ODAC Newsletter – 21 Mar 2008


Welcome to the ODAC Newsletter, a weekly roundup from the Oil Depletion Analysis Centre, the UK registered charity dedicated to raising awareness of peak oil.

This week the oil price struck yet another all time high - $111.80 on Monday – but then underwent a major correction through the rest of the week, sinking to around $100, and settlling at just under $103 as ODAC went to print. The depth of America’s economic troubles were being offered as the main explanation and the exit of hot money.

However, the avid oil market observer will know that these explanations flip-flop almost by the day, one minute the American economy is beling wheeled into the morgue, the next it has bounced back and is ready for the next bubble.

The slump came against the backdrop of wild swings in commodity and equity markets, the collapse of Bear Stearns, another aggressive rate cut from the Fed, and as the Bank of England pumped an extra £5 billion into the London money markets. Only in days like these could the halving of profits at major investment banks Goldman Sachs and Lehman Brothers be a cause of ecstatic relief.

Shell’s delayed announcement of its 2007 reserve replacement received a generally positive press, but the underlying numbers are hardly reassuring. Shell claimed to have replaced its oil and gas production by 124%, but that number is only valid if you exclude the impact of Russia’s expropriation of the Sakhalin II project.

Otherwise Shell’s 20-F filing shows that its oil replacement was just 37% and its gas replacement a paltry 8% - despite a major upward revision in its Qatari gas reserves. On a barrels-of-oil-equivalent basis, Shell replaced just 17% of its oil and gas production overall.

We’ve said it before, but no wonder Shell and their peers are jockeying for position in Iraq, especially as Russia appears to be limbering up for another round of expropriation of oil and gas assets, and as Dick Cheney acknowledges that the world has essentially no spare oil production capacity.

If oil was the reason for invading Iraq, as many suspect, the strategy has had minimal success at an exorbitant price. On its fifth anniversary, the war is estimated to have killed hundreds of thousands of people, cost trillions of dollars, while Iraqi oil production is not much higher than before the invasion. Yet having made such a fine job of Iraq, Tony Blair now apparently thinks he can solve climate change single handed. Happy Easter!


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Disclaimers

Oil

Crude extends slide

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Shell wants to produce five times more oil from tar sands

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Shell counts rising cost of squeezing oil from sand in Canada

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Our reserves are healthy, insists Shell

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Reserves don't matter as much as the cost of getting the oil out the ground

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Cheney says high oil price reflects market reality

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Mexico grapples with oil's direction

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Iraq

Bush defends Iraq war five years on

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Forbidden fields: Oil groups circle the prize of Iraq’s vast reserves

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The high cost of fighting a losing battle

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Gas

Ukraine insists on removing intermediary from natural gas trade with Russia

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Israel deplores Swiss natural gas deal with Iran

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Coal

Australia plans carbon storage under ocean

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Carbon capture is turning out to be just another great green scam

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Nuclear

British Energy shares rise 20% after confirmation of tie-up talks with rivals

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Renewables

Green power station site opened

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Australia commits $1 billion to renewable, clean energy projects

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Rising costs 'threaten green agenda'

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Centrica extends deal for unique wind turbine barge

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Climate

Push to bar oil sands to US military

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Home is where the heat is: why old can be good as new

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Glaciers suffer record shrinkage

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EU’s move on emissions targets

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What can Blair's climate trip achieve?

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Economy

Gold crashes as investors bail out

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Ask the oil producers to rescue Wall Street

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Banks meet BoE as industry jitters persist

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Utility bills lift UK inflation to 9-mth high

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UK

Scottish & Southern raises prices

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Rising energy costs hit middle-class families

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Business

Police raid BP’s Russian venture

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Russia accuses brothers Alexander and Ilya Zaslavsky of being 'oil' spies

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Delta cuts staff as it struggles with tie up

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EasyJet shares plummet on profit warning

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Disclaimers

The items contained in this newsletter are distributed as submitted and are provided for general information purposes only. ODAC does not necessarily endorse the views expressed in these submissions, nor does it guarantee the accuracy or completeness of any information presented.

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