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Triple Crunch Log                                                                                                            

payments without admitting bribery; Amec and Balfour Beatty – £5m+ in penalities without admitting bribery; Most countries have now signed the UN’s Convention Against Corruption, and slowly a clampdown takes shape, with growing significance attached to brand damage.442

Mike Haywood, an analyst who predicted much correct about the financial crisis, links it to peak oil. In an e-mail to his readers: “I started my Peak Oil digests in June 2006, (during the economic boom) in order to highlight the effect that peak oil and rising energy costs would have on the global economy. For an excellent summary, Gail Tvberg, editor of The Oil Drum links the financial crisis to peak oil and I agree with her arguments443. As the banking crisis unfolded, I replaced the Peak oil digest with the Banking Crisis digest in August 2009. Over the last 4 years my predictions have been pretty well spot on; with the exception of the UK housing market which I thought would fall more heavily.  Here is what I predicted would happen: The Global banking system would continue to be in crisis, due to the unknown and potentially unlimited losses of the banks; Stimulus and bailout packages would have no impact as most of the intervention money is borrowed, sucking capital from private economy and transferring the debt to the taxpayer; Continued unwinding of debt and deflation of all asset values would lead to more stock market falls; Huge falls in tax revenues; Pension schemes and retirement plans severely underfunded; Contraction of the public sector; Global Civil unrest; Severe global banking crisis; High probability of Financial collapse like the one we were within hours of in October 2008.444 We are now in the final stages of this slow motion car crash. The global financial system is inherently weak because of its interconnectivity.”

9.6.10. Oil company bosses must make personal safety pledges before they can drill from now on. New government rules mean oil company bosses will be required personally to certify that their operations are in compliance with regulations in order to obtain licences to work on the outer continental shelf of the US, both in shallow and deep water. Third-party consultants will also have to sign off on key safety kit, such as blow-out preventers. 445

Scientists report layers of degraded oil lurking deep beneath the surface of the Gulf. Ernst Peebles, a biological oceanographer at the University of South Florida, has identified layers of degraded oil, in some cases 30m thick, suspended at depths of 400m or more. BP has contested the presence of “plumes” of subsea oil. Further research is underway.446

Barack Obama: BP chief would be fired if he was working for me, because he downplayed the catastrophe in the Gulf of Mexico. Obama also lifts restrictions on offshore oil and gas exploration in shallow waters.447

BP faces bill for lost drilling wages including paying any workers hit by the government’s moratorium on offshore drilling imposed on 33 deep-water rigs while safety reviews take place.448

Cameron to discuss BP crisis with Obama as shares plunge. At today's lowest point, BP had lost 47% of its value since the Gulf of Mexico disaster struck, wiping around £58bn off the market capitalisation of one of Britain's biggest companies. 449

Numerous errors in BP's contingency plan to handle an oil spill included naming a deceased scientist as a recommended expert.450

Tony Hayward’s wife and children are under police protection following threats. Anger in the US now extends far and wide. Matt Simmons has told many TV audiences that the oil spill was "entirely BP's fault" and that the company will be bust within months. In the UK, pressure emerges on Cameron to fight back for because the “Britain bashing” has gone too far. Only 8 workers on the rig were BP employees. Transocean was asked this week to explain to a congressional committee the apparent poor staffing on the rig on the night of the gulf disaster: 18 employees on shift, the lowest number in a fortnight of records, with no engineers, electricians, mechanics or subsea supervisors. BP shed its “British Petroleum” name a decade ago. It employs 80,300 people, 29,000 of them in the US. Some 40% of its shares are held in the UK, while 39% are held in the US.451 Also, a quarter of its production is in the US, according to ING. 452

EIA’s oil production optimism peaks. So says Steven Kopits of energy consultants Douglas-Westwood. In 2030, the EIA still sees oil production at an optimistic 103.9m barrels per day in its reference case (the IEA, for comparison, is 103m). But the EIA’s forecasts to 2020 — 92.1m barrels a day — are now lower than almost anyone’s.

Question: Will the BP Statistical Review of World Energy reflect peak oil risk? JL: “On June 2, the day BP found itself facing a criminal investigation into its deepwater-production risk management, Tony Hayward, the company’s chief executive, admitted it had to find entirely new ways of handling “low-probability, high-impact” risks. Today, as it publishes its review of energy statistics, the question is: will BP find entirely new ways of handling the high-impact risk that is peak oil?”453

Answer: Quite the reverse. BP chief economist says “reseves remain sufficient to meet demand” and “supply will never peak”, professing to feel “very safe” in that risk assessment.454

BP Statistical Review shows importance of Gulf of Mexico. American crude production rose faster last year than anywhere else in the world, and the 7% increase to 7.2m barrels a day is largely attributed to Gulf of Mexico. Global oil consumption declined by 1.2m barrels a day, or 1.7%, the largest fall since 1982. OECD consumption fell by 2m barrels a day – a fourth consecutive annual decline.455

Hayward doesn’t mention peak oil, or “47 years of supply” in his introduction to the BP SRWE. He did mention the rise in energy intensity of energy activity last year, because of “many energy-intensive fiscual stimulus programmes.”456

Chinese regulators order a freeze on some renewable energy initial public share offerings, amid fears that overcapacity will weigh on the rapidly growing industry. “The Chinese government hasn't said so publicly, but certain sectors including polysilicon and wind are forbidden from hitting the primary IPO market," says a well placed Reuters source. “They're holding approval for certain IPOs because of overcapacity concerns.” China Securities Regulatory Committee officials could not be reached for comment.457

10.6.10. Head of US government-appointed experts group says flow rate could have been up to 40,000 bd. Marcia McNutt, director of the US Geological Survey, said the average flow from macondo pre-cap was probably 25,000 -30,000 barrels a day.458

160 class action suits have now been filed against BP. FT: “One is on behalf of holders of BP’s American Depository Receipts, which have fallen to 14-year lows. The suit states that BP had previously said its gulf

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