The Oil Drum

OECD European gas production looks set to peak in 2008. After that, falling production combined with rising demand will see OECD European gas imports wanting to rise from current 197 BCM per annum to 442 BCM per annum by 2020. Where will this gas come from and how will rising European imports affect N America and the rest of the world?

Figure 1 OECD Europe gas production and conceptual forecast. Click all charts to enlarge

This is a guest post by Kiashu.

Recently Victorians got a taste of what the future holds for us with the dangerous combination of peak fossil fuels and climate change.

My natural gas company SimplyEnergy added a "Gas Congestion Charge" of $3.51 (a tenth of my normal bill, more or less) to my natural gas bill today. They say:

Gas usage is typically higher throughout winter due to the use of heating and hot water systems, however winter 2007 saw a combination of particularly cold days and the effects of the drought on power generation which led to extraordinary peak demand.

Ondoing drought conditions have reduced the availability of water for hydro power generation which resulted in a greater reliance on gas-fired power production. During particularly cold winter days when the demand for gas increased, the gas market was further constrained by gas-fired power generators creating periods of demand that exceeded the available supply.

When this demand occurred, VENCorp [the co-ordinating company for Victoria's electricity and natural gas supplies] arranged for additional gas to be injected into the gas pipelines at a premium in order to maintain safe gas operational pressure levels and meet Victoria's gas requirements. [...] Congestion charges were applied to pay for these unexpected injections of gas which were required at short notice from gas reserves.

[...] this instance of gas congestion was unprecedented and resulted from a combination of several contributing factors. It has never occurred in the past and we hope it will not occur again.

Cross posted from Peak Energy.

I seem to have spent half of this week criticising various energy articles in the local media, however there seems to be an endless supply of them coming down the pipeline.

NZ Petroleum Exploration and Production Association executive officer John Pfahlert had an opinion piece in the NZ Herald this week ("Minister out of whack on importance of gas") arguing that New Zealand should be building new gas fired power stations instead of trying to become carbon neutral.

This is an update to an article of mine that was originally published in The Age back in March this year.

On the 15th March, the Esso/BHP Billiton Bass Strait joint venture asked the Minister for Planning whether a new gas conditioning plant at Longford requires an Environmental Effects Statement. The State Government's new guidelines for assessing projects with significant carbon dioxide (CO2) emissions were about to get their first big test.

The gas conditioning plant is required to treat new production from the Kipper gas field. The downside is that it would emit a million tonnes of CO2 every year. While not quite in the same league as a coal-fired power station, this is not the right approach to achieving urgent CO2 reductions.

This is a guest post by Mike Pepler. Mike lives in Rye, UK, and works from home for the Ashden Awards for Sustainable Energy (www.ashdenawards.org). He is also one of the founding members of PowerSwitch (www.powerswitch.org.uk), and together with his wife Tracy manages eight acres of coppice woodland near Rye.

On 25th September 2007, the BIEE, the UKERC and the Energy Institute held a seminar in London where they invited academics to critique the 2007 Energy White Paper.

Background

In 2003 the UK government released the Energy White Paper 2003: Our Energy Future - Creating a Low Carbon Economy. As we all know, events in the energy world have moved fast since 2003, and faced by falling gas supplies from the North Sea and ageing nuclear power stations, the government launched another energy consultation in 2006, details of which are available online here. The result was another Energy White Paper, published in May 2007, this time with the subtitle Meeting the Energy Challenge. It seems to me that the change in the energy world over the intervening years can be seen from the change in the tone of the titles from 2003 to 2007!

The purpose of the seminar was to bring together a range of academics to give a critique of the Energy White Paper – and they certainly were critical! So, without further ado, here are the key points form the speakers, with comments from me in italics where appropriate.

The slides are available on the BIEE website here: www.biee.org/downloads.php

Here's three four pieces of media that you can send to folks to explain the basic arguments regarding peak oil. First is Matt Simmons on CNBC a month ago talking about the GAO report (7 mins), then under the fold a link to Jim Kunstler's latest talk (which is great), a piece by ABC Radio of Australia on the GAO report and peak oil, and Boone Pickens on the issue as well.

"The GAO report found no focussed coordinated government plans to prepare for peak oil or other supply disruptions."
"We are on the verge of replacing the term 'global warming' with the term 'peak oil.'"
"The best new oil basin we will ever find is the one called 'conservation.'"

What's the meltdown price for uranium?

Add another certainty to death and taxes: Barring some sort of nuclear catastrophe or an instant, massive influx of new supply, the price of uranium oxide is going to continue its shocking rise for now.

The question for the fissile metal's producers, and for investors seeking to cash in on the gains, is how high can it get before its key nuclear power plant consumers defer plans to add reactors, or try to cut consumption at existing plants, as they wait for much delayed new mine supplies to come on stream and bring the price back down?

Since bottoming out at just $7 (U.S.) a pound in December, 2001, the "yellowcake" spot price has climbed almost exponentially, hitting $40 a pound about a year ago and a startling $120 a pound last month. This means it is very close to shattering the record high of $43 it hit back in 1979, which, adjusted for inflation, is the equivalent of $122.42 today. Already, some producers are predicting it could rise to $250 some time next year.

I've been struggling for two weeks with the article in the Economist about Russian gas (A bear at the throat) as it takes legitimate (if often poorly informed) worries about Russia's sometimes blustering behavior on the energy markets to peddle the usual insane crap that market liberalisation is the only solution to promote energy security (I'll get to why I think it is insane below).

But two days ago, I spoke at a debate on Gazprom at IFRI, a French think tank. That conference was organised after the publication of two quite different articles about Gazprom:

Gazprom as a Predictable Partner. Another Reading of the Russian-Ukrainian and Russian-Belarusian Energy Crises by Jérôme Guillet
Gazprom, the Fastest Way to Energy Suicide by Christophe-Alexandre Paillard

The titles give a hint that the papers start from pretty different positions - as you can see in the executive summaries of each that I am posting below. Before jumping in, I'll flag that I am identified as an Oil Drum contributing editor in the paper, so the good name of the site is slowly spreading around...

Here's three four pieces of media that you can send to folks to explain the basic arguments regarding peak oil. First is Matt Simmons on CNBC yesterday talking about the GAO report (7 mins), then under the fold a link to Jim Kunstler's latest talk, a piece by ABC Radio of Australia on the GAO report and peak oil, and Boone Pickens on the issue as well.

"The GAO report found no focussed coordinated government plans to prepare for peak oil or other supply disruptions."
"We are on the verge of replacing the term 'global warming' with the term 'peak oil.'"
"The best new oil basin we will ever find is the one called 'conservation.'"

ED by PG: I moved the Simmons video under the fold for load times--also I have also posted the Simmons video on the GAO report/peak oil to another post above as well that contains three other pieces of video/audio media on the topic.