Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.
Oil demand was down this week — as were most European flight schedules. The eruption of the Eyjafjallajokull volcano wrought further damage to the airline industry, which is already on its heels as a result of high fuel prices and recession. The incident also graphically illustrated the nature of our reliance on global transport systems - currently almost entirely fuelled by oil - and gave rise to some musings on whether this might be a snapshot of the future rather than merely a temporary blip.
That we may face peak oil in the near future appears to be moving ever more into mainstream thinking. In the FT this week Kate McKenzie summarised the growing consensus around an oil crunch, even if the language and emphasis from the various groups, ranging from the UK industry taskforce (ITPOES) to the US military, differs.
The other rather crucial point of difference is on what such an oil crunch would mean. This was highlighted during Tuesday's climate and energy hustings hosted by The Guardian . At the event the three candidates to be the next secretary of state for energy and climate change were questioned by a ticketed audience on their plans. ODAC trustee David Strahan asked a question about peak oil, which was treated far more seriously than in previous elections, yet candidates still showed a lack of understanding of the issue and its likely ramifications. See David's ODAC Guest Commentary for his summary and for a link to audio of the peak oil responses.
In other news this week, the leaders of the Gas Exporting Countries Forum, who control 70% of the world's gas, met this week. The key outcome appears to have been support for continued efforts to link gas prices to oil. Should unconventional gas continue to boom as many forecast, however, defending the oil price linkage may prove difficult. One man who is not convinced by the hyperbole is Henry Groppe of Texas petroleum industry analysts Groppe Long & Littell, a remarkably accurate forecaster of the oil market over many decades. In his view estimates of economically recoverable volumes of gas from shale are optimistic. Based on rapid decline rates of shale wells, and a slowdown in production due to the economy he is predicting a tightening of the gas market as soon as the end of summer.
OilAre policymakers, economists and peak oilists starting to speak the same language?Oil Trades Below $84 as Dollar's Rally Curbs Commodity Demand Kuwait sees bigger reserves at top oilfieldA State With Plenty of Jobs but Few Places to LiveSaudis Tighten China Energy Ties to Reduce U.S. Dependence China Lends Venezuela $20 Billion, Secures Oil SupplyGasGas exporters push for prices to be linked to crudeA contrarian makes another call — this time, natural gas Moscow buys sea power with Ukraine gas dealUK natural gas storage: The politics, and the punditsShell sees global gas demand upElectricityNational Grid charges putting thousands of jobs at risk, claim electricity bossesNational Grid smart meter can take control of your dishwasherBiofuelsBiofuels' green credentials called into questionWill we switch to gas made from human waste?UKLabour, Conservatives and Lib Dems clash over environment policies Guest Commentary: David Strahan - ODAC Trustee Britain 'facing electricity blackouts'Town halls вЂto bear brunt of 600,000 public sector job cuts'ClimateEurope counts saved carbon emissions as flights stay groundedEconomyDeveloping world leads the global economic recovery What links the banking crisis and the volcano?Green energy needs huge spendTransportReflections on Eyjafjallajokull: Let's Not Waste Another Wake-up CallAirlines lost over $1.7 bln by Tuesday: IATA OilAre policymakers, economists and peak oilists starting to speak the same language?Kate Mackenzie, Financial Times, 21 Apr 2010View original article
A rash of papers, comments and interviews have made us think this recently. It's not as simple as 'policymakers are waking up to peak oil', but that all those groups — and indeed, industry — are increasingly talking about the same issues looming in fossil fuel production, even if they're using different terminology...
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Oil Trades Below $84 as Dollar's Rally Curbs Commodity Demand Ben Sharples and Yee Kai Pin, Bloomberg, 23 Apr 2010View original article
Crude oil traded below $84 a barrel in New York as the dollar rallied to its strongest in almost a year against the euro, damping investor demand for commodities.
Oil is set for a weekly gain amid speculation that fuel demand will grow with an economic recovery in the U.S., the world's biggest energy consumer. Sales of previously owned homes in the country climbed in March for the first month in four and new applications for jobless benefits declined. OPEC will reduce crude oil shipments for the first time since March as refiners in Asia cut imports...
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Kuwait sees bigger reserves at top oilfieldNeeraj Gangal, Reuters, 22 Apr 2010View original article
The world's second-largest oilfield contains more oil than previously estimated, Kuwait's state news agency reported a top official as saying on Thursday.
OPEC-member Kuwait is the world's fourth-largest oil exporter, and sits on around 8 percent of global reserves. The Greater Burgan area is second only to Saudi Arabia's Ghawar oilfield in size, according to U.S. government data...
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A State With Plenty of Jobs but Few Places to LiveMonica Davey, New York Times, 20 Apr 2010View original article
When Joey Scott arrived here recently from Montana, he had no trouble finding work — he signed almost immediately with a company working to drill in the oil fields. But finding housing was another matter.
Mobile homes and so-called skid shacks line up in a mobile home park in Williston, N.D. The park's new owner has said he plans to update and expand the park...
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Saudis Tighten China Energy Ties to Reduce U.S. Dependence Henry Meyer, Bloomberg.com, 20 Apr 2010View original article
Li Wei, a Chinese diplomat in Riyadh, had only just seen off a Ministry of Commerce delegation to Saudi Arabia this month when he started preparing for another Chinese governmental visit in two weeks.
"Every month we have delegations coming to Saudi Arabia," said Li, who works in the Chinese Embassy's commercial section in the Saudi capital. "We are too busy."...
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China Lends Venezuela $20 Billion, Secures Oil SupplyDaniel Cancel, Bloomberg.com, 19 Apr 2010View original article
China, the world's second-biggest consumer of oil, will lend Venezuela $20 billion and form a venture to pump crude from the Orinoco Belt, President Hugo Chavez said, vowing to meet the Asian country's energy needs.
The financing from China is separate from a $12 billion bilateral investment fund, Chavez said, and will pay for Venezuelan development projects. Venezuela currently sends China 460,000 barrels a day of crude oil. The oil is used to repay the Asian country for $8 billion Venezuela used from the fund for infrastructure projects...
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GasGas exporters push for prices to be linked to crudeTamsin Carlisle, The National, 20 Apr 2010View original article
The Gas Exporting Countries Forum (GECF), made up of nations controlling 70 per cent of the world's gas reserves, has dropped an Algerian proposal to cut gas exports, thereby proving it is no "Gas OPEC".
Instead, ministers from its 11-member states resolved yesterday to push for gas prices to be linked to market prices for crude...
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A contrarian makes another call — this time, natural gas David Parkinson, Globe & Mail, 18 Apr 2010View original article
When it comes to predicting the price of oil, Henry Groppe has made a long career out of zigging when others were zagging. So why should he be any different when talking about natural gas?
Mr. Groppe — the octogenarian patriarch of Texas petroleum industry analysts Groppe Long & Littell — doesn't buy the prevailing wisdom that New York Mercantile Exchange natural gas prices are dead in the water, stuck around $4 to $5 (U.S.) per million British thermal units even as demand recovers, awash in supplies and with much more on the way...
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Moscow buys sea power with Ukraine gas dealTony Halpin, The Times, 22 Apr 2010View original article
Russia achieved an important strategic ambition yesterday by striking a deal to keep its Black Sea Fleet in Ukraine until the middle of this century.
President Medvedev said that the fleet would remain at its port in Sevastopol for 25 years after its present lease expires in 2017, following talks with Viktor Yanukovych, his Ukrainian counterpart. The agreement allows a further five-year extension to 2047...
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UK natural gas storage: The politics, and the punditsEd Crooks, Financial Times, 21 Apr 2010View original article
Gas storage has, unsurprisingly, not featured as a prominent issue in the UK general election campaign. The public only notices its gas supply if it fails to arrive at the turn of a knob, and when the bill comes. There is also, as discussed in an earlier post, a remarkable degree of consensus between Labour and Conservative parties about the right way forward. (The Liberal Democrats are also broadly in agreement, although on this as on many issues there is rather more difference between them and the other two parties than there is between Labour and Conservatives.)...
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Shell sees global gas demand upMuriel Boselli, Emma Farge and Marie Maitre, Reuters, 22 Apr 2010View original article
Global demand for gas is set to rise constantly over the next 20 years amid plentiful reserves and its increasing use to produce power, a senior executive at Royal Dutch Shell said on Thursday.
"We see global gas demand growing by at least 2 percent a year over some decades, so by 2030 we look at gas demand hitting 4.5 trillion cubic meters of gas per year," Malcom Brinded told an oil conference. "That's 50 percent up from today's level."...
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ElectricityNational Grid charges putting thousands of jobs at risk, claim electricity bossesPeter Jones, The Times, 20 Apr 2010View original article
Electricity industry leaders are demanding an end to "unfair" National Grid charges that they claim are putting tens of thousands of jobs at risk.
A joint letter to politicians, seen by The Times, argues that charges levied by National Grid for transmitting electricity may cause some renewable electricity generation projects to be delayed or abandoned...
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National Grid smart meter can take control of your dishwasherAngela Jameson, The Times, 20 Apr 2010View original article
It will be able to turn on your washing machine remotely, to switch off your tumble dryer and to manage how and when you use your energy supply — and National Grid believes that ultimately it will change the way in which Britain uses its electricity and gas.
OnStream, a National Grid business that supplies meters and meter-reading services for all six energy retailers, has developed a smart meter that can communicate with similarly equipped appliances through Bluetooth-style wireless technology...
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BiofuelsBiofuels' green credentials called into questionReuters, 22 Apr 2010View original article
Biofuels were once seen as the perfect way to make transport carbon-free, but a series of EU studies are throwing increasing doubt on the green credentials of the alternative fuel.
The latest to be released gave a preliminary assessment that biodiesel from soybeans could create four times more climate-warming emissions than conventional diesel...
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Will we switch to gas made from human waste?Dhruti Shah, BBC Online, 19 Apr 2010View original article
As the UK faces the prospect of North Sea gas running out, could supply problems be eased by using gas made from human waste?
For most people the waste they eject from their bodies is something they don't bother thinking about once they've shut the toilet door behind them...
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UKLabour, Conservatives and Lib Dems clash over environment policiesJuliette Jowit, The Guardian, 22 Apr 2010View original article
Important differences between the major parties on the environment emerged last night, as they clashed over nuclear power, windfarms, expanding flying, and the number of climate change sceptics in their ranks.
Despite similar-sounding manifestos, Labour's climate and energy secretary, Ed Miliband, and his Conservative and Liberal Democrat shadow spokesmen attacked each other's policies at a special debate organised by the Guardian...
Guest Commentary: David Strahan - ODAC Trustee
Peak oil has come a long way in the last few years: from bug-eyed millennial cult to mainstream consensus, embracing academia, much of the oil industry, and now the US military. There's a growing consensus global oil production will peak this side of 2020, with many forecasts clustered around the middle the decade and some well within the next parliament. Strange then that even now the mainstream parties' manifestos contain not a single word on the subject.
I put this point to Secretary of State Ed Miliband, Greg Clark, his Conservative Shadow, and Simon Hughes for the Liberal Democrats, at an energy hustings hosted by the Guardian last night...
Read more
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Britain 'facing electricity blackouts'Telegraph, 22 Apr 2010View original article
Britain faces widespread electricity blackouts within six years, government experts have warned.
Ofgem, the national regulator of gas and electricity, have suggested in a report that power cuts could start in 2016 — three years earlier than previously thought...
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Town halls 'to bear brunt of 600,000 public sector job cuts'Jill Sherman and GrГЎinne Gilmore, The Times, 21 Apr 2010View original article
Nearly 600,000 public sector jobs will be lost over the next five years no matter which party wins the general election, economists have warned.
Bureaucrats will be hit first but few public sector experts believe that jobs for nurses, doctors and policemen can be protected, given the scale of the spending cuts needed to balance the deficit...
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ClimateEurope counts saved carbon emissions as flights stay groundedBen Webster, Environment Editor, The Times, 19 Apr 2010View original article
The grounding of 63,000 flights over the past four days has saved 1.3 million tonnes of carbon dioxide, more than the annual emissions of many developing countries.
Aviation is responsible for about 2 per cent of global emissions of CO2, but accounts for a much higher proportion of emissions in European nations, which have many frequent flyers. Aircraft are responsible for more than 6 per cent of Britain's CO2 emissions...
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EconomyDeveloping world leads the global economic recovery Andrew Walker, BBC Online, 21 Apr 2010View original article
The global economy is recovering from what the IMF's managing director Dominique Strauss-Kahn has dubbed the "Great Recession".
In fact, the IMF had told us before that the recovery had started, but the picture is becoming a little clearer. There is even a little good news. The IMF tells us "the recovery has been stronger than expected thus far"...
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What links the banking crisis and the volcano?George Monbiot, The Guardian, 19 Apr 2010View original article
Man proposes; nature disposes. We are seldom more vulnerable than when we feel insulated. The miracle of modern flight protected us from gravity, atmosphere, culture, geography. It made everywhere feel local, interchangeable. Nature interjects, and we encounter — tragically for many — the reality of thousands of miles of separation. We discover that we have not escaped from the physical world after all.
Complex, connected societies are more resilient than simple ones — up to a point. During the east African droughts of the early 1990s, I saw at first hand what anthropologists and economists have long predicted: those people who had the fewest trading partners were hit hardest. Connectivity provided people with insurance: the wider the geographical area they could draw food from, the less they were hurt by a regional famine...
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Green energy needs huge spendYang Ning, China Daily, 20 Apr 2010View original article
China needs an additional investment of $64 billion annually over the next two decades to implement an "energy-smart" growth strategy, the World Bank said.
Such investment should be aimed at making the power and transport sectors more efficient and developing renewable energy, the bank said in its latest report...
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TransportReflections on Eyjafjallajokull: Let's Not Waste Another Wake-up CallRob Hopkins, Transition Culture, 21 Apr 2010View original article
Last week none of us had ever heard of an Icelandic volcano called Eyjafjallajokull, and still even now, very few of us can actually pronounce its name. The volcanic dust spewn forth across Europe as a result of its spectacular eruption has had a remarkable effect, leading to, among other things, the total grounding of the UK's aviation fleet for several days until this morning. The headline on Metro, the free newspaper the person next to me on the train is reading as I write this, is "Fly, fly again". It will take days to clear the backlog and to get things back to normal, but let us not pass up this opportunity to meditate on vulnerability and resilience, which led to major disruption to the air freighting of produce from Kenya and other places, thousands of people stuck in their Easter holiday destinations, and Liverpool Football Club having to travel to its Europa League fixture with Athletico Madrid on public transport . But perhaps rather than seeing it as the 'misery' most news broadcasts labelled it as, we might see it as good practice for the near future...
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Airlines lost over $1.7 bln by Tuesday: IATAMaria Sheahan, Reuters, 22 Apr 2010View original article
"For an industry that lost $9.4 billion last year and was forecast to lose a further $2.8 billion in 2010, this crisis is devastating," IATA Director General and Chief Executive Giovanni Bisignani said in a statement on Wednesday.
Speaking at a press briefing in Berlin, Bisignani said that he expects it will take the airline industry at least three years to return to business levels it saw before the global economic crisis and the volcano eruption...
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A ‘watershed month for the truth about peak oil’Nashville recycler PSC Metals makes recovery
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