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 expected OPEC leaders meeting on Sunday agreed to hold off making further production cuts. Instead they will work on enforcing current commitments before reconvening in May to review the situation. The decision reflects concern that raising prices now could further damage the global economy, as well as the fact that existing cuts appear to have put a floor under the price for the time being.
The impact of the economic crisis on investment in oil production was a strong theme in reports from the 4th International OPEC Forum, which took place this week in Vienna. IEA Executive Director Nobuo Tanaka said that slowdowns and cancellations would reduce supply capacity by roughly 1.1 million barrels per day in 2009, while Dave O’Reilly, CEO of Chevron, reportedly stated that current spare capacity was still lower than in previous downturns despite falling demand. There is clearly a strong prospect of rising oil prices as soon signs of an economic recovery emerge.
The oil price received a boost on Wednesday as the US Federal Reserve entered into its version of ‘quantative easing’ raising hopes that economic recovery will come earlier than expected. Meanwhile doubts over the WTI benchmark contract were underscored as Platts unveiled an alternative, the ‘Americas Crude Marker’, which they hope will more accurately reflect the realities of US crude market.
Shell caused outrage this week by announcing that it would stop investing in renewables. In a statement Linda Cook, head of Shell's gas and power business, said that renewables “struggle to compete with the other investment opportunities we have in our portfolio”. In the meantime E.on and EDF reportedly warned the government about its 35% renewables goal, claiming that the target could undermine investment in new nuclear and CCS.
The government’s Chief Scientific Advisor, Professor John Beddington, was busy sending mixed messages this week. On the one hand he warned of an impending “perfect storm”, with global shortages of water, food and energy by 2030. On the other, he said "We're relatively fortunate in the UK; there may not be shortages here, but we can expect prices of food and energy to rise." Oh, that’s alright then.
OPEC Decides Against Fourth Output Cut on Economy
Oil Rises Above $50 on Speculation Fed Plan Will Spur Growth
Crude truth behind numbers that govern our lives
Consumers, producers agree oil projects at risk
Fossil fuel vital for decades: Saudi oil minister
Energy minister to urge Opec to invest for recovery
Chevron Confirms Loss of 11,500bpd to Attack
Investment squeeze 'will cut North Sea oil exploration'
Shell Lagged Behind BP in Replacing Reserves in 2008
Anger as Shell reduces renewables investment
Anger after government halts solar energy grant programme
Green lobby and nuclear groups clash over role of renewable energy
Plan B: scientists get radical in bid to halt global warming ‘catastrophe’
Federal Reserve plan stuns investors
IMF says Britain faces long recession
World Bank lowers China forecast
A New Washington Team and a Fresh Game in Russia, Iran and the Caspian
Food and energy shortages will create 'perfect storm', says Prof John Beddington
Russia declines OPEC membership; proposes 'permanent envoy'