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.
As oil companies reported sharply increased profits this week, an estimated 5000 barrels of oil a day was spewing into the Gulf of Mexico following the explosion of the Deepwater Horizon oil rig. This ecological disaster comes just a month after President Obama gave the green light to expand drilling off the US coast, and while the timing of the disaster could hardly be worse for big oil's PR, it is unlikely that policy will change as a result: the oil depletion stakes are just too high. As the remaining resources become ever harder to produce, the likelihood of this kind of accident can only increase. Obama said yesterday the US military may have to join the cleanup effort, and he would be sending BP the bill.
Threats to the oil supply were reinforced this week by a statement from Khalid al-Falih, chief executive officer of Saudi Aramco, which said Saudi Arabia's domestic demand for energy is set to rise by 250% to 8.3 million barrels a day of oil equivalent by 2028. This follows report data from the IEA earlier in the month showing that Saudi Arabia is now the second largest source of demand growth after China. While some commentators point out that a perception of a coming supply constraint which supports a strong oil price is in the kingdom's interests, Saudi Arabia's role as the only swing producer with significant spare capacity means that the warning should be taken seriously.
In the UK this week, election fever continued against the backdrop of the worsening European debt crisis. Energy policy continues to play a back row seat, though news that the UK attained one gigawatt of installed offshore wind capacity was welcomed by all parties. Pushing through an energy transition while reigning in the vast public debt is going to be a tough sell for whoever wins — leadership will therefore be essential. On the basis of the Guardian energy hustings we reported last week, there seems little hope of that.OilGulf oil spill 'five times' larger than estimatedDrilling and spilling for all the oil that's left Deepwater Horizon disaster comes at bad time for oil industryOil spill overshadows BP resultsShell profits rise 60%, helped by oil priceShell, Total Rely on Gas as Access to Oil DeclinesSaudi Arabia global oil exports to wane post-2010Oil Rises to Two-Week High on Signs of Global Economic Recovery Deal opens Barents Sea to explorationCoalCash-starved UK Coal tries land sell-offUS research paper questions viability of carbon capture and storageNuclearPutin Proposes Russia, Ukraine Nuclear Energy MergerChernobyl Radiation Killed Nearly One Million People: New BookBags of radioactive waste from Sellafield dumped in landfill siteRenewablesRegulators Approve First Offshore Wind Farm in U.S.UK offshore wind breezes through 1GW barrierCoping with wind Giant gravel batteries could make renewable energy more reliableUKShell drafted letter Tony Blair sent to Gaddafi while Prime MinisterBrutal choices over British deficitGeopoliticsParliamentarians swap blows as Ukraine exchanges naval lease for cheap Russian gasIraq's ex-premier calls for caretaker government, new electionsEconomySpain hit as Greek 'illness' spreads over EuropeTransportVolcano crisis and soaring oil prices send air fares up by more than 11% Oil
Gulf oil spill 'five times' larger than estimatedAdam Gabbatt and agencies, The Guardian, 29 Apr 2010View original article
Five times more oil a day than previously believed is spewing into the Gulf of Mexico from the blown-out well of the Deepwater Horizon drilling rig, the US coastguard has said.
Coastguard Rear Admiral Mary Landry said National Oceanic Atmospheric Administration (NOAA) experts now estimate that 5,000 barrels a day of oil are spilling into the gulf вЂ“ far more than the previous estimate of 1,000 barrels a day. Robot submarines have so far failed to shut off the flow, 1,500m (5,000ft) below the surface, but the coastguard said a test burn on an isolated area of the spill was successful...
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Drilling and spilling for all the oil that's left Jeff Rubin, Globe & Mail, 28 Apr 2010View original article
America's dream of greater energy independence is rapidly turning into an ecological nightmare. Instead of filling empty gas tanks, BP's Deepwater Horizon well miles offshore is oozing thousands of barrels a day of oil, already covering an area over 1,900 square miles in the food-rich waters of the Gulf of Mexico. With no way of shutting off the valve, which is now buried 1,900 metres below the sea, a $2-billion seafood industry is threatened, not to mention the billions more in damage to coastal real estate values and the potential devastation to wetlands and the wildlife they contain if the growing slick washes ashore.
Most forms of unconventional oil and gas (including, by the way, shale gas) are invariably very hard on the environment. Although tar sands production draws most of the world's criticism, we are quickly discovering that deep-water wells and the pressure surges they engender run the risk of wreaking even greater ecological and environmental devastation...
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Deepwater Horizon disaster comes at bad time for oil industryRobin Pagnamenta, The Times, 27 Apr 2010View original article
For Big Oil the timing could not have been worse. Less than a month ago President Obama announced a significant expansion of offshore oil drilling in the US.
His decision to open up new parts of the Gulf of Mexico, the East Coast and Alaska's Beaufort and Chukchi seas was met with delight by the supermajors вЂ” companies such as BP, Chevron, ExxonMobil, Total and Shell that had been arguing that new technology and safer processes had mainly done away with the threat of major oil spills such as the 1989 Exxon Valdez disaster...
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Oil spill overshadows BP resultsEd crooks, Energy Editor, Financial Times, 28 Apr 2010View original article
BP is to mount what it says is the biggest oil spill clean-up the industry has seen, as it struggles to limit the damage caused by last week's explosion on the Deepwater Horizon drilling rig, which is believed to have killed 11 men.
The accident overshadowed strong results for the first quarter for the oil group, which exceeded analysts' expectations with a 135 per cent rise in post-tax profits...
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Shell profits rise 60%, helped by oil priceSarah Arnott, The Independent, 29 Apr 2010View original article
Royal Dutch Shell's profits rose by 60 per cent to $4.8bn (ВЈ3.2bn) in the first quarter due to increased production and sharp oil price rises.
The oil major's revenue also rose — by 48 per cent to $88bn — in a first-quarter performance that outstripped analysts' expectations. Financial results from its rival, BP, earlier in the week also beat forecasts. Shell's strong showing was driven by the exploration and production business, which saw profits double to $4.4bn compared with the same quarter of the previous year. Not only did the group manage a 6 per cent increase in oil and gas production levels, which hit 3.59 million barrels per day thanks to the ramping up of projects in Russia and Brazil, but profits also saw a lift from an average oil price of $76 in the quarter, compared with just $41 in the same period a year ago...
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Shell, Total Rely on Gas as Access to Oil DeclinesEduard Gismatullin and Brian Swint, Bloomberg.com, 26 Apr 2010View original article
Royal Dutch Shell Plc and Total SA are among energy producers shifting the balance of their production toward natural gas as oil-rich countries clamp down on access and deposits become easier to tap.
BP Plc is also moving more resources to gas even after purchasing $7 billion of mainly oil assets from Devon Energy Corp. last month. Exxon Mobil Corp. blazed the trail into gas with its $30 billion acquisition of XTO Energy Inc. in December.
Although oil prices have risen 69 percent in the last year compared with a 29 percent gain for gas, companies are betting that the need for gas will grow. The Organization of Petroleum Exporting Countries is limiting oil supplies, the global economic recovery is stoking energy demand and governments are debating how to curb carbon dioxide emissions, increasing the appeal of the cleaner-burning fuel...
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Saudi Arabia global oil exports to wane post-2010Lianna Brinded, Risk.net, 27 Apr 2010View original article
Saudi Arabia's long-standing status as a swing producer of crude oil could be drawing to a close according to the head of national oil company Saudi Aramco.
Global oil exports from Saudi Arabia, the world's largest oil producer alongside Russia, will start to wane in the coming years as domestic demand surges and spare capacity drops, warned Khalid al-Falih, chief executive officer of Saudi Aramco in a speech published on the company's website.
Domestic energy demand is expected to increase by almost 250%, from about 3.4 million barrels per day (b/d) in 2009 to about 8.3 million b/d by 2028, which will eventually affect the country's ability to export oil, he said...
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Oil Rises to Two-Week High on Signs of Global Economic Recovery Margot Habiby, Bloomberg.com, 29 Apr 2010View original article
Crude oil rose to the highest level in two weeks after European economic confidence increased and U.S. and German unemployment claims dropped, signals that the global economy is rebounding.
Oil climbed 2.3 percent after the European confidence report showed the euro-area recovery is strengthening even as Greece's fiscal crisis spreads across the region. U.S. jobless claims fell to a one-month low, and German unemployment declined in April at the fastest pace in more than two years...
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Deal opens Barents Sea to explorationAndrew Ward in Stockholm, Financial Times, 28 Apr 2010View original article
Russia and Norway have struck a provisional deal over their disputed Arctic maritime border, promising to open large tracts of the Barents Sea that have been out of bounds to oil and gas exploration...
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Cash-starved UK Coal tries land sell-offRobert Lea, The Times, 27 Apr 2010View original article
UK Coal is to sell thousands of acres of land in the Midlands, the North East and Scotland that had been set aside to develop pits.
The company said yesterday that production problems had prompted a cashflow crisis, an eightfold increase in losses and the abortion of a potential ВЈ350 million merger with the mining group Hargreaves Services...
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US research paper questions viability of carbon capture and storageTerry Macalister, The Guardian, 25 Apr 2010View original article
A new research paper from American academics is threatening to blow a hole in growing political support for carbon capture and storage as a weapon in the fight against global warming.
The document from Houston University claims that governments wanting to use CCS have overestimated its value and says it would take a reservoir the size of a small US state to hold the CO2 produced by one power station...
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Putin Proposes Russia, Ukraine Nuclear Energy MergerAnna Shiryaevskaya - Bloomberg, Business Week, 27 Apr 2010View original article
Russian Prime Minister Vladimir Putin proposed creating a nuclear power holding company with Ukraine as the two former Soviet republics rebuild ties.
вЂњWe have made massive proposals, referring to generation, nuclear power engineering, and nuclear fuel,вЂќ Putin told reporters after a meeting with Ukrainian President Viktor Yanukovych in Kiev today. Any cooperation may be phased, Putin said after the surprise visit to Kiev...
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Chernobyl Radiation Killed Nearly One Million People: New BookEnvironment News Service, 26 Apr 2010View original article
Nearly one million people around the world died from exposure to radiation released by the 1986 nuclear disaster at the Chernobyl reactor, finds a new book from the New York Academy of Sciences published today on the 24th anniversary of the meltdown at the Soviet facility.
The book, "Chernobyl: Consequences of the Catastrophe for People and the Environment," was compiled by authors Alexey Yablokov of the Center for Russian Environmental Policy in Moscow, and Vassily Nesterenko and Alexey Nesterenko of the Institute of Radiation Safety, in Minsk, Belarus...
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Bags of radioactive waste from Sellafield dumped in landfill siteBen Webster, Environment Editor, The Times, 26 Apr 2010View original article
Five bags of radioactive waste from the Sellafield nuclear processing facility were dumped in a landfill site after a faulty scanner wrongly passed them as safe.
Environment Agency inspectors have found one of the bags but is still searching for the other four at the Lillyhall landfill site near Workington, Cumbria...
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Regulators Approve First Offshore Wind Farm in U.S.Katharine Q. Seelye, New York Times, 28 Apr 2010View original article
After nine years of regulatory review, the federal government gave the green light Wednesday to the nation's first offshore wind farm, a highly contested project off the coast of Cape Cod.
The approval of the 130-turbine farm gives a significant boost to the nascent offshore wind industry in the United States, which has lagged far behind Europe and China in harnessing the strong and steady power of ocean breezes to provide electricity to homes and businesses...
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UK offshore wind breezes through 1GW barrierJames Murray for BusinessGreen, part of the Guardian Environment Network, The Guardian, 23 Apr 2010View original article
The UK cemented its position as the leading player in the global offshore wind energy market today with the announcement that it has attained one gigawatt of installed offshore wind capacity.
Trade association RenewableUK said that the completion of Dong Energy's Gunfleet Sands offshore wind farm and E.ON's Robin Rigg development means that the UK now boasts 11 working offshore wind farms, featuring 336 wind turbines capable of generating power for up to 700,000 homes...
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Coping with wind David Strahan, DavidStahan.com, 27 Apr 2010View original article
Texas is full of surprises. In the historic home of the oil industry, the electricity supply is going green. A landscape that for over a century has been carpeted with 'nodding donkey' oil wells is now sprouting wind turbines. The state has 9 gigawatts (GW) of wind generating capacity, more than double that of Britain, providing 6% of its electricity last year. If Texas were a country its wind capacity would rank fifth in the world, behind only Germany, China, Spain and India. Grid operator ERCOT is building power lines to connect another 18GW, which would raise wind capacity in the Lone Star State to over 40% of peak demand...
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Giant gravel batteries could make renewable energy more reliableAlok Jha, The Guardian, 26 Apr 2010View original article
Newly designed giant gravel batteries could be the solution to the on-off nature of wind turbines and solar panels. By storing energy when the wind stops blowing or the sun stops shining, it is hoped the new technology will boost to renewable energy and blunt a persistent criticism of the technology - that the power from it is intermittent.
Electricity cannot be stored easily, but a new technique may hold the answer, so that energy from renewables doesn't switch off when nature stops playing ball. A team of engineers from Cambridge think they have a potential solution: a giant battery that can store energy using gravel...
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Shell drafted letter Tony Blair sent to Gaddafi while Prime MinisterDavid Robertson, The Times, 27 Apr 2010View original article
Tony Blair lobbied Colonel Muammar Gaddafi on behalf of Shell in a letter written for him in draft form by the oil company, documents obtained by The Times reveal.
The correspondence, written while Mr Blair was Prime Minister, bears a striking resemblance to a briefing note by Royal Dutch Shell weeks earlier promoting a $500 million (ВЈ325 million) deal it was trying to clinch in Libya...
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Brutal choices over British deficitChris Giles, Alex Barker and Nicholas Timmins, Financial Times, 26 Apr 2010View original article
The next government will have to cut public sector pay, freeze benefits, slash jobs, abolish a range of welfare entitlements and take the axe to programmes such as school building and road maintenance — or make a set of equally politically perilous choices, according to an analysis by the Financial Times...
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Parliamentarians swap blows as Ukraine exchanges naval lease for cheap Russian gasCharles Clover in Moscow and Roman Olearchyk in Kiev, Financial Times, 28 Apr 2010View original article
Amid shouted insults, fisticuffs, exploding smoke bombs and the occasional airborne egg, Ukraine's parliament yesterday ratified an agreement to extend Russia's lease of a naval base until 2042 in return for cheap natural gas supplies from -Russia...
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Iraq's ex-premier calls for caretaker government, new electionsNed Parker, Lost Angeles Times, 28 Apr 2010View original article
Reporting from Baghdad вЂ” Former Iraqi Prime Minister Iyad Allawi demanded that an internationally backed caretaker government be formed and new national elections be held, if an Iraqi court continues to bar parliamentary candidates from his slate from taking office.
The comments by Allawi, whose slate won more parliament seats than any other political list in the March elections, underscored a deepening conviction within his coalition that Prime Minister Nouri Maliki's Shiite Muslim-dominated alliance is trying to erode his slate's lead by any means possible...
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Spain hit as Greek 'illness' spreads over EuropeCarl Mortished, World Business Editor, The Times, 29 Apr 2010View original article
The crisis affecting the eurozone worsened yesterday when Spain's credit rating was downgraded less than 24 hours after Greece was sent into financial meltdown.
Fear of contagion gripped Europe's financial markets when the debt rating agency Standard & Poor's cut the rating on Spain's sovereign bonds. The decision вЂ” coming after the agency downgraded Portugal's rating and cast Greek bonds into the scrapyard, designating them junk вЂ” sent the euro plunging against the dollar...
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Volcano crisis and soaring oil prices send air fares up by more than 11%Ray Massey, The Daily Mail, 27 Apr 2010View original article
Air passengers face an 11.5 per cent rise in fares because of the fallout from the volcanic ash crisis and soaring oil prices, travel experts warned yesterday.
The first phase will be a 5.2 per cent rise this year which will add ВЈ48 on to the cost of the average plane ticket.
But that will have increased to 11.5 per cent by 2012 - putting the average cost of a London to New York economy class ticket up by ВЈ62, say financial travel experts...
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Nashville recycler PSC Metals makes recoveryODAC Newsletter - Apr 16