three years earlier. The important point is that
between the $1.44 a gallon gasoline of 2002 and the $4.20 a gallon gasoline of July 2008,
the cost of filling our collective fuel tanks, rose by some $2.2 billion a day. With half
of this money leaving the country to pay for oil imports, it is not difficult to figure
out why the economy has not been doing too well of late. Conversely, when gasoline fell
from $4.20 a gallon in July to $1.84 in December of 2008, $1.8 billion a day reappeared in
our collective pockets and the economy started to revive. The situation we are facing
today is similar to that of 2008, yet is different in that the price spike of 2008 was of
relatively short duration. At the end of February 2008 gasoline was averaging $3.18 and 19
weeks later in early July it was at $4.16, a dollar increase. The fall from the peak was
even more spectacular, for in 12 weeks gasoline prices had declined by one dollar and six
weeks later another dollar. This drop put money back into consumers' pockets at the rate
of $600 billion a year - nearly the same amount as the federal stimulus provided and a lot
quicker. This year's gasoline price run-up started
in early December 2010 with gasoline at $3.01 a gallon. Twenty five weeks later in early
May prices peaked the requisite dollar higher at $4.01. It is now 12 weeks since the May
2011 peak. Prices have fallen about 25 cents a gallon and at the minute do not seem to be
showing signs of falling much further. London's Brent
crude, which is now the real benchmark for world oil prices, rose from $80 a barrel last
summer to $125 in May and has been trading above $115 ever since. The massive increase in
money coming out of consumers' pockets to pay for fuels is still going on. It is sucking
the life out of our economy and yet few notice." The Peak Oil Crisis: Parsing the GDP Falls Church News-Press, 3 August 2011 |
"Libyan oil production will take
years, not months, to return to full capacity once a political solution to the conflict is
found, according to Barclays Capital. 'The
reincorporation of Libyan oil into the world market increasingly seems a distant
possibility' according to the study, which warns of a
lasting political vacuum after the potential fall of the Gaddafi regime..." |
"Most European major oil
companies posted a surge in quarterly profits last week, but their results were
overshadowed by a trend that continues to trouble Wall Street and corporate boardrooms:
Nearly every major oil company reported year-to-year oil-and-gas output declines, often in
the double-digits. Big Oil is throwing huge
resources at the problem with more open embrace of unconventional petroleum developments,
high-risk exploration in frontier areas and corporate restructuring. But even if these strategies work in some cases, there is little
doubt that anemic petroleum output signals a long-term challenge confronting the sector." |
"BP
has been accused of taking a 'stranglehold' on the Iraqi economy after the Baghdad
government agreed to pay the British firm even when oil
is not being produced by the Rumaila field, confidential documents reveal. The original
deal for operating Iraq's largest field half as big as
the entire North Sea has been rewritten so that BP will be immediately compensated
for civil disruption or government decisions to cut production. This potentially could influence the policy decisions made by Iraq in
relation to the Opec oil cartel, and is a major step away from the original terms of an
auction deal signed in the summer of 2009, critics claim." |
"President Obama announced
new automobile fuel-efficiency standards on Friday that require an average 54.5 miles
per gallon by 2025. But even if the auto industry
manages to meet the new standards, it is unlikely car buyers will see many fuel-economy
stickers with such high mileage. Instead, the average new vehicle in 2025 will probably be
closer to 43 miles per gallon, based on the typical 20-percent discount applied by federal
officials when rating a car or truck in real-world driving conditions. Thats one
example of how new corporate average fuel economy rules, known as CAFE, will require
considerable interpretation for the industry and consumers alike. Administration officials
said Friday that the new fuel rules also contained an intricate set of credits
for auto companies to achieve the new target of 54.5 miles per gallon for their fleets in
14 years. The system of credits has been devised to encourage new technology and better
penetration of current fuel-saving equipment into the market. Sales of vehicles that run
on electric batteries or fuel cells, for example, will be given more weight in the fleet
average than normal gas-powered vehicles, even those with particularly efficient
engines." |
"UK crude oil production fell
10.9% month-on-month in May to 1 million b/d, the UK's Department of Energy and Climate
Change said Thursday. The output figure was also
down 20.2% on May 2010, the data showed, due to maintenance-related outages at North Sea
crude oil fields. "This is the second consecutive month of record decreases in
production and the first time that over 20% has been lost on the corresponding period of
the previous year. As last month, the decrease stems from maintenance related work on a
number of fields," the DECC said. UK crude production has averaged 1.1 million b/d in
the first five months of the year, the lowest figure recorded since data began to be
compiled in 1995. UK oil production has fallen
steadily since reaching a peak in 1999." |
"Arkansas regulators are
expected Tuesday to order the closure of some underground storage facilities that
natural-gas drillers use to dispose of contaminated water because of concerns they are
causing earthquakes. The ban would only affect part
of the state and wouldn't stop drilling in the Fayetteville Shale gas field there. But it highlights how water issuesincluding the disposal of
waste tied to the controversial hydraulic fracturing processhave emerged as a major
challenge for the oil and gas industry across the U.S." |
"High crude prices have dented
global oil demand in the second quarter, oil majors said this week, in a trend likely to
be repeated in the second half of the year if prices stay high. Oil majors BP , Royal
Dutch Shell (RDSa.L) and ConocoPhillips all said they witnessed signs of demand rationing
in the second quarter, which saw Brent oil prices LCOc1 spiking to $127 per barrel, close
to their all-time high of $147. Many analysts and
fund managers say demand erosion will ultimately help bring oil prices down if producing
nations cannot pump more to help support fragile world economic growth.... Shell said oil
products sales volumes decreased by 8 percent compared with the same period a year ago
while, excluding the impact of divestment, sales volumes were 4 percent lower than in the
second quarter of 2010. On Tuesday, BP's head of refining and fuel marketing Iain
Conn said the firm's marketing volumes were down about 2 percent in the second quarter
year-on-year. 'This is a reaction to high prices. This is something we are going to
continue to see in Europe and the U.S.. East of the Rockies retail volumes are down about
6 percent year on year... Everywhere else were are seeing diminishment of demand,' he
said..... European oil consumption is set to fall to its lowest since 1995 this year as
high prices cut sharply into fuel use in debt-laden peripheral eurozone nations.
Efficiency gains have reduced European oil demand over the past five years. Crude price
changes do not normally have as much impact on retail demand as in the United States
because tax in Europe makes up a much larger share of total fuel costs. Some funds,
including Investec, say the risks of demand destruction in the United States are
underestimated as gasoline prices hover around a critical level of a tenth of personal
disposable income, after which demand destruction begins." |
"There are signs that peak oil
may have already arrived. The International Energy Agency (IEA) recently increased its
forecast for average global oil consumption in 2011 to 89.5 million barrels per day (bpd),
an increase of 1.2 million bpd over last year. For
2012, the IEA is expecting another increase of 1.5 million bpd for a total global oil
consumption of 91million bpd, leaving analysts such as Whipple to question how production
will be able to keep up with increasing consumption. Whipple's analysis matches IEA data
which shows world oil production levels have been relatively flat for six years. 'This is
getting very close to the figure that some observers believe is the highest the world will
ever produce,' Whipple wrote of the IEA estimate in the July 14 issue of Peak Oil Review.
He told Al Jazeera that peak oil could be reached at some point in the next month, or at
the latest, within 'a few years'." |
"The OECD's IEA now foresees
average global consumption in 2011 at 89.5 million b/d which is 1.34 million above
Washington's EIA projections and 1.32 million above OPEC's projection. For 2012, the IEA sees demand increasing to 91 million b/d while OPEC
sees demand at a more sedate 89.5 million." |
"In a section of its website responding to questions sent in by
elementary school children, Chubu Electric Power Co. informs us that nuclear power 'is the
cheapest.' The media, including the Mainichi, have often cited the information provided to
us by power companies. However, Kenichi Oshima, a professor of environmental economics and
policy at Ritsumeikan University, has done some calculations and has reached a completely
difference conclusion. Oshima says that the cost for
a kilowatt-hour of electrical power between fiscal 1970 and fiscal 2007 was 10.68 yen for
nuclear, 3.98 yen for hydroelectric, and 9.9 yen for thermal generation, with
nuclear-generated power coming out as the most expensive. These calculations were even
presented at a meeting of the government's Atomic Energy Commission last September. So how
does one explain these two different conclusions? First of all, there is a huge gap
between estimates given by power companies and figures derived from actual records....The figure '5.3 yen per kilowatt-hour of power' as the cost of nuclear
power generation is an estimate submitted in 2003 by the Federation of Electric Power
Companies of Japan (FEPC) to a subcommittee of the Committee for Natural Resources and
Energy, an advisory body to the Minister of Economy, Trade and Industry. The estimate
presupposed a power plant that began operations in the 2002 fiscal year and would run 40
years with a utilization rate of 80 percent. Construction costs were calculated based on
an actual power plant that had recently begun operations, and foreign exchange rates and
fuel prices needed to calculate the cost of importing fuel were derived from economic
indices at the time. It's a government-endorsed figure that has continued to give
nuclear-power generation the 'low cost' seal of approval. Oshima's calculations,
meanwhile, have been based on actual performance figures found in utilities' corporate
financial reports." |
"Extra safety measures and two
deadly accidents have delayed EDF's flagship French nuclear plant by another two years,
raising fears about the delivery of its first two stations in Britain. The UK is relying on EDF to build the first nuclear power stations for a
generation in Suffolk and Somerset by 2018. However, suspicions are growing that EDF is
preparing to delay Britain's new plants substantially, having said it will issue a
"revised timetable" for the UK in the autumn. It is understood that British
officials are now working on the assumption that new nuclear will not arrive in the UK
until after 2020. Costs in France have already doubled and construction is severely
delayed at EDF's flagship plant in Flamanville, which will be its first new plant in more
than 15 years." |
"Saudi oil exports are set to
fall sharply in the long term as domestic consumption claims an increasing share of the
output, Jadwa Investment said in a report. The Saudi
investment firm said the kingdom could face a serious revenue crisis within the current
decade as it cut exports to meet rising demand. Saudi Arabia is still dependent on oil
revenues to fund its entire state apparatus, welfare system and defense machinery. Efforts to achieve economic diversification have yet to produce
substantial results. Jadwa pointed out the kingdom's oil exports had declined from around
7.5 million barrels per day in 2005 to 5.8 million bpd in 2010 and could drop further by
2015. An expected high growth in domestic
consumption could prompt the government to reduce exports to around 6 million bpd in 2020
and only 4.9 million bpd in 2030, said the report." |
"Saudi Arabia, the worlds
largest oil producer and exporter, which last month pumped 9.7m barrels a day, the second
highest level in three decades, could soon become one of the top oil consumers. The
emergence of Saudi Arabia as an important consumer sets a critical new trend that could
have profound implications for oil prices over the next few years. As the kingdoms oil demand surges, the exportable surplus narrows,
tightening global oil markets..." |
"Venezuelas proven oil
reserves have surpassed Saudi Arabias for the first time, making it the most
oil-rich nation in the world, according to the Organization of Petroleum Exporting
Countries. In its 2010-2011 Annual Statistical Bulletin, OPEC said Venezuelas proven
oil reserves spiked 40 percent in 2010 to reach 297 billion barrels. Saudi Arabia, the long-time leader in the category, had 265 billion
barrels of proven reserves, according to the online report, which will be published in
November..... The new reserves are being fueled by finds in the existing fields of
Barcelona, Maracaibo and Barinas, as well as off-shore projects and in the Orinoco,
Venezuelas Ministry of Communication and Information said in a release Tuesday. But
the figures are also a matter of debate. About one-third of Venezuelas reserves are
extra heavy crude, which is difficult to extract and only economically feasible to recover
when the long-term price of oil is above about $70 a barrel, said Jorge Piñon, a research
fellow at Florida International University and the former President of Amoco Latin
America. The cash-strapped PDVSA may have trouble raising the funds to tap that oil, he
said. 'You can be sitting on the largest reserves in the world but if you do not have
capital and technology to recover them
they are worthless,' he said." |
"Demand for biofuels in the US is driving
this year's high food prices, a report has said. It
predicts that food prices are unlikely to fall back down for another two years. The report,
produced by Purdue University economists for the Farm Foundation policy organisation,
said US government support for ethanol, including subsidies, had fuelled strong demand for
corn over the last five years. A dramatic rise in
Chinese imports of soybeans was also putting pressure on prices and supply, the report
said. Since 2005, a growing number of US farmers have switched to corn and soybeans from
other crops. Farmers in other countries have also switched to corn but, the report said,
the demand kept growing. 'In 2005, we were using about 16m acres [6.4m hectares] to supply
all of the ethanol in the United States and Chinese soybean imports,'
Wallace Tyner, one of the authors said. It took 18.6m hectares (46.5m acres) last year,
just to satisfy that demand. The US department of agriculture reported earlier this month
that US ethanol refiners were for the first time consuming more corn than livestock and
poultry farmers. It took 27% of last year's corn crop to meet the demand for corn ethanol.
Only about 10% went to make ethanol in 2005, Tyner said. The Centre for Agricultural and Rural Development at Iowa
State University has estimated that 40% of the US corn crop now goes to make ethanol.
But Tyner said the cobs and husks of corn used to make ethanol would go on to be used for
animal feed. The other driver of rising food prices was China,
which has been building up its soybean reserves since the last big global food price rises
of 2008. But the report focused strongly on a US government mandate for ethanol production
and $6bn (£3.7bn) in annual subsidies for ethanol refineries." |
"Afghanistan and Central Asia are abundant with natural resources
worth billions. So far, they are largely untapped but the battle is raging for who will be
able to exploit them in the 21st century. In the 19th century, it was the Russians and the
British who wrestled for influence in Afghanistan and Central Asia in a highly-explosive
endeavor known as the Great Game. Today, Afghanistan's natural resources are estimated to
be worth billions of dollars. The resources in the neighboring Central Asian states are
thought to be worth even more - the cake is huge and as yet largely untouched. While the
US and China want an especially large slice of it, neighboring states Iran, Pakistan,
India and Russia all have their eyes on it as well. Most experts agree that a battle for
natural resources is underway, alongside the war against terrorism. Not enough has been
done to define who has access to the natural resources, says Thomas Greven, a political
scientist who teaches at Berlin's Free University. 'If
conflict arises, in the worst-case scenario, it will not be sufficient to have contracts
on exploiting natural resources. The access has to be secured via military bases, as well
as political and security cooperation,' says Greven.
The US and China have been competing for the world's natural resources for at least a
decade now. Both countries know that direct access to energy resources will determine who
can maintain their wealth. Greven points out that the
new Great Game in Central Asia will thus decide whether the 21st century ends up being
Chinese or American. ..... The Chinese government
has been conducting an offensive 'shopping spree' in Afghanistan and other Central Asian
states for some time now. To Washington's displeasure, Beijing was able to secure the
exploitation rights for the region's biggest copper mine, by shelling out three billion
dollars. Now, fully-laden trucks head from the mine in eastern Afghanistan to China on
roads built by the Americans. Officially, Beijing insists it does not have any great
ambitions in Afghanistan and the region. But many observers think China at least wants to
set the tone....Until now, China has deliberately avoided direct confrontation with the
US. The emerging superpower feels threatened by the 100,000 US soldiers in its direct
vicinity. Stetten says Beijing is also concerned about the US' plans to maintain a
presence in Afghanistan after 2014. 'Obviously China has no interest in being surrounded
by US military bases,' he says, adding however, that the situation does not look likely to
change in the immediate future. This is why he thinks China is looking more at cooperating
closely with Pakistan." |
"More than a fifth of all
households in the UK were affected by fuel poverty in 2009, government figures have shown.
Higher fuel bills meant the number of homes affected rose by one million, or 22%, to 5.5
million, the Department of Energy and Climate Change said. A household is described as
being in fuel poverty when it has to spend more than 10% of its income keeping warm. DECC predicts that the numbers for 2010 and 2011 will have increased
because of further rises in the price of energy. 'Between 2004 and 2009, energy prices
increased: domestic electricity prices increased by over 75%, while gas prices increased
by over 122% over the same period,' DECC said. 'This led to the rise in fuel poverty seen
over this period,' it added." |
"Drilling for oil and gas in
British waters fell sharply in the second quarter of this year, according to industry
figures. Exploration for new reserves was down by more than 50% when compared with April
to June of last year. It reached the lowest level in that quarter for nine years. That was despite a buoyant oil price encouraging more drilling activity
in Norwegian waters and consistent levels off the coast of the Netherlands. Industry
analysts said it was too early to blame the shock increase in oil industry taxation, which
was announced in the Budget in March, but it had added to uncertainty to investment in UK
drilling." |
"Saudi Arabia is delivering on its promise to unilaterally boost oil
production in response to OPEC's failure to agree to a collective output increase last
month, according to the International Energy Agency. The
IEA said the kingdom's oil production had increased substantially last month, up 700,000
barrels a day to 9.7 million barrels a daythe highest monthly level since February
2006. The agency, which advises industrialized nations on energy policy, said July
production might rise to as much as 10 million barrels a day." |
"U.S. ethanol refiners are
consuming more domestic corn than livestock and poultry farmers for the first time, underscoring how a government-supported biofuels industry has
contributed to surging grain demand. The U.S. Department of Agriculture estimated that in
the year to August 31 ethanol producers will have consumed 5.05 billion bushels of corn,
or more than 40% of last years harvest. Animal feed and residual demand accounted
for 5 billion bushels. |
"A Chinese buying spree for U.S.
corn is putting on display the ability of Beijing to reshape grain markets as well as the
cost of food globally. China this past week bought 540,000 metric tons of U.S. corn for
delivery after August, according to the U.S. Department of Agriculture, more than the
500,000 tons the agency forecast that nation would buy in an entire year. The news drove corn prices higher on Thursday and Friday, to settle at
about $6.75 a bushel, giving new life to the market after a three-week slump." |
"Household electricity bills will soar by 30 per cent to pay for
'green' measures being announced this week by Chris Huhne, the Energy Secretary, according
to experts. Costly new incentives to encourage energy companies to invest in renewable
power sources such as wind farms will put an extra £160 a year on the average household
bill over the next 20 years. The huge rise is on top of drastic increases in bills being
faced already by consumers. Last Friday British Gas, which posted profits of £742million
last year, announced gas price rises of 18 per cent, which followed Scottish Power saying
it would increase rises of 10 to 15 per cent. Mr Huhne is expected to announce on Tuesday
that energy companies, such as Centrica and EDF, will get a fixed price for electricity
generated from nuclear power and wind farms, which will be higher than the market price. The financial incentives will be funded by consumers, who will see
their electricity bills rise by 30 per cent over the next 20 years from an average of
£493 per year to £655 per year. Experts predicted
that single pensioners will be the hardest hit by the changes, because power bills
represent a higher proportion of their income than for any other group." |
"Petrol sales have collapsed
this year in the face of escalating prices at the pumps and millions of families feeling
squeezed and being forced to cut back on driving, figures have shown. Motorists bought one billion fewer litres of petrol and diesel in the
first three months of this year compared with the pre-credit crunch January to March 2008
period, the AA has calculated. The sharp fall confirms anecdotal evidence from
supermarkets and garages that drivers have cut back on their driving to save money, as
they juggled higher food bills, the jump in VAT and in most cases a freeze
in wages. Service stations sold 835 million fewer litres of petrol and 247 million fewer
litres of diesel in January to March 2011, compared with in the same period three years
earlier. This equated to a 15.2 per cent slump in
petrol sales and a 6 per cent fall in diesel sales.
The AA said more fuel efficient cars had 'next to nothing' to do with the trend. Instead,
the record fuel prices, which saw petrol increase by 7.94p a litre and diesel go up by
10.51p a litre in the first three months of this year, were to blame. It added that the
drop in sales deprived the Treasury of more than £637 million in tax during the first
three months of 2011. A number of family cars now cost more than £100 to fill up a tank,
and garages have reported many people can only afford to fill up a half or even a quarter
tank at a time. Green Flag, the car recovery company, said it has seen a significant jump
in the number of call outs because people had accidentally let their tanks run dry. Edmund
King, the president of the AA, said: 'The full impact of higher VAT, unbridled stock
market speculation and a weaker pound on fuel prices and drivers' ability to afford them
have been laid bare. 'The first three months of this year saw the equivalent of 13.5 days
of UK petrol sales wiped out good for the environment but appalling for families,
business, rural communities and the Treasury.' He went on: "Our study shows the real
impact of record pump prices. Petrol and diesel prices continued to set new records up
until the second week of May, adding a further 4.3p a litre to the cost of petrol and 3.3p
to diesel." |
"Oil supply will be 'critically
tight' in 2012 and prices are likely to surpass their recent highs as spare production
capacity and inventories are 'effectively exhausted,' analysts at Goldman
Sachs said in a research note Thursday.
Goldman also reiterated a recommendation that its clients buy some forward oil contracts
now, before prices move higher later. This advice underlines the influential bank's
skepticism at the ability of the Organization of Petroleum Exporting Countries to meet
rising demand. It also sets it at odds with the view of other important players in the oil
market, notably the International Energy Agency. Goldman said it expects the expanding
global economy to drive oil demand growth that outstrips production growth, meaning, 'the
oil market continues to draw on inventories and OPEC spare
capacity in order to balance.' 'It is only a matter of time before inventories and OPEC
spare capacity become effectively exhausted, requiring higher oil prices,'
Goldman said. 'We recommend opening a long position in the ICE Brent December 2012
contract, as we expect that the market will continue to tighten to critical levels by
2012.' Goldman's estimate of the amount of oil production that OPEC holds in reserve--its
spare capacity--is smaller than that of many other analysts, mainly because of differing
views over the ability of the group's kingpin Saudi Arabia to increase output. The
International Energy Agency, which represents major energy consuming countries, estimates
that Saudi Arabia is capable of producing up to 12 million barrels of oil a day, compared
with actual production in May of 9 million barrels a day. This
would give the Saudis plenty of headroom, even after they increase production to 10
million barrels a day as they promised last month. Goldman, by extrapolating from the
previous Saudi production peak in 2008, believes this figure is significantly lower at
between 10.5 million and 11.0 million barrels a day." |
"Global banking and securities firm Goldman Sachs said Thursday it
was expecting considerable oil price upside in the next 6-12 months as rising demand
fueled by improved global economic growth cut into OPEC spare capacity. 'With world
economic growth continuing to drive oil demand growth well in excess of non-OPEC
production growth, the oil market continues to draw on inventories and OPEC spare capacity
in order to balance,' Goldman Sachs said in its Commodity Watch report. 'In our view, it
is only a matter of time before inventories and OPEC spare capacity become effectively
exhausted, requiring higher oil prices to restrain demand, keeping it in line with
available supply.' As such, Goldman Sachs has now forecast a WTI crude price of $111.00/b
in three months, $115.00/b in six months and $126.50/b in 12 months, this compares with
$108.00/b, $114.50/b and $126.50/b forecasts from its May 24 Commodity Watch report. For
Brent crude, Goldman Sachs said its three, six and 12-month forecasts were now to
$117.00/b, $120.00/b and $130.00/b. In its May 24 report Goldman had forecast prices of
$115.00/b, $120.00/b and $130.00/b, respectively. 'We continue to expect that oil demand
growth fueled by moderate economic growth expectations will be sufficient to draw down
crude oil inventories and OPEC spare capacity by early next year, leading to considerable
oil price upside on a 6- to 12-month horizon,' Goldman said....Goldman also said the impact of the recent International Energy
Agency agreement to release 60 million barrels of oil onto the market to compensate for
lost production out of Libya would only be short-lived. 'As details of the release have begun to be made available, it is now
clear that only about two-thirds of the release of 60 million barrels will be through a
sale from government-controlled inventories that would otherwise be unavailable to the
market. Further, the impact of the release is likely to be substantially more muted as
time goes on,' Goldman said." |
"China is well within its rights, legally
and morally, to limit rare earth exports, argued an article in Chinese state media on
Thursday, days after the World Trade Organization ruled against China on its curbs of raw
materials exports. The People's Daily, the
mouthpiece of China's ruling Communist Party, said claims by countries that China's export
curbs on the minerals threatened their economic and national security were 'groundless'.
'It's not that other countries don't have their own supplies, it is just that they
have hidden them away,' it said. 'China's handling [of rare earths] does not violate
international rules and is not contrary to its WTO accession promises,' the paper said.
The WTO ruled on Tuesday that China had violated its rules when it curbed exports of
coveted raw materials such as bauxite, coke and magnesium used in the production of steel,
electronics and medicines. That ruling, initiated by complaints filed by the United
States, the European Union and Mexico
in 2009, was seen as a possible precedent for a future case on China's rare earth export
quotas." |
"Global investment in renewable
energy sources grew by 32% during 2010 to reach a record level of US$211bn (£132bn), a UN
study has reported. The main growth drivers were backing for wind farms in China and
rooftop solar panels in Europe, it said. It also
found that developing nations invested more in green power than rich nations for the first
time last year. The Global Trends in Renewable Energy Investment 2011 report was prepared
for the UN by Bloomberg New Energy Finance." |
"A report completed
in 2008 by USGS argued that almost one-quarter of the undiscovered, technically
recoverable, hydrocarbons in the world may be contained in an area north of the Arctic
Circle. This
in numerical terms amounts to 90bn barrels of undiscovered, technically
recoverable oil, 1,670 trillion cubic feet of technically recoverable natural gas, and
44bn barrels of technically recoverable natural gas liquids in 25 geologically defined
areas thought to have potential for petroleum. That
would mean the Arctic accounts for around 13% of the undiscovered oil, 30% of the
undiscovered natural gas, and 20% of the undiscovered natural gas liquids in the world.
About 84% of the estimated resources are expected to occur offshore, says the USGS in
figures which the Russians argue hugely underestimate the contribution from their
continental shelf. Extracting these hydrocarbons would be hugely expensive using
conventional means, but oil companies such as Shell are now building floating liquefied
natural gas production systems which would reduce costs. But even high extraction costs
can be economically viable because of the soaring value of fuel. The price of crude has
risen from below $10 per barrel barely a decade ago to a current level of around
$110 with predictions it could double again in the coming years, making exploration a
highly attractive business. Despite concerns about climate change, there is still rising
demand for petrol and acrimonious debate about future fuel shortages and whether the world
has already reached 'peak oil' (the point at which
oil production peaks before going into terminal decline). All of this makes oil deposits
that are more difficult to reach financially viable. 'The low-lying fruit has been
picked,' is how Fadel Gheit, the veteran oil analyst at Oppenheimer & Co
brokerage in New York, puts it. The oil found in massive quantities just below the
desert sands of Saudi Arabia or in the relatively calm waters of the North Sea has been
used up or shut off by politics to Western oil companies. This leaves oil companies to
push the physical boundaries out into deep water, or the technical boundaries out into
"unconventionals" such as the carbon-intensive tar sands, and environmentally
sensitive areas such as the Arctic. The pressures have increased for the Western oil
companies because of resource nationalism, which has seen developing countries seeking to
restrict developments for their own national oil companies. A report written by the
Norwegian green group Bellona said it was
particularly concerned about Russian operations in the Barents, Pechora and Kara seas
because much of the hydrocarbon equipment there is old and inefficient, environmental
regulation lax and too little is known about the marine ecosystems in the region." |
"The US ambassador in Baghdad
said on Saturday that the State Department has asked for a $6.2 billion budget for Iraq in
2012, underscoring that its oil and gas reserves were critical for the world's future
energy needs. 'This country is on a glide path to
increase its oil exports,' James Jeffrey told reporters at the sprawling US embassy in
Baghdad, the world's largest. The embassy plans to double in size next year to 16,000
personnel, when it takes over many military tasks after US troops pull out of Iraq at the
end of this year, including military sales and training of Iraqi security forces. Nearly
50,000 American troops still remain, down from a high of 170,000 after the 2003 US-led
invasion. 'Right now they are at about 2.2 million barrels (of oil) per day. They could go
as high as four to six million within four or five years,' he said, noting that
energy-related facilities remained vulnerable to insurgent attacks. 'There's no other source of millions of new barrels in the
pipeline anywhere in the world,' Jeffrey said. 'The implications on the price per barrel
are dramatic.' Saudi Arabia, the only producer
inside the Organisation of Petroleum Exporting Countries with an extra production capacity
of about 1 million barrels per day (bpd), is able to control global prices, Jeffrey noted.
He said that Iraq was also critical to Europe's future gas needs. 'The only source of
enough gas for Europe to become somewhat more diversified in energy sources -- or gas
sources -- is Iraq,' he said. 'Azeri gas is not sufficient, Turkmen gas is many years
off.'... 'Given the criticality of Iraq, given the investment we've made in it... the effort that we need to make
and the amount of money required to make it is absolutely -- absolutely -- justified,'
Jeffrey said." |
"Though not even yet in its official pilot phase, IEIs shale
extraction process aims to produce 40 billion barrels of oil in its currently licensed
jurisdiction, which covers 16 percent of Israels oil shale stores, according to
Kadmiel. To create oil from shale which is dark sedimentary rock containing
hydrocarbons workers must drill as far as 400 meters down through an impermeable
layer to reach the shale, Kadmiel explained. Surrounding
the production pipeline, the company must also drill a ring of heating wells, which
gradually heat the rock to 300º C and thereby
transform it into lightweight oil in situ. In this pre-pilot phase, rather than using
heaters, the company is removing pieces of shale for analysis in Ben- Gurion University
laboratories.... To make a profit, IEI needs to produce 50,000 barrels per day of oil,
which costs $40 per barrel to produce, as long as oil prices remain above $80 per barrel,
Kadmiel said.... Even in the smoothest of scenarios,
however, Vinegar said that no oil is likely to start flowing until 2018-2020. And IEI is facing a plethora of environmental objectors, who say that
natural resources will be destroyed and that increased production of fossil fuels is
unnecessary." |
"It was an open secret that
Britain's decision to back
nuclear power in 2006 was pushed through government by a cosy group of industrialists
and others close to Tony Blair, and that a full debate about the full costs, safety and
potential impact on future generations was suppressed. But the release
of 80 emails showing that in the days after the Fukushima accident not one but two
government departments were working with nuclear companies to spin one of the biggest
industrial catastrophes of the last 50 years, even as people were dying and a vast area
was being made uninhabitable, is shocking. What the
emails shows is a weak government, captured by a powerful industry colluding to at least
misinform and very probably lie to the public and the media. When the emails were sent, no
one, least of all the industry and its friends in and out of government, had any idea how
serious the situation at Fukushima was or might become. For the business department to
then argue that 'we really need to show the safety of nuclear' and that 'it's not as bad
as it looks', is shameless. But to argue that the radiation was being released
deliberately and was 'all part of the safety systems to control and manage a
situation" is Orwellian. An ignorant government that relies for its information on
companies it is planning to reward with contracts for billions of pounds smacks of
corruption. These guys were not just cosy. They were naked, in bed and consenting. Their
closeness now raises questions such as what influence could the industry have had on the
chief nuclear inspector's report on Fukushima, and whether speeches by David Cameron,
Chris Huhne and other ministers were informed or even written by the industry. Can we ever
trust government to tell us the truth on nuclear power, or should we just accept that the
industry and government are now as one." |
"An 8700-kilometre natural gas
pipeline linking Turkmenistan with southern China has begun operations, helping to boost
supplies to the country's booming industrial region, the Xinhua News Agency reports. The 142.2 billion yuan ($A20.6 billion) pipeline, which started operating
on Thursday, passes through 15 of China's provinces to reach the Pearl River Delta region
near Hong Kong, Xinhua says. The gas pipeline will provide up to 30 million cubic meters
of natural gas a year, helping to reduce China's reliance on heavily polluting coal." |
"Chinas
largest oil
company has begun operations at Al-Ahdab oil field in Iraq,
making the field the first major new area to start production in Iraq in 20 years,
according to an official news report on Tuesday. Operations began June 21, and the field
is expected to produce three million tons of crude oil per year, reported China Daily, an
official English-language newspaper. The oil field
was discovered in 1979 and is believed to contain a billion barrels of crude. The Chinese
company, the China National Petroleum Corporation, a state-owned enterprise, secured
rights to the field under a technical services contract signed with the Iraqi government
in November 2008. Under the contract, the company has development rights for 23 years,
China Daily reported. It is investing $3 billion. The contract, the renegotiation of a
deal first signed in 1996 with the government of Saddam Hussein, was postponed after the
United Nations imposed economic sanctions on Iraq and the American military toppled Mr.
Hussein in 2003. Analysts say the Ahdab operation is China National Petroleums
largest in the Middle East. The contract stipulates that the company receive a fee for
every barrel of oil produced, rather than an equity interest in the oil field, as it would
have under the original agreement with Mr. Husseins government. A Chinese oil executive said in 2009 that the company would make a
profit of less than one percent, but that the contract was a way to 'get a foot in the
door' of the Iraqi oil industry, which has much larger fields than Ahdab." |
"In 2008, the stocks of many natural gas companies were sinking
because of the financial meltdown, recession fears and falling gas prices. But they began
to rebound after a sweeping rule change by the Securities and Exchange Commission,
intended to modernize how energy companies report their gas reserves....The rule change
was especially helpful to shale gas companies because it approved the use of new
technology and modeling techniques that these companies rely on more heavily than
traditional oil and gas companies. Shale gas producers also especially benefited from the relaxed
restrictions on how large an area companies could predict would be productive without
drilling to test first.... in internal e-mails
and documents, many industry executives and federal officials have questioned whether some
companies are overstating, perhaps intentionally, the amount of gas they can economically
produce in a given period. This practice, known as overbooking, is illegal because it
misleads investors trying to assess a companys strength and banks that use reserves
as collateral for loans. 'There is now plenty of production data available from the states
to show that these wells are nowhere near what these guys are touting,' an official with a
Texas oil and gas company who formerly worked at Enron wrote
on Nov. 7, 2009, comparing the practices of shale companies to Enrons. 'I have discussed this numerous times with analysts that are friends of
mine they agree with me and then just shrug their shoulders.'... Some industry experts say they think they are seeing a replay of
events from last decade. In 2004, the oil and gas industry faced one of its most
embarrassing scandals. After whistle-blowers reported concerns about the size of Royal
Dutch/Shells reserves, the company surprised investors by slashing reserve
estimates. 'I am becoming sick and tired about
lying,' Walter van de Vijver, a senior executive at Royal Dutch/Shell, wrote in a November
2003 e-mail made public shortly after his companys problems came to
light....Companies could not apply the new rule until they submitted their 2009 federal
filings to the S.E.C. in the early part of 2010. However, companies began describing to
investors the coming increases in reserves shortly before the rule change was officially
adopted in late 2008. John E. Olson, an energy market analyst at Houston Energy Partners,
says he believes shale companies have been aggressively booking their reserve estimates
and playing down costs to make themselves appear more profitable. Mr. Olson, who is famous for having been fired from Merrill Lynch
in 1998 for refusing to recommend Enron stocks, compared the accounting practices of shale
gas companies and the hype surrounding the industry to what he saw at Enron. Of the S.E.C.
rule change, Mr. Olson said: 'Welcome back to Alice in Wonderland.'" |
"Brussels risks triggering a
fresh fuel crisis if a new directive imposes 'unfair' carbon reduction targets on the
worlds third biggest energy resource. The EU fuel quality directive, which is due
later this year, is expected to classify Canadian oil sands as high polluters and demand
stringent carbon reduction targets. This would reduce the likelihood of European suppliers
importing the fuel. The Canadian province of Alberta, in which the oil sands are located,
is protesting, and Britain wants all sources of fuel treated equally. Jeff Sundquist, managing director of Albertas London office, said:
'This is unfair discriminatory treatment which threatens energy security and could easily
see prices rise.' Oil sands, also called tar sands, hold a third of the worlds oil
reserves and could be key to Europe if Middle Eastern supplies were disrupted further.
Global oil supplies have already been hit by falling output from Libya, forcing the
International Energy Agency to tap into its reserves last week to stop crude oil prices
rising further." |
"In its annual forecasting reports, the United States Energy
Information Administration, a division of the Energy Department, has steadily increased
its estimates of domestic supplies of natural gas, and investors and the oil and gas
industry have repeated them widely to make their case about a prosperous future. But not
everyone in the Energy Information Administration agrees. In scores of internal
e-mails and documents, officials within the Energy Information Administration, or
E.I.A., voice skepticism about the shale gas industry. One official says the shale
industry may be '
set up for failure.' 'It is quite likely that many of these companies will go
bankrupt,' a senior adviser to the Energy Information Administration administrator
predicts. Several officials echo concerns raised during previous bubbles, in housing
and in technology stocks, for example, that ended in a bust. Energy
Information Administration employees also explain in e-mails and documents, copies of
which were obtained by The New York Times, that industry estimates might overstate the
amount of gas that companies can affordably get out of the ground. They discuss the
uncertainties about how long the wells will be productive as well as the high prices some
companies paid during the land rush to lease mineral rights. They also raise concerns
about the unpredictability of shale gas drilling. One
senior Energy Information Administration official describes an 'irrational exuberance'
around shale gas. An
internal Energy Information Administration document says companies have exaggerated
'the appearance of shale gas well profitability,' are highlighting the performance of only
their best wells and may be using overly optimistic models for projecting the wells
productivity over the next several decades. While
there are environmental and economic benefits to natural gas compared with other fossil
fuels, its widespread popularity as an energy source is relatively new. As a result, it
has not received the same level of scrutiny, according to some environmentalists and
energy economists. The Energy Information Administration e-mails indicate that some of
these difficult questions are being raised. 'Am I just totally crazy, or does it seem like
everyone and their mothers are endorsing shale gas without getting a really good
understanding of the economics at the business level?' an energy analyst at the Energy
Information Administration wrote
in an April 27 e-mail to a colleague. Another e-mail expresses similar doubts. 'I
agree with your concerns regarding the euphoria for shale gas and oil,' wrote a senior
officialin the forecasting division of the Energy Information Administration in an April
13 e-mail to a colleague at the administration. 'We might be in a gold rush
wherein a few folks have developed monster wells,' he
wrote, 'so everyone assumes that all the wells will be monsters. |
"The National Iranian Oil Company (NIOC) has discovered another large
deposit of crude oil and natural gas in the South Pars field in the Persian Gulf. The NIOC
director for exploration, Mahmoud Mohaddes, said on Friday that the seismologic data from
drilling the first exploration well in the east of the gas-rich Assalouyeh region in the
southern province of Hormuzgan have indicated that the volume of crude reserves of the
field exceeds initial estimates, the Mehr news agency reported. The official noted that
the exact volume of the new deposit will be announced in the near future, adding that NIOC
experts have estimated that the discovery will increase Iran's crude and gas condensate
reserves by one billion barrels. He went on to say that the discovery of the Khayyam field
in the Persian Gulf coastal areas east of Assalouyeh revealed that in addition to about
260 billion cubic meters of gas reserves, there are also some crude reserves in the
region. According to NIOC, the value of the natural
gas and gas condensates in the Khayyam field is over $50 billion. Iran has 137.6 billion
barrels of proven oil reserves, and 29.61 trillion cubic meters of proven gas reserves. It
has the world's third largest oil reserves and second largest gas reserves." |
"Natural gas companies have been
placing enormous bets on the wells they are drilling, saying they will deliver big profits
and provide a vast new source of energy for the United States. But the gas may not be as
easy and cheap to extract from shale formations deep underground as the companies are
saying, according to hundreds
of industry e-mails and internal documents and an analysis of data from thousands of
wells. In the e-mails, energy executives, industry lawyers, state geologists and market
analysts voice skepticism about lofty forecasts and question whether companies are
intentionally, and even illegally, overstating the productivity of their wells and the
size of their reserves. Many of these e-mails also suggest a view that is in stark
contrast to more bullish public comments made by the industry, in much the same way that
insiders have raised doubts about previous financial bubbles. 'Money is pouring in' from investors even though shale gas is 'inherently
unprofitable,' an analyst from PNC Wealth Management, an investment company, wrote
to a contractor in a February e-mail. 'Reminds you of dot-coms.' 'The word in the world of independents is that the shale plays are
just giant Ponzi schemes and the economics just do not work,' an analyst from IHS Drilling
Data, an energy research company, wrote
in an e-mail on Aug. 28, 2009. .... There is undoubtedly a vast amount of gas in the formations. The question
remains how affordably it can be extracted. The data show that while there are some very
active wells, they are often surrounded by vast zones of less-productive wells that in
some cases cost more to drill and operate than the gas they produce is worth. Also, the amount of gas produced by many of the successful wells is falling much
faster than initially predicted by energy companies, making
it more difficult for them to turn a profit over the long run. If the industry does not live up to expectations, the impact will be felt
widely. Federal and state lawmakers are considering drastically increasing subsidies for
the natural gas business in the hope that it will provide low-cost energy for decades to
come....The e-mails were obtained through open-records requests or provided to The New
York Times by industry consultants and analysts who say they believe that the public
perception of shale gas does not match reality... 'I think we have a big problem.' Deborah
Rogers, a member of the advisory committee of the Federal Reserve Bank of Dallas, recalled
saying that in a May 2010 conversation with a senior economist at the Reserve, Mine K.
Yucel. 'We need to take a close look at this right away,' she added. A former stockbroker with Merrill Lynch, Ms. Rogers said she
started studying well data from shale companies in October 2009 after attending a speech
by the chief executive of Chesapeake, Aubrey K. McClendon. The math was not adding up, Ms.
Rogers said. Her research showed that wells were petering out faster than expected. 'These
wells are depleting so quickly that the operators are in an expensive game of
catch-up, ' Ms. Rogers wrote in an e-mail on Nov. 17, 2009, to a petroleum
geologist in Houston, who wrote back that he agreed....
A
former Enron executive wrote in 2009 while working at an energy company: 'I wonder
when they will start telling people these wells are just not what they thought they were
going to be?' He
added that the behavior of shale gas companies reminded him of what he saw when he worked
at Enron. Production data, provided by companies to state regulators and reviewed by The
Times, show that many wells are not performing as the industry expected. In three major shale formations the Barnett in Texas, the
Haynesville in East Texas and Louisiana and the Fayetteville, across Arkansas less
than 20 percent of the area heralded by companies as productive is emerging as likely to
be profitable under current market conditions, according to the data and industry
analysts. Richard K. Stoneburner, president and chief operating officer of Petrohawk
Energy, said that looking at entire shale formations was misleading because some companies
drilled only in the best areas or had lower costs. 'Outside those areas, you can drill a
lot of wells that will never live up to expectations,' he added. .... Gas production data
reviewed by The Times suggest that many wells in shale gas fields do not level off the way
many companies predict but instead decline steadily. 'This
kind of data is making it harder and harder to deny that the shale gas revolution is being
oversold,' said Art Berman, a Houston-based
geologist who worked for two decades at Amoco and has been one of the most vocal skeptics
of shale gas economics. The Barnett shale, which has the longest production history,
provides the most reliable case study for predicting future shale gas potential. The data suggest that if the wells production continues to
decline in the current manner, many will become financially unviable within 10 to 15
years. A review of more than 9,000 wells, using data from 2003 to 2009, shows that
based on widely used industry assumptions about the market price of gas and the cost of
drilling and operating a well less than 10 percent of the wells had recouped their
estimated costs by the time they were seven years old. " |
"In the wake of the nuclear
meltdown at the Fukushima Daiichi power plant in Japan in March, several countries
have announced plans to reject nuclear power. Japan will
not build any more reactors. Germany plans to phase
out its nuclear power plants, Switzerland will not replace
its reactors, and last week Italy voted against
starting a nuclear programme. The International Atomic Energy Agency is running an emergency conference this week to identify the key lessons from
Fukushima (see 'Agency
report praises Fukushima staff, slams TEPCO'). So does this mean a decade-long
revival of interest in nuclear power is grinding to a halt? IAEA figures suggest not. They list 65 reactors under
construction, and those figures are just the tip of the iceberg because they do not
include reactors that are contracted to be built, or those being planned. Neither do they
acknowledge the significance of the United Arab Emirates being on course to become the
first country to go nuclear since China in 1985: the UAE has signed a deal with a
consortium led by the Korea
Electric Power Corporation to build four reactors. Saudi Arabia is following suit,
having announced earlier this month that it will build 16 reactors by 2030. Turkey plans to build two new plants. Dozens
more countries have registered an interest in the nuclear option with the IAEA, though few
are likely to follow through, according to Jessica Jewell at the Central European University in Budapest,
Hungary. Jewell gathered data on countries with established programmes to work out what it
takes to go nuclear. When they started building nuclear power stations, these countries
had robust electricity grids, stable, effective governments and big economies that could
swallow the upfront costs. Of 52 countries that have recently asked the IAEA to help them
start a nuclear programme only 10 meet all of these criteria, Jewell says. Another 10 had
the motivation and resources but were politically unstable (Energy Policy, DOI: 10.1016/j.enpol.2010.10.041). That second group includes
Egypt, which Jewell reckons is the most likely to gain nuclear power of the five north
African countries with stated intentions. Continuing political uncertainty in Egypt makes
nuclear an unlikely option there in the near term, however. Meanwhile, the plants already
under construction in established nuclear countries are feeling the ripples of Fukushima.
Just under half of the reactors listed as under construction by the IAEA are in China -
but following events in Japan, the Chinese government has suspended
approvals for new plants while it reviews their safety." |
"In a surprise U-turn, members
of the United States Senate voted 73-27 last week to abolish a 45-cents-a-gallon subsidy
for ethanol from corn (ie, maize) that is used for blending with petrol. They also voted
to kill the 54-cents-a-gallon import duty on ethanol from abroad. This is the first time
in over three decades that the Senate has challenged the sacrosanct $6 billion-a-year tax
break for American corn-growers and ethanol producers. The federal government started
subsidising corn-based ethanol back in the late 1970sin a bid to wean the country
off imported oil. As recently as last December, lawmakers voted to extend the ethanol
subsidy for yet another year. Since then, two things
have happened to make the politicians change their minds. First, a broad consensus has now
thrown its weight behind the environmentalists view that using home-grown
ethanolas a replacement for imported oilsquanders far too much energy and
water in the process, and is not a particularly good way or reducing greenhouse gases
anyway. Indeed, given the intensive use of energy in agribusiness, it is debatable whether
replacing petrol with ethanol breaks even in terms of the 'wells-to-wheels' energy
consumed, or even produces a net reduction in carbon emission. Besides, even if
Americas entire corn crop were to be devoted to ethanol production, it would still
only supply 4% of the countrys oil consumption. So much for the argument that
home-grown ethanol offers an answer to Americas dependence on foreign oil. Second,
the food industry has gone noisily public about the way the federal governments corn
subsidieswhich have encouraged American farmers to devote more and more of their
corn crops to ethanol productionhave driven up food prices. Last year, 40% of the
corn grown in the United States (some five billion bushels) was used for making ethanol.
This summer, corn supplies for animal feed are heading for a 15-year low. As a
consequence, corn futures have soared to almost $8 a busheltwice their price a year
ago. Consumers counting the cost at the supermarket checkout now know who to blame....A
gallon of pure ethanol contains two-thirds the energy of a gallon of petrol. If a
flex-fuel vehicle achieves 30mpg on petrol, switching to ethanol would give it 20mpg. In
other words, 50% more fuel is needed to travel the same distance. In having some petrol
blended in it, the consumption penalty falls to 25% to 30% when a car is fuelled with E85.
On a cost-per-mile basis, ethanol fuels like E85even with their hefty
subsidiesare typically 20% more expensive than petrol. Something similar goes for
E10, though the penalty is much less.... But the victory for energy, environment, food
supply and fiscal commonsense remains incomplete. Last weeks vote in the Senate to
scrap ethanol subsidies is unlikely to become law. The
underlying tax bill to which the amendment was attached does not have a hope of being
passed. But the broad bipartisan action by Congress generally to put a stop to wasteful
ethanol subsidies suggests they are most unlikely to be extended when they come up for
renewal in December." |
"There is a significant sticking
point to the promotion of thorium as the 'great green hope' of clean energy production: it
remains unproven on a commercial scale. While it has
been around since the 1950s (and an experimental 10MW LFTR did run for five years during
the 1960s at Oak Ridge National Laboratory in the US, though using uranium and plutonium
as fuel) it is still a next generation nuclear technology theoretical. China did
announce this year that it intended to develop a thorium MSR, but nuclear radiologist
Peter Karamoskos, of the International Campaign to Abolish Nuclear Weapons (ICAN), says
the world shouldn't hold its breath. 'Without exception, [thorium reactors] have never
been commercially viable, nor do any of the intended new designs even remotely seem to be
viable. Like all nuclear power production they rely on extensive taxpayer subsidies; the
only difference is that with thorium and other breeder reactors these are of an order of
magnitude greater, which is why no government has ever continued their funding.' China's
development will persist until it experiences the ongoing major technical hurdles the rest
of the nuclear club have discovered, he says.... the nuclear industry itself is also
sceptical, with none of the big players backing what should be in PR terms and in a
post-Fukushima world its radioactive holy grail: safe reactors producing more
energy for less and cheaper fuel. In fact, a 2010
National Nuclear Laboratory (NNL) report (PDF)concluded the thorium fuel cycle 'does
not currently have a role to play in the UK context [and] is likely to have only a limited
role internationally for some years ahead' in short, it concluded, the claims for
thorium were 'overstated'. Proponents counter that the NNL paper fails to address the
question of MSR technology, evidence of its bias towards an industry wedded to PWRs.
Reliant on diverse uranium/plutonium revenue streams fuel packages and fuel
reprocessing, for example the nuclear energy giants will never give thorium a fair
hearing, they say. But even were its commercial viability established, given 2010's
soaring greenhouse gas levels, thorium is one magic bullet that is years off target. Those
who support renewables say they will have come so far in cost and efficiency terms by the
time the technology is perfected and upscaled that thorium reactors will already be
uneconomic. Indeed, if renewables had a fraction of nuclear's current subsidies they could
already be light years ahead. All other issues aside, thorium is still nuclear energy, say
environmentalists, its reactors disgorging the same toxic byproducts and fissile waste
with the same millennial half-lives. Oliver Tickell, author of Kyoto2, says the fission
materials produced from thorium are of a different spectrum to those from uranium-235, but
'include many dangerous-to-health alpha and beta emitters'. Tickell says thorium reactors
would not reduce the volume of waste from uranium reactors. 'It will create a whole new
volume of radioactive waste from previously radio-inert thorium, on top of the waste from
uranium reactors. Looked at in these terms, it's a way of multiplying the volume of
radioactive waste humanity can create several times over.' Putative waste benefits
such as the impressive claims made by former Nasa scientist Kirk Sorensen, one of
thorium's staunchest advocates have the potential to be outweighed by a
proliferating number of MSRs. There are already 442 traditional reactors already in
operation globally, according to the International Atomic Energy Agency. The by-products
of thousands of smaller, ostensibly less wasteful reactors would soon add up. Anti-nuclear
campaigner Peter Karamoskos goes further, dismissing a 'dishonest fantasy' perpetuated by
the pro-nuclear lobby. Thorium cannot in itself power a reactor; unlike natural uranium,
it does not contain enough fissile material to initiate a nuclear chain reaction. As a
result it must first be bombarded with neutrons to produce the highly radioactive isotope
uranium-233 'so these are really U-233 reactors,' says Karamoskos. This isotope is
more hazardous than the U-235 used in conventional reactors, he adds, because it produces
U-232 as a side effect (half life: 160,000 years), on top of familiar fission by-products
such as technetium-99 (half life: up to 300,000 years) and iodine-129 (half life: 15.7
million years).Add in actinides such as protactinium-231 (half life: 33,000 years) and it
soon becomes apparent that thorium's superficial cleanliness will still depend on digging
some pretty deep holes to bury the highly radioactive waste." |
"The House of Representatives
passed legislation on Wednesday that would speed up approvals for drilling in the Arctic
by removing regulatory hurdles that have stymied development of the area's vast oil and
gas resources. The Republican-controlled House voted
253 to 166 in favor of the bill, which would require the Environmental Protection Agency
to approve or deny applications to drill on the outer continental shelf within six months.
'Current impediments have delayed development of the Beaufort and Chukchi sea for over
five years,' the bill's sponsor, Republican congressman Cory Gardner, said in a speech on
the House floor. 'These are areas that have already been approved for drilling; the
revenues for the leases have already been collected by the federal government,' he said.
The bill, which faces a tougher road to passage in the Democrat-controlled Senate, would
also eliminate the authority of EPA's Environmental Appeals Board to weigh in on the
Arctic exploration permits. That appeals board scuttled Royal Dutch Shell's plans to drill
in the Beaufort Sea this year, when it revoked a key air permit." |
"Oil rose in New York, reversing yesterdays plunge, on concerns that
stockpile releases by consuming nations may limit the ability to respond to supply
disruptions in future. Crude climbed as much as 1.5 percent after sliding 4.6 percent
yesterday. The International Energy Agency agreed to release 60 million barrels to
buyers starting next week. Oil stockpiles among the 28 member-countries of the IEA
declined by 340,000 barrels a day during the first quarter of this year, the Agency said
in its monthly Oil Market Report on June 16. 'People are concerned that if we use
that last bullet then whats going to happen as we go through the year and things get
tighter?' said Anthony
Nunan, assistant general manager for risk management at Mitsubishi Corp. in Tokyo.
'Thats going to be bullish in the long run. Were rebounding because you get
this knee-jerk reaction and then cooler heads prevail.'.... The
IEA announced the release of 2 million barrels a day for 30 days to make up for supplies
choked off by an armed rebellion in Libya. The U.S. Strategic Petroleum Reserve will provide 30 million
barrels, European members will supply about 20 million and Asian nations the remainder.
'The more stocks you use now, the less of a buffer you have for any supply shock in the
future,' said Ben
Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne. The decision
comes after the Organization of Petroleum Exporting Countries failed to reach an accord on
production increases at a meeting in Vienna on June 8. The group said two days later that
it will need to pump 30.9 million barrels a day in the third quarter, or 1.9 million
barrels more than it supplied in May.... Brent crude wont
fall below $90 a barrel because OPECwill start talking about cutting
production near that price, according to Societe Generale SA. Saudi Arabia, the
worlds biggest oil exporter, needs prices at $90 to $100 to balance its budget,
analysts at the bank said in a report e-mailed today..... The U.S. Energy Department
yesterday requested bids for 30 million barrels of oil from the Strategic Reserve. The
department offered 10 million barrels of sweet, or low-sulfur, crude from storage sites in
Bryan Mound and Big Hill, Texas,
and West Hackberry, Louisiana. Bids are due by 1 p.m. Central time on June 29, the
department said. Japan will release 7.9 million barrels of oil products from its
stockpiles as part of the IEAs plan, mostly to the domestic market, Trade Minister Banri Kaieda told
reporters today in Tokyo.
South Korea will
release 3.467 million barrels of oil, according to the Ministry of Knowledge Economy. The
nation has 173 million barrels of reserves, the ministry said in an e-mailed statement
yesterday. Germany will
open up 4.2 million barrels of its reserves, while the U.K.s share will be 3
million, the agency said. Australia isnt contributing to the IEAs plan,
according to Joel Grant, spokesman for the office of the Minister of Resources and Energy,
by phone from Melbourne today. Its the third time the IEA has coordinated the use of
emergency stockpiles since the agency was founded in 1974. The first was during the 1991
Persian Gulf War and the second was after Hurricane Katrina in 2005. The Paris-based IEA
is an energy policy adviser to 28 industrialized nations including the U.S., Japan and Germany." |
"International Energy Agency
(IEA) Executive Director Nobuo Tanaka announced today that the 28 IEA member countries
have agreed to release 60 million barrels of oil in the coming month in response to the
ongoing disruption of oil supplies from Libya. This supply disruption has been underway
for some time and its effect has become more pronounced as it has continued. The normal
seasonal increase in refiner demand expected for this summer will exacerbate the shortfall
further. Greater tightness in the oil market threatens to undermine the fragile global
economic recovery. In deciding to take this
collective action, IEA member countries agreed to make 2 million barrels of oil per day
available from their emergency stocks over an initial period of 30 days. Leading up to
this decision, the IEA has been in close consultation with major producing countries, as
well as with key non-IEA importing countries.... 'Today, for the third time in the history
of the International Energy Agency, our member countries have decided to release stocks.'
Mr. Tanaka said. 'I expect this action will contribute to well-supplied markets and to
ensuring a soft landing for the world economy.' Total oil stocks in IEA member countries
amount to over 4.1 billion barrels, and nearly 1.6 billion barrels of this are public
stocks held exclusively for emergency purposes. IEA
net oil-importing countries have a legal obligation to hold emergency oil reserves
equivalent to at least 90 days of net oil imports. These countries are holding stock
levels well above this minimum amount, currently at 146 days of net imports." |
"Federal regulators have been
working closely with the nuclear power industry to keep the nation's aging reactors
operating within safety standards by repeatedly weakening those standards, or simply
failing to enforce them, an investigation by The Associated Press has found. Time after time, officials at the U.S. Nuclear Regulatory Commission have
decided that original regulations were too strict, arguing that safety margins could be
eased without peril, according to records and interviews. The result? Rising fears that
these accommodations by the NRC are significantly undermining safety and inching
the reactors closer to an accident that could harm the public and jeopardize the future of
nuclear power in the United States. Examples abound. When valves leaked, more leakage was
allowed up to 20 times the original limit. When rampant cracking caused radioactive
leaks from steam generator tubing, an easier test of the tubes was devised, so plants
could meet standards. Failed cables. Busted seals. Broken nozzles, clogged screens,
cracked concrete, dented containers, corroded metals and rusty underground pipes
all of these and thousands of other problems linked to aging were uncovered in the AP's
yearlong investigation. And all of them could escalate dangers in the event of an
accident. Yet despite the many problems linked to aging, not a single official body in
government or industry has studied the overall frequency and potential impact on safety of
such breakdowns in recent years, even as the NRC has extended the licenses of dozens of
reactors. Industry and government officials defend their actions, and insist that no
chances are being taken. But the AP investigation found that with billions of dollars and
19 percent of America's electricity supply at stake, a cozy relationship prevails between
the industry and its regulator, the NRC. Records show a recurring pattern: Reactor parts
or systems fall out of compliance with the rules. Studies are conducted by the industry
and government, and all agree that existing standards are 'unnecessarily conservative.'
Regulations are loosened, and the reactors are back in compliance. 'That's what they say
for everything, whether that's the case or not,' said Demetrios Basdekas, an engineer
retired from the NRC. 'Every time you turn around, they say 'We have all this built-in
conservatism.' 'The ongoing crisis at the stricken, decades-old Fukushima Dai-ichi nuclear
facility in Japan has focused attention on the safety of plants elsewhere in the world; it
prompted the NRC to look at U.S. reactors, and a report is due in July. But the factor of
aging goes far beyond the issues posed by the disaster at Fukushima. Commercial nuclear
reactors in the United States were designed and licensed for 40 years. When the first ones
were being built in the 1960s and 1970s, it was expected that they would be replaced with
improved models long before those licenses expired. But that never happened. The 1979
accident at Three Mile Island, massive cost overruns, crushing debt and high interest
rates ended new construction proposals for several decades. Instead, 66 of the 104
operating units have been relicensed for 20 more years, mostly with scant public
attention. Renewal applications are under review for 16 other reactors. By the standards
in place when they were built, these reactors are old and getting older. As of today, 82
reactors are more than 25 years old. The AP found proof that aging reactors have been
allowed to run less safely to prolong operations. As equipment has approached or violated
safety limits, regulators and reactor operators have loosened or bent the rules." |
"Prices of some rare earth
metals have doubled in just three weeks amid heavy
stockpiling in China that has raised fears over global supplies. China produces more than
90 per cent of the worlds rare earths, 17 elements used in hybrid cars, fluorescent
lights and many high-tech applications." |
"Pressure valves are working overtime. Immense stress is on crude
producers, urging, pleading, demanding and even threatening them to open the taps
further and further. There is a growing murmur all around. Informed sources
believe Washington is considering, rather seriously, releasing crude from its Strategic
Petroleum Reserves (SPR), possibly as soon as this week if indeed nothing significant
takes place. Reports from Washington, quoting diplomatic sources, indicate that signals
were sent to Riyadh seeking reassurance that Saudi Arabia would not offset the SPR
barrels by reducing its own supply. Some also claim
in the run-up to the Vienna June 8 fracas, Washington evaluated surprising crude markets
with an unprecedented move exchanging the urgently-needed high-quality crude oil
stored in the US emergency reserve for heavier, low-quality oil from Saudi Arabia. The swap idea as per the emerging reports, involved shipping some of the
light low-sulfur, or 'sweet,' crude out of the US Strategic Petroleum Reserve to European
refiners, who needed it after the war in Libya cut off shipments of its premium crude
varieties. In return, Saudi Arabia was exhorted to
sell its heavier high-sulfur or 'sour' crude at a discount back to the US to top up the
caverns holding Americas emergency stocks. And it did not make past the drawing
board, four sources familiar with the talks were quoted as saying. There were hints that
the pricing of the available, sour crude turned out to be a big impediment. Washington
reportedly insisted on discounted pricing for the sour crude. And that was reportedly not
palatable to the producers. Indeed Riyadh has been clear on the issue it cannot and
will not tamper with the pricing of the crude. That
is for the markets to decide Petroleum and Mineral Resources Minister Ali Al-Naimi
has been forthright in saying this in Vienna too. And IEA, the OECD energy watchdog in the
meantime, could also be seen stepping up the pressure, urging OPEC not only to steeply
raise output, but also warning it was ready to order a release from stocks at any
time. Executive Director Nobuo Tanaka said Thursday
the IEA was waiting to see how fast Saudi Arabia and other OPEC producers would deliver
more oil to prevent what he called a 'hard landing' for the global economy and that he
stood ready to order a release from stocks at any time. And at the same time, the issue of weak fundamentals appears back on the
center stage. A tightening supply-demand balance on the oil market meant the bull run
since late 2010 was largely justified by fundamentals, the IEA now says, underlining that
the levels of speculative activity were lower now than in 2008. At this moment, however, there was no indication of
excessive speculative activity on oil markets, David Fyfe the IEAs head of Oil
Industry and Markets says." |
"Director of oil consumers'
organisation makes bold invitation to major producer in bid to settle dispute over
responsibility for high fuel prices. Energy consumer organisation the International Energy Agency
(IEA) has invited Russia and the Opec oil producers to join it, in a desperate
bid to broker a peace between buyers and sellers over soaring crude prices. The olive
branch was extended today by the IEA's executive director, Nobuo Tanaka, to Russia's
deputy prime minister, Igor Sechin, but has already run into powerful opposition from the
country's state-owned gas group, Gazprom. In an exclusive interview with the Observer, Tanaka said it was time that
producers and consumers realised they were on the same side. 'We all really have a common
interest. You cannot take oil in isolation from gas security, energy efficiency and
electricity from renewables. 'The issues of energy security and climate change need to be
tackled collectively and we think Russia and other key producers can learn a lot from [the
IEA's] experience.' Producers and consumers have been
at war with each other over who is responsible for high oil and gas prices. The IEA has repeatedly
called on Opec to increase production, while producers blame western banks and other
speculators for the volatility. Russia has recently called for the establishment of a gas
cartel to match the oil cartel of Opec, something the IEA wants to avoid. The initiative from Tanaka comes as the spike in oil and gas
prices continues to make life miserable for already struggling UK households, whose living
standards are being eroded by inflation. On Friday
the AA said it had written to the European Union's competition commissioner asking him to
investigate price volatility at the pumps, as drivers were being 'ripped off'. In the last
month the oil price has fallen back from $126 a barrel to $110, but the AA says this
change has not been reflected in retail prices. Supermarkets Sainsbury's and Tesco warned
last week that higher petrol prices were having a serious impact on consumer spending,
with Sainsbury's saying that its cheapest Basics brand was its fastest-growing range,
signalling a move by customers to keep their costs down....The agency has warned that the
recently announced phasing-out
of nuclear plants in Japan, Germany and Italy is likely to have a dramatic impact on
pollution. Tanaka now believes that CO2 emissions could rise 30% if as looks likely
those nations and others scrap or scale back plans to build new atomic plants. The IEA originally believed 14% of all electricity would be
generated by nuclear plants by 2035. Now it believes the figure will be just 10%." |
"The biofuels industry is being
blamed for record food prices and high price volatility. Earlier this month a report
from the World Trade Organization and other international agencies recommended that
governments cut support for
biofuels to ease that volatility. On the heels of
that report, the U.S. Department of Agriculture issued its corn forecast;
it suggested that corn supplies will be very tight this year because bad weather has
limited planting and because the share of corn going to ethanol is increasing. After the
report, corn prices shot to record highs, reaching $8 a bushel. Then on Friday, the
Organization for Economic Cooperation and Development released a report predicting that food prices will remain high for the next
decade. Many experts say the unprecedented prices are at least partially driven by
government subsidies and mandates that have led to fourfold increases in production of
ethanol biofuel and tenfold increases in production of biodiesel between 2000 and 2009
worldwide. In the United States, multiple bills and amendments have been introduced to
scale back subsidies as a way of trimming the federal budget, and on Thursday the Senate
voted to end tax credits for ethanol that amounted to nearly $6 billion. (The program
won't be killed unless the House passes its own law ending it.) The WTO report cited many
reasons for the high prices and volatility, including changes in demand for food, bad
weather, low stock, and the recent high cost of oil. Oil prices directly affect the
production costs of food by raising the price of tractor fuel and fertilizers. If oil is
expensive enough, it can also increase demand for biofuels, which drives up the price of
crops such as corn and sugarcane. The WTO report also cited government biofuel mandates as
a significant problem. Not only do these requirements drive up demand for crops such as
corn, increasing prices, but they limit the ability of markets to respond to price
changes, increasing volatility. 'We've lost a lot of our ability for our agricultural
system to be buffered from price shocks from weather and other things that affect
production,' says Jason Hill, a professor of bioproducts and biosystems engineering at
the University of Minnesota. Worldwide, 8 percent of corn produced is used for biofuels.
In the United States, according to the new USDA report, 35 percent of corn in the growing
season ending in 2010 went to the production of biofuels; this growing season it is
predicted to be 37 percent; it is expected to be 38 percent in 2012. Representatives for
the ethanol industry say that the share of corn used for ethanol is typically overstated.
After processing in an ethanol plant, one-third of the corn used, by weight, can still be
used as feed, decreasing the amount of feed that ethanol displaces, according to the
Biotechnology Industry Organization." |
"After taking a step back in the
wake of Japans nuclear disaster this year, energy-hungry China
is moving cautiously ahead with its ambitious nuclear
energy program. That is the message that Chinese
officials have been giving to visiting environmental experts and local news media." |
"How to remove $5 billion from
the federal deficit in one fell swoop? Eliminate the $5 billion-a-year subsidy given to
oil refiners for blending ethanol into gasoline. The Senate voted Thursday to do just
that, and even though the amendment is attached to a bill that probably wont pass,
the 73-27 vote sends a message that many Democrats and Republicans are behind an idea
supported by an odd coalition that ranges from Tea Partyers to the Sierra Club.
Thirty-three Republicans joined 40 Democrats in voting to eliminate the subsidy. Provided in the form of tax credits, the subsidy gives 45 cents a gallon
to refiners who use ethanol, a renewable fuel additive that comes mainly from corn in the
U.S. These tax breaks long have been supported as a way to reduce oil imports by
politicians in both parties emphatically so for many who run for president and look
to woo the farm vote. But a new emphasis on deficit reduction, particularly among
Republicans aligned with Tea Party activists, has contributed to a shift in the political
landscape. Environmental groups like the Sierra Club argue that corn-based ethanol isn't
any cleaner than gasoline because of all the fossil fuel used to farm corn. They instead
want to see more renewable energy like solar and wind. The measure will now be added to a
bill renewing a federal economic development program. The prospects for the overall bill
are uncertain, but Thursday's vote clearly endangers the ethanol tax credit, which would
expire at the end of the year anyway, unless Congress renews it. The measure passed
Thursday would end the tax credit immediately." |
"It was to be a swap felt around the world - a plan privately
discussed by the world's largest oil exporter and the globe's biggest consumer to take the
heat out of $120-plus oil prices. In the weeks leading up to the failed June OPEC meeting,
US and Saudi officials met to discuss surprising the
market with an unprecedented arrangement: exchanging urgently-needed high-quality crude
oil stored in the US emergency reserve for heavier, low-quality oil from Saudi Arabia, according to people familiar with the plan. The idea involved shipping
some of the light low-sulphur, or 'sweet', crude out of the US Strategic Petroleum Reserve
to European refiners, who needed it after the war in Libya cut off shipments of its
premium crude varieties coveted for making gasoline and diesel. In return Saudi Arabia
would sell its heavier high-sulphur or 'sour' crude at a discount back to the United
States to top up the caverns that hold America's emergency stocks. It was a striking
suggestion, one that would have demonstrated Washington's readiness to put the SPR to
extraordinary use and Riyadh's willingness to work creatively with consumers to quell high
prices. But it did not make it past the drawing board, four sources familiar with the
talks confirmed. The sources disagree on which country proposed the plan. Two said it fell
apart because Riyadh was not willing to subsidize European or US customers by discounting
its crude prices below market value." |
"The government was warned by
its own civil servants two years ago that there could be 'significant negative economic
consequences' to the UK posed by near-term 'peak oil'
energy shortages. Ministers were told it was impossible to know exactly when production
might fail to meet supply but when it did there could be global consequences, including
'civil unrest'. Yet ministers consistently played down the threat with the contemporaneous
Wicks
review into energy security (PDF) effectively dismissing peak oil as alarmist and
irrelevant. The report
on the risks and impacts of a potential future decline in oil production has just been
published but only after the Department of Energy and Climate Change (Decc) was
repeatedly threatened
under the Freedom of Information (FoI) Act with forced disclosure. The information is
revealed at a critical time when oil prices have soared to historic highs of around $115
(£71) a barrel hitting motorists through higher petrol costs and helping to drive up
household gas bills. The price of oil and gas tend to be linked due under the terms of
many wholesale gas contracts. This report admits it is not possible to predict with any
accuracy when crude production will peak and go into steady but final decline. But it goes
on to say that 'if peak oil happened before 2015, this would have significant negative
economic consequences for some of the main importers of UK goods and services resulting in
a negative impact on the UK economy in the longer term.' Civil servants from Decc argued
that while global oil reserves were still plentiful, it is 'clear' that existing fields
are maturing and new production is being slowed by bottlenecks. Yet it concludes that 'alternative technologies to oil will take a
long time to develop and deploy at scale.'... The
Decc report has been finally been published alongside other documents on peak oil as the
government finally goes through a major rethink on the subject. The department's chief
scientist, David MacKay, recently called for information and views on peak oil amid rising
pressure from industrialists to take it more seriously." |
"Poland is being hailed as Europe's new Qatar. Located deep beneath
its rolling landscape are 5300 billion cubic metres (bcm) of recoverable shale gas, more
than enough to meet the countrys needs (currently 14 billion bcm per year) for
centuries to come. This has captured the imagination of a country that sees its dependency
on Russian gas as a threat to national sovereignty. But
Poland already seems to have sold its resources to American oil companies and they
might find it more lucrative to sell into the Russian-controlled pipeline network. As one
analyst puts it, Poland is not on course to become a second Norway, more a second
kind of Turkmenistan. " |
"A Senate effort to take away
ethanol subsidies came up short Tuesday but exposed weakened support for a $6 billion tax
break, suggesting that the incentive could be eliminated. The Senate didn't reach the 60 votes needed to proceed to a vote,
undermined by Democratic leaders frustrated at the procedural maneuver used to bring the
measure to the floor. But in the process of reaching the 40-59 vote, a coalition of
conservatives and environmentalists challenged the legitimacy of the subsidies as their
peers became entangled in a larger debate over tax breaks in an age of deficits. 'Even
though I've supported this tax credit, for all of the years that I have served in both the
House and Senate, I think the time has come,' said Sen. Saxby Chambliss (R, Ga.), in a
sign of the changing political climate. 'I do not intend to support an extension of that
tax credit beginning from the expiration at the end of this year.' The domestic industry
is protected by a tariff of 54 cents a gallon on imported ethanol. A separate tax credit
gives refiners a 45-cent-a-gallon tax credit for blending ethanol into gasoline." |
"Nabucco has been plagued by one
delay after another, however, largely because the consortium of energy companies behind it
has no firm supply contracts lined up. That makes it more difficult to secure financing.
Reinhard Mitschek, the managing director of Nabucco Gas Pipeline International, said last
month that gas should start flowing in 2017, three years later than was originally
planned. But he did not announce any firm deal with a supplier. Talks with the Azeri
government to obtain gas from the Shah Deniz II field in Azerbaijan, for example, have so
far not yielded a solid commitment. In fact, Russia has long held influence in the Caspian
region and wants to tap natural gas there, too. Iraq
also could choose to export its gas in liquefied form to world markets rather than sending
it through pipelines to Europe. South Stream is already serving to 'sow doubts among
central Asian countries about the viability of Nabucco,' said Mr. Egenhofer, the energy
expert. South Streams backers say that Europe needs to reinforce its access to
Russian gas at a time when Europes domestic production, in areas like the North Sea,
is falling and unrest in the Arab world is raising questions about reliability from
sources there. Countries like Germany also may end up driving demand for gas higher by
shuttering nuclear power plants in the wake of the nuclear disaster at the Fukushima
Daiichi plant in Japan, countering suggestions of possible oversupply. 'There are several
reasons to think the market will tighten again,' said Paolo Scaroni, the chief executive
of Eni, the joint-venture partner with Gazprom in South Stream, speaking last month in
Brussels at a promotional event for South Stream." |
"The anti-nuclear movement won a crushing victory in Italy on Monday
when well over 90% of voters rejected Silvio Berlusconi's plans for
a return to nuclear power generation. The result represented an overwhelming setback for the prime minister,
who had tried to thwart the outcome by discouraging Italians from taking part. The
referendum needed a turnout of at least 50% to be binding. Interior ministry figures
projections indicated that more than 57% of the electorate had taken part. Greenpeace
called it a historic result. Quorums were also reached in three other referendums held
simultaneously the first time in 16 years that a quorum had been achieved in any
referendum in Italy." |
"Nuclear power has become a hard
sell in many parts of the world since the disaster at the Fukushima nuclear plant in Japan
with gas continuing to benefit. Last week, Bank of America Merrill Lynch said that
it thought the global gas glut was set to disappear quickly as liquefied natural gas (LNG)
consumption soared. In fact, it saw demand rising so fast it expects the market to start
tightening in the second half of next year. The
comments followed news of the closure of another nuclear reactor in Japan because of
safety fears. A lawsuit seeking the permanent closure of Hamaoka nuclear plant had been
filed by people living close to the plant near Tokyo, which is close to the junction of
two tectonic plates. 'Following the shutdown of another nuclear plant, we expect
Japans LNG imports in 2011 to increase by up to 8.5m tonnes from 70m tonnes last
year,' Merrill Lynch said. Of course, the LNG market is currently well supplied but
things are changing. 'The increased Japanese demand is accelerating a progressive market
tightening that had already been ongoing for a while due to the strength in LNG demand
growth,' Merrill said. 'With little liquefaction capacity growth on the horizon until
2015, when Australia is expanding its Pluto project, the global LNG market could tighten
rapidly in the face of huge expansions in regasification capacity and imports in emerging
markets' By the second half of next year, Merrill envisages a global LNG market that is
tight enough to drive up spot Asian LNG prices. Emerging market customers are already
moving to secure long-term LNG contracts. On Friday, Russian gas behemoth Gazprom inked an
agreement with three Indian energy companies to supply up to 7.5m tonnes of LNG over 25
years .... in March, global imports of LNG increased by 12pc on a year-on-year basis. At
23m tonnes, this was the second strongest level on record 'On a percentage basis, the
strongest growth is coming from Latin America, especially Argentina and Brazil but also
Chile,' Merrill noted. 'Argentina is just commissioning its second floating regasification
facility built in a record nine months.' Also, as clean energy laws tighten, gas becomes
more attractive because it is one of the cleaner fossil fuels and new uses are found. This
means the use of LNG in vehicles is on the rise. Volvo has already started marketing a
long haul truck that is powered by up to 75pc gas. |
"Millions of households were
warned last night that they face 'unacceptable' rises in their energy bills after one of
the biggest power firms announced average increases of nearly £200 a year. Scottish Power became the first of the six major suppliers to disclose a
new round of price rises. It told five million customers that gas and electricity bills
would go up by 19 per cent and 10 per cent respectively. The increase, which will take
effect on Aug 1, will push households average annual bills to almost £1,400, the
highest level ever. Other energy suppliers are expected to follow suit and increase their
prices within weeks." |
"Russia's Gazprom Neft, the oil
arm of state-controlled energy giant Gazprom, wants to start oil production at the Junin-6
block in the oil-rich Orinoco River belt in Venezuela in 2013, CEO Alexander Dyukov said on Thursday. 'We are discussing a possible
launch of early production in 2013 with the Venezuelans,' Dyukov told an annual
shareholders meeting, adding that Gazprom Neft planned to make exploratory drillings at
the deposit in 2011." |
"China ... has enjoyed phenomenal economic growth in recent decades
and continues to expand at 9 or 10 percent a year. Although the numbers still look good
for another year of rapid economic growth, just below the surface are some serious
troubles. The aquifers that supply water to 440 million people living in the north China
plain are about to run dry. Beijing is rushing to bring water from the Yangtze basin to
the north in an effort that has been likened to diverting the Mississippi River to New
York and New England. At the minute parts of China seem to be simultaneously beset by the
worst drought in 100 years and the worst floods in 200. When
the serious environmental problems are coupled with the current power crisis, a case can
be made that the years of rapid growth in China are nearing an end. The concern for the
rest of the world is that Beijing with trillions in foreign currency reserves may begin
importing food, oil, and minerals in such quantities that there won't be much left for the
rest of us." |
"Ministers were facing growing
pressure last night to investigate the safety and environmental impacts of drilling for
shale gas after fears that it could have triggered two small earthquakes in Lancashire. Critics say the released gas can contaminate local water supplies and
that seismic activity could be linked with the technique. They also argue that prospecting
for shale gas which is banned in France, as well as New York and Pennsylvania
states leaves a far worse carbon footprint than conventional gas drilling. Chris
Huhne, the Energy and Climate Change Secretary, has given the controversial technique,
known as 'fracking', a clean bill of health and insisted it is already subject to 'robust'
controls. The Commons Energy Select Committee has also backed the procedure, arguing that
Britain could have considerable reserves of shale gas that should be exploited to reduce
the country's reliance on energy imports." |
"Energy consumption worldwide
advanced at the fastest pace since 1973, driving greenhouse-gas emissions to a record and
increasing the threat of climate change, BP Plc (BP/)said in an
annual report. Use of energy rose 5.6 percent in 2010, rebounding from the
recessions drag on demand, according to the BP Statistical Review of World Energy
report for 2011, released today. Increases in
fossil-fuel consumption, which included a 10 percent jump in use of coal by China to a
record 1.7 billion metric tons of oil equivalent, pushed emissions growth to its biggest
jump since 1969, BP said. Global carbon emissions from electricity generation climbed to a
record last year as growth accelerated in emerging economies, the International
Energy Agency said May 31. Use of fossil fuels may drive temperatures beyond a 2
degrees Celsius (3.6 Fahrenheit) limit sought in United Nations-overseen
climate-protection talks, the agency said." |
"Hopes that Opec would bring
relief to motorists and wider western economies from soaring energy prices were today
dashed when a crunch meeting of the oil cartel broke up in disarray without
the expected agreement to increase crude output. Political turbulence in North Africa and
the Middle East undermined the usual consensus at the meeting in Vienna and led to
speculation that new internal rivalries could split the group, leading to even more market
chaos. Saudi Arabia, the world's largest
oil producer and influential Opec dove, was outmanoeuvred by Iran,
Venezuela, Libya
and others, later describing the summit as 'one of the worst meetings we have ever had'.
The price of Brent crude soared a further $1.65 to $118.43 a barrel as an expected Opec
agreement to raise its production quotas by about 1.5 million barrels a day failed to
materialise. Petrol in Britain averages 136p a litre 18p more than a year ago
and Edmund King, president of the AA, said the prospect of a new rise on the back
of the failed Opec meeting was a 'slap in the face' for the consumer. 'With so many
indicators pointing to the pain of high oil prices and the detrimental effect they are
having on family budgets and economic recovery, Opec's decision simply deepens the gloom,'
he added. The four west-leaning Gulf Arab states had proposed increasing daily output to
more than 30m barrels but they were outvoted by seven countries including Venezuela and
Algeria who wanted them left unchanged. Saudi Arabia made clear it was not happy. Ali
al-Naimi, oil minister for a country which has close ties with America and Britain, said:
'We were unable to reach an agreement this is one of the worst meetings we have
ever had.' Market analysts said there were genuine differences inside Opec about whether
the bout of very high oil prices could last and undermine the global economy or naturally
fall back.... The atmosphere had been poisoned by Qatar backing Libyan rebels fighting the
government of Muammar Gaddafi, while Saudi Arabia has angered Shi'ite Iran by using force
to help the Sunni-led Bahrain suppress a Shi'ite rebellion. But, this time, those in Opec
politically opposed to the United States led by Iran and Venezuela found
enough support to block Saudi Arabia whose views normally hold sway. Katherine Spector at
CIBC World Markets said: 'Saudi is the cartel member most interested in earning political
'points' with consuming countries, and maintaining its image as a reliable supplier of
last resort.' But several Opec members also argued they needed to keep tax revenues high
to protect their citizens against the rocketing cost of other commodities such as food, and
could not to let the oil price decline. Opec is not due to meet again for another three
months and some analysts said the angry divergence of views could mark the beginning of
the end for the cartel. 'A new world order beckons, doubtless preceded by disorder,' said
Marc Ostwald, strategist at Monument Securities. He predicted that non-Opec members such
as Russia and Kazakhstan could be the main beneficiaries if the cartel's power
waned...However, Julian Jessop, chief international economist at Capital Economics, said
the weakening outlook for the global economy should bring oil prices down later this year
. 'We continue to expect the price of Brent crude to drop back below $90 per barrel by the
end of the year, as global demand continues to disappoint, the Middle East risk premium
fades, and the dollar rebounds.'" |
"If you ever wonder why
seemingly obscure countries like Yemen, Qatar and Bahrain get so much attention, just look
at these two narrow straits, and know that nearly 50% of the world's seaborne oil passes
through them daily. Then think about the global
economic meltdown that would result if the straits were disrupted. So when unrest in Yemen
sends its injured (and U.S.-friendly) despot packing, or when Iran helps foster Shiite
unrest in Bahrain, or when Saudi Arabia struggles with its own leadership transition...
you need know what's really going on and how it could end up affecting you." |
"The increasing abundance of
cheap natural gas, coupled with rising demand for the fuel from China and the fall-out
from the Fukushima nuclear disaster in Japan, may have set the stage for a 'golden age of
gas,' the International Energy Agency said Monday.
Under a scenario set out by the IEA, global consumption of natural gas could rise by more
than 50% over the next 25 years, with it accounting for more than a quarter of global
energy demand by 2035, up from 21% now." |
"That back-of-the-cabin pilgrimage to Ibiza or Miami this summer will
be a little less cramped than usual, according to the airline industry's
leading trade body, as economy class passengers balk at higher fares due to rising fuel
costs and aviation taxes. The International Air
Transport Association said leisure travel fell 3.5% worldwide between last November and
March this year, with Europe suffering the most as recession-hit passengers declined to
accept ticket prices driven
higher by the increasing cost of oil. IATA's
chief economist, Brian Pearce, said carriers have had no choice but to hike fares because
the cost of jet fuel has risen by more than 50% over the past 12 months. With no sign of a
significant decline in an oil price that is staying stubbornly
above $100 a barrel, airlines are fighting to stay profitable and have pushed up ticket
prices in order to recoup costs, with an inevitable consequence for discretionary
spenders, said Pearce." |
"The Internet has long promised a more efficient and greener world.
We save on paper and mailing by sending an email. We can telecommute instead of driving to
work. We can have a meeting by teleconference instead of flying to another city.
Ironically, despite the web's green promise, this explosion of data has turned the
Internet into one of the planet's fastest-growing sources of carbon emissions. The
Internet now consumes two to three per cent of the world's electricity. If the Internet
was a country, it would be the planet's fifth-biggest consumer of power, ahead of India
and Germany. The Internet's power needs now rival
those of the aviation industry and are expected to nearly double by 2020. 'The Internet pollutes, but people don't understand why it pollutes. It's
very, very power-hungry, and we have to reduce its carbon footprint,' said Mohamed
Cheriet, a green IT expert and professor in the engineering and automation department at
Montreal's Ecole de Technologie Superieure (ETS). The bulk of all this energy is gobbled
up by a fast-growing network of huge 'server farms' or data centres that form the backbone
of the Internet. They are hush-hush facilities, some the size of five Wal-Marts, packed
from floor to ceiling with tens of thousands of computers. These are the computers that
make the Internet run routing traffic and storing much of those ever-expanding
heaps of data. Say you do a Google search. Your query kicks into action about 1,000
servers at various Google data centres. Those computers scan billions of web pages already
in Google's archives and spit out an answer. Total time elapsed: 0.2 seconds on average.
Meanwhile, Google's data centres are also constantly combing the Internet to update their
archives of web pages. All those computers have a voracious appetite for energy,
especially for cooling equipment to prevent overheating." |
"Claims that biofuels have lower
greenhouse gas emissions than fossil fuels are 'complete nonsense' and EU-wide targets to
increase their use should be scrapped says letter to transport minister.A global 'land grab' and increased loss of forests and other natural
ecosystems is being driven by European targets for more transport fuel to come from
biofuels, say a group of prominent UK scientists. The EU has a target for 10 per cent of
total transport fuel to be derived from renewable sources by 2020. Observers estimate the
vast majority of these targets will be met by biofuels, mainly sourced from food crops,
such as oil seeds, palm oil, sugar cane, beet and wheat. The UK is currently aiming to
reach 5 per cent of fuel from renewable sources by 2013 and admits that 90 per cent or
more of the increase to 10 per cent by 2020 will be met by crop-based biofuels. The
biofuels target was originally designed to help reduce greenhouse gas emissions but in a
letter sent to the transport minister Philip Hammond, and seen by the Ecologist, 19
prominent scientists from across the UK say crop-based biofuels will actually
'substantially increase emissions'. According to the scientists, in a rush to promote
biofues both the UK and EU had failed to take account of two factors - the high-use of
nitrogen fertilisers and land-use change brought about by the increasing demand for land
to grow biofuel crops instead of food. 'The additional demand for grains, oilseeds and
sugars brought about by increased biofuel production will indirectly bring about the
conversion of land currently under forest or other natural ecosystem into agricultural
land, with the concomitant release into the atmosphere of carbon stored in trees and
soil,' says the letter. Professor Keith Smith, of
University of Edinburgh, one of the letter's co-authors, says the release of carbon
dioxide would be 'huge' compared to the savings from the crops taking in CO2 from the
atmosphere to grow. He says another factor,
emissions related to fertiliser-use, was also being ignored. 'There has been a
naivety that biofuels are carbon neutral but when we count the fossil fuel energy going
into biofuels from fertiliser use and then also the nitrous oxide emissions from using
nitrogen fertilisers, the emissions are even higher,' says Professor Smith." |
"Britain is at 'high risk' of
energy price shocks in the short term, with a dependence on imports making it just as
vulnerable as Uganda, according to new research.
Maplecroft, the risk-analysis firm, has found that the UK is one of the most exposed
developed nations and is more likely to suffer supply disruption than France, Germany or
the US. Only Italy, Spain, Greece and Japan are at greater risk than Britain in the
short-term among developed countries. China also faces an uphill struggle to meet its
energy demand. 'Although energy infrastructure is well maintained in the UK, high fuel
prices at the pump and relatively high imports of both fossil fuels and electricity leave
the UK vulnerable to disruption of their energy supply,' Maplecroft found. 'The UK became
a net importer of natural gas and oil in 2004 and 2005 respectively. And the UK lags
behind other European countries in its adoption of renewables as an energy source.' More
than 100 countries are rated 'high risk', emphasising the problems faced across the world
in meeting energy needs over the next decade....Surprisingly, some oil and gas producing
countries in the Middle East and North Africa, including Egypt, Iran, Iraq, Kuwait and
Qatar, are also rated 'high risk' in the long-term because the countries are 'energy
intensive' and may not be able to meet internal demand in future." |
"Britain is facing a shortage of
UK-sourced diesel and may need to triple imports over the next decade, the UK Petroleum
Industry Association has warned. In a submission to MPs, the industry group cautions that
a greater reliance on imports could lead to 'reduced security of supply as imported
products may be less immediately available in times of emergency or crisis'. This would expose motorists to the possibility of further price shocks.
Analysts from Deloitte estimate that a three-week supply disruption of diesel from the key
Rotterdam trading hub would increase prices by 15pc overnight. Challenging conditions for
the UK refining industry mean that it is becoming less economical to convert crude oil
into diesel, petrol and other finished fuel products in this country. However, demand for
diesel vehicles has never been greater, with the price of the fuel hitting new highs above
140p per litre this year. The biggest cause of the domestic shortfall of diesel is this
rising demand up 38pc over the past 15 years coupled with falling refining
capacity. Currently, four out of the UK's eight refineries are in a sale process and all
are under pressure from high-volume, cheaper rivals in Asia, which are not subject to the
same £1bn green taxes on the industry. A new Deloitte report for the Government says
imports will need to rise from 3m tons to 7m tons over the next decade from places such as
the Netherlands, Russia and Sweden. However, potential closures and lost refining capacity
may mean an extra 11m barrels of diesel is needed, according to the UK Petroleum Industry
Association. 'The refining sector faces a growing imbalance in petrol and diesel supply
and demand,' it said. 'Addressing this imbalance is a growing challenge for UK
refineries.' Existing UK refineries will need around £500m of investment to make them fit
for purpose to produce more diesel and refine heavier grades of crude, as Britain's light,
sweet supplies from the North Sea slowly deplete. The UK Petroleum Industry Association
says many existing refinery owners are unwilling to invest given the burdens of British
environmental legislation and the requirement to build up strategic stocks. It says much
new investment may be 'delayed or permanently shelved, as importing products rather than
building new processing equipment may be a more attractive option'." |
"Russia and Qatar are under
growing pressure from Europes biggest utilities to scrap a 40-year-old system that
links natural-gas prices to oil after Brent crudes 23 percent surge this year. As delegates from countries that hold two-thirds of the worlds
reserves gather in Cairo tomorrow for a one-day meeting of the Gas Exporting Countries
Forum, customers from Frances
GDF Suez SA to EON AG of Germany
are urging producers to link prices to spot markets instead of insisting on long-term
contracts that shadow the fluctuations of oil. Contract prices will rise about 15 percent
in the next quarter alone, according to Wood Mackenzie Ltd., an Edinburgh-based energy
consultant. 'The European contract price of gas is going up,' said Thierry Bros, a senior
analyst at Societe Generale SA in Paris. 'Utilities wont sign new oil-linked
contracts.' Europes
dependency on gas is rising as the region seeks to minimize carbon emissions and nations
such as Germany turn away from nuclear power after Japans radiation crisis. About
two-thirds of continental Europes gas is priced under long-term contracts that lag
movements in Brent by about six months, making it more expensive than spot markets, where
prices more closely reflect supply and demand." |
"The controversial new drilling
operation for natural shale gas in Lancashire has been suspended following a second
earthquake in the area that may have been triggered by the process. The earthquake last Friday near Blackpool occurred at the same time that
the energy company Cuadrilla Resources was injecting fluids under high pressure deep
underground to deliberately blast apart the gas-bearing rock a process known as
'fracking', brought to Britain from the US, where it has been highly contentious.... Bans
on commercial fracking are already in place in France as well as in New York and
Pennsylvania states, where people living close to fracking sites have been filmed setting
fire to tap water contaminated with methane gas." |
"With little fanfare, a press
release appeared last week on the website of the UK Industry Taskforce on Peak Oil and
Energy Security (ITPOES). The release said that during a meeting between Chris Huhne, the
UK's Secretary of State for Energy and Climate Change, and representatives of ITPOES, an
agreement had been reached that Her Majesty's Department for Energy and Climate will
collaborate with ITPOES on a joint examination of concerns that global oil supply will
begin to fall behind demand within as little as five years. This collaboration is seen by the British government as the first step in
the development of a national peak oil contingency plan. There are many implications
buried in this seemingly innocuous announcement. First, American readers should note that
the British government recognizes that energy policy and climate change are inextricably
linked so that you cannot formulate policies for one without the other. The major step
forward, however, is the official and semi-public recognition by a major government that
global oil supplies will fall behind demand in as little as five years. After years of
official denial this is indeed a breakthrough worthy of note. Gone is the rhetoric about
the billions of barrels of oil remaining that will last for so many decades that nobody
alive today needs to worry. Official recognition has been given to the concept that the
remaining oil will be so expensive to extract or will be locked into the earth by
intractable political disputes, so that it simply will not be available in the unlimited
quantities or at the prices we have known for the last 100 years. Also implicit in the
announcement is that ever-rising real energy costs will destabilize nearly all of the
world's economies and that economic growth in the form we have come to know it will no
longer be possible. Now, announcing that you are going to study something is a long ways
from having a plan to deal in a realistic manner with a problem of this magnitude, but it
is clearly a step forward and positions the British months or more likely years ahead of
their American cousins in thinking about the problem. It will be interesting to follow
whatever is made public about the discussions and just what a British plan to deal with
peak oil and climate change will look like. It is also interesting that the announcement
that the world-as-we-know-it will come to an end shortly was announced on an obscure
website with minimal attention.... This raises the key issue of the next few decades -
What will be the role of government in holding society together during the transition to
the post carbon age? A corollary issue will be how well current systems of finance,
industrial organization and capital formation will function during what is likely to be a
prolonged period of economic decline as fossil fuels and then many other resources become
scarcer and much more expensive. As people naturally prefer to stay with accustomed life
styles and ways of doing things as long as possible, there will inevitably be a period of
political controversy between those who have come to recognize that major changes in our
civilization must take place if society is to survive in a recognizable fashion and those
who will cling to the familiar until overcome by events. Indeed, the opening rounds of
this debate have likely started already in the controversies over global warming, jobs,
taxes, deficits, and sovereign debts. In the United States a great political debate is
taking place on 20th century terms with discussion focused on reviving economic growth,
cutting federal deficits, and stimulating spending. In the 21st century, an era of
depleting resources, much of this debate is no longer relevant..... There will be many
other issues besides the creation of jobs, and supplying goods and services in the coming
transition. Some of these issues are not yet apparent and some will not be recognized for
years. What is obvious, however, is the faster people and their governments recognize the
real nature of the problem and start working on real solutions the better off we and
succeeding generations will be. For now we can only thank Her Majesty's government for
taking some sort of a lead and hope that others will follow soon." |
"In
a Guardian interview 10 days ago, the business secretary Vince Cable said the public
was unaware of just how bad the structural problems of the economy were, and he's quite
right about that. One of these structural problems is Britain's growing reliance on
imported energy. North Sea oil has been a great comfort blanket for politicians of all
stripes since it was first pumped ashore in the mid-1970s: it has plugged the gap in the
balance of payments caused by the relative decline of manufacturing as a share of the
economy, and it has paid for Conservative tax cuts and Labour spending increases. Had Britain salted away the oil revenues, as Norway did, it would now
have a whopping sovereign wealth fund that could be used to re-tool and rebalance the
economy in the way that all politicians say is long overdue. But the money was spent long
ago, and since 2005 Britain has imported more energy than it has exported. This dependency
could hardly have come at a worse time. Unravelling the reason for higher oil prices is
tricky, but whether it has been stronger demand from the fast-growing emerging economies,
the long-anticipated arrival of peak oil, speculation from hedge funds or a combination of
all three, the era of easily available cheap crude is over for good. Hence the attempts to
get oil out of dangerous deepwater fields or from the Canadian tar sands. In the long
term, however, countries will have to find ways of making fossil fuels cleaner, going
nuclear, or investing heavily in renewables. All are expensive and potentially
controversial, as Germany will find with
its decision to abandon nuclear altogether. But at least Berlin has been prepared to
face up to issues which in Britain have been ducked." |
"British firms have acquired
more land in Africa for controversial biofuel
plantations than companies from any other country, a Guardian investigation has revealed.
Half of the 3.2m hectares (ha) of biofuel land identified in countries from Mozambique to Senegal
is linked to 11 British companies, more than any other country. Liquid fuels made from plants such as bioethanol are hailed
by some as environmentally-friendly replacements for fossil fuels. Because they compete
for land with crop plants, biofuels have also been linked
to record
food prices and rising
hunger. There are also fears they can increase greenhouse gas emissions. A market has
been created by British and EU laws requiring the blending of rising amounts of biofuels
into petrol and diesel, but the rules were condemned
as unethical and 'backfiring badly' in April by a Nuffield Council on Bioethics commission.
In the UK, only 31%
of biofuels used meet voluntary
environmental standards intended to protect water supplies, soil quality and carbon
stocks in the source country." |
"It has been facetiously dubbed
'the phaseout of the phaseout of the phaseout.' But after weeks of heated discussion, the
German government has made it clear that it is serious with its U-turn on nuclear
energy. Following talks that went into the early hours of Monday morning, Environment
Minister Norbert Röttgen announced the details of the government's new approach to
phasing out nuclear power. The new plan foresees all of Germany's nuclear plants going
offline by 2021 -- with one possible exception: If the transition to renewable energy does
not go as quickly as planned, three of the plants will be allowed to continue operating
until 2022, as a kind of safety buffer against electricity shortfalls.... Under the new plan, Germany's seven oldest reactors, which are
already offline under a nuclear moratorium announced by Chancellor Angela Merkel in
mid-March after the Fukushima disaster, will not resume operation. The Krümmel nuclear
plant in the state of Schleswig-Holstein, which has been offline following an accident in
2009, will also be permanently shut down. One plant, possibly Philippsburg I in the state
of Baden-Württemberg or Biblis B in Hesse, will, however, be kept in "standby"
mode as a reserve should extra energy be needed. It would be used to produce energy if
there appeared to be a risk of power shortages, for example on cold, gray winter days when
there is little solar energy available and when neighboring countries have little energy
available for export, due to their own needs." |
"Chancellor Angela Merkel said
Germany could serve as a global trailblazer with its decision Monday to phase out nuclear
power by 2022 but France, Europe's biggest producer,
said it will not follow suit. Merkel said the "fundamental" rethink of energy
policy in the world's number four economy, prompted by the disaster in March at Japan's
Fukushima plant, opened new opportunities for business and climate protection. 'We believe
we as a country can be a trailblazer for a new age of renewable energy sources,' she told
reporters. 'We can be the first major industrialised country that achieves the transition
to renewable energy with all the opportunities -- for exports, development, technology,
jobs -- it carries with it.' Yet neighbour France, while saying it 'respected' the German
position, insisted it was not ready to give up nuclear energy which Prime Minister
Francois Fillon described as a 'solution for the future'. 'We think that for some decades
at least we will not be able to do without nuclear energy,' added Foreign Minister Alain
Juppe." |
"A gas field in Turkmenistan has
been crowned the second largest deposit ever discovered, potentially transforming the
desert nation into a Caspian Qatar. A new report
from Gaffney Cline, the British oil field auditing company, to be released officially next
month, has confirmed claims from the former Soviet Republic that many had dismissed as
overly optimistic. 'It appears that the South Yolotan field is now easily the world's
second largest gas field in terms of gas in place second only to the North Field
and South Pars,' Peter Holding, Gaffney Cline's director for Central Asia, said at a
conference in the Caspian resort of Awaza. The report is expected to say that the field
could hold 20 trillion cubic metres, enough to supply the UK for more than 350 years, and
Europe for more than 50. The compares with the top-level estimate of 14 trillion cubic
metres it gave in its 2008 audit, which ranked the field only sixth worldwide. The
development of the giant North Field has made Qatar the world's richest country in terms
of per capita income. The field, which is shared with Iran, holds more than 50 trillion
cubic metres. Mr Holding pointed out that the South
Yolotan field could now easily support gas deliveries to Europe, as well as to Russia and
China.... Turkmenistan's autocratic President
Gurbanguly Berdimukhamedov has broken Russia's long stranglehold over the country's gas
exports, building new pipelines to China and Iran. But European energy companies have so
far struggled to strike a similar deal to buy Turkmen gas, a crucial element of the
European Union's strategy to reduce its dependence on Russia for supplies." |
"Europe's nuclear power faultlines in
the wake of the Fukushima disaster were exposed on Wednesday as Switzerland moved to phase out its
nuclear power plants and the extent of British and
French lobbying to water down nuclear safety checks was revealed. The UK, with the backing
of France and the Czech Republic, managed to have terror attacks excluded from a series of
new nuclear safety tests ordered
after the Japanese tsunami led to radiation leaks from Fukushima nuclear reactors in March.
The Swiss cabinet called for the decommissioning of the country's five nuclear power
reactors and new energy sources to replace them.
The recommendation will be debated in the country's parliament, with a decision expected
in June that could see the reactors go offline between 2019 and 2034. European regulators
struck a deal on 'stress tests' of how the EU's 143 nuclear power plants would withstand
natural disasters, but terror attacks were reportedly excluded because of the UK argument
that they lie within the purview of national security authorities and not the European
commission or national nuclear regulators." |
"The Arabian Peninsula has fueled the global economy with oil for five decades. How long it can continue to do so hinges on projects like one unfolding here in the desert sands along the Saudi Arabia-Kuwait border. Saudi Arabia became the world's top oil producer by tapping its vast reserves of easy-to-drill, high-quality light oil. But as demand for energy grows and fields of 'easy oil' around the world start to dry up, the Saudis are turning to a much tougher source: the billions of barrels of heavy oil trapped beneath the desert. Heavy oil, which can be as thick as molasses, is harder to get out of the ground than light oil and costs more to refine into gasoline. Nevertheless, Saudi Arabia and Kuwait have embarked on an ambitious experiment to coax it out of the Wafra oil field, located in a sparsely populated expanse of desert shared by the two nations. That the Saudis are even considering such a project shows how difficult and costly it is becoming to slake the world's thirst for oil. It also suggests that even the Saudis may not be able to boost production quickly in the future if demand rises unexpectedly. Neither issue bodes well for the return of cheap oil over the long term. 'The easy oil is coming to an end,' says Alex Munton, a Middle East analyst for the Scottish energy consulting firm Wood Mackenzie. The major oil fields in the Gulf region, he says, have pumped more than half their oilthe point at which production traditionally begins to decline.... To get to Wafra's thick oil, workers are injecting steam into the ground to heat the oil and make it less viscous, allowing it to flow to the surface. The technique is tricky, expensive and unproven in the type of rock that holds Wafra's oil. For their half of the project, the Saudis have enlisted the help of Chevron Corp., which has decades of experience extracting heavy oil from fields in California and Thailand. It is a rare chance for a Western oil company to get a piece of the world's biggest oil reserves.... But it is also a gamble. The project, much more complex that what Chevron has done before, will cost billions of dollars and take decades to complete. And it will be Chevron, not the Saudis, putting up the capital needed to make the project workand taking the risk that it won't.... Global oil consumption, buoyed by skyrocketing demand in China and India, jumped by 2.3 million barrels a day last year, a 2.8% increase, according to U.S. government figures, the second biggest increase in 30 years. Oil production in the Western world, meanwhile, is barely growing. That means the world is increasingly dependent on production from countries in the OPEC cartel, and particularly Saudi Arabia, its dominant member. 'All the countries in the Middle East are going to have to start grappling with these [heavy-oil] reserves,' says Andrew Gould, chairman and chief executive of oil-field services giant Schlumberger Ltd., which has worked on several heavy-oil projects in the region. 'They've never had to think about it before.'.... In the 1930s, 1940s and 1950s, Western oil companies, including predecessors of Chevron, Exxon Mobil Corp., BP PLC and most of the other big international producers, helped discover many of the world's greatest oil fields: Ghawar in Saudi Arabia, Burgan in Kuwait and Rumaila in Iraq. Those fields were so easily tapped, however, that by the 1970s most governments in the region had decided they no longer needed the help of Western companies and nationalized their oil fields. Big Oil found itself virtually shut out of the region.... Using steam to extract oil isn't a new idea. Chevron has been using the method to recover heavy oil at its Kern River field in Bakersfield, Calif., since the 1960s. That field yielded less than 10% of its oil using traditional methods. Using steam injection, Chevron is now on its way to pumping as much as 80% of the crude. The Wafra project, however, is far more of a challenge than traditional steam projects. As in most of the Middle East, the oil at Wafra is trapped in a thick layer of limestone that also contains minerals that can build up inside pipes and corrode eq |