ODAC Newsletter - Oct 15

The Obama administration on Tuesday lifted its ban on deepwater drilling seven weeks ahead of schedule, saying new rules cut the risk of a repeat of the BP oil spill, the worst ever to hit the United States.

The U.S. Interior Department said oil companies must comply with new regulations and demonstrate they can adequately respond to blowouts...

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Analysts unimpressed by early lifting of deepwater drilling banSheila McNulty, FT Energy Source Blog, 14 Oct 2010View original article

Oil company stocks may have risen on the news that the Obama Administration was lifting the moratorium on deepwater drilling in the Gulf of Mexico, but analysts are not rushing to change their outlooks for these companies. The bottom line is that the decision does not mean it is business as usual for anyone operating in the Gulf of Mexico.

The administration has imposed new regulations, including those requiring outside auditors to certify blowout preventers are in working order. The companies must file a more comprehensive cleanup plan than in the past, with enforceable obligations that ensure that containment resources are available. And chief executives must certify that they have complied with all the new regulations. Beyond that, the authorities plan to inspect rigs to ensure compliance before permitting them to get back to work...

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European bid to freeze deepwater drilling collapsesRoddy Thomson and Christian Spillmann, AFP, 13 Oct 2010View original article

A bid to freeze deepwater drilling in Europe in the wake of the Gulf of Mexico disaster collapsed Wednesday under pressure from the multi-billion North Sea oil industry.

European Union Energy Commissioner Guenther Oettinger announced moves to tighten the issuing of drilling permits to ensure there is no repeat of the devastating Gulf of Mexico disaster in the United States...

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North Sea oil companies angry at new EU rulesRowena Mason, Telegraph, 14 Oct 2010View original article

The British oil industry has reacted with fury at Europe's new "centralised and prescriptive" restrictions on North Sea drilling after BP's Deepwater Horizon accident.

The European Commission yesterday rowed back on original plans to impose a moratorium on deepwater drilling, but suggested instead that safety rules would be much tougher across the Continent...

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OPEC Maintains Oil Production Quotas, Urges Adherence Ayesha Daya and Grant Smith, Bloomberg, 14 Oct 2010View original article

OPEC ministers agreed to leave oil- production quotas unchanged and called on members to improve compliance to the self-imposed limits as mixed growth in some of the world's biggest economies damps demand.

"The market is good, that's why" we rolled over quotas, Saudi Oil Minister Ali al-Naimi said today in Vienna. Members of the Organization of Petroleum Exporting Countries, which supplies 40 percent of the world's oil, need to improve their adherence to the group's production limits, he said. OPEC agreed to a record 4.2 million barrel-a-day cut in output in late 2008 as global demand fell 0.6 percent, the first decline since 1983...

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Iraq increases oil reserves by 24%BBC Online, 04 Oct 2010View original article

Iraq has raised the level of the oil reserves it claims to own by 24% in its first revision since Saddam Hussein fell from power.

The country has 143.1bn barrels of known and extractible oil, up from the 115bn barrels previously estimated...

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Iraqi oil output plans overambitious - executivesHumeyra Pamuk, Reuters, 13 Oct 2010View original article

Problems with security, political instability and poor infrastructure mean plans by Iraq to expand its crude oil production dramatically over the next few years are overambitious, oil executives told an industry conference.

Iraq is sitting on some of the biggest proven oil reservoirs in the world, which Iraqi officials said last week were as high as 143 billion barrels, giving it the world's fourth-largest reserves after Saudi Arabia, Venezuela and Iran...

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Disruptions At French Oil Refineries Continue, May ExtendWall Street Journal, 14 Oct 2010View original article

All French refineries but one Thursday suspended fuel deliveries as a consequence of strikes in oil and port industries, an official from the Confederation Generale du Travail union leader said.

Workers at the oil refineries walked out Tuesday to protest against a government-sponsored pension reform that seeks to delay legal retirement age to 62 from 60 to help balance government accounts. A previous strike of port workers at the oil terminal of Fos-Lavera in southern France started Sept. 27 had already disrupted the supply of crude oil to several refineries in the country...

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Dwindling oil supplies threaten economies [REPORT]stuff.co.nz, 13 Oct 2010View original article

The world faces decades of economic turmoil and a vicious cycle of recessions as oil supplies run low and prices spike, according to a Parliamentary research paper.

The paper, The Next Oil Shock, says that known oil reserves would last for another 25 to 32 years, but an oil ''supply crunch'' could occur in 2012 or shortly afterwards as demand rises and supplies fail to keep pace...

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Pentagon going green, because it has toOlivia Hampton, AFP, 13 Oct 2010View original article

The US military's heavy dependence on fossil fuels is a dangerous vulnerability, officials said Wednesday as they made a fresh push to develop renewable energy solutions for the battlefield.

In the wake of a spate of deadly attacks on tankers carrying fuel to foreign troops in Afghanistan, Admiral Mike Mullen, the chairman of the Joint Chiefs of Staff, spoke of a "strategic imperative" for the US military to become more efficient and find new sources of energy...

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World oil consumption forecast raised by watchdogPA, The Independent, 13 Oct 2010View original article

An energy watchdog lifted its forecast for world oil consumption today but played down fears that prices will top 100 US dollars a barrel.

Global demand is expected to reach 86.9 million barrels a day this year and 88.2 million barrels a day next year, the International Energy Agency (IEA) said, revising up its previous forecast by 300,000 barrels for each year...

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North America's risky race to exploit oil sands and shalesKeith Schneider for Yale Environment 360, The Guardian, 01 Oct 2010View original article

The most direct path to America's newest big oil and gas fields is U.S. Highway 12, two lanes of blacktop that unfold from Grays Harbor in Washington State and head east across the top of the country to Detroit.

The 2,500-mile route has quickly become an essential supply line for the energy industry. With astonishing speed, U.S. oil companies, Canadian pipeline builders, and investors from all over the globe are spending huge sums in an economically promising and ecologically risky race to open the next era of hydrocarbon development. As domestic U.S. pools of conventional oil and gas dwindle, energy companies are increasingly turning to "unconventional" fossil fuel reserves contained in the carbon rich-sands and deep shales of Canada, the Great Plains, and the Rocky Mountain West...

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Shell offers spill system in AlaskaSheila McNulty in Houston, Financial Times, 11 Oct 2010View original article

Royal Dutch Shell is offering to spend "tens and tens of millions of dollars" building an oil spill containment system for Arctic conditions if the US government permits it to drill offshore Alaska...

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Gas

Outlook for Shale Gas in Europe Is UncertainJames Kanter, New York Times, 13 Oct 2010View original article

The chief executive of one the largest oil and natural gas services companies in the world said Wednesday that shale gas could be much harder to recover in Europe, compared with the United States, because of concerns about environmental damage and other issues.

"We should not underestimate the challenge," said Andrew F. Gould, the chief executive of the company, Schlumberger...

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US to take on rivals in natural gasSheila McNulty in Houston, Financial Times, 11 Oct 2010View original article

The US could soon be competing with Russia and the Middle East to supply the world with natural gas, a shift in production that would reshape energy markets over the next decade, according to industry executives...

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UK to need more shipped gas in winterRowena Mason, The Daily Telegraph, 08 Oct 2010View original article

The power networks operator calmed fears that there would be a repeat of last year, when it was forced to issue a series of alerts forcing industrial customers to cut back their gas usage.

Britain also came dangerously close to running low on gas the previous year, during a dispute between Ukraine and Russia that threatened European pipeline supplies...

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Renewables

Wind could provide 20 pct of world power by 2030: studyThe Independent, 13 Oct 2010View original article

Wind power could meet about a fifth of the world's electricity demand within 20 years, an industry group and environmental watchdog Greenpeace predicted in a new report released Tuesday.

The global market for wind power grew 41.7 percent on year in 2009, beating average annual growth of 28.6 percent over the past 13 years, said Steve Sawyer, secretary general of the Global Wind Energy Council, or GWEC...

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Floating turbines promise to deliver reliable wind, says reportBusinessGreen, The Guardian, 11 Oct 2010View original article

The higher up-front costs associated with developing floating wind turbines would be offset by the fact that they would be able to access areas of deep water off the coastlne of the UK where winds are stronger and reliable.

That is the conclusion of a major feasibility study backed by the Energy Technologies Institute (ETI), which is due to be launched later today and will argue that floating turbines are both technically and economically viable...

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10,000 Birmingham council homes to get solar panelsLarry Elliott, The Guardian, 05 Oct 2010View original article

Plans to fit power generating solar panels to council-owned properties in Birmingham will be pushed forward this week after the council agreed a "green new deal" scheme covering 10,000 homes...

In the biggest proposal for retrofitting houses through an energy efficiency upgrade yet seen in the UK, the council agreed a £100m proposal last week designed to create jobs and meet the city's ambitious targets for reducing carbon emissions.

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Ofgem: Every household faces £60 bill to rewire BritainTim Webb, The Guardian, 04 Oct 2010View original article

Rewiring Britain's energy networks to hit the country's renewable targets will cost every household at least £60 over the next decade, according to the regulator Ofgem...

Companies need to invest £32bn by 2020 to plug thousands of wind farms, mainly in Scotland, into a grid capable of distributing the electricity to where the country needs it. The money is also needed to build "smart grids" which move electricity and gas around new local networks to meet flexible demand.

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Human waste turned into renewable gas to power homesTim Webb, The Guardian, 05 Oct 2010View original article

Pilot project is first in UK to produce domestic gas from sewage

Next time you flush the toilet, you could be doing your bit for green energy. After being stored for 18 days, human waste will from today be returning to homes in the form of renewable gas...

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UK

Fuel poverty doubles in five yearsHarry Wallop, Telegraph, 14 Oct 2010View original article

The number of households who are in "fuel poverty" has more than doubled in the last five years because of surging energy bills, according to official statistics.

With the average British fuel bill climbing to well over £1,000 a year — for many pensioners the largest bill they have to pay all year — a worryingly large number of people are struggling to keep their homes warm...

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UK backs EU plan for controversial 'beyond A' energy labelsJessica Shankleman for BusinessGreen, The Guardian, 04 Oct 2010View original article

The UK government has promised to work with businesses to ensure customers understand new and potentially confusing "beyond A" energy labels for fridges, freezers, dishwashers and washing machines.

The EU Commission outlined plans last week to reform energy label ratings for so-called "wet" appliances, with the introduction of three new "beyond A" grades: "A+", "A++" and "A+++"...

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CBI urges switch to incineratorsFiona Harvey, Environment Correspondent, Financial Times, 11 Oct 2010View original article

Local authorities should bury their objections to building incinerators for rubbish in order to take pressure off landfill sites and reduce carbon emissions, the CBI employers' organisation has urged...

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ODAC Newsletter - Oct 1Era of cheap ‘Made in China’ is ending

ODAC Newsletter - Oct 1

The United States military must entirely get off oil by 2040 if it wants to reduce operational vulnerabilities, reduce costs, stop new security risks caused by climate change and avoid the coming peak oil supply crunch. That's the word from the Center For a New American Security, whose Fueling the Future Force report details the hows and whys of the situation.

Petroleum is 77% of Military Energy Supply
Report authors Christine Parthemore and Dr. John Nagl say, "Reducing dependency on petroleum will help ensure the long-term ability of the military to carry out its assigned missions. Moving beyond petroleum will allow DoD to lead in the development of innovative technologies that can benefit the nation more broadly, while signaling to the world that the United States has an innovative and adaptable force."...

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Crude Oil Rises to Seven-Week High on U.S., China Economic Data Ben Sharples and Yee Kai Pin, Bloomberg, 01 Oct 2010View original article

Oil rose for a third day, headed for its biggest weekly gain since May, after economic data from the U.S. and China bolstered optimism that demand is growing in the world's two biggest consumers of the fuel.

Futures reached their highest level in more than seven weeks after the U.S. government yesterday reported economic growth and a decline in jobless claims that exceeded forecasts. China's purchasing managers' index rose in September at the fastest pace in four months, a report today showed...

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Questions about what's next as offshore drilling ban expiresJuliet Eilperin and Steven Mufson, The Washington Post, 30 Sep 2010View original article

Interior Secretary Ken Salazar is getting ready to take his finger off what he has called the "pause" button on deepwater oil drilling, with environmentalists and oil industry executives alike worried about what comes next.

Thursday, Salazar will receive recommendations from Michael Bromwich, head of the Bureau of Ocean Energy Management, Regulation and Enforcement, based on information gathered at public forums and private meetings in the wake of the BP oil spill. Salazar could act on the BOEMRE report well before the drilling ban's expiration date, Nov. 30...

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BP ousts exploration chief, vows to boost safetyTom Bergin, Reuters, 30 Sep 2010View original article

BP Plc's incoming Chief Executive Bob Dudley has ousted the oil group's exploration and production chief following the Gulf of Mexico oil spill and promised to restructure the company to boost safety.

Echoing a move BP made after the Texas City blast in 2005, Dudley also said on Wednesday he was appointing a new safety guru, Mark Bly, who would ensure safe practices across the organization...

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Oil firms reap benefit of Iran's build-up of crude stocksRobert Booth, The Guardian, 27 Sep 2010View original article

In March Barack Obama's argument for tougher international trade sanctions against Iran and its lucrative oil industry was brutally simple. "The long-term consequences of a nuclear-armed Iran are unacceptable," he said.

The UN, EU and US Congress seemed to agree, passing into law fresh restrictions in June and July aimed at frustrating Iran's economic development and inhibiting its crude oil exports of 2.2bn barrels-a-day, representing 80% of all its trade abroad...

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Oil: Can Ecuador see past the black stuff?John Vidal, The Guardian, 28 Sep 2010View original article

One of the most extraordinary people I have met in 10 days of travelling around Peru and Ecuador has been Alberto Acosta. He's head of Ecuador's leading research group now, but until 2007 was the second most powerful man in the country after the president, Rafael Correa. He was not only charged with masterminding the new constitution but was head of the assembly, or parliament, a founder of the ruling political party and minister of energy of the country that depends on oil.

But Acosta will go down in history as the world's only serving oil minister to have ever proposed leaving a country's black stuff in the ground. That's like Dracula renouncing blood, or a sports minister saying it's better to play hide and seek than football. It just does not happen...

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OPEC crude oil production fell to 8 month lowBloomberg, arabianbusiness.com, 30 Sep 2010View original article

The Organization of Petroleum Exporting Countries' crude oil output fell to an eight month low in September, led by Iraq, where a pipeline disruption curtailed shipments, a Bloomberg News survey showed.

Production slipped 145,000 barrels, or 0.5 percent, to an average 29.055 million barrels a day, the lowest level since January, according to the survey...

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Iraq to announce big rise in oil reserves MondayReuters, 30 Sep 2010View original article

Iraq will announce on Monday a "big increase" in its oil reserves, currently 115 billion barrels, a spokesman for the oil ministry said on Thursday.

Iraq's crude reserves are the world's third largest but its production lags. The government has signed a series of deals with oil majors to ramp up output capacity to about 12 million barrels per day from around 2.5 million bpd now...

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Shell plans rapid North American growthEd Crooks in New York, Financial Times, 29 Sep 2010View original article

Royal Dutch Shell is planning a rapid expansion of its North American business to raise production by 40 per cent to 1m barrels equivalent per day in 2014, including gas, Canadian oil sands and deepwater oil.

The strategy, announced in Canada on Tuesday, is part of Europe's largest oil company's plan to meet its "aspiration" of producing 3.7m barrels per day in 2014, compared with 3.15m last year...

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Obama says energy policy a top priority next yearJeff Mason, Reuters, 28 Sep 2010View original article

President Barack Obama said revamping U.S. energy policy would be a top priority next year and may have to be done "in chunks" rather than through one piece of legislation, according to Rolling Stone magazine.

In an interview published on Tuesday, Obama lamented that more progress to fight climate change had not been made since he took office, and blamed the economy for that failure...

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Greenpeace banned from intercepting oil-drilling shipSeverin Carrell, Scotland correspondent, The Guardian, 29 Sep 2010View original article

Greenpeace has been banned from intercepting a deep sea oil-drilling ship after the protest group sent "wave after wave" of swimmers into the north Atlantic to stop the vessel from reaching its drilling site.

The US oil giant Chevron was granted a wide-ranging interdict, or injunction, by judges in Edinburgh today, ordering Greenpeace to stop any further direct action preventing the Stena Carron from reaching its destination or impeding its "lawful business"...

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Gas

Eni, Mitsubishi Among Companies Bidding to Develop Iraq Natural-Gas FieldsNayla Razzouk and Robert Tuttle, Bloomberg.com, 27 Sep 2010View original article

Eni SpA is among international companies interested in bidding to develop natural-gas fields in Iraq, while China National Petroleum Corp. and others reported progress producing oil there, officials and executives said.

Italy's Eni and Mitsubishi Corp. of Japan are two of 13 companies to have registered to bid on gas contracts that Iraq is preparing to auction next month, Abdul Hadi al-Hassani, vice chairman of the oil and gas committee of the country's parliament, said today. Together with a dozen oilfield contracts awarded last year, the bidding round for gas rights planned for Oct. 20 marks a step forward in Iraq's campaign to boost the output of its most valuable commodities...

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House passes shale gas production taxTom Barnes, Post-Gazette, 30 Sep 2010View original article

Democrats and environmentalists praised it, while Republicans and gas industry officials pilloried it. But in the end, a bill to create Pennsylvania's first Marcellus Shale gas severance tax took a step forward Wednesday.

Senate Bill 1155, after being totally rewritten by House Democrats, would slap a hefty levy of 39 cents per thousand cubic feet (MCF) of gas extracted from underground shale throughout Pennsylvania...

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Coal

EU to allow Spain coal plan to 2014Foo Yun Chee, Reuters, 27 Sep 2010View original article

Spain will win EU approval this week for a plan that would benefit domestic coal producers over importers until the end of 2014, sources with direct knowledge of the matter said on Monday.

Under a decree passed by the Spanish government, power utilities would be required burn domestic coal instead of imports, which are usually cheaper. The executive European Commission has been examining the scheme to check whether it complies with the European Union's state aid rules...

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Renewables

Germany to wean itself off fossil fuelsGerrit Wiesmann in Berlin, Financial Times, 29 Sep 2010View original article

The German government has signalled its ambition to wean one of the world's largest economies off fossil fuels by pledging to generate enough renewable energy to meet 60 per cent of the country's energy needs by 2050.

Norbert Röttgen, environment minister, said it was "the most ambitious energy programme ever seen, not only in Germany"...

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Denmark eyes up fossil fuel-free futureBusiness Green, 29 Sep 2010View original article

Danish climate commission report predicts the country could switch to renewables by the middle of the century

The falling cost of renewable energy and rising cost of oil and gas will allow Denmark to develop an energy network entirely free of fossil fuels by 2050, according to a report published by the government's climate commission tomorrow...

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Britain's offshore windpower costs twice as much as coal and gas generated electricityRichard Alleyne, Telegraph, 28 Sep 2010View original article

Off shore wind farms cost twice as much to produce electricity as gas and coal powered stations and will need subsidies for at least 20 years, a major report warns.

Britain's so-called "dash for wind" means that it is now the biggest off shore generator – producing as much as the rest of the world put together...

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Mining and Minerals

UN environment chief urges recycling of rare metalsAFP, 29 Sep 2010View original article

The UN's environment chief on Wednesday called for a global drive to recycle rare metals that have hit the headlines in a spat between Japan and China, warning that they are crucial for green technologies.

Achim Steiner, executive director of the UN Environment Programme, said that demand for "rare earth metals" such as lithium and neodymium -- used in batteries for hybrid cars or components in wind and solar power -- was accelerating fast...

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Japan May Spend on Rare Earths After China's Cut, Ohata SaysGo Onomitsu and Jae Hur, Business Week, 30 Sep 2010View original article

Japan may budget measures to secure supplies of rare earths after China curtailed exports of the minerals, said Japan's Trade Minister Akihiro Ohata.

The Ministry of Economy, Trade and Industry "hopes" to ask for a supplementary budget to secure stable rare earth supplies, Ohata told Jiji Press today. The comments were confirmed by a ministry spokesman, who didn't want to be identified...

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‘Rare earths' fears spur US reviewDaniel Dombey in Washington, Financial Times, 27 Sep 2010View original article

The US is trying to resume production of raw materials vital for defence equipment and green technology in response to rising fears about Chinese dominance of the sector...

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Climate

We can't use it — so why the heck are we prospecting for new oil?George Monbiot, The Guardian, 27 Sep 2010View original article

Forget, for a moment, the fragility of the Arctic environment and the likely consequences of a spill there. Forget the dangers of deepwater drilling in a strait plagued by storms and icebergs, and the difficulties — greater than in the Gulf of Mexico — of capping a leaking well there. There's an even bigger question raised by a British company's discovery of oil off the coast of Greenland. It's the same question that is invoked by the decision the British government is expected to make tomorrow: to allow exploration wells to be drilled in deep waters to the west of Shetland. Why the heck are we prospecting for new oil anyway?..

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Climate change crisis 'can be solved by oil companies'Michael McCarthy, Environment Editor in Lyon, The Independent, 27 Sep 2010View original article

Climate change can be solved in a snap by making oil, gas and coal companies take responsibility for burying all the carbon dioxide emitted by the fossil fuel products they sell, one of Britain's leading young climate scientists said yesterday.

Government attempts to try to get millions of people to change their behaviour through taxes and incentives were doomed to fail, said Dr Myles Allen, head of the Climate Dynamics Group at the University Oxford, and an increasingly influential voice in the climate debate...

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China seeks binding climate treaty late 2011-reportChris Buckley, Reuters, 24 Sep 2010View original article

China wants the world to seal a binding climate change treaty by late 2011, a Chinese negotiator said in a newspaper on Friday, blaming U.S. politics for impeding talks and making a deal on global warming impossible this year.

Li Gao, a senior Chinese negotiator on climate change, said his government would remain unyielding on issues of "principle" in the talks aimed at forging a successor to the Kyoto Protocol. The first period of that key treaty on fighting global warming expires at the end of 2012...

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Gulf spill won’t dampen U.S. appetite for oilODAC Newsletter - June 11