Stuart McCarthy of ASPO Brisbane discusses the recent response to a petition for the state of Queensland to adopt the Oil Depletion Protocol and other Australian peak oil news. Read more.

Richard Heinberg discusses the Oil Depletion Protocol in the Winter 2007 edition of Earth Island Journal. Click here to read more.

By Carola Hoyos in London, Edward Luce in Washington and Krishna Guha in Beijing

Published: December 13 2006 22:07 | Last updated: December 13 2006 22:07

Copyright The Financial Times Limited 2006

See article here.

In its report, drawn up by Eluned Morgan (PES, UK), the committee welcomes the Commission's green paper on a European strategy for sustainable, competitive and secure energy, but stresses that changing conditions in the broader global energy market need to be taken into account. MEPs in the committee want a systematic approach considering production, distribution and consumption in order to develop a policy which secures affordable energy.
 
A binding CO2 target for 2020 and changes in Emissions Trading Scheme 
 
To tackle climate change, MEPs say EU leaders should agree within the next year on a binding CO2 target for 2020 and an indicative one for 2050. They say the existing Emissions Trading Scheme (ETS) needs to be changed, to include a move towards auctioning or benchmarking based on output - and also to bring in further emitting sectors including all types of freight transport.
 
Energy Efficiency to be a priority across the board
 
The report asks the Council and Commission to make the EU the most energy efficient economy in the world by 2020 and to set energy efficiency measures as cross-cutting priority for all EU policy areas. It supports an EU target for energy efficiency improvements of at least 20 per cent by 2020.  MEPs call for an EU strategy on transport energy use, aiming at the phasing out of fossil fuel, a reduction in oil dependency and the gradual introduction of  clean energy.
 
Targets for renewables supported - nuclear power is up to Member States
 
In order to help diversify energy sources, the committee says the EU needs a stable long-term policy framework, with  binding sectoral targets for renewables to reach 25 per cent in primary energy by 2020 - and a route map to reach 50 per cent by 2040.  The committee recognises the role that nuclear energy plays in some Member States as part of the energy mix and as a way of avoiding CO2 emissions, but says decisions on the future of nuclear power must be taken by the Member States individually.
 
Consumers at the centre of energy policies
 
MEPs in the committee stress that consumers must be placed at the centre of all future energy policies and that energy poverty should feature more clearly in the Commission's proposals. Consumers should have easy access to price and choice information, to an easy method of switching energy provider and a right to be heard by the regulators in each Member State.
 
EU should speak with one voice with third countries
 
The committee says a common stance vis-à-vis third countries is needed to increase the EU's ability to negotiate with energy producing and consuming countries. The Commissioner responsible for energy should, say MEPs, work to a well defined mandate with a long-term energy planning vision. MEPs urge the Commission and the Member States to take very seriously the real danger of a deficit in gas supplies from Russia after 2010.  They insist on the ratification of the Transit Protocol and the Energy Charter Treaty, which are instrumental in ensuring much needed foreign investment in Russia’s energy infrastructure and to assure sufficient gas supply to the EU.

23/11/2006
Committee on Industry, Research and Energy
Chair : Giles Chichester (EPP-ED, UK)
Procedure: Own Initiative Report
Plenary vote: December, Strasbourg

Original story here. 

If you are a resident of Queensland, Australia, click here to read about and sign the petition to Parliament!

Calling for "bold and decisive action," British Prime Minister Tony Blair has endorsed a new report that warns failure to act on climate change could trigger a worldwide economic slowdown along the same level as the Great Depression.

Written by former World Bank economist Sir Nicholas Stern at Blair's request, the 700-page report was released on Monday.

"Our actions over the coming decades could create risks of major disruption to economic and social activity later in this century and in the next, on a scale similar to those associated with the great wars and the economic depression of the first half of the 20th century," says the report.

Blair quickly endorsed the report, saying the consequences of ignoring climate change would be disastrous.

"And this disaster is not set to happen in some science fiction future many years ahead, but in our lifetime," he said.
Economy will shrink: report

The report warns that unless the issue of climate change is immediately addressed, global economic growth could shrink by 20 per cent and cost the world economy close to $7 trillion US.
Continue Article

The report suggests other effects could include:

    * 200 million new refugees as people are displaced by severe flooding or droughts.
    * Water shortages for one in six people.
    * A spike in world temperatures of up to 5 C.
    * Melting glaciers that could lead to water shortages.
    * The extinction of 20 to 40 per cent of wildlife species.

The international community must spend one per cent of global gross domestic product (GDP) to address the issue of climate change within 10 to 15 years, said Stern.

"Action is urgent since stocks of greenhouse gases are rapidly approaching dangerous levels," said the report.

Many environmentalists believe capping greenhouse gas emissions is key to tackling climate change.

Among the measures Stern advises are stabilizing greenhouse gas levels by decarbonizing the power sector by as much as 70 per cent through new energy sources, eliminating deforestation and cutting transportation emissions, especially from aircraft.

Stephen Smith, an economic professor at University College London, said the report is a "solid review of the range of things that could happen" if climate change is left unchecked.

"I think it's a very serious and … thoroughly argued report with … very detailed and serious evidence," said Smith. "I think it will have a big impact on thinking in Europe and elsewhere."
Blair proposes new European targets

The report is expected to increase pressure on the Bush administration — which never approved the Kyoto Protocol climate change accord — to step up its efforts to fight global warming. Washington says it can't buy into a deal that hasn't been signed by two of the world's biggest polluters, India and China.

Kyoto targets call for a reduction of greenhouse gas emissions of 5.2 per cent from 1990 levels by 2012. Canada agreed to a slightly higher target of six per cent, a goal the federal government says it can't reach.

Blair, who will leave office within a year, called for "bold and decisive action" on the issue.

"The Stern review has done a crucial job. It has demolished the last remaining argument for inaction in the face of climate change," said Blair.

"We know now urgent action will prevent catastrophe and investment in preventing it now will pay us back many times."

Blair called for Europe to cut its carbon dioxide emissions by 30 per cent by 2020 and 60 per cent by 2050. The British government is considering new "green taxes" on cheap airline flights, fuel and high-emission vehicles.

Blair also said his government has enlisted the support of former U.S. vice-president Al Gore to promote the issue in North America. Gore recently produced An Inconvenient Truth, a documentary on climate change.

The report comes days before United Nations talks on climate change in Nairobi on Nov. 6, which are aimed at finding a successor to Kyoto.

http://www.cbc.ca/world/story/2006/10/30/climate-cost.html 

By Fred Pearce
27 September 2006. New Scientist Magazine

"Further global warming of 1 °C defines a critical threshold. Beyond that we will likely see changes that make Earth a different planet than the one we know."

So says Jim Hansen, director of NASA's Goddard Institute for Space Studies in New York. Hansen and colleagues have analysed global temperature records and found that surface temperatures have been increasing by an average of 0.2 °C every decade for the past 30 years. Warming is greatest in the high latitudes of the northern hemisphere, particularly in the sub-Arctic boreal forests of Siberia and North America. Here the melting of ice and snow is exposing darker surfaces that absorb more sunlight and increase warming, creating a positive feedback.

Earth is already as warm as at any time in the last 10,000 years, and is within 1 °C of being its hottest for a million years, says Hansen's team. Another decade of business-as-usual carbon emissions will probably make it too late to prevent the ecosystems of the north from triggering runaway climate change, the study concludes (Proceedings of the National Academy of Sciences, vol 103, p 14288).

The analysis reinforces a series of recent findings on accelerating environmental disruption in Siberia, northern Canada and Alaska, underlining a growing scientific consensus that these regions are pivotal to climate change. Earlier this month, NASA scientists reported that climate change was speeding up the melting of Arctic sea ice. Permanent sea ice has contracted by 14 per cent in the past two years (Geophysical Research Letters, vol 33, L17501). However, warming and melting have been just as dramatic on land in the far north.

A meeting on Siberian climate change held in Leicester, UK, last week confirmed that Siberia has become a hotspot of global climate change. Geographer Heiko Balzter, of the University of Leicester, said central Siberia has warmed by almost 2 °C since 1970 - that's three times the global average.

Meanwhile, Stuart Chapin of the University of Alaska Fairbanks this week reported that air temperatures in the Alaskan interior have risen by 2 °C since 1950, and permafrost temperatures have risen by 2.5 °C (Proceedings of the National Academy of Sciences, DOI: 10.1073/pnas.0606955103).

In Siberia the warming is especially pronounced in winter. "It has caused the onset of spring to advance by as much as one day a year since satellite observations began in 1982," says Balzter. Similarly, Alaskan springs now arrive two weeks earlier than in 1950, according to Chapin.

The Leicester meeting heard that the rising temperatures are causing ecological changes in the forests that ratchet up the warming still further. Vladimir Petko from the Russian Academy of Sciences Forest Research Institute in Krasnoyarsk says warm springs are triggering plagues of moths. "They can eat the needles of entire forest regions in one summer," he says. The trees die and then usually succumb to forest fires that in turn destroy soil vegetation and accelerate the melting of permafrost, Petko says.

In 2003 Siberia saw a record number of forest fires, losing 40,000 square kilometres according to Balzter, who has analysed remote sensing images of the region. Similar changes are occurring in Alaska. According to Chapin, warming there has shortened the life cycle of the bark beetle from two years to one, causing huge infestations and subsequent fires, which destroyed huge areas of forest in 2004. "The current boreal forest zone could be so dried out by 2090 that the trees will die off and be replaced by steppe," says Nadezhda Tchebakova, also at the institute in Krasnoyarsk.

Melting permafrost in the boreal forests and further north in the Arctic tundra is also triggering the release of methane, a powerful greenhouse gas, from thick layers of thawing peat. First reports published exclusively in New Scientist last year (13 August 2005, p 12) were recently confirmed by US scientists (Nature, vol 443, p 71).

"Large amounts of greenhouse gases are currently locked in the permafrost and if released could accelerate the greenhouse effect," says Balzter. Hansen's paper concludes that the effects of this positive feedback could be huge. "In past eras, the release of methane from melting permafrost and destabilised sediments on continental shelves has probably been responsible for some of the largest warmings in the Earth's history," he says.
“The release of methane from melting permafrost has been responsible for some of the largest warmings in history”

We could be close to unleashing similar events in the 21st century, Hansen argues. Although the feedbacks should remain modest as long as global temperatures remain within the range of recent interglacial periods of the past million years, outside that range - beyond a further warming of about 1 °C - the feedbacks could accelerate. Such changes may become inevitable if the world does not begin to curb greenhouse gas emissions within the next decade, Hansen says.

Meanwhile, another new study underlines that the boreal peat bogs, permafrost and pine forests are not just vital to the planet as a whole, they are major economic assets for the countries that host them. A detailed study of the northern boreal forests by environmental consultant Mark Anielski of Edmonton, Canada, puts the value of their "ecosystem services" at $250 billion a year, or $160 per hectare.
“The value of the services this ecosystem performs is more than twice that of the resources taken from the region each year”

These benefits include flood control, water purification and pest control provided by forest birds, plus income from wilderness tourism and meat from wildlife such as caribou. Anielski presented his findings to Canada's National Forest Congress in Gatineau-Ottawa earlier this week.

The value of these ecosystem services is more than twice that of conventional resources taken from the region each year, such as timber, minerals, oil and hydroelectricity, Anielski says. "If they were counted in Canadian inventories of assets, they would amount to roughly 9 per cent of our gross domestic product - similar in value to our health and social services."

You can add to that figure the value of having such a huge volume of carbon locked away. "The boreal region is like a giant carbon bank account," he says. "At current prices in the European carbon emissions trading system, Canada's stored carbon alone would be worth $3.7 trillion."

And if Hansen is right that the carbon and methane stored in the boreal regions has the potential to transform the world into "another planet", then the boreal region may be worth a great deal more than that.

From issue 2571 of New Scientist magazine, 27 September 2006, page 8-9. 

Click on the link below to see a map of climate change hotspots:

http://www.newscientist.com/article/mg19125713.300-one-degree-and-were-done-for.html 

September 13, 2006

VIENNA (Reuters) — Some of the biggest oil companies are urging consumers to use less energy to bring down prices and slow rising global demand.

The move comes as concern grows about global warming and as the oil industry contends with limited access to new reserves and criticism from politicians for not investing enough.

"It's interesting they are saying that because very often they have not said anything on (the subject of curbing demand)," says Claude Mandil, head of the International Energy Agency.

"I fully agree with them," he told Reuters on the sidelines of an OPEC seminar on Wednesday.

Chevron, the second largest U.S. oil company, ran a two-page advertisement in Britain's Financial Times Sept. 6 encouraging consumers to use less fuel.

"A 5% reduction in global energy use would be enough to power Australia, Mexico and the entire UK," the ad said. "So what are we waiting for?"
Chevron, which says it has improved its energy efficiency 24% since 1992, is not alone among international oil firms in encouraging consumers to burn less fuel.

France's Total has advised the French government and the European Union to cool oil demand to avoid a supply crunch as production peaks and starts to decline.

Global oil production will peak around 2020, earlier than some estimates, if output growth remains at current levels, according to Total Chief Executive Thierry Desmarest.

More efficient use of energy is the cheapest and quickest way to cut greenhouse gas emissions, Mandil said.

"If we want to have a long term sustainable future, including a cap on CO2 emissions, we will need everything at our disposal," he said.

"The most important tool and the one most immediately available at least cost is energy efficiency."

http://www.usatoday.com/money/industries/energy/2006-09-13-oil-use-less_x.htm

Former US President Bill Clinton was reading about peak oil this summer, specifically, Richard Heinberg's book The Party's Over: Oil, War and the Fate of Industrial Societies.

This week in the New Yorker, David Remnick profiles Bill Clinton. Here, with Blake Eskin, Remnick discusses the ex-President’s legacy and Hillary Clinton’s political future. Specific excerpt posted below:

You write that Clinton rejected Gerald Ford as a model for the post-Presidency. But is Clinton at all a man of leisure?

He plays a hell of a lot of golf and he’s a voracious reader. His library’s got a lot of books about policy, a lot of history, a lot of Presidential biography, and a lot of books on religion—that’s a sincere interest. His taste in fiction, although I don’t think it’s limited to this, seems to be of a lower brow: he loves thrillers and police novels and stuff like that. I borrowed a book from him that he had just read—“The Party’s Over: Oil, War, and the Fate of Industrial Societies,” by Richard Heinberg, not exactly summer reading—and it was full of underlinings and what looked like the most serious undergraduate’s markings, with lots of exclamation points.

Ian Cohen, New South Wales, Australia, Member of Legislative Council, put forward a notice of motion in State Parliament on August 31st, 2006, asking that NS Wales adopt the Oil Depletion Protocol. This motion makes Australia the first country to consider official adoption of the Protocol at a state or national level.

The motion available here:
http://www.parliament.nsw.gov.au/prod/lc/lcpaper.nsf/0/1EAC6FF1F5B6E6BBCA2571DB002CA528

Ian Cohen's Press Release available here:
http://www.iancohen.org.au/mediarelease.aspx?id=179

143. Mr Cohen to move—

That this House:

1. Notes the looming crisis of dwindling of global oil supplies known as peak oil.

2. Calls on the Government to adopt the Oil Depletion Protocol, which can be found in full at www.oildepletionprotocol.org, as drafted by international authority on peak oil, Dr Colin Campbell, and is also known, with slight changes in wording, as the “The Rimini Protocol” and “The Uppsala Protocol”.

3. Calls on the Government to commit signatories to the following principles, namely that:

(a) a convention of nations be called to consider the issue with a view to agreeing to an Accord with the following objectives:

(i) to avoid profiteering from shortage, such that oil prices may remain in reasonable relationship with production cost,
(ii) to allow poor countries to afford their imports,
(iii) to avoid destabilising financial flows arising from excessive oil prices,
(iv) to encourage consumers to avoid waste,
(v) to stimulate the development of alternative energies,

(b) such Accord have the following outline provisions:

(i) the world and every nation aim to reduce oil consumption by at least the world depletion rate,
(ii) no country to produce oil at above its present depletion rate,
(iii) no country to import at above the world depletion rate,
(iv) the depletion rate is defined as annual production as a percent of what is left (reserves plus yet-to-find),
(v) the preceding provisions refer to regular conventional oil—which category excludes heavy oils with cut-off of 17.5 API, deepwater oil with a cut-off of 500 metres, polar oil, gas liquids from gas fields, tar sands, oil shale, oil from coal, biofuels such as ethanol, etc,
(vi) detailed provisions cover the definition of the several categories of oil, exemptions and qualifications, and the scientific procedures for the estimation of depletion rate,
(vii) the signatory countries cooperate in providing information on their reserves, allowing full technical audit, such that the depletion rate may be accurately determined,
(viii) the signatory countries have the right to appeal their assessed depletion rate in the event of changed circumstances.

4. Notes that the protocol has already been adopted by a number of Australian organisations.

(Notice given 31 August 2006)

Australian Senate seeks action on peak oil – what about New Zealand?

Press Release from Russel Norman, Green Party Co-Leader

11th Sept 2006

Green Party Co-Leader Russel Norman said that the acceptance by an Australian Senate committee that oil production will peak well before 2030 should be serving as a wakeup call to the New Zealand Government, especially in light of other evidence that it will peak even earlier.

Dr Norman was commenting on the release last week of an interim report by the Australian Senate’s rural, regional affairs and transport committee. The report predicted global oil production will peak before 2030, and then start declining, with major social and economic consequences.

“What the Senate report is saying is that the consequences are so serious, no responsible government can afford to sit on its hands until peak oil has become a reality before it decides what responses it should make,” says Dr. Norman, also the Greens Economics Spokespeson.

“The Senate report acknowledged that there is strong evidence that oil production will peak much sooner than 2030, and they acknowledged that there is strong evidence that it will peak even earlier.

“New Zealand, given its distance from its main markets and its heavy dependence on energy imports, stands to be even more affected than Australia by the projected decline in conventional oil production.

“The planning on alternatives to oil and natural gas has to begin now, and the Government needs to be showing leadership on all fronts. In a responsible fashion, it should be alerting the public to the problem. It should be launching a major drive to develop alternatives, invest in public transport, renewable electricity generation, change planning rules to reign in suburban sprawl, and much more.

"Such planning has to be an integral part of future-proofing New Zealand, and of ensuring our economy is sustainable, given the threats it will be facing from peak oil and climate change."

http://www.scoop.co.nz/stories/PA0609/S00252.htm

Read the report:

http://www.aph.gov.au/Senate/committee/rrat_ctte/oil_supply/int_report/report.pdf 

Barbara Yaffe, Vancouver Sun
Published: Saturday, September 02, 2006

How wonderful it would be if we could just keep living our lives as we do now, driving our cars, buying whatever imported food we desire -- all without fretting about the future of global petroleum reserves.

Who really wants to ponder how much of the black stuff is left on the planet or, the mayhem that might ensue when fields start experiencing that worst of fates -- depletion?

Can you imagine China and the U.S., jockeying for the remaining drops of the precious stuff that makes their respective economies go round? Already, we've been witnessing China's reluctance to impose sanctions on Iran in response to the mullah's nuclear program because the sino-giant is hooked on Iranian crude.

Dare we think more broadly of the antics that could ensue care of governing regimes in the Middle East -- some of which are sane, others insane, and which control so much of the world's oil reserves?

Well, here's the reality check. The longer we wait to start fretting and plotting some serious strategy, the more chaotic and horrendous the situation in which we are all likely to find ourselves.

Oh sure, there are those who say such anxiety is for naught. We'll discover new deposits or turn to nuclear or someone will make a breakthrough on the biofuels front or the free market will make our transition orderly and polite.

If that were the truth, we'd have started seeing significant evidence of some of that. Instead, what we have been witnessing are ever more atrocious prices at the pumps. Has anyone noticed a diminution of people driving to work solo in their gas guzzlers?

So, it might be worth everyone's while to have a read of The Oil Depletion Protocol, a just-published book by Californian Richard Heinberg, who has immersed himself in the frightening phenomenon of "peak oil."

Heinberg concludes we must start curtailing activities "enabled by this remarkable substance" that is oil. Now. In a coordinated fashion.

A massive, overarching plan must be developed by industry and government; a protocol for diminishing the amounts of oil we have so capriciously been pumping and deploying.

Under Heinberg's suggested protocol, oil-exporting nations would begin reducing exports gradually while consuming nations would agree to reduce consumption. This would be in accordance with a formula Heinberg explains in his book working out to roughly three per cent annually.

How might such a plan affect us? The most obvious areas where we depend heavily on oil are in transportation and agriculture.

Did you know, for example, that 90 per cent of world transportation relies on oil or oil byproducts?

Are you aware how heavily dependent industrial agriculture has become on fossil fuels? Think fertilizers and pesticides, mechanized planting and harvesting machinery, never mind transporting all that food to oft-distant markets.

We have designed our cities in a way that prompts people to be heavily reliant on fossil fuels. In the new era, we are going to have to adapt or perish.

For those newly confronting this issue, peak oil refers to the time when the world's supplies peak and the amount produced no longer keeps pace with the volume consumed.

Estimates vary about precisely when this day of doom is to transpire, but the latest estimate from a think tank that works on nothing but this issue -- the British-based Oil Depletion Analysis Centre (www.odac-info.org) -- reported last November that supply will fall short of demand as early as 2007 or 2008.

Heinberg reveals that as many as 70 per cent of the globe's producing oil fields are in decline.

This is not something most of us know. Why not?

Because it's in man's nature to avoid problems he knows not how to handle.

And it is certainly not in the best interests of politicians wishing to get re-elected, who work on four- to five-year election cycles, to alarm their constituents or foist upon them challenges that they'd rather not hear about.

Another difficulty is good-old garden variety inertia. Just look at the way Canada handled its commitment to the Kyoto Protocol on greenhouse gas emissions. We've dragged our feet, debated endlessly and missed every target we set for ourselves.

If a responsible nation like Canada did so poorly on a worthy protocol like Kyoto, what are the chances the world will get its act together to ensure an orderly adoption and implementation of a badly needed oil depletion protocol?

byaffe@png.canwest.com

August 28, 2006 

William Maclean | Algiers, Algeria

Libyan leader Moammar Gadaffi has scolded his nation for over-reliance on oil, foreigners and imports and told it to start manufacturing things people need.

The criticisms, in an unusual series of speeches in July and August, have stirred keen interest in a forthcoming annual September 1 address to the nation of five- million marking the 1969 coup d'etat that brought him to power.

"We don't produce anything. We sell only oil and consume everything," he said, condemning what he said was a consumer society destined for a sorry future when oil finally runs out.

"The kind of trade in which you produce nothing and import goods in exchange for oil, it's a catastrophe," the Libyan news agency quoted him as saying. Libya could have become an economic power like Japan were it not "socially backward", he said.

Reformist rhetoric is nothing new from Gadaffi, but Libyans say it is unusual for such speeches to be made so frequently and to such a wide variety of audiences -- from professional groups and state planners to teachers and religious students.

The flurry of stern commentaries suggests his September 1 address may unveil further reforms to modernise the country.

Experts say there is real hope the non-oil sector of the economy may finally be on the mend in a country long enfeebled by international sanctions and suffering serious unemployment.

Two factors, one foreign and one domestic, mean Libya has a chance to diversify its old-fashioned command economy, long hobbled by a primitive banking sector and red tape, experts say.

The foreign factor is the revival of diplomatic relations with Washington: On May 15, the Bush administration said it would restore formal ties with Tripoli as a reward for Libya's scrapping of its weapons of mass destruction programme.

While most US sanctions were lifted in 2004 the revival of formal ties loosens the remaining web of financial curbs placed on US-Libya investment in the decades of estrangement when the West accused Libya of supporting terrorism.

'What kind of paradise?'
Repaired relations with US firms could lift confidence among investors of other nations who have been hesitant until now about taking part in the modernisation of the economy.

The second is that Gadaffi's economic outspokenness is now being regularly echoed in public by his son Saif al-Islam, the most high profile of his children whose public statements have focused mainly up to now on social policy and foreign affairs.

Islam told youth groups this month Libya had no free press and its political system was not as democratic as he would like.

"We say Libya is paradise on earth, it's heaven. What kind of paradise? We have no infrastructure. There are cities with no water," Islam told the meeting.

His father's speeches have taken aim at a range of targets -- Muslim fundamentalists, civil servants who do second jobs, red tape, begging and the dirty state of many towns.

But the main theme has been economic self-reliance and the reforms to fight an unemployment rate of at least 13%.

He said future work on the Great Man-Made River Project, a 20-year-old venture to pump water from beneath the Sahara to northern cities, should be done almost exclusively by Libyans.

He warned Libyans in stark terms against copying what he called the Gulf Arab states' reliance on desalination plants.

"The Arabian peninsula is living on [desalinating] sea water because there is oil, there is money. But once oil is over there will be no money, no desalination, and people would die." - Reuters

http://www.mg.co.za/articlePage.aspx?articleid=282218&area=/breaking_news/breaking_news__business/ 

Published on 27 Jul 2006 by Al-Hayat. Archived on 27 Jul 2006 @ www.energybulletin.net

Kuwait considers Oil Depletion Protocol?
by Kamel Abdullah Al-Harmi

(This article represents the first sign that any nation is seriously considering adopting the Oil Depletion Protocol, or at least something resembling it. It's especially significant coming from one of the world's top producers. To read more about the protocol see How to avoid oil wars, terrorism, and economic collapse by Richard Heinberg.)

Challenges of Linking Kuwaiti Production with Oil Reserve

Ten members of the Kuwaiti National Assembly last week tabled a motion to link Kuwait's crude oil production with its oil reserve. After it is passed by parliament it will become a law under which the Ministry of Energy and the oil sector will operate.

The motion comes from National Assembly members seven months after a report published by the 'Petroleum Intelligence Weekly', which is a prestigious and internationally acclaimed specialized magazine. The bulletin stated that the actual volume of oil reserve is about 24 billion barrels and it is almost the same volume of the potential reserve. This means that the total reserve stands at about 50 billion barrels, and that the oil industry will last another 25 years or more according to the production capacity of the oil reserve, which is not yet finally defined.

Other sources of information, such as the Organization of the Petroleum Exporting Countries (OPEC), the International Atomic Energy Agency (IAEA) and specialized publications all indicate that the Kuwaiti reserve ranges between 85 and 102 billion barrels of actual and potential crude oil.

The Kuwaiti Ministry of Energy and its oil sector have not yet verified the exact figure of the oil reserve, because it wants to assure the world and Kuwait in particular. With this lack of information, some MPs asked the former Minister of Energy a direct question about the accuracy of the published information. The National Assembly has provided all the information on the nation's oil reserve in general, and the tables and statistics on the quantity of reserve in each field, and the number of discovered reservoirs that are being developed.

With the beginning of the new session of the new National Assembly last week, ten members tabled a four-item objective bill. In the absence of real information about the size of oil reserve amid growing queries and doubts, the purpose of their motion is to ensure proper utilization of the exhausted oil riches to stop the depletion of this wealth. The bill also aims to ensure that this wealth lasts, but under the umbrella of the government and the National Assembly.

If approved, Kuwait will be the first oil state to regulate and tie up oil production with the rate of oil reserve quantities. Certainly, all the other oil states will follow up on this thorny issue carefully. So, too, will the consumer countries. The proposed bill illustrates the mechanisms of calculating the production of crude oil while estimating the volume of oil reserve. This is done by calculating the amount of Kuwait's crude oil output and the size of the oil reserve for two consecutive years. The bill will be passed immediately after the government sends the official information to the National Assembly and the State Audit Bureau (SAB) of Kuwait. If the quantity of oil reserve remains constant, the daily production will remain stable. The production goes up or down depending on the quantities.

To further simplify the equation, the current rate of Kuwait's oil production has stood at 2.65 million barrels per day for two consecutive years. If we assume that the current oil reserve is 100 billion barrels, and that any change in oil reserve, for example, drops to 85 billion barrels, Kuwait's production will be reduced, and the Ministry of Energy will therefore have to reduce the output to 2.25 million barrels per day instead of 2.65 million.

The idea itself is pioneering and transparent. Detection of oil reserve in producing countries will significantly help consumer countries understand the energy capacities of all the producing states. It may be an important factor in the stability or the rise of prices, due to the inadequate quantities of the world's oil reserves.

The proposal lays down the mechanisms and the responsibilities of the Ministry of Energy to provide the National Assembly, the Cabinet, and the SAB of Kuwait with the dates for sending the data, the timetables of the reserve of every field and reservoir. Furthermore, the ministry will be committed to reporting any discoveries or new fields and reservoirs annually, two months after the end of the fiscal year.

But the pressing question, among many others, is how to explain or clarify the difference between the actual and potential (unconfirmed) reserves, and who will determine the difference. Will he be satisfied with the existing quantities on the ground, which are estimates, whereupon everyone agrees to a certain discretionary percentage of the possible extraction to obtain an approximate figure that would be to everyone's satisfaction?

Today, there are major differences, not only in the oil states, but also between the giant oil companies, over the definition of the actual reserve and the extraction percentage. Some major companies insist that the actual reserve is the last barrel extracted from the field. The oil extraction percentage hovers between 40% and 55%. At the same time, some companies confirm they are capable of extracting more than 60%, depending on the state-of-the-art technologies at their disposal.

The main concern is the controversy over the definition of the actual reserve, hence giving rise to the urgency for a common definition, if possible.

Everyone may not agree on this, but the Kuwaiti bill, if approved by parliament, will frankly lead to a new challenge for the oil industry and the national oil companies to reach reliable figures for the oil reserve.

*A Kuwaiti oil analyst

~~~~~~~~~~~~~~~ Editorial Notes ~~~~~~~~~~~~~~~~~~~

Thanks to Ron Patterson for alerting us to this one. It looks potentially very significant.

Richard Heinberg notes that Kuwait "could gain some international political capital by being the very first to sign on to the Protocol"

The Post Carbon Institute have a new website devoted to the protocol:
www.oildepletionprotocol.org

Richard has a forthcoming book on the protocol described as "a must-read for all who seek to avert a Peak Oil collapse."

On the subject of Kuwaiti reserves, Jeffrey Brown points out: The Oil Drum: What would we have predicted for Kuwait? by Stuart Staniford.

Energy Bulletin

By Dave Rollo

On July 19, the Bloomington, Indiana City Council passed a resolution acknowledging that the global peak of petroleum production is “an unprecedented challenge” for society, and recognizes that the city must prepare for its inevitability. Bloomington is the 7th largest city in Indiana, home to Indiana University, and has a population of 70,000 residents plus a 40,000 student population. The resolution supports a global depletion protocol, such as the one drafted by Colin Campbell and Richard Heinberg.

The Bloomington City Council directs the City Clerk to distribute this Resolution to the attention of the Indiana Congressional delegation, the Governor of the State of Indiana, and all members of the Indiana Statehouse, and urges them to take action on the impending peak in petroleum production and prepare for its consequences.

Dave Rollo, the council representative who sponsored the resolution, and who also serves on the city’s sustainability commission stated that “we need to take this very seriously, and begin to plan on local adaptation to oil scarcity. Experts now warn that global peak may be imminent, and we should pay them heed.”

Bloomington City Council website: bloomington.in.gov/council

UPDATE: The resolution now seems to be at another link: bloomington.in.gov/egov/docs/1153747651_559687.pdf

Across 19 countries, 19, 579 people were polled about energy. And the results are in...spiring.

Save energy - but not at any cost!

You don't often get polls asking the same important questions across a wide range of countries in a truly scientific way, so this one is important.

The survey, carried out for the BBC World Service, concludes that: "We're very concerned that the way energy is consumed and produced threatens the environment and threatens peace."

So far, so clear.

But then the snag. The difficulty for policy-makers is that the poll also indicates a strong view across the globe that taxes should not rise to alleviate the problem - unless it be taxes on others like car-makers.

All told, 19,579 people were polled in May and June in 19 countries - Australia, Brazil, Britain, Canada, Chile, Egypt, France, Germany, India, Israel, Italy, Kenya, Mexico, Philippines, Poland, Russia, South Korea, Ukraine and the US.

Read More

http://news.bbc.co.uk/2/hi/in_depth/5173818.stm

A tale of two countries: How North Korea and Cuba reacted differently to a suddenly diminished oil supply.

Read the full article at yes! Magazine.

EESI Launches Global Database of International Energy Treaties:

Includes over 1,700 agreements representing every country in the world, covering renewable energy, energy efficiency, nuclear power, fossil energy, advanced technologies and more

July 6, 2006

Boulder, Colorado—The Energy and Environmental Security Initiative (EESI), an interdisciplinary center at the University of Colorado Law School, announced today the unveiling of an online global database of international energy treaties.

Sponsored by the Renewable Energy and Energy Efficiency Partnership (REEEP), the database is called the International Sustainable Energy Assessment (ISEA) and contains in-force energy treaties from all 192 countries in the world dealing with some 45 energy-related subject areas.

Commenting on the launch of the ISEA database, U.S. Senator Richard Lugar (R), Chairman of the Senate Foreign Relations Committee, remarked: “This is an invaluable database. It will be a useful tool in our diplomatic efforts to chart a sustainable energy future with our international partners.” Senator Lugar recently introduced the Energy Diplomacy and Security Act (EDSA) in the U.S. Senate, which has garnered bipartisan sponsorship from eleven U.S. senators. The EDSA seeks to use new and existing international agreements to enhance energy security and promote the use of sustainable energy.

According to Dr. Lakshman Guruswamy, EESI Director and CU Law’s Nicholas Doman Professor of International Environmental Law, the genesis of the ISEA project “arose out of the recognition that the challenges in moving to a more sustainable global energy regime cannot be solved by any one nation and must entail international engagement and cooperation.”

Morgan Bazilian, REEEP Programme Board Chair, remarked that “international agreements have the ability to profoundly impact renewable energy and energy efficiency activities. These instruments play a critical role by supporting markets, facilitating technology transfer and capacity-building, and reducing financial barriers. The ISEA project gives us an essential analytical baseline for understanding what’s happening in the world of international agreements relative to energy technologies—and enables us to take the next step of figuring out the best ways of using these instruments to facilitate the growth of renewable energy and energy efficiency activities.”

An impressive amount of work went into building the ISEA database. For more than a year, a team of EESI researchers identified and analyzed tens of thousands of international agreements. The researchers first spent months pulling together international agreements from around the world—focusing particularly on China, India, the European Union and the United States. They then reviewed every single agreement, determining which of them were relevant enough to include in the database. For those agreements included, the researchers carefully analyzed each agreement, coding them by subject areas, obligations, financial mechanisms, implementing methods, institutional arrangements and other relevant criteria.

At present, there are two versions of the ISEA database: an internal, password-restricted version that contains all 1,700 agreements—of which the United States is party to approximately 1,100—and a free public version that contains about 500 agreements. Project Manager Kevin Doran explained, “The internal database is a kind of holding-bin. After we’ve thoroughly researched and analyzed a treaty, we then pass it into the public database where anyone can access the information. We plan to have all 1,700 agreements available on the public site in the next six months. But in the meantime, we’re happy to provide information on the treaties in the internal database on request.”

The ISEA database covers a wide array of energy subjects. Energy markets, electricity infrastructure, renewable energy, energy efficiency, and hydrogen are just a few of the subject areas dealt with in the database. Users of the public database are able to search for agreements using basic and advanced search options, including a “subject-tree” that allows users to navigate to treaties dealing with a given subject area. For instance, by clicking on Energy Efficiency users are presented with links to treaties dealing with energy efficiency in Buildings, Industry, Power Generation and Transportation.

According to Doran, the public database currently has 94 international agreements dealing with renewable energy technologies—with 40% of these agreements addressing solar energy. The remainder of the renewable energy category is made up of agreements dealing with hydropower (23%), wind (11%), bioenergy (11%), and geothermal (11%).

The ISEA public database is available through the following web address: http://lawweb.colorado.edu/eesi/. Technology support for the project was provided by Anthum Solutions, LLC, of Denver, Colorado.

Next Steps

EESI has begun strategizing on how to improve and expand the ISEA database. Future plans for the project include developing an online, controlled-access “wiki-system” enabling pre-approved experts throughout the world to contribute to the database; and expanding the database to include partnerships—such as the Asia-Pacific Partnership on Clean Development and Climate—and “soft law” instruments such as declarations, resolutions and charters. “It is extremely difficult to obtain reliable facts and information pertaining to the implementation and impact of the agreements in our database,” explained Dr. Guruswamy. “Our distributed online system will enable experts including academics, government personnel, international institutions, and civil society representatives to provide us with that information for both hard and soft law instruments.” The EESI team also plans to link its database to REEGLE—the online information gateway for renewable energy and energy efficiency recently launched by REEEP and the Renewable Energy Policy Network for the 21st Century (REN21).

Contact

Kevin Doran
Energy and Environmental Security Initiative
1-303-492-5127
Email: dorank@colorado.edu