ODAC News
Monday 10 Sept
The Oil Depletion Analysis Centre
Global Oil Production
1a/ August Oil Supply Falls 1 Million b/d Short Of Demand
(Energy Intelligence [Energy Intelligence Briefing], Wed 05 Sep)
1b/ OPEC
Oil Production
(Energy Intelligence, Fri 07 Sep)
1c/ August
Oil Production
(Energy Intelligence, Thu 06 Sep)
1d/ MegaProjects
data and Global Oil Production
(Petroleum Review, Feb 2007)
Peak Oil and Climate Change at the APEC Meetings
2/ Don't
blow it APEC, habitable planets are hard to find (crikey, Thu 06 Sep)
3/ Building a
Super-giant? (
Food
4a/ Hot
Winds Severely Damage Australian Wheat
(
4b/ Australia's
Dry Threatens Wine Drought
(
4c/ EU
Approves BP Joint Venture for Biofuels (
4d/ The
Looming Food Crisis (The Guardian, Wed 29
Aug)
4e/ Low
grain harvest, rising food prices and China’s ethanol
plan (Energy Bulletin, Sun 09 Sep)
Population -
5/ Where Have All the
Children Gone? (
6/ Eni Standoff Leaves
Kashagan In Turmoil
(Energy Intelligence [Petroleum Intelligence Weekly], Fri 07 Sep)
Economics -
7/ Mortgages to rise as
crisis grips the markets [UK] (The Telegraph,
Fri 07 Sep)
Peak Oil in the Sunday Times
8/ You’re
going green ...or else (The Sunday Times, Sun 09 Sep)
Natural Gas Flaring
9/ Oil Industry Flares $40
Billion a Year in Gas (Spiegel Online, Fri 07 Sep)
Asian LNG Spot Prices
10/ Nuke
plant shutdown strains Asian markets (Oil and Gas Journal, Fri
07 Sep)
Economics - the Subprime Scam
11/ Attorneys
General step up pursuit of wrongdoing on Wall Street
(The Independent, Sat 08 Sep)
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1a/
No link, newsletter.
Article: A benign growth in global
August products consumption was enough to create a 1 million barrel per day gap
with worldwide oil supply that was limping ahead last month, setting the stage
for a supply shortfall in the third quarter. Oil consumption was a modest
750,000 b/d higher than in August 2006, yet global oil supply managed to add
only 250,000 b/d.
1b/ OPEC Oil Production
(Energy Intelligence, Fri 07 Sep)
No link. From newsletter.
Comment: From the commentary section, ‘World
Watch -- Comment & Interpretation on Today's News’, of the daily newsletter.
Article: August oil market balances tightened
appreciably after a relatively sloppy July, according to preliminary soundings
by Energy Intelligence's Oil Market Intelligence. While demand grew by 500,000 b/d on the month,
heavy
1c/ August Oil Production
(Energy Intelligence, Thu 06 Sep)
No link. From newsletter.
Comment: From the commentary section, ‘World
Watch -- Comment & Interpretation on Today's News’, of the daily
newsletter. OPEC are meeting tomorrow (Tue 11th Sep) for their
quarterly meeting to set oil production quotas for the next 3 months. The IEA
amongst others, and the price of oil, back up at the mid- $70s/barrel, suggest
increasing oil output, but the fallout from the
Article: With the ghost of the Opec Jakarta meeting 10 years ago very much present, the
producer group is expected to keep production quotas steady at its meeting on
Tuesday. The logic is that increasing output in an effort to ease current oil
market tightness is too risky for Opec right now with
the
1d/ MegaProjects data and Global Oil Production
(Petroleum Review, Feb 2007)
http://www.odac-info.org/bulletin/documents/MegaProjects_Feb2007.pdf
(PDF, 79 Kb)
Comment: This is Table 1 from Chris Skrebowski’s MegaProjects article, Petroleum Review,
Feb 2007.
Year
2005 2006
2007 2008
2009 2010
2011 2012 2013
2014
Total new
capacity
2,596 3,219 4,559
4,386 5,053 4,025
3,662 3,117 1,167 645
Opec new
capacity 1,250
1,660 1,715 1,955
2,670 2,070 1,877
1,307 155 0
Non-Opec new capacity
1,346 1,559 2,844
2,431 2,383 1,955
1,785 1,810 1,012 645
Global
production
1,480 760
It is worth reviewing this data again. For “Non-Opec new capacity”, the peak in new production is 2007, so
new production from non-OPEC is unlikely to get any better than this year.
2.844 Mb/d of new production (non-OPEC) looks impressive, except that last year
net new production was almost 1Mb/d less than forecast. Project slippage etc.
suggests that 2.844 Mb/d is probably too high. We then have a figure for
non-OPEC new capacity that it is roughly the same as production lost to
depletion. Allowing for minor oscillations from month to month, as long as OPEC
cap their production, then global oil production will not grow. See the US EIA’s data. If we are headed for a major global
recession, then this might not matter, for a year or two anyway.
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2/ Don't blow it APEC, habitable planets are hard to find
(crikey, Thu 06 Sep)
http://www.crikey.com.au/Politics/20070906-APEC-good-planets-are-hard-to-find.html
Comment: “Crikey” is an online
Australian magazine. The author of the article, Ian Dunlop, is a member of ASPO
Australia who writes about the conversion of Peak Oil and Climate Change. APEC
is the Asia-Pacific Economic Cooperation. They had a major gathering in
Article: As APEC meets, the good ship “humanity”
is steaming into the teeth of a hurricane with our leaders asleep at the wheel,
as the great global issues of climate change and the peaking of oil supply
converge.
The need to address human-induced climate change is
finally reaching the top of the political agenda, driven primarily by
scientific and community concern rather than by any proactive political
leadership. Even now, the political rhetoric confirms that our leaders do not
understand or accept the seriousness of our position, and the limited time to
take action in reducing carbon emissions before we encounter dangerous climate
change.
... In contrast to climate change, the peaking of
global oil supply is barely on the agenda in this country. Recent reports from
the International Energy Agency and the US National Petroleum Council are the
first, grudging, official admissions that peak oil may soon become a reality.
Indeed, peak oil may have a greater impact than climate change in the short
term, given the all-pervasive use of oil throughout global society. If oil does
move into short supply, where is the vision to manage the allocation of the oil
that is available? Solutions range from:
Letting the market take its course. The economists
argue that supply will always balance demand at some price, but conveniently
skirt around the traumatic societal implications of recession, depression and
inequity that will arise from higher oil prices.
The “Washington Consensus” of sending in the marines
to secure supply. Quite apart from moral considerations, recent experience
confirms this is neither realistic nor sustainable.
A global Oil Depletion Protocol to provide for
equitable sharing of available oil. Again, this may well require convergence
toward equal per capita oil allocations by an agreed date if global conflict is
to be avoided.
... Which brings us back to APEC. The 21 APEC leaders
are convening for three days to focus on solutions to major global problems. At
present, there is nothing more important than managing our transition to a
sustainable global society; without it, discussions on trade and security are
meaningless. Climate change is on the agenda, but peak oil is not mentioned
although it is fundamental to the functioning of the global economy...
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3/ Building a Super-giant? (
http://www.russiaprofile.org/page.php?pageid=Business&articleid=a1188998390
Comment: The shenanigans get a bit complicated,
but as the article states at the end, it is reminiscent of the Mikhail
Khodorkovsky affair and the dismantling of YUKOS by state agencies.
Article: Consolidations in the Oil
Sector Increase Speculations
… The story of the summer, however, was the attempted
acquisition of Russneft by Oleg Deripaska's
Basic Element for $3 billion, which Kommersant
reported on Aug. 29 had been deposited in the bank account of former Russneft owner Mikhail Gutseriyev
three weeks before it became known that he had left Moscow after a warrant was
issued for his arrest on tax evasion charges by a local court. The case sent
familiar shock waves throughout the investment and finance community and
brought critical scowls from the Russian media.
Gutseriyev
was the head of Russian-Belarusian oil company Slavneft,
75 percent of which was sold in December 2002 to a Sibneft/TNK
joint venture for $1.86 billion, which prompted Finance Minister Alexei Kudrin to comment at the time, “its a shame Slavneft has been sold at such prices.” Roman Abramovich later sold Sibneft to
Gazprom for $13 billion. Russneft emerged somewhat
nebulously from the remains of Slavneft. Between 2002
and 2004, Russneft spent 19.1 billion rubles ($745.3 million) on acquisitions, financed by Gutseriyev’s own BIN-Bank. Financing also came from BNP
Paribas and Glencore, the Switzerland-based trading
company that previously handled Slavneft sales.
Founded in 2002, Russneft
posted output growth of 216 percent in 2004 and 253 percent in 2005, eventually
producing 330,000 barrels per day and controlling 300 retail gas stations
across
On Aug. 30, Basic Element applied to the Federal
Anti-Monopoly Service to sanction the purchase of six offshore companies
controlled by Russneft. Basic Element could
conceivably pick up Russneft, with recoverable
reserves of more than 630 million metric tons (4.6 billion barrels), for less
than half its estimated market value. Before the state closed in, a deal of about
$9 billion had been speculated, but RIA Novosti reported on Aug. 31 that Gutseriyev would receive about $3 billion, while the buyer
would repay the company's $2.8 billion debt to Sberbank
and Glencore, and cover the back tax claim levied
against it, costs that could possibly total some 20 billion rubles
($780 million). The Federal Anti-Monopoly Service initially rejected Basic Element’s application due to an error in paperwork, but the
group has since reapplied.
However it is highly unlikely Gutseriyev
will return to
A Super-Giant Emerges?
Russneft’s
“incorporation” triggered wider speculation on the possibility of
power-vertical-related restructuring in the oil sector, with industry analysts
discussing the possibility that Rosneftegaz would
form the basis of a new super-oil holding to rival Gazprom’s
dominance of the gas sector.
… The proposed Rosneftegaz
consolidation would create an oil holding with a market capitalization of $160 billion
– within shouting distance of “rival” Gazprom’s $230
billion market capitalization – even without the possible addition of Russneft. The consolidation would hopefully satisfy, if
only for a while, the desires of those strategists behind the proposal. It
remains close to nationalization, however, and the emergence of back-tax claims
against Russneft has reminded all parties of the
desperate need for a clearer separation of powers in
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4a/ Hot Winds Severely Damage Australian Wheat
(
http://www.planetark.com/dailynewsstory.cfm/newsid/44175/story.htm
Comment: The current drought that is
affecting food production around the Murray-Darling basin is in the southeast
of
Article:
Wheat from
December wheat futures on the Chicago Board of Trade
hit a record on Tuesday on concerns about supplies and
Wheat prices have nearly doubled since April, fuelled
by big demand from importers and a range of dire predictions for the crop
around the world.
Chance predicted
"We will be able to satisfy the requirements of
our core buyers only and some buyers at the fringe of the core," he said.
Because of the severe drought, Australian exports in
the last crop year shrivelled to 10.4 million tonnes from 16.0 million the year
before, according to the Australian Bureau of Agricultural and Resource
Economics.
… In the five years to 2006,
Chance said that dry weather in
"It's a pretty sad outlook with European wheat
having trouble and the
4b/
http://www.planetark.com/dailynewsstory.cfm/newsid/44166/story.htm
Article: The winding lines of shipping
containers outside Casella Wines may mark the
high-point of
John Casella heads the
country's biggest family winery, based 600 km from the coast in the farming
town of
But Casella fears the
halcyon days may be past as
"If we don't get rain the budget end of
Australian wine will disappear and it will be replaced by budget imported
wines, casks, cheap sparklings," he told Reuters
in his modest office facing towering wine storage tanks.
"I would say if it does dry significantly, I'd
say we will lose two-thirds of our exports."
Casella's
budget Yellow Tail tops the
The country's high-tech approach to harvesting and
wine manufacture, backed by aggressive marketing and soft-drinking styles has
led the global push by so-called
The
But Casella says grape shortages
and severe price increases lie ahead without urgent rain to end a drought that
has lasted years in
4c/ EU Approves BP Joint Venture for Biofuels
(
http://www.planetark.com/dailynewsstory.cfm/newsid/44058/story.htm
Comment: How economic will wheat to
bioethanol be if record-high wheat prices are maintained?
Article: Oil major BP Plc and
Associated British Foods Plc won competition clearance from the European
Commission on Thursday to build a plant to make transport fuel from wheat in
The companies have announced plans to invest 200
million pounds (US$401.6 million) in the plant, scheduled to produce around 420
million litres of ethanol annually from late 2009.
4d/ The Looming Food Crisis
(The Guardian, Wed 29 Aug)
http://www.guardian.co.uk/environment/2007/aug/29/food.g2
Comment: Focuses mainly on the booming
industry of crops for biofuels, in the
Article: Land that was once used to
grow food is increasingly being turned over to biofuels. This may help us to
fight global warming - but it is driving up food prices throughout the world
and making life increasingly hard in developing countries. Add in water
shortages, natural disasters and an ever-rising population, and what you have
is a recipe for disaster. John Vidal reports
... Jagels and Stahr are part of a global green rush, one of the greatest
shifts that world agriculture has seen in decades. As the US, Europe, China,
Japan and other countries commit themselves to using 10% or more alternative
automobile fuels, farmers everywhere are rushing to grow maize, sugar cane, palm
oil and oil seed rape, all of which can be turned into ethanol or other
biofuels for automobiles. But that means getting out of other crops.
The scale of the change is boggling. The Indian
government says it wants to plant 35m acres (140,000 sq km) of biofuel crops,
While this may be marginally better for carbon
emissions and energy security, it is proving horrendous for food prices and
anyone who stands in the way of a rampant new industry. A year or two ago,
almost all the land where maize is now being grown to make ethanol in the
The effect on agriculture in the
4e/ Low grain harvest, rising food prices and
http://www.energybulletin.net/34519.html
Comment: Written by David DuByne, who lives and works in
Article: I want to stitch together
some pieces of information, a set of events unfolding, that that I describe as
a double Achilles Heel in ethanol production here in
Last week, flipping through China Daily, an
English-language daily here in
In southern China flood waters have submerged about
9.7 million hectares (21.5 million acres) putting the total submerged and
parched dry land at one-sixth of the country's 120 million-hectares (288
million acres) of arable land. Add to this, the damage to half-a-million
hectares (1.2 million acres) that have been devoured by rice-plant hoppers in
... On September first the head of
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5/ Where Have All the Children Gone?
(
http://www.russiaprofile.org/page.php?pageid=Politics&articleid=a1189075707
Comment: Another very interesting
article that reviews the fall in
Article: Can
In 2000, newly elected President Vladimir Putin said
that the most important issue facing
Given the present fertility rate,
In 2006, the number of children born in
... Secondly, low levels of health care have resulted
in 7 percent of the population – 4 million men and 6 million women – being
sterile. This is twice the level of in developed countries...
**********************************************************************************************************
6/ Eni Standoff Leaves Kashagan In Turmoil
(Energy Intelligence [Petroleum Intelligence Weekly], Fri 07 Sep)
No link, newsletter.
Article: Alarm bells are ringing over
the Eni-led development of
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7/ Mortgages to rise as crisis grips the markets [
Comment: Not so different from developments
in the USA: “Higher mortgage costs will be particularly harsh for two
million home owners already expecting to be hit by a sharp escalation in their
monthly payments, as their fixed rate deals - taken out at rock bottom rates
around two years ago - come to an end over the next few months. The Nationwide
building society estimates that a quarter of a million mortgage holders will
see their payments increase by £200 each month from October…”
Article: Home owners are facing fresh
misery as experts predict mortgage rates will rise as a direct result of the
crisis that has gripped the financial markets.
Any increase in rates would be a severe blow to
It would also be the first sign that the turmoil in
the global money markets has crossed over the
... Higher mortgage costs will be particularly harsh
for two million home owners already expecting to be hit by a sharp escalation
in their monthly payments, as their fixed rate deals - taken out at rock bottom
rates around two years ago - come to an end over the next few months.
The Nationwide building society estimates that a
quarter of a million mortgage holders will see their payments increase by £200
each month from October. Banks borrow much of their money in the wholesale
markets, where rates have soared over the past month.
They pay the London Interbank
Offered Rate and this has shot up from 6.04pc at the start of last month to
6.87pc yesterday.
Melanie Bien, a director at Savills Personal Finance, said: "The longer this
turmoil goes on the more likely it is to hit consumers directly.
''Banks will have to start repricing
their mortgages upwards, even if interest rates do not increase. The reality is
that banks cannot absorb all these costs."
Demonstrating the severity of the crisis, the Bank of
England took the highly unusual step of issuing a statement alongside its
interest rate decision yesterday. The Bank has resorted to an explanatory note
on only two occasions when holding rates since being granted independence in
1997. Both times were during global financial crises...
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8/ You’re going green ...or else
(The Sunday Times, Sun 09 Sep)
http://www.timesonline.co.uk/tol/news/politics/article2413305.ece
Comment: The Sunday Times interviews
ex-editor of The Ecologist, Zac Goldsmith, who has just co-written a report for
the Conservative Party. Peak Oil gets a good mention.
Article: … The full report will be
published on Thursday, so this is something of a warm-up. Goldsmith, although
not yet a professional politician, sticks to his brief with only minor wobbles
and what he really wants to talk about is energy. Many geologists believe that
global oil supplies are approaching peak volumes. Some say they have peaked
already, that we will never produce more oil than we do now. Meanwhile, global
demand shoots up and up. Pessimists predict severe and unending economic
depression as demand exceeds supply.
“Peak oil informs everything,” says Goldsmith. “People
ought to know about that, but they don’t. When it’s going to peak or if it’s
happened already I don’t know, but if oil ran out
tomorrow we would be stuffed. We depend on it for everything.”
Goldsmith’s
review aims to tackle this grim situation by means of several painless
measures: “We have not imagined policy ideas that are going to be repugnant to
people.” …
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9/ Oil Industry Flares $40 Billion a Year in Gas
(Spiegel Online, Fri 07 Sep)
http://www.spiegel.de/international/world/0,1518,504511,00.html
Comment: The Spiegel Online covers a
report that came out last week on the amount natural gas wasted by flaring
every year.
Article: Up to 170 billion cubic
meters of natural gas are "flared" by the world's oil producers every
year. The economic value amounts to $40 billion, but the burden on the earth's
atmosphere -- in warming emissions like methane and carbon dioxide -- is
enormous.
In spite of all the recent talk about climate change,
the Kyoto Protocol and tight energy resources in
According to the NOAA, oil producers torch from 150 to
170 billion cubic meters (5,200 to 6,000 billion cubic feet) of natural gas per
year. This amounts to more than five percent of global natural-gas production.
...
**********************************************************************************************************
10/ Nuke plant shutdown strains Asian markets (Oil and
Gas Journal, Fri 07 Sep)
Comment: One nuclear power station
gets shut down and the price of spot Liquefied Natural Gas in the Asian markets
could get pricy.
Article: The July shutdown of Tokyo
Electric Power Co.'s Kashiwazaki-Kariwa nuclear power
plant will strain Asian LNG and oil markets.
Tomoko Hosoe, senior
consultant at Facts Global Energy, Honolulu, said Tokyo Electric will have to
buy 1.3 million tonnes more LNG than it planned in its current fiscal year and
87,900 b/d more fuel oil and crude for direct burning because of the shutdown.
The plant has been idle since June 26 because of an
earthquake (OGJ, Aug. 6, 2007, p. 76).
Tokyo Electric now expects to need 18.8 million tonnes
of LNG in fiscal 2007, compared with actual consumption of 16.8 million tonnes
in 2006. It will need 180,900 b/d of fuel oil and crude vs. 69,600 b/d last
year.
In a report, Hosoe described
how Tokyo Electric's increased fuel requirements will affect Asian markets.
"An additional 2-3 million tonnes of LNG, which
need to be secured from the spot market in 2007-08 in a very tight LNG market,
is a serious problem," she said.
Tokyo Electric's increased oil demand, she added, will
have "a dramatic impact" on prices of low-sulfur
heavy fuel oil, low-sulfur waxy residue, and low-sulfur crude.
The 8.2 Gw Kashiwazaki-Kariwa plant is expected to remain closed through
at least next March and might require at least a further year to return to full
operation.
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11/ Attorneys General step up pursuit of wrongdoing on Wall Street
(The Independent, Sat 08 Sep)
http://news.independent.co.uk/business/news/article2941937.ece
Comment: Feedback from an ODAC News
subscriber: “That article by Robert Preston (Liar's Loans) was very enlightening - staggering. Lie to
Buy. In light of that, this article below is very interesting - investigation
of the Credit Ref agencies. It's worse than fraud - far worse - more like
wholesale deliberate sabotage of the entire global financial system.”
Article: Eliot Spitzer's successor as
attorney general of
Standard & Poor's and Fitch have received
subpoenas from Andrew Cuomo as part of an examination of the mortgage and debt
market crisis – and pressure is rising on the agencies from several other
quarters too.
The Securities & Exchange Commission confirmed
yesterday that it has begun an investigation into the policies and procedures
of the credit rating agencies, which grew fat during the credit boom, thanks to
fees for rating more and more exotic debt instruments. Their certifications
that many credit derivatives based on sub-prime mortgages were as safe as
government bonds encouraged investors to buy them in record numbers, but
confidence in their creditworthiness has since collapsed, demand has dried up
and the agencies have downgraded at least a small proportion of the securities.
"The more we look at it, the more we realise that
these firms are important," Mr Dann told The
Wall Street Journal.
The three major credit rating agencies – S&P,
Fitch and their rival Moody's – receive fees for certifying the
creditworthiness of debt originated by the Wall Street banks. Regulators and
politicians are concerned that this represents a conflict of interest, since
investor demand is strongest for the highest-rated debt. As criticism mounted
last week, S& P replaced its president, Kathleen Corbet,
and yesterday the agencies said they would fully co-operate with regulators'
requests for information.
Mr Spitzer was elected Governor of New York last year,
partly as a result of the reputation he gained in his battles with Wall Street,
particularly when he won multi-billion settlements from investment banks over
conflicts of interests that arose as the dotcom boom turned to bust. Mr Cuomo's
investigation into the mortgage market comes on top of recent campaigns against
malpractice in the student loan and sub-prime credit card industries.
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