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Triple Crunch Log                                                                                                            

Ofgem’s forecasts could mean average energy bills of more than £2,000 by 2020. The consumer group u-switch says the figure could £4,000 if events conspire against markets. Now 4.6m households are in fuel poverty (spending >10% of income on energy).147

The Guardian takes a dim view of the state of UK energy, saying nationalisation is overdue. Terry Macalister: “The privatisation of the gas sector in 1986 and electricity in 1989 brought little in the way of strategic, long-term thinking and when the privatisation of the nuclear industry came in 1996 it swiftly brought problems, with British Energy having to be bailed out by the taxpayer within six years. Now ministers once again are being called on to intervene because companies left to their own devices will not invest in new nuclear, wind and other low-carbon technologies. Having sucked profits out of the industry when government "interference" was a dirty word, they are – like the banks, railways and even car industry before them – keen to see the state step in and help them out with a greener and more secure agenda. The government should seize its chance.”148

Moody’s warns that the US sovereign credit rating of AAA is under threat unless the deficit is cut or economic growth increases.149

German solar industry calls for protests as Merkel’s government dithers over cuts to feed-in tariff. As many as 10,000 workers from Solarworld, Q-Cells, First Solar and other companies will take to the streets tomorrow.150

4.2.10. Kuwaiti  scientists forecast world conventional crude oil production will peak in 2014. The Kuait Univerisity / Kuwait Petroleum Company study, published in the journal Energy & Fuels, describes the development of a new version of the original “single cyle” Hubbert model that accounts for individual production trends (i.e. a “multi-cycle” model) to provide a global oil production forecast. The researchers analyse production trends of the 47 oil-producing countries supplying most of the world’s conventional crude oil.151

Petrobras CEO infers oil capacity, including biofuels, will peak in 2010 and drop rapidly, at 5% pa. A 1 December 2009 presentation Jose Gabrielli gave in Sao Paulo is translated on The Oil Drum. In it, he says that the world needs oil volumes to replace the equivalent of one Saudi Arabia every two years to offset future world oil decline rates …just to keep production constant at less tham 90 mbd. TOD analysis shows Gabrielli’s additions exclude additions from unsanctioned projects and from oil yet to be discovered, so many potential Iraq projects and Brazilian Santos basin projects are not included. BP professes Iraq might produce another 8 mbd by 2020. Petrobras forecasts an additional 2 mbd from Brazil by 2020, making another 10 mbd capacity by 2020. That still leaves a required lower capacity addition of 19 to 24 mbd in 2020 to come from other sources: equivalent to production from about two Saudi Arabias. SA production was an average 9.3 mbd in 2008 and new capacity addition over two years 2008&9 was less than this (9.2 mbd).152

Petrobras says that it does not predict peak in 2010. The above article makes an erroneous interpretation of a graph presented by Petrobras in December 2009. the slide was intending to show a reasonable estimate of the “challenges” that oil supply will face in the long term. “Although unsanctioned projects and oil yet to be discovered are not represented in the graph, this fact does not mean that we do not believe that these projects will add production capacity in the long run. Once again, we do not believe it is possible to predict a peak oil date. In particular, we do not believe it will happen in 2010.”153

Tony Hayward sees peak demand before peak supply – beyond 2020. “I personally – and BP – have never believed we will see peak oil because of supply. We always believed we would see peak oil because of demand. There will come a time – I believe it is beyond 2020 – when because of the changes in the energy portfolio, because of the drive for energy efficiency, because of the introduction of biofuels, demand for oil will peak.” There is plenty of oil in the world, not least in Iraq, expecting as he does production to grow from a couple of million barrels a day today to close to 10m. This makes it “a big part of oil security for the world.” he dismisses fears over dependence on Russian gas as “paranoic.”154

Shell will slow down tar sands operations in face of profits drop of 75% in fourth quarter. And more job losses, of course.155

Gazprom postpones giant Shtokman gas field as global demand drops in face of US shale gas. Shtokman is an LNG venture between Gazprom, Total, and Statoil and had expected the project to produce its first gas in 2013, with LNG shipments to North America beginning in 2014.156

IEA and other experts expect global gas glut to last until around 2015, and then for supply to tighten quickly. The new LNG production capacity in the Middle East plus new non-conventional sources of gas in the US, plus the recession, which has depressed demand in Europe by some 10 per cent. The International Energy Agency expects this glut to continue until around 2015, but many analysts predict the market will then tighten sharply. “Around the middle of the decade we expect  a perfect storm of falling domestic gas production, economic recovery and tightness in the global LNG market,” says Professor Jonathan Stern, “and we might not get very much warning. It could flip in a matter of weeks.”157

NY Attorney general alleges two top BoA execs duped shareholders during Merrill Lynch takeover. Ken Lewis and Joe Price now face fraud charges.158

7.2.10. UK industry taskforce will warn this week of premature global peak oil by 2015. JL: “We are heading for a steep decline in oil production in a few years’ time and we are completely unprepared. Most people just assume this is not a scenario that can happen, but it can, and it will, unless we do something now.” Ian Marchant, SSE CEO: “Unless we acknowledge a shock may come, then a shock will come,” said Marchant. “The unit cost of energy will go up. The only way to offset it is to bring overall consumption down.”159

Further positive coverage of UK solar feed-in tariffs in Sunday papers. “These tariffs are going to generate rates of return that will beat high-street savings accounts by a mile, at the same time as they save carbon and generate jobs in a new fast growing, British industry. We reckon as many as 100,000 jobs by 2020, at the rates announced."160

UEA professor at centre of leaked e-mail scandal says he has considered suicide and is receiving death threats. Phil Jones is on beta blockers and sleeping tablets. Conservatives waver on climate in face of “climategate”: most MPs are now sceptical.161

Polls show the number of Britons who believe climate-change science of has fallen in the last year.

A BBC poll, which surveyed 1,000 people, reveals that 25% of adults do not believe in global warming, up of 8% since a similar November. 75% believe climate change is a reality but of these one in three feel climate

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