Scraping the Barrel… 31 July 2012

In today’s roundup we look at whether ‘independent academic reports’ backing fracking in the US are actually produced by Big Oil in disguise; the debate around a groundbreaking report which puts Peak Oil to rest once and for all, and finally, how Bob Dudley’s woes at BP look set to continue for a while yet.

The “Do we frack, don’t we frack” battle has drawn in new contenders to the arena; this time, academics in US universities who, it turns out, have been receiving $$$s from Big Oil while writing pro-fracking reports. Coincidence? The increasingly cosy relationship between universities and industry is calling into question the independence of academic eports produced which have been used in Congress to justify the use of fracking. Is nobody out of the reach of Big Oil?

This report, produced last month by Eni executive Maugeri, has caused an explosion in the oil world. The report uses statistics and hard evidence to take down peak oil theory, even going so far as to say that actually, the world is at the start of a new oil boom. Among its supporters is George Monbiot, who has had a complete U-turn of opinion. Last month he wrote in the Guardian that the environmentalist movement has, in fact, been wrong the entire time, with Hubbert’s Peak more likely to become “Hubbert’s Rollercoaster.” So – peak oil theorists out of a job then?

Not so fast. Not everyone has taken Maugeri’s word as law, and last week Chris Nelder published a detailed analysis of the report in an FT blog, picking it apart to conclude the complete opposite; that in fact, peak oil theory is even more valid than ever. Hmm. The case continues.

It’s a dark day for Mr. Dudley. On Tuesday BP reported a loss of $1.4 billion for the three month period ending June 30th, compared to a net profit of $5.7 billion a year earlier. He’s had a hard time of it though; inheriting the problems from Deepwater Horizon, lower oil prices, and lower income from their 50% owned Russian affiliate, TNK-BP. The main reasons for the loss, however, were re-evaluations of their assets which led to a $4.8 billion write-down on refineries and shale gas assets in the US. Dudley has hinted that this isn’t the last loss that they’ll see, saying that BP’s “major transformation” will take time.

To check out previous news roundups, see the Scraping the Barrel series.

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