Current Peak Oil And Energy Crisis News

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 that’s 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, it’s 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 doesn’t mean the recent uptick in oil production has no benefit. As the EIA’s Energy Outlook 2012 noted, the recent boom is helping the United States curb its dependency on foreign crude. But that’s 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."
Oil production is booming — but for how long?
Washington Post (Blog), 26 January 2012

"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 Wednesday’s 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 we’re 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 won’t 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 we’ve 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 aren’t 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 haven’t done so and current production estimates indicate they won’t 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, we’d 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 we’ll 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 isn’t alone, either. Italy’s 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 can’t grow, the implication is that the economy can’t grow either,' the authors write. 'This is such a frightening prospect that many have simply avoided considering it.' And it’s 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 can’t 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, that’s 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 haven’t 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, they’ve 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."
Researchers Argue Peak Oil Is Here, Bringing Permanent Volatility
Wired, 26 January 2012

"... 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."
The Peak Oil Crisis: On Closing Our Refineries
Falls Church News-Press, 25 January 2012

"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."
Obama's speech and some sober talk about the oil patch
Foreign Policy, 25 January 2012

"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."
Fracking complicates the climate debate: John Kemp
Reuters, 25 January 2012

"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."
Uranium supply crunch by 2016 - nuclear expert says
Mineweb, 24 January 2012

"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."
IEA Sees 2035 Crude at $247 Barrel, Almost Twice OPEC’s Forecast
Bloomberg, 24 January 2012

"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."
Why Does Gas Production Remain so High Whilst the Price is so Low?
OilPrice.com, 23 January 2012

"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 year’s 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."
U.S. Cuts Estimate for Marcellus Shale Gas Reserves by 66%
Bloomberg, 23 January 2012

"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."
US will break free from oil dependence by 2030: BP report
Sydney Morning Herald, 21 January 2012

"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'."
Fossil fuels are sub-prime assets, Bank of England governor warned
Guardian, 19 January 2012

"Saudi Arabia’s 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 world’s 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 Libya’s 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 year’s 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."
OPEC consensus on $100/barrel oil broadened by Saudi comments
Reuters, 23 January 2012

"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."
Bulgaria bans shale gas drilling with 'fracking' method
BBC Online, 19 January 2012

"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."
Oil demand falling as recession fears mount: IEA
Reuters, 18 January 2012

"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."
Fossil fuel forecast: a huge role
Houston Chronicle, 18 January 2012

"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."
Citizens Advice: 43% of people worried they can't afford next fuel bill
Guardian, 16 January 2012

"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."
Exclusive: Ministers slammed over fracking
Independent, 16 January 2012

"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."
Saudi Arabia, China Ink Nuke Cooperation Deal
RTTNews, 16 January 2012

"The European Union’s 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."
Growing Doubts in Europe on Future of Carbon Storage
Guardian, 16 January 2012

"Saudi Arabia, the world’s 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 it’s 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 Arabia’s 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.'”
Saudis have 2.5m barrels spare oil capacity, PFC says
Bloomberg, 14 January 2012

"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."
Unlocking the Secrets Behind Hydraulic Fracturing
New York Times, 14 January 2012

"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."
Green deal suffers setback as loft insulations set to plummet
Guardian, 13 January 2012

"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."
China's renewables surge dampened by growth in coal consumption
Guardian, 12 January 2012

"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."
UK N.Sea oil, gas investment set for record year
Reuters, 10 January 2012

"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.'"
Western oil firms remain as US exits Iraq
Al-Jazeera, 7 January 2012

"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 world’s 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 Ministry’s 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, Russia’s 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."
Russian Crude Oil Production Rose to Post-Soviet High in 2011
Bloomberg, 2 January 2012

"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."
Peak oil review
ASPO USA, 2 January 2012

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."
BP to End Sakhalin Venture With Rosneft
Wall St Journal, 30 December 2011

"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] It’s 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, let’s 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."
Afghanistan signs first major oil deal with China
AFP, 28 December 2011

"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."
Oil prices predictions: What moved the oil price this year and and what will 2012 hold?
ThisIsMoney, 28 December 2011

"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."
Landowners turn against leasing for 'fracking'
Independent, 19 December 2011

"[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.'"
Oil boomlet sweeps U.S. as exports and production rise
USA Today, 16 December 2011

"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."
Gas, not renewables, is driving up bills, says Climate Committee
BusinsessGreen, 15 December 2011

"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."
OPEC Opts to Increase Its Level of Output
New York Times, 14 December 2011

"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."
Areva suspends raft of nuclear power projects
BusinessGreen, 13 December 2011

"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."
Exxon's deal with the Kurds inflames Baghdad
Independent, 9 December 2011

"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."
Climate Committee: Biomass has 'no role' in electricity production without CCS
Business Green, 7 December 2011

"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."
Oil's Growing Thirst for Water
Wall St Journal, 6 December 2011

"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.'"
Uranium supply shortage possible, Cameco says
Bloomberg, 6 December 2011

"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."
Peak oil debate losing relevance due to new upstream technology: Repsol CEO
Platts, 6 December 2011

"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 world’s 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, Brazil’s 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. Exxon’s 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 don’t 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."
Has the world reached economic peak oil?
New Scientist, 5 December 2011

"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 America’s 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."
This Is a Big Deal
New York Times, 3 December 2011

"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 Japan’s 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."
Setback to nuclear power plans
Telegraph, 2 December 2011

"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.'"
Cairn finds no oil off Greenland
Guardian, 30 November 2011

"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."
Throwing Another Barrel of Fuel on the Euro Zone's Fire
Wall St Journal, 29 November 2011

"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."
The Peak Oil Crisis: The IEA’s Road Show
Falls Church News-Press, 29 November 2011

"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."
Mexico's oil output rises in Oct-Pemex data
Reuters, 25 November 2011

"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."
Don't bet on big fall in oil – even as crisis looms
Reuters, 23 November 2011

"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."
Google quits plans to make cheap renewable energy
Reuters, 22 November 2011

"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."
Chevron spill may complicate Brazil oil dreams
Reuters, 21 November 2011

"The race to deliver stockpiles of oil from Oklahoma to the world’s 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."
Oil prices surge on pipeline plans by Enbridge, TransCanada
Calgary Herald, 17 November 2011

"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 world’s biggest discovery in four decades. Centered on a man-made island 70 kilometers (44 miles) from Kazakhstan’s 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 that’s 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."
Biggest Find in Decades Becomes $39 Billion Cautionary Tale
Bloomberg, 17 November 2011

"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 can’t 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 energy’s 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."
State Department Launches "Bureau of Energy Resources"
U.S State Department, 16 November 2011

"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 year’s 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."
Clean Energy Investment May Double to $395 Billion by 2020
Bloomberg, 16 November 2011

"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 year’s 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."
MPs attack Government for fuel taxes that 'destroy communities'
Telegraph, 15 November 2011

"Libya’s oil production remains at about 40 percent of the level that it was before the revolution began. But none of the country’s 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.”
Spared in War, Libya’s Oil Flow Is Surging Back
New York Times, 15 November 2011

"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 shift—outlined by Gillard in a newspaper editorial on Tuesday—comes 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."
Australia Seeks End of India Uranium Ban
Wall St Journal, 15 November 2011

"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."
Britain asks Iraq to back off after threats to Exxon
Independent, 14 November 2011

"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 Beijing’s 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 earth’s 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 they’re 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."
A New Era of Gunboat Diplomacy
New York Times, 12 November 2011

"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 don’t yet know the full extent of the shale gas in the UK. We don’t know how economically or environmentally viable it will be to extract. At best, it is years away. As last week’s 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."
Britain can’t afford to bet its future on shale gas - wind turbines are here to stay
Telegraph, 12 November 2011

".. 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."
'Pee power' is possible, UK scientists find
Guardian, 11 November 2011

"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].'"
'Invest in production or see oil hit record $150 a barrel'
Telegraph, 9 November 2011

"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."
Saudi set to overtake Russia as top oil producer
Reuters, 9 November 2011

"The European Union is expected to overtake the United States as the world’s 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 world’s 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."
E.U. Poised to Overtake U.S. as Biggest Oil Importer
New York Times, 9 November 2011

"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 fracking’s 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 community’s 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."
U.S. Government Confirms Link Between Earthquakes and Hydraulic Fracturing
Oilprice.com, 8 November 2011

"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."
Oil demand globally to peak before 2020
Telegraph, 7 November 2011

"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."
Ricardo Study Suggests Global Oil Demand May Peak Before 2020
MarketWatch, 7 November 2011

"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."
Energy landscape in 2012 and beyond: John Kemp
Reuters, 3 November 2011

"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."
Military thinktank urges US to cut oil use
Guardian, 2 November 2011

"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."
Belgium plans to phase out nuclear power
BBC Online, 31 October 2011

"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."
Saudi oil production cut looms
CNN, 27 October 2011

"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."
The Peak Oil Crisis: The Energy Trap
Falls Church News-Press, 26 October 2011

"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."
China's oil thirst will squeeze market - funds
Reuters, 25 October 2011

"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 society—those who use cars every day to commute, drop the kids off at school, and run errands—it 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 we’ve 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 costs—including gas, insurance, and other related expenses. According to the Department of Commerce, that family is paying more for transportation than health insurance or taxes."
We Pay More to Drive Than We Spend on Taxes
TIME, 24 October 2011

"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."
Why is the oil price still so high?
Telegraph, 23 October 2011

"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."
Thousands of streets left in darkness to save money
Telegraph, 22 October 2011

"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.'"
In the Barnett Shale, the bloom is off the boom
Star-Telegram, 21 October 2011

"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."
Trouble in the algae lab for Craig Venter and Exxon
Foreign Policy, 21 October 2011

"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."
Earthquakes along Lancashire coast WERE caused by drilling for gas
Mail, 17 October 2011

"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 doesn’t come in a timely manner,' he said. 'Oil demand is set to increase.' Birol’s 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 Arabia’s 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."
IEA chides MENA producers to increase output capacity
Oil & Gas Journal, 12 October 2011

"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."
IEA Cuts Demand Forecast
Wall St Journal, 12 October 2011

"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."
Virgin Atlantic unveils plan to use 'green' fuel
Guardian, 11 October 2011

"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."
Hopes that economic crisis will deliver cheaper oil
Guardian, 4 October 2011

"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 LLC—which hold the rights—maintained 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, �ric 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.'."
France Cancels Shale-Gas Permits Over Fracking Impasse
Wall St Journal, 4 October 2011

"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."
Nuclear seeps back into favour as Japan begins energy debate
Reuters, 3 October 2011

"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."
The Smart answer to the energy crisis?
Independent, 1 October 2011

"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'."
Scottish and Southern Energy abandons nuclear plans for wind
Telegraph, 1 October 2011

"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."
North Sea oil slump will cost UK Treasury millions in lost taxes
Telegraph, 30 September 2011

"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."
UK renewable electricity output reaches all-time high
BusinessGreen, 29 September 2011

"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."
N. American oil output could top 40-year-old peak
Houston Chronicle, 28 September 2011

"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."
Doubts raised about giant shale gas find in England
Reuters, 23 September 2011

"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."
Damage, Poor Security Slow Libyan Oil Flow
Wall St Journal, 23 September 2011

"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 world’s 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."
China Consolidates Grip on Rare Earths
New York Times, 15 September 2011

"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."
Fossils From Animals And Plants Are Not Necessary For Crude Oil And Natural Gas, Swedish Researchers Find
ScienceDaily, 10 September 2011

"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 nets �14m in first Middle East adventure
Independent, 8 September 2011

"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."
UK oil production falls to 984,000 bpd in June
Reuters, 8 September 2011

"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."
Libya oil exports not to return to normal until 2013: IEA
AFP, 7 September 2011

"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."
Russia launches major new gas pipeline to Europe, bypasses Ukraine
CNN, 7 September 2011

"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."
Unlocked by melting ice-caps, the great polar oil rush has begun
Independent, 6 September 2011

"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."
World's deepest oil well may rival Alaskan field in production
Lubbock Avalanche-Journal, 3 September 2009

"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 Jupp�, 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 Lib�ration. 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 Lib�ration 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 Lib�ration."
The race is on for Libya's oil, with Britain and France both staking a claim
Guardian, 1 September 2011

"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."
The Peak Oil Crisis: A Billion Vehicles
Falls Church News-Press, 31 August 2011

"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."
OPEC oil output set to hit three-year high in August
Reuters, 30 August 2011

"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 Germany’s electricity. But after the tsunami and earthquake that sent radiation spewing from Fukushima, half a world away, the government disconnected the 8 oldest of Germany’s 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. 'It’s easy to say, ‘Let’s just go for renewables,’ and I’m quite sure we can someday do without nuclear, but this is too abrupt,' said Joachim Knebel, chief scientist at Germany’s prestigious Karlsruhe Institute of Technology. He characterized the government’s 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."
Germany Dims Nuclear Plants, but Hopes to Keep Lights On
New York Times, 29 August 2011

"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."
New power wave heads out to sea
New Scientist, 26 August 2011

"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."
WikiLeaks cables reveal fears over China's nuclear safety
Guardian, 25 August 2011

"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.'"
China has been forced to dig deep to meet its energy needs
Telegraph, 28 August 2011

"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."
China's love affair with the car shuns green vehicles
Guardian, 24 August 2011

"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."
Analysis: Brazil boom takes world fuel markets by surprise
Reuters, 23 August 2011

"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."
Chinese oil giant ends ops in Libya, Syria: report
Agence France Presse, 23 August 2011

"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.'"
Oil Producers Take Steps to Return
Wall St Journal, 23 August 2011

"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 that’s 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, Repsol’s 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 world’s 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 they’ve 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 nation’s oil and natural gas infrastructure, viewing oil as a cash cow that must be preserved."
Oil companies see quick return to Libya, once peace restored
McClatchy Newspapers, 22 August 2011

"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."
Electricity bills could rise by �13 a year to fund infrastructure expansion
Telegraph, 17 August 2011

"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."
The end of the road for motormania
New Scientist, 16 August 2011

"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.'"
Oil not Wall Street is top US threat
Reuters, 15 August 2011

"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."
GM corn being developed for fuel instead of food
Guardian, 15 August 2011

"The IMF forecast Kuwait’s 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."
Kuwait oil exports to peak in 2011: IMF
Emirates 24/7 - 13 August 2011

"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 Greece’s 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.'”
Oil Set for Third Weekly Drop as Financial-Market Swings Threaten Recovery
Bloomberg, 12 August 2011

"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'."
Cairn Energy falls on dry Greenland well
Telegraph, 6 August 2011

"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."
Exclusive: Oil demand outlook dims as economies sputter
Reuters, 4 August 2011

"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."
China set to cap energy use in national low-carbon plan
Guardian, 4 August 2011

"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."
Analysis: Energy policy chaos threatens Japan's economy
Reuters, 4 August 2011

"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..."
Libya years away from oil recovery
Financial Times, 2 August 2011

"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."
Europe's Big Oil Sees Output Fall
Wall St Journal, 1 August 2011

"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."
BP 'has gained stranglehold over Iraq' after oilfield deal is rewritten
Guardian, 31 July 2011

"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. That’s 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."
Obama Reveals Details of Gas Mileage Rules
New York Times, 29 July 2011

"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."
UK crude oil output fell 11% in May on month to 1 million b/d
Platts, 28 July 2011

"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 issues—including the disposal of waste tied to the controversial hydraulic fracturing process—have emerged as a major challenge for the oil and gas industry across the U.S."
Quakes Push Arkansas to Limit Gas-Waste Wells
Wall St Journal, 28 July 2011

"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."
Shell says OPEC capacity worry to fuel oil price
Reuters, 28 July 2011

"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 scourge of 'peak oil'
Al Jazeera, 25 July 2011

"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."
Peak oil review - July 25
ASPO-USA, 25 July 2011

"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."
Contrary to power company figures, cost of nuclear power generation highest: research
The Mainichi Daily News (Japan), 23 July 2011

"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."
Problems at EDF's French nuclear site raise fears of UK energy delays
Telegraph, 21 July 2011

"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 oil exports set to fall in long term
UPI, 20 July 2011

"Saudi Arabia, the world’s 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 kingdom’s oil demand surges, the exportable surplus narrows, tightening global oil markets..."
Surge in Saudi oil burn adds new demand twist
Financial Times, 19 July 2011

"Venezuela’s proven oil reserves have surpassed Saudi Arabia’s 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 Venezuela’s 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, Venezuela’s Ministry of Communication and Information said in a release Tuesday. But the figures are also a matter of debate. About one-third of Venezuela’s 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 Pi�on, 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."
Venezuela tops world oil reserves
Miami Herald, 19 July 2011

"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."
Biofuel demand in US driving higher food prices, says report
Guardian, 19 July 2011

"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."
A new Great Game is evolving in Afghanistan
Deutsche Welle, 15 July 2011

"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."
Fuel poverty affects one in five households
BBC Online, 14 July 2011

"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."
UK oil and gas drilling falls 52% in second quarter
BBC Online, 14 July 2011

"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 day—the 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."
Saudis Deliver on More Output
Wall St Journal, 14 July 2011

"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 year’s harvest. Animal feed and residual demand accounted for 5 billion bushels.”
US ethanol refiners use more corn than farmers
Financial Times, 13 July 2011

"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."
China's Hunger for Corn Turns Market on Ear
Wall St Journal, 9 July 2011

"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."
Power bills to soar by 30% in 'green’ reforms
Telegraph, 9 July 2011

"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."
Petrol sales collapse in face of high pump prices
Daily Telegraph, 8 July 2011

"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."
Critically Tight 2012 Oil Supply To Push Up Prices-Goldman
Dow Jones Newswires, 7 July 2011

"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."
Oil to climb on growing demand, reduced spare capacity: Goldman
Platts, 7 July 2011

"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."
Paper says China has legal, moral right to curb rare earth exports
Reuters, 7 July 2011

"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."
Green energy investment hits record global high
BBC Online, 7 July 2011

"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."
Exhausted global oil supplies make Arctic the new hydrocarbon frontier
Guardian, 5 July 2011

"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."
US envoy says Iraq critical to global energy needs
AFP, 2 July 2011

"Though not even yet in its official pilot phase, IEI’s shale extraction process aims to produce 40 billion barrels of oil in its currently licensed jurisdiction, which covers 16 percent of Israel’s 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 300� 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."
'Oil shale can bring energy security and independence'
Jerusalem Post, 1 July 2011

"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."
Fukushima spin was Orwellian
Guardian, Comment Is Free, 1 July 2011

"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."
World's longest gas pipeline operating
Associated Press, 1 July 2011

"China’s 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 Petroleum’s 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. Hussein’s 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."
China Opens Oil Field in Iraq
New York Times, 28 June 2011

"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 company’s 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 Enron’s. '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/Shell’s 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 company’s 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.'"
S.E.C. Shift Leads to Worries of Overestimation of Reserves
New York Times, 27 June 2011

"Brussels risks triggering a fresh fuel crisis if a new directive imposes 'unfair' carbon reduction targets on the world’s 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 Alberta’s 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 world’s 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."
BRUSSELS RULE 'TO TRIGGER OIL CRISIS'
Express, 26 June 2011

"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.’”
Behind Veneer, Doubt on Future of Natural Gas
New York Times, 26 June 2011

"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."
Iran discovers major oil, gas reserves
Press TV (Iran), 25 June 2011

"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. "
Insiders Sound an Alarm Amid a Natural Gas Rush
New York Times, 25 June 2011

"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."
Dozens of countries queue up to go nuclear
New Scientist, 24 June 2011

"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 1970s—in 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 ethanol—as a replacement for imported oil—squanders 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 America’s entire corn crop were to be devoted to ethanol production, it would still only supply 4% of the country’s oil consumption. So much for the argument that home-grown ethanol offers an answer to America’s dependence on foreign oil. Second, the food industry has gone noisily public about the way the federal government’s corn subsidies—which have encouraged American farmers to devote more and more of their corn crops to ethanol production—have 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 bushel—twice 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 E85—even with their hefty subsidies—are 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 week’s 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."
The Difference Engine: The beef about corn
The Economist (Blog), 24 June 2011

"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."
Don't believe the spin on thorium being a greener nuclear option
Ecologist, 23 June 2011

"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."
House OKs speed-up of Arctic oil/gas permitting
Reuters, 22 June 2011

"Oil rose in New York, reversing yesterday’s 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 what’s 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. 'That’s going to be bullish in the long run. We’re 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 won’t fall below $90 a barrel because OPEC“will start talking about cutting production” near that price, according to Societe Generale SA. Saudi Arabia, the world’s 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 IEA’s 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 isn’t contributing to the IEA’s plan, according to Joel Grant, spokesman for the office of the Minister of Resources and Energy, by phone from Melbourne today. It’s 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."
Oil Rises on Concern IEA Emergency Crude Release May Limit Future Supplies
Bloomberg, 24 June 2011

"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."
IEA makes 60 million barrels of oil available to market to offset Libyan disruption
International Energy Agency, 23 June 2011

"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."
Safety rules loosened for aging nuclear reactors
Associated Press, 20 June 2011

"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 world’s rare earths, 17 elements used in hybrid cars, fluorescent lights and many high-tech applications."
Rare earth prices soar as China stocks up
Financial Times, 20 Jun 2011

"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 America’s 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 IEA’s head of Oil Industry and Markets says."
Oil scene: Strategic petroleum reserves fuel debate
Arab News, 19 June 2011

"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%."
Head of IEA pleads with Russia: join us to help solve energy price crisis
Observer, 19 June 2011

"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."
Record Food Prices Linked to Biofuels
Technology Review (MIT), 17 June 2011

"After taking a step back in the wake of Japan’s 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."
After Inspections, China Moves Ahead With Nuclear Plans
New York Times, 16 June 2011

"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 won’t 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."
$5 billion-a-year ethanol subsidy nearing its end?
MSNBC, 16 June 2011

"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."
Saudi, US mulled secret oil reserve swap
Reuters, 15 June 2011

"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."
UK ministers ignored 'peak oil' warnings, report shows
Guardian, 15 June 2011

"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 country’s 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.’ "
Shale gas doesn't make Poland the new Norway yet
European Energy Review, 14 June 2011

"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."
Senate Rejects Effort to Cut Ethanol Subsidy
Wall St Journal, 14 June 2011

"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 Stream’s backers say that Europe needs to reinforce its access to Russian gas at a time when Europe’s 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."
European Natural Gas Pipelines Plagued by Uncertainties
New York Times, 13 June 2011

"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."
Berlusconi's nuclear power plans crushed
Guardian, 13 June 2011

"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 Japan’s 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.”
LNG demand rises as nuclear power is shunned
Telegraph, 11 June 2011

"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."
Millions of households face record high energy bills
Telegraph, 11 June 2011

"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."
Gazprom Neft wants to start oil production in Venezuela in 2013
RIA Novosti, 9 June 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."
The Peak Oil Crisis: The Gathering Storm
Falls Church News-Press, 8 June 2011

"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."
MPs call for inquiry into shale gas drilling after earthquakes
Independent, 8 June 2011

"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 recession’s 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."
Global Energy Use Advances at Fastest Pace Since 1973 on Coal, BP Says
Bloomberg, 8 June 2011

"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.'"
Oil price rises sharply after Opec meeting collapses in disarray
Guardian, 8 June 2011

"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."
Middle East: Strait Shooting
Stratfor, 8 June 2011

"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."
Natural Gas Entering 'Golden Age'
Wall St Journal, 7 June 2011

"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."
Airlines lose economy passengers as soaring fuel bills force up ticket prices
Guardian, 7 June 2011

"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."
Could the Net be killing the planet one web search at a time?
Vancouver Sun, 3 June 2011

"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."
UK scientists launch scathing criticism of EU biofuel targets
Ecologist, 2 June 2011

"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 as vulnerable to energy price shocks as Uganda
Telegraph, 2 June 2011

"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'."
UK diesel shortage 'may put energy security at risk'
Telegraph, 1 June 2011

"Russia and Qatar are under growing pressure from Europe’s biggest utilities to scrap a 40-year-old system that links natural-gas prices to oil after Brent crude’s 23 percent surge this year. As delegates from countries that hold two-thirds of the world’s reserves gather in Cairo tomorrow for a one-day meeting of the Gas Exporting Countries Forum, customers from France’s 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 won’t sign new oil-linked contracts.' Europe’s dependency on gas is rising as the region seeks to minimize carbon emissions and nations such as Germany turn away from nuclear power after Japan’s radiation crisis. About two-thirds of continental Europe’s 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."
Russia, Qatar Face Pressure to Scrap Gas Link to Oil Prices as Crude Jumps
Bloomberg, 1 June 2011

"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."
Small earthquake in Blackpool, major shock for UK's energy policy
Independent, 1 June 2011

"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."
The Peak Oil Crisis: An Announcement
Falls Church News-Press, 1 June 2011

"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."
The triple crunch won't be pretty. But will it banish our economic torpor?
Guardian, 31 May 2011

"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."
Biofuels boom in Africa as British firms lead rush on land for plantations
Guardian, 31 May 2011

"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 R�ttgen 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 Kr�mmel 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-W�rttemberg 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."
Germany to Phase Out Nuclear Power by 2022
Der Spiegel, 30 May 2011

"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."
German nuclear shutdown sets global example: Merkel
Agence France Presse, 30 May 2011

"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."
Second largest gas field found in Turkmenistan
Telegraph, 25 May 2011

"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."
Europe divided over nuclear power after Fukushima disaster
Guardian, 25 May 2011

"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 oil—the 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 work—and 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

	PEAK OIL AND ENERGY CRISIS NEWS
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Peak Oil and Energy Crisis News Reports 2012 2011 2010 2009 2008 2007 2006/5/4/3/2	".... 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 OPEC’s diminishing spare capacity (even with Iraq’s production back to preinvasion levels) becomes less and less able to accommodate short-term fluctuations.....The third crisis, due to OPEC’s incremental supply being unable to meet incremental demand, follows in the first half of the next decade. This assumes that OPEC’s 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." Sir David Manning, British Ambassador To The United States Of America Speech at Standford University, 13 March 2006 "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." James Schlesinger, former US Energy Secretary Interview with David Strahan, ASPO 6, September 2007 "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." New president faces increased risk of conflict, intel chief says CNN, 5 November 2008 "The world will never be able to produce more than 89m barrels a day of oil, the head of Europe’s 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 Alberta’s tar sands and Venezuela’s 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." Total says oil output near peak Financial Times, 15 February 2009 "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 world’s 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. What’s 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 Iraq’s 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. That’s 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." Tony Hayard, Chief Executive of BP The Challenge of Energy Security Speech at London School of Economics, 4 February 2010 "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." Global Crude Output Likely Peaked in 2006, IEA's Birol Says Bloomberg, 16 November 2010 "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.... " David Miliband, British Foreign Secretary, 2007-10 Whatever you do, Mr Obama, don’t play safe London Times, 23 May 2011, P20 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." The Far-Ranging Costs of the Mess in the Gulf TIME, 6 May 2010 "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." Transcript of Barack Obama’s Energy and Environment Team Announcement New York Times, 15 December 2008
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