September nef Newsletter

20 09 2013

I used to get ODAC newsletters by email, but ODAC sort of disappeared, taken over by this nef crowd….  who don’t appear to have their own website, so I’ve decided to circulate them here because they are chockers full of great info/links that anyone interested in Peak Energy will like to follow up on.

new economics foundation

Good morning,

It’s election time in Germany and energy policy is high on the agenda. The country’s Energiewende, a real energy revolution, is playing havoc with traditional utilities (see this week’s chart). France is also considering its options with one idea being a form of Quantitative Easing for renewables.

Aniol Esteban

Aniol Esteban

The global resource base of tight oil is huge, says a new report from IHS CERA. The study gives a potential technically recoverable resource of 300 billion barrels of oil, but don’t hold your breath for a sudden boom – extracting tight oil outside of the US market is likely to meet more obstacles and be more expensive; and even in the US shale isn’t making many energy companies rich.

World oil markets are still critically dependent on the Middle East and conventional oil. Even with a 4.8million bpd increase in global liquids production since 2005 – largely thanks to North American shale oil and tar sands – the market remains tight and new production is coming at a significant price. Saudi Arabia is pumping at its highest levels since the 70s to make up for shortfalls from Libya and Iran.

The UK fracking debate continues this week as former scientific advisor Sir David King stepped in to warn of the “enormous environmental consequences”. Energy minister Ed Davey was also seen to contradict the PM’s line that shale gas would bring down prices, saying that “It is highly unlikely to happen here. There isn’t enough shale gas in the UK and in Europe to change the European market price.” 

Best wishes,

Aniol Esteban
Head of Environment, nef

Three things you shouldn’t miss this week

  1. Chart of the week: German energy prices on the futures market versus economic breakeven of different types of power plants

    Gas – Natural gas, Braunkohle – Brown coal, Steinkohle – Hard coal, Atomkraft – nuclear
    Source: thegwpf 
  2. The Economic and Political Consequences of the Last 10 Years of Renewable Energy Development – – A lot of rather unusual things have been happening in the Germany power sector lately, from negative prices, to utilities closing down brand new power plants and, naturally, a ferocious debate as to whether to cut support for renewable energy (as has already been done in Spain).
  3. The peak in world oil production is yet to come – – Certainly world oil production did not stop growing in 2005. Last year’s total was estimated by the EIA to be 4.8 million barrels higher each day than it had been in 2005.

The Headlines

Oil & Gas

Shale: Come the revolution – There is lots of shale about, but will anybody make any money from it?
IHS: World’s tight oil resources hold large potential – The world has large potential technical recoverable resources of tight oil possibly several times those of North America, according to a recent geological study by global analytics firm IHS.
Record Saudi oil output fills supply gap – The US might be drowning in oil, but the world is still dependent on Saudi Arabia.
Exploration: Rising cost of complex projects hits majors – It is now three years since the devastating accident at BP’s Macondo well in the Gulf of Mexico, and it is business as usual for the oil majors drilling in the area’s lucrative waters. Apart from one thing: costs.

Colorado Flooding Imperils Oil and Gas Sites, Causes Spill – In the wake of unprecedented massive flooding over thousands of square miles in Colorado, government officials and private companies are rushing to secure the region’s heavy concentration of oil and natural gas wells, and prevent dangerous chemicals and toxic waste from contaminating the region’s water.


France considers cash creation to finance energy transition – A French government advisory body has suggested that the European Central Bank create money – via loans to other financial institutions – in order to support the transition to renewable energies, claiming the proposed system would not necessarily fuel inflation.
Romantic Germany risks economic decline as green dream spoils – Germany is committing slow economic suicide. It has staked its future on heavy industry and manufacturing, yet has no energy policy to back this up.
Germany’s renewable energy experiment comes at a cost – The shift away from nuclear power and fossil fuels is Germany’s most complex undertaking since reunification two decades ago.


County councils sidelined from nuclear waste dump site decisions – Energy department policy makes district councils lead authority on locating waste dumps, which Cumbria county council says abandons big society
Shutdown of Japan’s Last Nuclear Reactor Raises Power Concerns – Japan’s last operating nuclear reactor was halted for maintenance yesterday, leaving the country nuclear free for the first time since July 2012 and prompting concerns about power availability this winter.


Food price fears push EU lawmakers to put a lid on biofuels growth – The European Parliament has voted to limit the use of fuels made from food crops because of fears that biofuels can push up grain prices or damage the climate, further undermining the once booming industry.

UK Policy

Sir David King warns against fracking – Former UK scientific adviser says gas from unconventional sources could have huge environmental consequences
Fracking won’t lower energy bills, says Davey – Fracking for shale gas in the UK will not have “any effect” on gas prices, Ed Davey, the energy secretary has said, contradicting the Prime Minister’s promise that it will lead to lower energy bills.
Fracking won’t endanger UK’s climate targets, says Ed Davey – Minister talks of shale gas ushering a ‘green future’, but report warns global emissions will rise without international climate deal
Offshore wind farms need higher subsidies, says government adviser – Offshore wind farms may not be built unless subsidies are increased, the government’s official climate change adviser has warned, in the latest blow to the Coalition’s energy policy.
Lib Dems’ nuclear U-turn shows they realise we can’t say ‘no’ to everything – Party’s ditching of mistaken policy signals they understand we face serious challenges of energy security and climate change.


Swedish pension funds urged to dump fossil fuel holdings – Sweden’s cluster of state pension funds face political pressure to divest from all of their fossil fuel holdings.

Related Reports and Commentaries

GREEN STANDARD 2013: A review of UK political leadership on the environment since the 2010 general election – Campaign for Better Transport, Friends of the Earth, Greenpeace, Green Alliance, RSPB, The Wildlife Trusts and WWF
The Energy Crunch team: Simone Osborn, David Strahan, Aniol Esteban, Tim Jenkins
These e-mails were formerly sent from ODAC, which was taken over by nef in March 2012. To see the archive of ODAC newsletters follow this link.