ODAC News

 

Wednesday 04 April

 

The Oil Depletion Analysis Centre

 

 

1a/  Greed could bring America’s housing sector to grief    (The Times [UK], Mon 02 Apr)

1b/  US mortgage lender New Century files for bankruptcy (The Independent, Tue 03 Apr)

2/   Shell 2006 reserves show shift from oil to gas (Reuters, Mon 02 Apr)

3/   Oil shocks aren't what they used to be           (International Herald Tribune, Wed 30 Mar)

4/   Oil, climate change threaten food supply: B.C. report  (Vancouver Sun, Mon 02 Apr)

5/   Peak Oil: The End of the Modeling Phase       (samsambakhtiari.com, Mar 2007)

6a/  Russia to Implement Sakhalin-3 Project Jointly with China      (FC Novosti, Fri 30 Mar)

6b/  Thirty-seven Oil and Gas Fields Found in Russia in 2006        (FC Novosti, Thu 29 Mar)

7/   Natural gas supply shortfall leads to power plant resource waste – expert         (Interfax China, Tue 03 Apr)

8/   Qatargas LNG ventures advance talks to divert cargoes to Japan          (Platts, Mon 02 Apr)

9/   Government spending to boost Saudi Arabia GDP       (Gulf News, Sun 01 Apr)

10/  Big Oil spends more, only some see 2007 output up  (Reuters, Fri 30 Mar)

11/  Warning of bad hurricane season      (BBC News, Tue 03 Apr)

12/  Britons' wealth 'relies on homes'        (BBC News, Tue 03 Apr)

13/  Near-Term Uranium Market Could Get ‘Very Ugly’      (Seeking Alpha, Mon 02 Apr)

14a/ World oil production to peak in 15-25 years, AAPG told         (Oil and Gas Journal, Wed 04 Apr)

14b/ Oil peak predicted for year 2020 - Petroleum experts present their findings at gathering            (Long Beach Press-Telegram [California], Wed 04 Apr)

15/  Going "Green" - thinking beyond Peak Oil!     (British National party, Fri 09 Mar)

 

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1a/        Greed could bring America’s housing sector to grief          (The Times [UK], Mon 02 Apr)

 

http://business.timesonline.co.uk/tol/business/industry_sectors/construction_and_property/article1599721.ece

 

Comment:    There are many issues that could make 2007 a pivotal year. The top three that spring to mind are: the continuing slump in oil production growth from non-OPEC countries (non-OPEC countries produced about 800,000 b/d less than forecast by the IEA last year. This trend will continue.); the potential bombing of Iran by USA/Israel/whoever; the fallout from the USA housing market crash, at least in the sub-prime sector, which this article is about:

 

Article:    For hundreds of thousands of Americans, it is a personal financial disaster. For the wider US economy, it is a growing economic shock with an increasing potential to inflict severe repercussions on the nation’s prospects and prosperity.

 

The deepening scandal of the US “sub-prime” mortgage implosion looks more and more like a cautionary tale of financial excess that sits unhappily alongside Enron and the dot-com bubble, both in terms of scale and consequences.

 

... Viewed in hindsight, the debacle that is now unfolding was, like many such events, an obvious accident waiting to happen.

 

Around the turn of the decade, as the US housing boom accelerated, a large group of greedy American lending institutions became so rashly intent on maintaining the growth of their loan books at all costs that they began to hand out mortgages to borrowers with varying combinations of poor credit history, no steady source of income and little or no collateral.

 

... Two factors turned this trend into a train wreck. First, the vast bulk of sub-prime loans were adjustable rate mortgages, or “Arms”. While these start out at enticing, discounted rates, interest payments jump when such inducements expire.

 

Now payments on many of these loans are being reset, at a time when official US interest rates are much higher, having been lifted from historic lows of 1 per cent in 2003 and 2004 to more than 5 per cent now.

 

The result is that borrowers cannot meet repayments, so that mortgage arrears and defaults on sub-prime loans are surging. In turn, more than 30 mortgage lenders have shut up shop since last year. For borrowers and lenders, this was an Arms race on a road to financial destruction.

 

... The second factor makes the picture still worse. For many sub-prime borrowers, these financial horrors have been compounded by seeing their repayments leap just as the US housing market boom hit the buffers.

 

... The sub-prime market mushroomed over the past five years, so that by last year it accounted for almost a quarter of new mortgages, worth about $665 billion. That’s up from 10 per cent of loans, worth some $200 billion, in 2001.

 

... As Mr Dales suggests, arrears and defaults are likely to climb more steeply, as many sub-prime mortgages have yet to reset to higher interest-rate levels. And the problems will almost certainly be compounded by weakening economic conditions, as well as falling house prices in some regions that will push more borrowers into the trap of negative equity.

 

... An excess of property and a drop in demand will put more downward pressure on US house prices, deepening the slump in the property market. In turn, the impact could then be felt on consumer demand, since American homeowners have for years relied on cashing in on the previously rising value of their homes to finance their high-spending habits.

 

... Factoring in lower demand, in the event of sub-prime loans completely drying up, Mr Dales calculates that — in a possible worst-case scenario — the sub-prime meltdown could end up with ten months’ supply of homes on the US property market, up from about six months’ supply now: enough to trigger significant price drops.

 

 

1b/        US mortgage lender New Century files for bankruptcy  (The Independent, Tue 03 Apr)

 

http://news.independent.co.uk/business/news/article2414810.ece

 

Article:    New Century Financial, the giant US mortgage lender which rode the boom in the country's housing market, has filed for bankruptcy protection, engulfed by arrears in its customers' accounts and a collapse in confidence by its own creditors.

 

The Californian business, once the second-largest lender to Americans with poor credit histories - so-called "sub-prime" customers - bowed to the inevitable after teetering on the brink for several weeks, saying it would now conduct a fire sale of its loan portfolio and sack half its workforce.

 

... The once high-flying company has become a symbol of the meltdown in the sub-prime mortgage market, and its agonisingly slow demise has triggered intermittent panic on global stock markets, which fear that troubles in the US housing market could spill over into the wider economy. New Century's collapse also puts the spotlight on other high-risk lending, such as junk bonds and credit for private equity deals, raising the possibility that lenders will withdraw funding for other types of business.

 

In its bankruptcy filing in Delaware yesterday, New Century posted a 1,749-page list of creditors, but Wall Street's focus is on the big-name institutions which have provided billions of dollars of funding for New Century's loans.

 

... New Century was named one of America's fastest-growing companies in 2003 and 2004, as a house-price boom tempted lower-income Americans on to the housing ladder and encouraged sub-prime mortgage firms to relax their lending criteria. New Century funded $51.6bn of sub-prime loans last year and was second only to HSBC's American division, HSBC Finance.

 

However, as the housing boom has run out of steam and prices have fallen across some parts of the country, debt-burdened customers have become financially stretched and arrears have soared. Around 30 non-bank lenders to sub-prime customers have gone under or been forced to put themselves up for sale, and even HSBC issued the first profit warning in its 142-year history, writing off $11bn of US loans...

 

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2/         Shell 2006 reserves show shift from oil to gas          (Reuters, Mon 02 Apr)

 

http://investing.reuters.co.uk/news/articleinvesting.aspx?type=allBreakingNews&storyID=2007-04-02T100829Z_01_L0255210_RTRIDST_0_SHELL-RESERVES.XML

 

Article:    Royal Dutch Shell Plc (RDSa.L: Quote, Profile , Research) pumped twice as much oil as it found last year, forcing the company to rely on traditionally lower-margin natural gas and oil sands to boost its reserves.

 

Figures issued on Monday echoed a trend across the industry as resource holders increasingly shun the oil majors.

 

A spokesman said on Monday that Shell's reserve replacement ratio (RRR) -- the extent to which reserves additions matched output -- was a healthy 158 percent, well ahead of the 100 percent level oil companies usually target.

 

However, Shell's 20-F U.S. regulatory filing showed natural gas accounted for over 60 percent of the total, or 1.3 billion barrels of oil equivalent (boe), compared to a crude-biased oil and gas production total of 1.3 billion barrels.

 

Additions of reserves of crude oil and non-gas liquids accounted for only 367 million barrels, compared to daily crude production of over 2 million barrels per day.

 

Shell added more reserves from its growing oil sands operation in Canada than of conventional crude.

 

... Many other oil companies have failed to match their production with new reserves additions in recent years even including gas finds...

 

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3/         Oil shocks aren't what they used to be            (International Herald Tribune, Wed 30 Mar)

 

http://www.iht.com/articles/2007/03/30/business/gas.php

 

Comment:    Clearly, the implications are that if the USA has a shortage of petrol/gasoline, gasoline prices are going to have to go up relatively high before supply and demand re-aline. Contributor Paul Metz writes: “only (an extra) tax can help achieve real and lasting fuel efficiency and responsible driving improvements. Waiting for next Oil Peak or Climate Disaster facts is no preventative option and will always come too late. The Peak Oil Tax can easily be made revenue neutral and should not be resisted for that void reason. INTEGeR... consult is an expert on that, just addressed the EU Forum on Taxation for Sustainable Development in Brussels.”

 

Article:    Prices at the pump are rising again, much as they do every spring as oil traders bid up the price of crude ahead of possible summer shortages. Possibilities for more conflict in Iran and elsewhere in the Middle East are adding to the surge.

 

But there is something new this time, energy experts say, in how drivers are reacting - or rather, not reacting, even as the price of gas has climbed over the last two months to a U.S. average of $2.62 a gallon, or 69 cents a liter. It has topped $3 a gallon in many parts of the United States, particularly along the Pacific Coast.

 

In the late 1970s, OPEC oil shocks and gasoline lines persuaded most Americans to sacrifice some of their pleasure trips and drives to the mall, ease up on the accelerator, and switch to the bus or train.

 

But as Americans enter the sixth year of rising oil and gasoline prices, their shift in driving habits this time has been much less extensive. If anything, in recent weeks, gasoline consumption has gone up, not down, and drivers are changing their daily driving habits only slightly.

 

A recent study that Christopher Knittel, an economics professor at the University of California, Davis, helped write has shown that every time gasoline prices went up 20 percent from November 1975 to November 1980, consumers changed their driving behavior by cutting consumption by 6 percent per capita nationwide.

 

But from March 2001 to March 2006, drivers reduced consumption just 1 percent when prices rose 20 percent. Prices swung up and down seasonally during both periods, but Knittel said the two periods were comparable because regular gasoline prices increased in both periods by about 66 percent, to $2.50 from $1.50 in real terms, set at 2000 dollars.

 

While more and more consumers around the country are buying smaller, more-efficient cars and fewer sport utility vehicles, that trend is unfolding a lot more slowly these days than 30 years ago...

 

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4/         Oil, climate change threaten food supply: B.C. report         (Vancouver Sun, Mon 02 Apr)

 

http://www.canada.com/vancouversun/news/story.html?id=ab7a0613-7ca4-4104-896e-5f31a2eda914

 

Comment:    Interesting – an official report from British Columbia raising doubts about B.C.’s ability to feed itself due to climate change and Peak Oil. Note that ‘Balfour’ had to use Freedom of Information legislation to get hold of the report!

 

Article:    Climate change and rising oil prices are a threat to B.C.'s ability to feed itself in the future, scientists and planners say.

 

B.C. farmers produce only 48 per cent of the meat, dairy, fruit and vegetables that we consume, according to a report prepared by the B.C. Ministry of Agriculture. The report, titled B.C.'s Food Self-Reliance, says that the area of farmland with access to irrigation in B.C. would have to increase by nearly 50 per cent by 2025 to provide a healthy diet for all British Columbians.

 

Maintaining our current level of food self-reliance in 2025 would require a 30-per-cent increase in agricultural production, the report says.

 

... The agricultural industry's reliance on fossil fuels for irrigation, processing, harvesting, refrigeration, transport and the production of fertilizer means that as the world's oil supply wanes and fuel prices spike, we should not expect to be eating Chilean grapes and Mexican lettuce in a few years time, according to Vancouver architect and planner Rick Balfour. Balfour, who obtained the ministry report through Freedom of Information legislation, envisions a near-future in which virtually everything we eat will have to be produced locally.

 

... "This report speaks to that very issue and it was being buried by the government," Balfour said. "It took six months to get a 20-page report that asks the question, 'When we can't afford to ship our food from Chile and California, what are we going to do?'"

 

Within seven to 10 years fuel prices are going to spike dramatically, Balfour said. Peak oil theory predicts a massive rise in oil prices as oil production reaches maximum outputs and production begins to fall. Scientists and planners predict that a painful reorganization of the global economy will follow the peak and subsequent decline in oil production.

 

"We have the capacity to be self-reliant in B.C., but we have to start planning," Balfour says...

 

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5/         Peak Oil: The End of the Modeling Phase       (samsambakhtiari.com, Mar 2007)

 

http://www.sfu.ca/~asamsamb/The%20End%20of%20Modelling/The%20End%20of%20The%20Modeling%20Phase.pdf

 

Comment:    The latest report from A.M. Samsam Bakhtiari. This was Ali’s presentation at the recent ASPO-Italy conference, held in March. Ali presents his case that global oil production has peaked/will peak during 2006/2007. I am not familiar with the figures “of 81-82 million barrels per day”, so I asked Ali:

 

Q:  I am not sure what the "81-82 million barrels per day" refers to, and therefore think this might confuse others as well. Current global production according to the IEA is about 85-86 Mb/d, actual crude production is about 73-74 Mb/d according to the EIA. I would guess that your figures refer to crude plus NGLs?

 

A:  My main point is that between 81-82 and 84-85 there is little difference (who can tell which is best?), as crude and liquids output is not a precise science (by a long chalk not). The main point is that 'Peak' is behind us, whichever type of data you use...

 

Article:    …Modeling for 'Peak Oil' began seriously in the mid-1990s as the question of worldwide oil production reaching a maximum became a matter of widespread concern in some petroleum circles and academic centers. Among a score of other models, the 'World Oil Production Capacity' [WOCAP] model was developed over the years 1997-2000 [1]. And, even in those early days, the model --- based on 'Ultimate Recoverable Reserves' [URR] of 1,900 billion barrels estimated by Dr. Colin Campbell --- did point towards a 'Peak' within the first decade of the 21st century.

 

Further design developments and dozens of simulations over the years 2001-2003 resulted in WOCAP's final 'Base Case' scenario that predicted a 'Peak' of 81-82 million barrels per day [mb/d] over the years 2006-2007 (see Figure 1).

 

Thereafter, global production would enter a decline; at first, with a benign gradient, which would get gradually steeper, leading to a 2020 production level of some 55 mb/d (give or take 3 mb/d). In 2003, however, many of the other models did show 'Peaks' well after 2010 and the idea of an early 'Peak' in the first decade of the century was widely regarded as 'highly pessimistic' and 'rather improbable'.

 

Then, in 2004, Prof. Renato Guseo of the University of Padova entered the world of 'Peak' modeling with his 'Generalized Bass Model' [GBM] based on the 'Diffusion Method' [2] and making use of the powerful 'Non-Linear Least Squares' algorithm. The major results obtained by the GBM were for a 'Peak Oil' in 2007 (see Figure 2) and a 2020 production of 55 mb/d...

 

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6a/        Russia to Implement Sakhalin-3 Project Jointly with China           (FC Novosti, Fri 30 Mar)

 

http://www.fcinfo.ru/themes/basic/materials-rfcm-index.asp?folder=3192

 

Comment:    The reports of Sakhalin-3 are somewhat confusing. Here is what an article from FC Novosti on 23 Jan 2007 said about Sakhalin-3 development: <<“Russia would like Indian capital to take part in the implementation of the Sakhalin-3 project and the development of the Vankorskoye deposit in (Siberia’s) Krasnoyarsk Territory,” Russian Deputy Prime Minister Sergei Ivanov told Indian businessmen at a meeting. Sakhalin-3 participants ExxonMobil and Russian state-owned oil company Rosneft expect to start production under the project, which stipulates the output of 16.3 bln cu m of gas and 2 mln metric tons of gas condensate, in 2014.>> No mention of ExxonMobil below?

 

Article:    Russian state-run oil company Rosneft has signed a joint-stock and operational agreement with China’s petrochemical corporation Sinopec on joint exploration and development of the Veninsky offshore block on Sakhalin in Russia’s Far East (Sakhalin-3).

 

Rosneft will have 74.9% in the project and Sinopec 25.1%, the company has reported.

 

 

6b/        Thirty-seven Oil and Gas Fields Found in Russia in 2006  (FC Novosti, Thu 29 Mar)

 

http://www.fcinfo.ru/themes/basic/materials-rfcm-index.asp?folder=3192

 

Comment:    As with reports of the new oil and gas fields found in the UK sector of the North Sea, what should be mentioned but is not (usually) is the small size of the fields compared to what has been found in the past – the oil fields were all relatively small. At this stage in the history of Russian oil and gas production, “For a second consecutive year, the growth of mapped hydrocarbons reserves has exceeded their annual production” is quite simply not good enough. They should be finding much more than the annual production. 250 mln metric tonnes is almost 2 billion barrels. Seems like a lot, but not for Russia. The main question is, how fast can this oil be extracted?

 

Article:    In 2006, 37 new oil and gas fields were discovered in Russia, Anatoly Ledovskikh, head of the Federal Subsoil Resources Management Agency, said at a meeting of the agency’s board.

 

“For a second consecutive year, the growth of mapped hydrocarbons reserves has exceeded their annual production. We expect that the use of modern oil recovery technologies will raise recoverable oil reserves by 250 mln metric tons,” Ledovskikh said…

 

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7/         Natural Gas Supplies Only Sufficient for 1/3 of Installed Capacity           (Resource Investor, Wed 04 Apr)

 

http://www.resourceinvestor.com/pebble.asp?relid=30571

 

Comment:    China, as with India, currently does not have enough natural gas to supply its gas-fired power stations. The UK was in a similar situation two winters ago, and will be again in the not-to-distant future. China has the advantage that it is finding new, decent-sized gas fields on/off-shore China, and will probably get more imports from Russia. UK indigenous gas production will be 85-100% below peak by 2020.

 

Article:    China’s natural gas supply has failed to keep up with the expansion of gas-fired power plants, leading to a significant waste of resources, said an expert with the China University of Petroleum at an industry conference in Beijing.

 

"Only one-third of the installed capacity can be put into operation this year," according to Liu Yijun, a natural gas expert with the university. The university is a top industry research organization.

 

According to Liu, China’s aggregated installed capacity of natural gas power plants requires an annual natural gas supply of 30 to 50 billion cubic metres (bcm), exceeding the resources available in the domestic market for power generation.

 

"Though the government has put a limit on natural gas power project development, there has already been a good amount of investment capital injected into projects under construction, and [investors] are unlikely to reverse their plans," said Liu.

 

China National Petroleum Corp., the country’s top oil and gas producer, produced a total of 44 bcm last year.

 

In addition to power generation, residential and industrial demand for natural gas is also soaring, due to a runaway economy and the government’s campaign to increase its involvement in the country’s energy consumption, said Liu.

 

China is not rich in natural gas resources. With reserves of 2.27 trillion cubic metres (tcm), it ranks 15th in the world. Russia's 47.57 tcm of gas reserves are the world’s largest. 

 

Today, China National Petroleum Corporation (CNPC), the parent of PetroChina Co Ltd (HK 0857), has set a 2007 natural gas output target of 54 bcm, up from 44.5 bcm in 2006.

 

China raised citygate natural gas prices by 13.27%to 1.28 yuan per cubic metre in August 2005.

 

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8/         Qatargas LNG ventures advance talks to divert cargoes to Japan          (Platts, Mon 02 Apr)

 

http://www.platts.com/Natural%20Gas/News/8966445.xml?p=Natural%20Gas/News&sub=Natural%20Gas&src=energybulletin

 

Comment:    This is one of the most important, but least discussed, issues in the supply of natural gas. How much LNG from Qatar can be ‘diverted’ to the highest bidder? Last year, Simmons and Co. International wrote a report on Qatari LNG, that stated although the amount of new LNG coming from Qatar over the next few years was huge, all supplies were already contracted out for the next 25 years or so. And Qatar has stopped any new LNG developments, not already committed under contract, until they have completed a study of North Field, originally due to complete 2007/8, now 2012 at the earliest (what does this say?). There are essentially two types of client for Qatari LNG – national clients who want it specifically for their own country/purpose, such as the Japanese companies that produce electricity, and the ‘western’ multinationals such as ExxonMobil who will sell on to the highest bidder. For the former group, such as the Japanese utilities, the LNG that is contracted for Japan is going to Japan and in all likelihood nowhere else. The second group, big oil, nominally have customers but as the article below states, there are clauses in the contracts that allow the contracted LNG to be diverted to the highest bidder. The details of the contracts are not known, at least to ODAC, but the implication is that, if say the UK, was expecting 12 M tonnes of Qatari LNG a year for the next 20 years from one of the big oil and gas companies, they might well be disappointed (and cold) when a particularly cold northern hemisphere winter meant that there was a natural gas shortage and UK-bound LNG was diverted to the highest, non-UK, bidder. Bottom line: the first responsibility of the western oil and gas companies is their shareholders, i.e. maximising profits, not security of gas supply for European or US governments, although the governments might put the squeeze on the companies to divert LNG their way.

 

Article:    [Last paragraph] … Since most of the western buyers of the Qatargas 2, 3 and 4 projects also have a stake in the production facilities, they are amenable to diverting some cargoes away from European or US destinations to the highest-paying market should the opportunity arises. In fact, the contracts between Qatar and most of its western buyers allow for the flexibility to divert cargoes to

higher-priced markets and provide for the sharing of profits between the producer and the original buyer from such diversion sales.

 

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9/         Government spending to boost Saudi Arabia GDP  (Gulf News, Sun 01 Apr)

 

http://archive.gulfnews.com/articles/07/04/01/10115135.html

 

Comment:    Odd that Riyadh Bank, in a research report, should be forecasting Saudi oil production for the year ahead. What does Riyadh Bank know that we do not?

 

Article:    Saudi oil production is expected to fall from an average 9.12 million barrels per day in 2006 to 8.44 million bpd in 2007.

 

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10/        Big Oil spends more, only some see 2007 output up           (Reuters, Fri 30 Mar)

 

http://www.reuters.com/article/reutersEdge/idUSL2366007520070330?src=033007_1819_INVESTING_comment_n_analysis&pageNumber=2

 

Comment:    <<"The international oil companies are facing a tough challenge," said Fatih Birol, chief economist at the International Energy Agency, adviser to industrialized countries. "Their existing fields are declining and they do not have access to major oil reserves.">> Seems like Fatih is saying international oil companies have peaked/are peaking.

 

Article:    The world's five largest fully publicly traded oil firms are planning to invest billions of dollars more this year but extra spending may not translate into higher production.

 

Exxon Mobil Corp. (XOM.N: Quote, Profile, Research), Royal Dutch Shell Plc, BP Plc, Total SA (TOTF.PA: Quote, Profile, Research) and Chevron Corp. plan up to a total of $97 billion in capital spending this year, up around 9 percent from 2006. BP (BP.L: Quote, Profile, Research), Chevron (CVX.N: Quote, Profile, Research) and Shell (RDSa.L: Quote, Profile, Research) have also said output may fall in 2007.

 

"Most companies have dressed down their volume growth estimates," said Jason Kenney, analyst at ING in Edinburgh, referring to the European oil sector. "Essentially, they are spending more and getting less."

 

... In addition, oil and gas resources are increasingly in places where production is technically more difficult, such as offshore the Gulf of Mexico. The oilfields of top reserves holder Saudi Arabia are off limits for foreign companies.

 

"The international oil companies are facing a tough challenge," said Fatih Birol, chief economist at the International Energy Agency, adviser to industrialized countries.

 

"Their existing fields are declining and they do not have access to major oil reserves."

 

Oil and gas output rose 4.2 percent at Exxon last year and by 6 percent at Chevron. BP's output fell by 2.2 percent, Shell's 1.3 percent and Total's 5 percent...

 

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11/        Warning of bad hurricane season         (BBC News, Tue 03 Apr)

 

http://news.bbc.co.uk/1/hi/world/americas/6524017.stm

 

Article:    Experts are again predicting a busy Atlantic hurricane season, with up to 17 named tropical storms forming - nine of which could become hurricanes.

At least one major storm is expected to make landfall in the US during the 1 June-30 November season, Colorado State University forecasters said.

 

Last year, leading forecasters wrongly predicted a bad hurricane season.

 

However the record-breaking 2005 season saw 15 hurricanes, including Katrina which devastated New Orleans.

 

Another forecaster, London-based Tropical Storm Risk, has likewise predicted 17 tropical storms, nine of them hurricanes, for the 2007 season.

 

"We have increased our forecast for the 2007 hurricane season, largely due to the rapid dissipation of El Nino conditions," Colorado experts Philip Klotzbach and William Gray said in a statement.

 

"We are now calling for a very active hurricane season. Landfall probabilities for the 2007 hurricane season are well above their long-period averages," they said.

 

The researchers said the upsurge in storm activity could be anticipated because of an end of warm-water El Nino activity in the Pacific, which resulted in milder weather on the US Atlantic coast last year and a downturn in hurricane activity.

 

"Tropical and North Atlantic sea surface temperatures remain well above their long-period averages," they said.

 

The 2005 season broke records with a total of with 28 storms and 15 hurricanes. Hurricane Stan, which hit Guatemala, killed at least 2,000 people.

 

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12/        Britons' wealth 'relies on homes'          (BBC News, Tue 03 Apr)

 

http://news.bbc.co.uk/1/hi/business/6522525.stm

 

Comment:    The important bit of this article is the last section, quoted below. What happens if interest rates go up say 2-3 percent? You may remember an article in ODAC News 16 Nov 2006 where the Governor of the Bank of England warned all UK banks to model the effects of a 40% drop in UK house prices – see Banks told to predict effects of a 40% crash in house prices. << It stressed that this was not a forecast but a “severe but plausible scenario” >> This is going to hurt, should it come about.

 

Article:    … The fact that so much of UK personal wealth is tied up in property has long been a cause for concern for some economists.

 

In recent years, many people have borrowed against the increased value of their home to fund consumer spending, pay off other debts or fund home improvements.

 

The concern is that rises in UK interest rates could tip many people's finances over the edge.

 

The Bank of England's Monetary Policy Committee (MPC) meets on Wednesday to discuss the next move in UK interest rates.

 

Most experts are expecting the MPC to keep rates steady, but a rise from their current level of 5.25% is a possibility.

 

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13/        Near-Term Uranium Market Could Get ‘Very Ugly’    (Seeking Alpha, Mon 02 Apr)

 

http://utility.seekingalpha.com/article/31324

 

Comment:    Oil, natural gas, coal, uranium - all likely to give us supply/demand issues in the near future, unless we hit a recession.

 

Article:    … Earlier this past week, Entergy Corp’s director of nuclear fuel told Dow Jones MarketWatch, “There’s a period where the market is going to be very ugly from a buyer’s standpoint.” The New Orleans-based nuclear utility holds the second largest number of nuclear power plants behind Exelon Corp. Nuclear fuels vice president for Exelon Corp Jim Malone expects the impact of the rising uranium price to impact utilities at some unspecified future date, but not now…

 

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14a/      World oil production to peak in 15-25 years, AAPG told      (Oil and Gas Journal, Wed 04 Apr)

 

http://www.ogj.com/display_article/288877/7/ARTCL/none/none/World-oil-production-to-peak-in-15-25-years,-AAPG-told/?dcmp=OGJ.Daily.Update

 

Comment:    Oil and Gas journal, so article only available to non-subscribers for one week. Whole article below.

 

ODAC understands that this was no ordinary get-together within the oil and gas industry. It was invitation only, and all participants were experts in oil/petroleum original geological field data, except the representatives from the USGS who were co-organisers. It is to be hoped that a full report from the conference will be published. This was an oil ‘reserves’ conference, not a ‘production’ conference. The peak years of 2020-30 are quite simply not credible and not consistent with “the rate will be 90-100 million b/d”. Looking at IEA forecasts for growth in global oil production to 2011, we will reach 90 Mb/d about 2009. 2009! My guess is 2020-30 is a political statement, and perhaps has Robert Hirsch’s et al report Peaking of World Oil Production:  Impacts, Mitigation & Risk Management  in mind: “Initiating a mitigation crash program 20 years before peaking appears to offer the possibility of avoiding a world liquid fuels shortfall for the forecast period”.

 

A vital opportunity lost by the AAPG to put Peak Oil on the political radar.

 

Article:    … The world is consuming oil at a rate that will result in oil production peaking in 15 to 25 years, a group of geoscientists told the American Association of Petroleum Geologists' annual convention in Long Beach, Calif.

 

When world oil production reaches the peak by 2020-30, the rate will be 90-100 million b/d, only 10-20% higher than it was in 2005. Depending on the level of world oil resources, which is highly uncertain, that peak is likely to last 20-30 years before production begins its ultimate decline.

 

The estimates are released for the first time following an AAPG Hedberg Research Conference held in November 2006 in Colorado Springs.

 

Richard Nehring, chairman of that conference, said present estimates of conventional and unconventional world oil resources range from 3.4 to 5 trillion bbl. "These estimates of technologically and economically feasible world oil potential fall in the optimistic range of published estimates of world oil resources," Nehring said.

 

The world took more than 140 years to consume the first trillion barrels produced since the Drake well in Pennsylvania in 1859. Consumption of the second trillion barrels will occur within only 30 years.

 

Recovery growth, not discoveries, has been the major contributor to world oil production in the last 25 years. Growth in recovery above the initial estimates has been shown to be two and a half times internationally and more than eight times in the US.

 

Worldwide, about 300 billion bbl of known oil, or about a 10-year supply, is either undeveloped or not on production.

 

About 50% of the world's oil has characteristics acceptable for enhanced oil recovery application, but EOR is currently applied to about 11%.

 

Extrapolating past trends of recovery growth from existing fields adds about 1 trillion bbl to the overall ultimate production expectation, about 200 billion bbl of which would come from EOR.

 

Sustaining higher production rates will require higher costs, the research group found.

 

The 75 conference participants came from 18 countries on all six populated continents.

 

 

14b/  Oil peak predicted for year 2020 - Petroleum experts present their findings at gathering            (Long Beach Press-Telegram [California], Wed 04 Apr)

 

http://www.presstelegram.com/business/ci_5587816

 

Comment:    Hopefully even a Peak year of 2020 will arouse some attention. However, the article still gives an impression of nothing-to-worry-about, for now. Here are a couple of gems from the article:

 

“Fueled in part by rapidly expanding economies in India and China, global consumption will push production levels ever higher despite growing conservation efforts elsewhere, officials said. “ – global consumption will push production levels ever higher, not rigs and a workforce!

 

“Increasing production from regions of northern Alberta, Canada, may help drive down prices in the U.S. Midwest by increasing supplies. Currently, the region relies heavily on Gulf of Mexico oil.” – producing more of the most expensive ‘oil’ in the world is going to bring oil prices down!

 

Article:    … Development of the globe's remaining untapped oil reserves will push world production to its ultimate peak as early as 2020, before a long, slow decline begins near mid-century, petroleum experts predicted Tuesday.

 

Peak production levels, estimated to reach 950 million barrels daily, are expected to last between 20 and 30 years before gradually tapering off, giving economies across the globe a final window of opportunity to begin transitioning to alternative energy sources or face increasingly fierce competition for the fossil fuel, authorities said at the annual American Association of Petroleum Geologists convention in Long Beach.

 

"The peak in world oil production is not imminent, but is nevertheless foreseeable," said Richard Nehring, an independent petroleum geologist who addressed the conference Tuesday. "Ultimately, world oil production decline will be inescapable in the latter half of the 21st century."

 

... New and emerging oil reserves in the Arctic, off the coasts of western Africa and Brazil, in Canada, and around Greenland, among other locations, will help offset declining production levels in the coming decades.

 

To meet expected demand, production needs to rachet up by at least 5 million barrels daily, experts said.

 

... Fueled in part by rapidly expanding economies in India and China, global consumption will push production levels ever higher despite growing conservation efforts elsewhere, officials said.

 

... Increasing production from regions of northern Alberta, Canada, may help drive down prices in the U.S. Midwest by increasing supplies. Currently, the region relies heavily on Gulf of Mexico oil...

 

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15/        Going "Green" - thinking beyond Peak Oil!    (British National party, Fri 09 Mar)

 

http://www.bnp.org.uk/reg_showarticle.php?contentID=2159

 

Comment:    The BNP are the UK far right political party that scare the living daylights out of moderates/most other people. They have had very limited success at the local government level, but Peak Oil is at the top of their agenda. History has shown that such groups tend to be more successful during hard times, i.e. economic recessions.

 

Article:    … Gloucestershire correspondent reports.

 

We are constantly being told by the Government that we, as a nation, must reduce the size of our “Carbon footprint”. The fact that we are adding, net, some 250,000 people to our population each year through immigration – whom, in aggregate, adds significantly to that footprint – and probably cancels out any reduction made by the current population - appears to have escaped this government!

 

If the government were serious on this issue then they would halt immigration immediately.

 

However, having said that, we can all make a contribution – by walking to the local shops for our groceries or taking the kids to school on foot – rather than using the car.

 

Indeed if we all just used the car solely for those journeys that are impossible by foot then we, our kids and our wallets would be that little bit more healthier (and wealthier)!

 

Our Gloucestershire correspondent this morning recommends a recent Panorama programme in connection with “going green” – which is in many cases is easier said than done! The programme may be viewed here - standalone RealPlayer recommended.

 

British National Party – Thinking beyond Peak Oil.

 

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