Images, video of oil leaking into sea
BP has published the first photos of the leaking Macondo well in the Gulf of Mexico:
BP oil spill House hearings: live blogging UPDATED 11.55am EST
From the House of Representatives, the FT’s US political correspondent Anna Fifield reports:
A second day of hearings into the BP oil spill got underway in Washington on Wednesday, with the same line-up as for the Senate committee hearings on Tuesday – Lamar McKay of BP, Steven Newman of Transocean, and Tim Probert of Halliburton – joined by Jack Moore, president of Cameron International, manufacturer of the blow-out preventer used by the Deepwater Horizon.
The four appeared before the oversight and investigations subcommittee of the House of Representatives’ energy committee, a powerful panel that received more than 100,000 pages of documents from the companies involved. The documents contained a number of eye-popping revelations.
Mark Jacobson on pricing carbon, biofuels, and more
Highlights from our Mark Jacobson interview, for those who find the full 2000 words a little too much.
On the cost of 100 per cent renewables:
Upfront costs are high for all technologies, including coal, gas, and nuclear. In terms of overall costs per unit energy generated, however, land-based wind and geothermal are fairly low at this time, solar is more expensive. However, the total costs to society for solar and the others are lower than for all fossil fuels. Specifically, the health and environmental costs of fossil fuels through higher medical costs from pollution, higher insurance premiums for health care, higher environmental cleanup costs, higher severe storm damage are all costs to society that need to be accounted for.
Q&A: Mark Jacobson on 100% renewable energy
Mark Jacobson, a Stanford professor of engineering, has drawn a lot of attention with the article he wrote together with Mark Delucchi for Scientific American last year, about how the world could move to 100 per cent renewable power.
He spoke to FT Energy Source about the political, financial and other barriers to a mass transition to renewable power — and whether there is a role for carbon pricing.
Focusing on ‘above-ground’ oil issues
Some of its officials may have talked about short-term supply problems, but the EIA is firmly focusing on above-ground issues affecting oil supply in its latest set of annual energy forecasts, the US-focused Annual Energy Outlook.
Its ‘reference case’ scenario for 2035 looks like this: oil prices reach $133; total liquid fuels consumption reaches 112m b/d. This is an extra 26m barrels per day over 2008 levels; the EIA expects about 8m would come from unconventional sources, including biofuels.
In the ‘high price’ scenario, liquids production reaches only 91m b/d while prices reach $210/barrel. In this case, the EIA expects that unconventionals supply would grow by 16m b/d — in other words, conventional supply would fall by 8m.
However lower oil consumption isn’t purely because of price. The EIA says:
Liquids demand is dampened by the high prices, but is overshadowed by the severity of limitations on access to and availability of lower cost conventional resources. OPEC’s share of production falls to 35 percent.
In otherwords, the high price would be caused almost solely by above-ground issues — ie, politics:
In the High Oil Price case, oil prices from 2015 to 2035 are on average 66 percent higher than in the Reference case. The higher prices are caused by restrictions on economic access to non-OPEC conventional resources in countries such as Russia, Kazakhstan, and Brazil, combined with reductions in OPEC production. Conventional liquids production in the High Oil Price case totals 71.8 million barrels per day in 2035, 9.8 million barrels per day lower than the 2008 total; total liquids production reaches only 91 million barrels per day in 2035.
And guess where the agency expects the oil to come from.
Related links:
Are policymakers, economists and peak oilists starting to speak the same language? FT Energy Source
EIA sees big rise from Gulf of Mexico deepwater drilling
The EIA has published its latest long-term energy forecasts, and believes US domestic crude oil production will keep rising to 2035 – in contrast to what most other forecasters are saying.
IEA sees GoM peaking soon
In the near term the main reason is offshore deepwater drilling, and continued development of existing fields. The timing, while US officials and lawmakers mull over the causes — and possible effects — of the fatal Deepwater Horizon accident and continuing oil leak, is more than a little ironic.
Moreover, the agency’s outlook is in contrast to just about every other major energy forecaster, from the OECD’s International Energy Agency (see image on the right) to consultancy IHS Global Insight, who all see US oil production declining.
IEA takes a stand against US energy trading limits
The IEA has come out strongly criticising the CFTC’s proposed new position limits, warning that it could result in higher hedging costs for physical traders.
From its latest monthly oil market report (our emphasis):
Moves to prevent future systemic failure are entirely justified. Yet some policy makers now implicitly see commodity futures market liquidity itself as a problem, in moves to curb what is seen as speculative excess. Despite a lack of clear evidence that crude oil prices move in lock‐step with either open interest or net noncommercial positions, wide‐ranging curbs on market activity now look likely.
In the past the IEA has been reluctant to criticise speculators, and last month was rather dismissive about the “ogre of a speculative-driven rally”, but this is the strongest criticism we’ve seen yet of the US commodities regulator’s proposal to limit the positions that financial traders can hold in energy futures.
Climate bill changes offshore drilling provisions, but will it matter?
A brief summary of the US climate bill set to be introduced by senators John Kerry and Joe Lieberman began circulating on Tuesday night. It contains few surprises – much has been leaked already – but it appears to confirm that the pair have decided to respond to concerns about offshore drilling.
Whether this will help the bill’s chances is another question.
Oil spill leaves MMS under pressure, from within and without
The Minerals and Management Service, which oversees US offshore drilling leases, is coming under attack from all sides over its role in the Deepwater Horizon accident.
Accusations have been flying that the regulator is “too cosy” with the oil and gas drilling industry, along with questions over why BP was not required to file a comprehensive plan to address a big deepwater leak, and why environmental impact assessments are not always required for GoM offshore projects.
US Secretary for the Interior, Ken Salazar, is expected to split the roles of the MMS.
Get ready for more US shale oil
The EIA’s latest long-term forecast for US energy is out, complete with a new online tool for browsing its data.
Interestingly, under its ‘reference case’ scenario, shale oil production would rise, predominantly in the US — albeit to a small 400,000 barrels per day — by 2035, thanks to higher oil prices. Coal-to-liquids and biofuels would also increase significantly:
However shale oil production levels would not change significantly between the ‘reference’ ($133/barrel) scenario and the ‘high oil price’ ($210/barrel) scenario.
Energy Source is no longer updated but it remains open as an archive.
Insight into the financial, economic and policy aspects of energy and the environment.
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