ODAC News
Wednesday 02 May
The Oil Depletion Analysis Centre
1/ Gas shortage warning as Government fails to act on storage (The Times, Mon 30 Apr)
2/ Icebergs Threaten Vast Russian Gas Project (
3/ U.S. Gasoline Stocks (Matt Simmons and Peak Oil Review, Mon 30 Apr)
4/ Xinjiang kicks off largest coal mine (China Daily, Sun 29 Apr)
5/ Event - UK: Dealing with Peak Oil & Climate Change, Covent
Garden,
6a/ East Siberia-Pacific Ocean Pipeline Will Have Enough Oil –
Transneft Chairman (FC
Novosti, Wed 02 May)
6b/ Russia oil export duty to rise $44 to $200 per ton June 1 (RIA Novosti, Wed 02 May)
7/ A Brief Overview of
What the ‘Oil’ In Peak Oil Refers To (ODAC,
Wed 02 May)
8/ OTC: Simmons links
aging rig fleet, peak-oil concern (Oil
and Gas Journal, Mon 30 Apr)
9/ Carmakers see US April sales slip (BBC News, Tue 01 May)
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1/ Gas shortage warning as
Government fails to act on storage (The Times, Mon 30 Apr)
http://business.timesonline.co.uk/tol/business/industry_sectors/natural_resources/article1723006.ece
Comment: About a year ago warnings of
severe natural gas shortages in the
Article: The Government is expected to
duck one of the key energy issues facing industry next month by failing to set
out ways to boost
Industrialists had hoped that a White Paper, due on
May 17, would set out a package of measures to stimulate the building of
desperately needed additional storage facilities.
But it is thought that the issue has been put on ice
because ministers at the Department of Trade and Industry have not decided what
market mechanisms should be used.
Industrialists say that the lack of action could
trigger an energy shortage in a bad winter, with prices rocketing as they did
18 months ago.
The failure leaves
Gas storage is increasingly crucial to
... The Government has admitted that there is not
sufficient gas storage capacity. Last year Alistair Darling, the Trade and
Industry Secretary, put pressure on local authorities to grant planning
permission for new storage by saying energy companies could emphasise the
national need for their facilities. However, he does not have the power to
instruct councils to allow projects.
A few months after Mr Darling emphasised the national
need for new storage, a scheme planned for Caythorpe, near Bridlington, was
blocked. It is now facing a public inquiry...
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2/ Icebergs Threaten Vast
Russian Gas Project (
http://www.planetark.com/dailynewsstory.cfm/newsid/41619/story.htm
Comment: Gazprom currently forecasts
onstream 2013, which seems optimistic.
Article:
Even if icebergs are unlikely to halt the world's
largest single energy development, as the global hunger for resources grows,
they would make the US$30 billion-plus project by Russia's gas monopoly Gazprom
yet more expensive.
"Our studies show that, as the Arctic climate
gets milder, the risks of huge iceberg formation and ice storms in the
... Located 550 km (340 miles) from the shore, the
field cannot be reached by helicopter from continental bases. With water depths
of 600 metres (1,968 ft), installing a platform in the stormy sea will be hard.
Freezing winds and six months of winter darkness add to the many challenges.
... "The project foresees a system of iceberg
monitoring and the use of special technologies to chase them away," said
Gazprom's spokesman Denis Ignatyev...
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3/
Comment: There have been various
articles over the past few weeks warning that there might be a shortage of
gasoline/petrol in the USA this year e.g. 'Strong Possibility' Gas Will Rise
to $4. I did not really get
the gist of how tight the gasoline/petrol situation is in the
“I do not
know how closely all of you are following US gasoline stocks. We are at record
lows in both reported volumes and on days supply.
Finished
stocks at now around 11.5 days. This is in contrast to finished stocks at close
to 30 days at end of April, 1979 when
The
following text is from this week’s the ASPO-USA’s Peak Oil Review, item 1.
Article: Last week
By Friday, the price of gasoline on the futures
exchange had increased by 15 cents a gallon and spot shortages began to appear
around
Oil analysts are expressing mixed opinions on this
development. Some note that stockpiles have never been this low just in advance
of the summer driving season and are talking about gasoline reaching $4 a
gallon before the summer is over. Others feel that the shortages are only
temporary and that the oil industry has always come through in the past. They
note that prices in excess of $3 are likely to cut demand so much that the cost
per gallon is unlikely to reach $4 in the near term.
The underlying cause of the refinery problem is the
increase in utilization of
We should know within a few weeks how all the multiple
factors that bear on this situation will play out and whether or not we will
have much higher prices and possibly gasoline shortages later this year.
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4/ Xinjiang kicks off largest
coal mine (China
Daily, Sun 29 Apr)
http://www.chinadaily.com.cn/bizchina/2007-04/29/content_863817.htm
Comment: For comparison,
“The region's coal production stood at 43 million tons
in 2006. Before the end of the decade two or three mining bases each with an
annual output of 50 million tons along with a number of 10-million-ton mines
are expected to be built in Xinjiang.”
Article: Construction began on the
biggest coal mine in northwest
With a total investment of about 2.6 billion yuan (336
million U.S. dollars), construction of the mine will take 42 months to
complete.
It is expected to have annual revenue of 1.45 billion
yuan (188 million U.S. dollars).
Located in
The colliery is being built and financed by Xinwen
Mining Group Corporation,
Xinjiang is estimated to have coal reserves of 2.19
trillion tons, or 40 percent of the country's total. The region's coal
production stood at 43 million tons in 2006.
Before the end of the decade two or three mining bases
each with an annual output of 50 million tons along with a number of
10-million-ton mines are expected to be built in Xinjiang.
Xinwen Mining Group also revealed plans to invest in
facilities that will be able to process 30 million tons of coal a year for the
production of of methanol and olefin in
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5/ Event -
http://tinyurl.com/294wdg (brochure for event, PDF 20 Kb)
Date and Venue: The event starts at 12.45pm on
Saturday 12th May 2007 at Dragon Hall,
General Info: The relationship
between Climate Change and Peak Oil, and how to deal with the two threats, will
be discussed at a special event titled ‘Dealing with Peak Oil & Climate
Change’ in Covent Garden,
Arguably the two greatest global threats of the 21st
century are Climate Change and the decline of global oil supplies, the onset of
which is called Peak Oil. Climate Change is already happening while the global
peak in oil supplies is expected within the next ten years by many analysts.
They are happening in parallel, but analysts and commentators tend to focus on
one or the other. This event will argue that you cannot and must not ignore
either of them, as well as giving insight on their interaction. Also being
discussed will be a holistic but controversial approach to dealing with both of
these problems.
Speaking at the event, which will include talks and
workshops, will be David Strahan. Strahan is an award-winning investigative
journalist and documentary film-maker. In 2000 he made a BBC2 documentary
called The Last Oil Shock - also the title of his new and highly acclaimed book
on Peak Oil - and in 2003 another called The War For Oil, transmitted a week
after the invasion of
“Most people assume that running out of oil must at
least be good for climate change,” Strahan says, “but it could mean quite the
opposite. The failure of many climate change campaigners to recognize the
threat posed by peak oil gets more mystifying by the day.”
Also speaking will be Paul Mobbs, author of ‘Energy
Beyond Oil’. Paul Mobbs is one of
Some see him as a controversial speaker, opposing the
idea that we can make the transition without major changes in lifestyle. It is
this concept that he will deal with in his talk, challenging many of the
beliefs that are now taken for granted, by all ends of the spectrum. He will
dig deep into our economic system and discuss why ‘Less' is a four-letter
word. “If we are truly to find the
solution to energy depletion and climate change,” says Paul Mobbs, “then we must
tackle the driving force behind both – growth.” This is part of the ‘Wakey,
Wakey’ series of events happening across the
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6a/
http://www.fcinfo.ru/themes/basic/materials-rfcm-index.asp?folder=3192
Comment: In the full pay to view version
of the article, Semyon Vainshtok, president and board chairman of the
Article: Transneft will build the
second line of the
6b/
http://en.rian.ru/business/20070502/64755857.html
Article:
The duty has been raised for the first time in the
past six months.
On April 1, export duty was cut by $23.3 to $156.4 per
metric ton, reflecting a decline in oil prices that began late last year and
continued into 2007.
Alexander Sakovich, deputy head of the ministry's tax
and customs policy department, said the oil export duty is adjusted every two
months and is based on Russian Urals oil blend prices on world markets.
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7/ A Brief Overview of What the
‘Oil’ In Peak Oil Refers To (ODAC,
Wed 02 May)
http://www.odac-info.org//bulletin/documents/peak_oil.htm
Comment: This was posted on the ODAC
Bulletin Board today. It is intended to clarify why some analysts have
suggested peak may have passed, while International Energy Agency data shows
oil production still growing, just.
Article: When various analysts refer
to ‘Peak Oil’ or global oil production, it is sometimes not obvious what the ‘oil’
refers to – crude oil only or ‘total oils’ which may include Natural Gas
Liquids, liquid from tar sands and biofuels. US Energy Information
Administration data suggests if ‘oil’ refers to crude, then global production
may have peaked, but it is still too early to be sure. If ‘oil’ refers to all
types of oil, then International Energy Agency data hints that peak might occur
shortly after 2011, although they would strenuously deny any such suggestion...
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8/ OTC: Simmons links aging rig
fleet, peak-oil concern (Oil
and Gas Journal, Mon 30 Apr)
Comment: OTC = Offshore
Technology Conference, an annual get together in the
Article: Peak offshore oil production
is a reality, but the oil and gas industry isn't certain when it will occur—or
if it has already happened—or what to do about it, Matthew Simmons of Simmons
& Co. International said Apr. 30 at the Offshore Technology Conference in
Houston.
The debate over peak oil, Simmons said, eventually
will surpass global warming as an issue of general concern.
Even the rate of oil production decline is debatable,
Simmons said, because of "awful energy data." Most rates of decline
are based anecdotally on specific areas, he said, adding that the global
decline is probably 10-20%/year.
Relying on oil sands and shales is like "turning
gold into lead," Simmons said, referring to the energy needed to produce
from these unconventional sources.
Aging rigs
If the industry is to stave off a rapid offshore oil
production decline, Simmons said, its offshore drilling fleet will need to be
replaced and refurbished.
It can mitigate the decline in offshore oil production
by drilling more rapidly, he said. Unless the rig fleet expands, however, the
production decline eventually will accelerate.
The world's 51 fourth-generation offshore rigs now
average 18.7 years in age, while the 34 ultradeepwater rigs average 9.8 years,
Simmons said. "The offshore fleet is getting long in the tooth."
And how long refurbishment can last "is a
mystery," Simmons said. "Rust never stops; it can only be slowed
down."
The world's drilling fleet currently has 126 new rigs
or upgrades pending, some of which will start entering the fleet by 2008.
Overbook, meanwhile, is stretched beyond 2011, he said.
While technological advances will stretch out the oil
production decline curve, these "will be limited in scope," Simmons
said.
In the mid to long-term, life after the peak of
offshore oil production will be based on energy from the ocean but not
hydrocarbons, Simmons said.
Water covers 70% of the planet, but scientists know
only about 5% of the ocean floor, which is "the last low-hanging energy
fruit."
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9/ Carmakers see US April sales
slip (BBC
News, Tue 01 May)
http://news.bbc.co.uk/1/hi/business/6613731.stm
Comment: There has been a problem with
the
Article: US vehicle sales fell sharply
in April to what is expected to be an 18-month low, as economic worries kept
customers out of the country's car showrooms.
Even
Ford said demand had dropped 12.9% compared with this
time last year, with General Motors (GM) down 9.5%.
Higher petrol prices and consumer debt were blamed for
the trend.
The
"It appeared to us that customers were just
frozen," said Nissan spokesman Brad Bradshaw, citing the close to
$3-a-gallon price of fuel and a weak housing market for Americans holding back
purchases...
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