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.
In an interview with Reuters last week Shokri Ghanem, Head of Libya’s National Oil Corporation declared that “peak oil is looming”, but Tony Hayward of BP insisted that the problems of production are above ground rather than geological. No wonder! With BP TNK in the process of being dismantled by its Russian shareholders & the Russian state, and a market where much of the big oil is controlled by national governments, his immediate problems really are above ground. Meanwhile the assertion by ‘a former industry insider’ that global reserves are twice as big as stated is dismantled in our Guest Commentary this week from Richard Miller, Independent Consultant, and former geochemist for the BP Exploration Department.
Last week saw continued high oil prices. On Friday the price of a barrel surged $11 in one day, (that is more than the price of an entire barrel a decade ago). Some of the factors driving the price were: the jump in US joblessness figures; Israel’s warning to Iran over its nuclear policy; BP’s 2008 Statistical Review of World Energy titled 'Energy consumption rises as supplies lag, but free energy markets do work', reporting that global oil output fell 0.2% in 2007; and the IEA’s downward revision of both its oil demand and supply forecasts for 2008 while also stating that the world faces an ‘oil crisis’.
The price pressure, and significantly the rise in the cost of diesel saw political repercussions this week. In Spain and Portugal road hauliers came out on strike, resulting in dry petrol stations, the beginnings of food shortages and cancelled flights. In Buenos Aires a diesel supply shortage resulted in bus services being withdrawn. In the UK meanwhile the government is trying to head off possible industrial action by Shell tanker drivers which threatens disruption here. As John Hutton, Britain’s secretary of state for business and enterprise, and the G8 leaders appear devoid of new ideas - either hoping for help to come from the market or increased supply from OPEC rather than any real action to reduce consumption - further protest is likely from those who find their spending power increasingly eroded.
In the face of a predicted oil demand crunch and soaring fuel costs it is however heartening to see that Richard Branson is rolling out his plans for Virgin Galactic. You have to wonder how many coconuts will be needed to fuel this project!
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Global Crude Oil Production Dropped in 2007, BP Says
IEA trims world oil demand, cuts supply forecast
World Faces 'Oil Crisis;' IEA Ready to Tap Reserves
Oil shortage a myth, says industry insider
Production decline does not mean oil is running out, says BP
OPEC Wants Oil Price 'Solution' From Saudi Meeting
China's May Oil Imports Rise 25% to Meet Quake Demand
G8 ministers call for global action on oil
Oil hits $139 as jobless figures stun US
IEA calls for $45trn global revolution in energy technology
Panic buying at petrol pumps as strike talks stall
Factories close, supermarkets empty and jets run out of fuel as truckers' strike bites
Showdown in Moscow for BP and investors
Virgin to launch space flights from UAE
Fuel shortage affects urban transport in Buenos Aires
Soaring shipping costs fuel inflation