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.
The contradictions of our energy predicament were starkly exposed this week, as oil hit yet another record high of $112.21. Analysts blamed it on an unexpectedly large fall in US stocks, but more striking was that it came on the same day the IMF said the credit crunch would cost almost $1 trillion and that America faces the worst financial crisis since the Great Depression. Meanwhile the US EIA jacked up its average price forecast to $101/barrel for 2008, despite an accumulation of bad economic news on both sides of the Atlantic — including a sharp full in UK house prices. Apparently high oil prices and recession in the West are now compatible — for the time being at least.
OPEC continued to claim there is no shortage of oil and that it is all the work of speculators, and that in any case seasonal demand is about to fall. Qatar’s oil minister said the cartel would cut production immediately if the price dropped below $80. Against that an analysis from Lehman Brothers suggests that Middle East hydrocarbon exports will fall this summer regardless of production, as both gas and oil are diverted into summer power generation. Nevertheless US Energy Secretary Sam Bodman professed himself “optimistic” that OPEC would raise output. Well, there is as yet, no tax on hope.
The impact of soaring food prices was evidenced by fatal food riots in Haiti this week and more dire warnings. World Bank president Robert Zoellick said 33 countries faced similar unrest, and that "many more people will suffer and starve" unless the rich countries provide more funds. Gordon Brown proclaimed that something-must-be-done, but failed to draw the dots with the introduction this week of the UK’s Renewable Transport Fuel Obligation, which mandates 5% biofuel by 2010, and despite pleas from India and African countries that the West should stop diverting food into petrol tanks.
The nuclear ‘renaissance’ seems to be gathering steam as Westinghouse wins its first power station construction contract for thirty years, and as Germany’s RWE offers £11 billion for British Energy. However a parliamentary committee concluded that the UK Nuclear Decommissioning Agency is underfunded.
Prize for brass-neck-of-the-week goes to E.ON’s cigar chomping boss Wulf Bernotat, who complained that nobody in British government was making the case for ‘clean coal’. He may be right – although ministers talk about it incessantly - but wasn’t his the company that browbeat a British official into removing any suggestion that its proposed coal-fired power station at Kingsnorth in Kent should be even ‘carbon capture ready’, in an exchange of licensing emails exposed by Greenpeace earlier this year?
Runner up in the brass-neck stakes is Energy Minister Malcolm Wicks, who wants CCS to count against not only carbon reduction targets – which makes sense – but also against our renewable targets – which is grotesque. Still, with Britain third from the bottom in the EU-15 for renewables, and with a 20GW (25%) hole in UK generating capacity looming within the next decade or so, who can blame him for weaselling?
The good news is that Spain generated more than 40% of its electricity from wind capacity on a windy Saturday recently – the week-day record is 28% - enough to power “Madrid, Barcelona, Seville, Valencia, Toledo, Cordoba, Granada, Santander, Bilbao, and Zaragoza combined”. So high concentrations of wind power can be accommodated within an electricity grid, apparently, despite what the nay-sayers would have you believe.
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For a Time, Crude Oil Tops $112 a Barrel
EIA: Oil will stay above $100 this year
Unravelling the paradox of spiraling oil prices
OPEC ministers see no need for supply boost
GCC demand to curtail oil exports
Canada oil sands rules get UK backing
Mexican president submits bill to modernize state-owned oil company
Al Qaeda attacks in Yemen latest to target oil
China signs two big LNG deals with Qatar
BP, ConocoPhillips join to build $20 billion Denali gas line
ExxonMobil 'LNG demand set to triple'
Posco agrees 200% coal price increase
Westinghouse wins first US nuclear deal in 30 years
RWE offers £11bn for British Energy
UK nuclear decommissioning funding is 'unsustainable': MPs
Wind farm and tidal projects get green light
Spain's gain from wind power is plain to see
Stop using food for biofuel, West told
'Splash and dash' hits UK biofuels firm
Germany drops 'roadmap to biofuels' for cars
Skyrocketing corn prices hit ethanol profits
Starving Haitians riot as food prices soar
Food price rises threaten global security - UN
Fear of rice riots as surge in demand hits nations across the Far East
Brown urges action on food prices
Shell warns Europe on CO2 permits
IMF puts cost of credit crisis at $945bn
IMF says US crisis is 'largest financial shock since Great Depression'
The UK needs to rethink its 'romantic' energy policy or face disaster
British court condemns end to Saudi arms probe
Oasis calls in liquidator as airlines hit by turbulence
Alitalia in efforts to avoid pre-poll collapse
Britain’s railways see record peacetime traffic
Shipping operators face rise in fuel bills