ODAC News
Sunday 01 July
The Oil Depletion Analysis Centre
Iraqi Oil Production / Meeting
Demand
1a/ IEA: without Iraqi oil, we'll be in deep trouble by 2015
(The Oil Drum:
1b/ Americans
Are Gluttons For Mideast Oil
(The Day [
Natural Gas
2a/ EU
pipeline project loses momentum
(International Herald Tribune, Tue 26 Jun)
2b/ Turkmen
leader vows to increase natural gas exports to Russia
(International Herald Tribune, Tue 26 Jun)
2c/ Norway
to boost natural gas exports to European Union
(International Herald Tribune, Tue 26 Jun)
Peak Oil in
3a/ Energy debate must include all options
(The Meath Chronicle, Wed 27 Jun)
3b/ A
Royal week of Aussie sprinters, Irish first-timers, Fortune's success and a
Coronation
(Independent [
Peak Oil and Transport
4a/ IATA
report: Fuel replaces labour as largest cost for airlines in 2006
(domain-B.com, Tue 26 Jun)
4b/ Researchers
warn of 'transport poverty'
(ABC News [
Peak Oil Report
5/ Energy Alarmism: The
Myths That Make Americans Worry about Oil (Cato
Institute, Thu 05 Apr)
6a/ 'Paradox'
as Mideast faces power shortage
(Arabian Business, Tue 12 Jun)
6b/ UAE
diverts 50 pct of gas meant for oil to power
(Reuters, Tue 26 Jun)
Economy
7a/ Caliber becomes latest victim of US
sub-prime mortgage market
(The Independent, Fri 29 Jun)
7b/ BIS
warns of Great Depression dangers from credit spree
(Telegraph, Mon 25 Jun)
Big Oil / Geopolitics
8/ For
some oil companies, Venezuela is hardly the worst option (International
Herald Tribune, Thu 28 Jun)
10/ The
Problem's Not Peak Oil, It's Politics
(BusinessWeek, Thu 28 Jun)
Biofuels
9/ The
Great Corn Con - The Senate's preposterous new ethanol bill
(Slate, Tue 26 Jun)
11/ Iran in crisis after
cleric's murder (The
Australian [The Sunday Times], Mon 02 Jul)
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1a/ IEA: without Iraqi oil, we'll be in deep trouble by 2015
(The Oil Drum:
http://europe.theoildrum.com/node/2721#more
Comment: Translation of an article
from French to English quoting Fatih Birol, chief economist of the
International Energy Agency. As with the Al-Husseini brothers (Moujahed Al-Husseini and Sadad Al-Husseini, the latter
formerly Saudi Aramco’s Executive Vice President for
Exploration and Production and a Member of its Board of Directors), Fatih is
becoming increasingly outspoken.
Article: In a stunning interview for
the French (reference) daily Le Monde, Fatih Birol,
the chief economist of the International Energy Agency (i.e. the
intergovernmental body created after the oil shocks of the 70s to coordinate
the West's reaction to energy crises) effectively says that peak oil is just
around the corner, and that without Iraqi oil, we'll be in deep trouble by
2015:
"If Iraqi production does not rise exponentially
by 2015, we have a very big problem, even if
The whole interview is amazingly frank and free of
diplomatic obfuscation. He blasts biofuels ("not based on any kind of
economic rationality"), he notes that Africa is suffering the most already
from expensive oil, he points out that even a slowing of China's growth will
not reduce oil demand, and he talks pretty explicitly about production peaks
and depletion.
... He says it again twice in the interview: the gap
between demand and supply will widen, and he blasts our governments for doing
so little...
1b/ Americans Are Gluttons For Mideast Oil
(The Day [
http://www.theday.com/re.aspx?re=878e8f8a-6132-4447-a7a2-9d338f1d6fad
Comment: James Howard Kunstler points out that if the
Article: It seems you can call the
situation in
... I'm waiting for one of these birds to tell the
American people the truth: You can't have it both ways. You can't get our
military out of the
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2a/ EU pipeline project loses momentum
(International Herald Tribune, Tue 26 Jun)
http://www.iht.com/articles/2007/06/26/business/EUgas.php
Comment: The IHT reports that the
planned Nabucco gas pipeline is looking less likely than ever.
Article: The consortium attempting to
build a natural gas pipeline that would reduce the European Union's dependence
on Russian natural gas has failed to agree on financing or finding another
partner to make the project viable.
Interviews with members of the Nabucco consortium
Tuesday disclosed that the pipeline - proposed in 2002 by the European
Commission as the bloc's first attempt at forging a common energy security
policy - may be threatened by another project with similar intent.
On Saturday,
The Nabucco project seems to be losing momentum, as it
runs behind schedule and over budget, members of the consortium said.
...
"You have to remember that
Analysts said the delays and divisions inside the
consortium were being exploited by Gazprom, which they said appeared determined
to capture as much of the market as soon as possible in southeastern
Gazprom, tightening its grip on the market in
2b/ Turkmen leader vows to increase natural gas exports to
http://www.iht.com/articles/ap/2007/06/30/business/AS-FIN-Turkmenistan-Russia-Gas.php
Comment:
Article:
Gurbanguli Berdymukhamedov also said his country would develop a
U.S.-backed undersea Caspian pipeline along with a gas pipeline that runs along
the seashore favored by
"We will increase exports of our gas through the
Caspian shores to
Berdymukhamedov
was referring to an agreement last month to build a Moscow-backed pipeline that
would carry gas from
But the Turkmen leader also said his nation would
develop a U.S-favored pipeline across the Caspian Sea
to the west that would tap into the gas pipelines that cross the South
Caucasus, bypassing
"Without joining any political alliances we will
continue efforts to build pipelines to
"That way we will maintain mutually beneficial
relations with
The
2c/
http://www.iht.com/articles/ap/2007/06/25/europe/EU-GEN-Norway-EU-Energy.php
Comment: The source of this story
seems to be Andris Piebalgs,
the EU's energy commissioner. Given just how rich
Article:
"This is important taking into account the
expected growth of gas consumption and the need for additional gas supplies in
the EU in the years to come," Andris Piebalgs said in a statement released during his visit to
the Nordic country.
The EU is pushing
Piebalgs
said gas supplies from
Norwegian oil minister Odd Roger Enoksen
said gas exports would increase later this year when new offshore fields come
on line, including Ormen Lange in the
Enoksen
and Piebalgs also discussed carbon capture and
storage technology used to prevent carbon dioxide from being released into the
atmosphere. They visited the Sleipner offshore field,
where
"Carbon capture and storage could contribute
substantially in our efforts to reduce the world's CO2 emissions," Piebalgs said.
**********************************************************************************************************
3a/ Energy debate must include all options
(The Meath Chronicle, Wed 27 Jun)
http://www.meathchronicle.ie/opinion/editorial/energy-debate-must-include-all-options-807976.html
Comment: RTE, an Irish television
channel, ran a Peak Oil program a week or two ago. It will be reviewed in a
forthcoming newsletter. This is what the first sentence is referring to. You
can see from this editorial that the Irish media are way ahead of the
Article: RTE’S recent ‘Futureshock: End Of The Oil Age’ programme and its dire
predictions of an impending energy crisis will hardly have come as a surprise
to those who have followed the debate in recent years about ‘peak oil’.
As anyone who has turned on a TV or listened to a
radio in the past couple of years will tell you, oil is a finite resource that
we have been using like snuff at a wake, and now there’s
not a lot left. Soon, all the oil that is being discovered will no longer
replace all that has been produced, global production will peak and then begin
to terminally decline.
... In a nutshell, oil depletion (along with climate
change) is probably the most serious crisis ever to face industrialised society
and yet governments around the world are still incredibly ill-prepared to meet
the extraordinary challenge this will pose. Virtually every single item we
possess or need is due to oil in one form or another. However, no clear
consensus has emerged on what happens next. Will existing hydrocarbon
technologies be adapted to new realities or will radical new technologies
emerge, like hydrogen fuel cells, to complement renewable energy sources like
solar and wind energy?
... It has been interesting over the past year to hear
the tentative beginnings once again of discussions on nuclear energy as a
possible future energy option to produce electricity. It’s
an emotive subject in this country that often sparks a hostile reaction towards
those who dare to raise it.
... Whether or not nuclear ever forms part of the mix
in
Renewables like wind and wave power have potential,
for sure, but they cannot provide for all the country’s
needs and are unreliable sources of electricity unless adequate technologies
can be developed to store the power they generate.
3b/ A Royal week of Aussie sprinters, Irish first-timers, Fortune's success
and a Coronation
(Independent [
Comment: An ODAC News subscriber says:
“Peak Oil now on Sport Pages. Hard To Believe.”
However, this is
Article: WHERE have all the people
gone? Commuting time from the Arundel restaurant to the parade ring has been
practically halved versus last year when grid-iron shoulders and a crash-helmet
served as the best means of navigating from A to B. So large are the gaping
spaces in the enclosures today, the Agoraphobics' Society are considering cancelling
their attendance for the rest of the week.
One place they might have felt more comfortable was in
the winner's enclosure following the King's Stand Stakes which felt like
downtown
Tracey Collins was momentarily 'Most Unpopular Woman
Down Under' for deigning to spoil their clean sweep with Dandy Man and if one
consequence of Peak Oil is that it makes it untenable for the Aussies to travel
over next time then our sprint trainers will be happier than most to herald the
end of the Oil Age and move to a more sustainable energy source...
**********************************************************************************************************
4a/ IATA report: Fuel replaces labour as largest cost for airlines in 2006
(domain-B.com, Tue 26 Jun)
http://www.domain-b.com/aero/June/2007/20070626_iata.htm
Article: The Centre for Asia Pacific
Aviation (CAPA) reports that a recent International air Transport Association
(IATA) sample of the financial reports of 45 major global airlines reveals that
fuel replaced labour as the largest single cost item for the global airline
industry in 2006. This marks the first time ever that fuel costs have outpaced
that of labour.
According to the IATA analysis, fuel accounted for
25.5 per cent of total operating costs for carriers in 2006, up from 22.5 per
cent in 2005, while labour (including pension) expenses fell from 24.2 per cent
in 2005, to 23.3 per cent in 2006.
The rise reflects the sharp increase in fuel prices
faced by airlines, including a rise in the average price of jet fuel per barrel
from US$34.70 in 2003 to $81.90 in 2006...
4b/ Researchers warn of 'transport poverty'
(ABC News [
http://www.abc.net.au/news/stories/2007/06/27/1963181.htm?section=business
Comment: 2005/2006 there were a few
articles in the
Article: Petrol prices weigh on the
mind of any motorist, but there are predictions that if the cost of fuel
continues to rise, the poorest Australians will be forced to quit work because
travelling to and from their jobs will be unaffordable.
Researchers are calling it transport poverty, and it
is a concept that will be presented to a conference in
On the outskirts of
**********************************************************************************************************
5/ Energy Alarmism: The Myths That Make Americans Worry about Oil
(Cato Institute, Thu 05 Apr)
http://www.cato.org/pub_display.php?pub_id=8161
Web introduction
http://www.cato.org/pubs/pas/pa589.pdf
Report (PDF, 177 Kb)
Comment: Wikipedia:
“The Cato Institute is a libertarian think tank headquartered in
Article: From the web introduction.
… Each of those fears about oil supplies is
exaggerated, and none should be a focus of
Our overarching message is simply that market forces,
modified by the cartel behavior of OPEC, determine
most of the key factors that affect oil supply and prices. The
**********************************************************************************************************
6a/ 'Paradox' as
Comment: Over the past year or so,
ODAC News has reported cases of energy shortages in the
Article: Oil and gas-rich countries of
the
"Shortages of natural gas - hitherto the fuel of
choice for electricity generation - have become a regular feature, forcing
governments to consider alternatives such as coal, fuel oil, nuclear and even
imported gas," the IEA wrote.
A large gas-fired power station serving the
"But gas oil itself is scarce," the IEA
said. "In
For most countries local gas is not a short-term
option because projects take a long time to develop.
The agency said liquefied natural gas (LNG) was
another possibility for energy hungry
"Other countries are envisaging power imports,
with
6b/ UAE diverts 50 pct of gas meant for oil to power
(Reuters, Tue 26 Jun)
Comment: More on UAE natural gas
diversion.
Article: Tight gas supplies have
forced the
"It's almost fifty-fifty," UAE Oil Minister
Mohammed al-Hamli told reporters, when asked how much
gas was being taken away from oilfield reinjection
for use in power plants.
"Power generation demand is seasonal. Now there
is a lot of demand for reinjection gas (to be
diverted to power)," Hamli said.
As temperatures rise in the desert Gulf Arab states,
power demand soars with air conditioning needs. The seasonal rise has further
strained the UAE's gas system, already short of
supplies to meet the demands of its rapidly expanding economy.
Gas is used to maintain pressure in oil reservoirs to
maximise crude output. Hamli did not give the volume
of gas being diverted from the fields of the world's sixth largest oil
producer.
... The UAE holds the world's fifth largest gas
reserves, at over 200 trillion cubic feet, but has failed to develop them
quickly enough to keep pace with domestic demand.
**********************************************************************************************************
7a/ Caliber becomes latest victim of
http://news.independent.co.uk/business/news/article2720151.ece
Comment: Caliber
is a
Article: Aftershocks from the collapse
of the sub-prime mortgage market in the
In the UK, Caliber, a quoted
investment fund that has raised $250m (£125m) to invest in the credit markets,
most of it in US sub-prime mortgages, said that its investors had asked it to
wind up the ailing business rather than try to find a way to reverse its
losses.
... Sub-prime mortgages are home loans for Americans
with poor credit histories. Large numbers of these mortgages are parceled together and then sold off in pieces as CDOs to investors across Wall Street and beyond. Because
they are backed by monthly mortgage payments, investors such as Caliber were able to argue that they were relatively safe
assets. However, demand for CDOs was so high that
lenders offered mortgages to more and more people with a higher and higher
credit risk, and arrears are now at record levels. The value of the CDOs has collapsed.
Caliber
is the second British fund this week to report difficulties. Queen's Walk Investment
said that it lost $91m last year because it had to write down the value of its
portfolio...
7b/ BIS warns of Great Depression dangers from credit spree
(Telegraph, Mon 25 Jun)
http://www.telegraph.co.uk/money/main.jhtml?xml=/money/2007/06/24/cnbis124.xml
Comment: When the bankers’ bank, the Bank for International Settlements, warns of a second great
depression, it is more difficult to dismiss than say, a warning from the Peak
Oil community.
Article: The Bank for International
Settlements, the world's most prestigious financial body, has warned that years
of loose monetary policy has fuelled a dangerous credit bubble, leaving the
global economy more vulnerable to another 1930s-style slump than generally
understood.
"Virtually nobody foresaw the Great Depression of
the 1930s, or the crises which affected
The BIS, the ultimate bank of central bankers, pointed
to a confluence a worrying signs, citing mass issuance of new-fangled credit
instruments, soaring levels of household debt, extreme appetite for risk shown
by investors, and entrenched imbalances in the world currency system.
... In a thinly-veiled rebuke to the US Federal
Reserve, the BIS said central banks were starting to doubt the wisdom of
letting asset bubbles build up on the assumption that they could safely be
"cleaned up" afterwards - which was more or less the strategy pursued
by former Fed chief Alan Greenspan after the dotcom bust.
It said this approach had failed in the
... "Sooner or later the credit cycle will turn
and default rates will begin to rise," said the bank.
"The levels of leverage employed in private
equity transactions have raised questions about their longer-term
sustainability. The strategy depends on the availability of cheap
funding," it said.
That may not last much longer.
**********************************************************************************************************
8/ For some oil companies,
http://www.iht.com/articles/2007/06/28/business/oil.php
Comment: No matter how bad things get
for Big Oil in
Article: Exxon Mobil and
ConocoPhillips have decided the profits are not worth the risk of staying in
But other major oil companies have accepted the
increasingly tough terms posed by President Hugo Chávez's
government because they face few appealing alternatives elsewhere.
Terms are even tighter in
"The risks are clearly there and growing in
Under
Rising energy prices and
... In
"Some people think ultimately what the
Venezuelans would like is complete 100 percent ownership of those assets. I
don't agree," said Derek Butter, an analyst with Wood Mackenzie in
In contrast, most of
... "
**********************************************************************************************************
9/ The Great Corn Con - The Senate's preposterous new ethanol bill
(Slate, Tue 26 Jun)
http://www.slate.com/id/2169124/
Comment: The first paragraph says it
all: “the production of 36 billion gallons of ethanol per year by 2022—a
sevenfold increase over current levels”. Current levels of corn-to-ethanol are
already causing inflation in the price of food in the
Article: The ethanol madness
continues! Last week, the Senate passed an energy bill mandating the production
of 36 billion gallons of ethanol per year by 2022—a sevenfold increase over
current levels. Senators congratulated themselves for their environmental
foresight. The president, a biofuels advocate, has enthusiastically endorsed
the ethanol surge. But it's almost certainly a fantasy, since no one in
**********************************************************************************************************
10/ The Problem's
Comment:
Article: Some "peak oil" cassandras warn that global energy production will soon
fall into permanent decline. But a more immediate danger to world oil supplies
may be the tempestuous politics of many producing countries. Witness
Right now,
... This may make sense for the resource-rich
countries. Building up a domestic industry and curbing reliance on outsiders
could well serve their national interests. But for oil and gas consumers in the
U.S., Europe, and Japan, that means a growing dependence on producers that
don't share their interests—and likely more years of
high prices due to limited supplies, regardless of whether or not global output
has reached its peak.
**********************************************************************************************************
11/
http://www.theaustralian.news.com.au/story/0,20867,22000874-2703,00.html
Comment:
Article: THE assassination of a
prominent cleric in an oil-rich Iranian province, coinciding with violent
protests in
... Protests that followed shortly afterwards over the
rationing of petrol convulsed
The rationing is particularly damaging to Mr Ahmadinejad because those worst affected are the
constituency that elected him, the poor and disenfranchised.
During his campaign he adopted the slogan: "Oil
money must be seen on the table of the people." He increased
His biggest headache is that
Faced with UN sanctions and pariah status over its
nuclear ambitions, the regime lacks the foreign investment it needs to build
more refineries.
On the streets of
There was chaos last Tuesday when the Government gave
just three hours' notice of fuel rationing. Drivers lined up at their local
pumps and fought over the last drops of petrol in the face of a limit of 100L a
month.
Worse still, the private taxis that carry more than
half of Tehran's two million commuters a day were subject to the same
restrictions and would have had to raise their fares accordingly, from about
10c to 50c.
Men set petrol stations alight in
Mr Ahmadinejad was opposed
to the petrol rationing, but was overruled by the Majlis,
the Iranian parliament. His objections centred on the timing of its
introduction. He wanted stability while facing American plans to engineer
regime change, either through military strikes or by a revolution from within.
Little noticed in the media, but keenly watched in
"They always do this," a university lecturer
said.
Others predict Mr Ahmadinejad
will stand firm. "They bit the bullet," said an Iranian economist.
"These guys have the ability to put people on corners with guns. They're
not turning back."
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