Fortis anti-green position reopens other issues

A recent press release from Canadian-owned utility Fortis TCI, contradicting an earlier pronouncement by the Rufus Ewing-led government that the company was considering a change in part from inefficient diesel generation to renewable or green energy, has reopened debate on a number of related issues, including the cost of electricity in the TCI and the relationship between successive TCI governments and Canadian firms.

Fortis TCI headquarters in Providenciales

Fortis Inc. is the largest investor-owned gas and electric distribution utility in Canada. Its regulated utilities account for 90 percent of total assets and serve more than 2.4 million customers across Canada and in New York State and the Caribbean – Belize, Cayman Islands and the TCI.

In 2011, the government of Belize expropriated the approximately 70% ownership interest of Fortis Inc. in Belize Electricity Ltd (BEL) an integrated electric utility and the principal distributor in Belize.

Fortis still owns Belize Electric Company Limited (BECOL), a non-regulated hydroelectric generation business that operates three hydroelectric generating facilities in Belize. There is an ongoing controversy over a secret and possibly unenforceable agreement between the then government of Belize and Fortis over alleged pre-emption rights in relation to national waterways.

In 2013, in opposing a proposed $1.5 billion acquisition of CH Energy Group in New York, a local grassroots group pointed to what they say is Fortis’ poor record in dealing with projects in Belize and British Columbia and citing "misinformation and a lack of trust" on the part of Fortis.

Meanwhile, Fortis TCI has possibly the highest cost of electricity in the western hemisphere and five times higher than those charged by the closest mainland utility Florida Power and Light (FPL). Further, the company returns to its Canadian parent a profit averaging $1,000 per year per household from a customer base numbering only 9,000 consumers, which equates to more than $80 per month per household in pure profit.

Notwithstanding the extraordinarily high profit margins enjoyed by Fortis, the company is permitted to import supplies and equipment duty free and constantly upgrades its distribution system in order to lower its long term costs.

While the internal operating statements of Fortis TCI have yet to be made public, it has long been suspected that the utility uses accelerated depreciation to write off capital expenditures quickly and therefore reduce their publicly reported profits. US accounting practices require that capital equipment and assets be depreciated more closely in line with the life expectancy of the asset, reducing the annual write off and therefore showing a more accurate, and possibly higher net profit.

The latest Fortis policy on renewable energy sources puts a halt to the hope of generating power from wind energy from the prevailing trade winds or from solar panels.

Fortis defended its new position on a reported failure of German green power efforts. However, Germany is a northern European country with far less solar energy available, which in spite of huge labour costs and social benefits is now expected to raise its electricity rates to less than $0.09 per Kwh or just 1/6th the cost of Fortis power.

Fortis purchased the former assets of Provo Power Company (PPC) in 2006, three years after the PNP came to power in a 2003 by-election. At the time of the purchase, then premier Michael Misick denied any knowledge of the buyout saying he had nothing to do with the buyout and could not forecast the fate of the employees. However, the stamp duty on the purchase would have yielded the country upwards of $9 million and was subject to negotiation with the Misick government and undoubtedly Misick himself.

At the time of the buyout, PPC was charging $0.26 per Kwh and now Fortis charges an additional surcharge that almost doubles the old rate to $0.51 per Kwh.

Last year, during the first year of the newly elected Progressive National Party (PNP) government, Fortis purchased the Grand Turk power company, Turks and Caicos Utilities from an American firm.

Following the initial Fortis buyout in 2006, the Misick government, which then included current premier Dr Rufus Ewing as director of medical services, proceeded to enter into a hugely expensive and controversial healthcare contract with another Canadian company, Interhealth Canada.

Interest in the Misick connection with Canada has also been revived by some so far unconfirmed but informed reports that he may be a person of interest so far as the Canadian authorities are concerned.

Speculation that the Canadians may have had a hand in Misick’s travel back to the TCI following his recent extradition from Brazil has led to questions as to whether this was designed to protect or pursue significant political and other figures in Canada.

In fact, Canadian interest in the TCI has been around since 1917, when then Canadian prime minister Robert Borden suggested that Canada annex the islands. In 2004, Nova Scotia’s three parties voted unanimously to let the TCI join their province if they ever became part of Canada.

Similar discussions were held by former premier Misick.

As recently as last year, Canadian MP Peter Goldring wanted to revive the proposal for the TCI to join Canada, following the return of elected self-government in the territory in November 2012.

Goldring has been a consistent advocate of increased cultural and economic ties between the TCI and Canada for more than ten years but the idea was dropped when Britain imposed direct rule in 2009, following a commission of inquiry that uncovered widespread and systemic government corruption in the territory.

Goldring, who has visited the islands several times, said they would fit in nicely with the rest of Canada.

But Canada stands to gain more than simply a vacation destination from such a union, he said: "From my perspective, certainly it goes far behind sun and sand. South Caicos Island, for example, is on a deep water channel. It could be readily developed into a deep-water port, which would give Canada tremendous advantage for trans-shipment throughout the entire region."

He added the islands would be a strategic location from which to increase engagement with Haiti and Cuba.

 

 

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New York’s new solar plan sets a high bar

New York wants to get serious about solar power. The state has a goal to cut its greenhouse gas emissions 80 percent below 1990 levels by 2050, and it’s already among the nation’s solar leaders. New York ranks ninth overall for total installed solar, and in 2013 alone it added enough to power more than 10,000 homes.

While that’s great news for solar companies and environmentalists, it’s a bit of a problem for electric utilities. Until recently, the business model of electric companies hadn’t changed much since it was created a century ago. (The country’s first electric grid was strung up by Thomas Edison in Manhattan’s Lower East Side in the 1880s, and some parts of it continued to operate into the 2000s.) Utilities have depended on a steady growth in demand to stay ahead of the massive investments required to build power plants and the electric grid. But now, that tradition is crumbling — thanks to the crazy growth of rooftop solar and other alternative energy sources and some big advances in energy efficiency that have caused the overall demand for electricity to stop growing. Meanwhile, utilities in New York are also required to buy the excess power from solar buildings that produce more than they need — a policy called "net metering".

But here’s the thing: Even the most ardent climate hawks agree that we can’t afford for utilities to go out of business altogether. Someone needs to maintain and manage the grid. Hardly any solar homes are actually "off the grid," since they still depend on power lines to soak up their excess electricity during sunny afternoons and deliver power at night. In fact, net metering is a key factor in making solar economically viable to homeowners.

The question of how to aggressively slash carbon emissions without completely undermining the power sector (and simultaneously raising the risk of blackouts and skyrocketing electric bills) is one of the big existential questions that climate-savvy lawmakers are now trying to figure out. And last week in New York, they took a huge step forward.

Under a new order from the state’s Public Service Commission, utility companies will soon be barred from owning "distributed" power systems — that means rooftop solar, small wind turbines, and basically anything else that isn’t a big power plant. (There are some rare exceptions built into the order, notably for giant low-income apartment buildings in New York City that small solar companies aren’t well-equipped to serve.)

"By restricting utilities from owning local power generation and other energy resources, customers will benefit from a more competitive market, with utilities working and partnering with other companies and service providers," the commission said in a statement.

The move is part of a larger package of energy reforms in the state, aimed at setting up the kind of futuristic power system that experts think will be needed to combat global warming. The first step came in 2007, when the state adopted "decoupling," a market design in which a utility’s revenue is based not on how much power it sells, but on how many customers it serves. (Remember that in most states utilities have their income stream heavily regulated by the state in exchange for having a monopoly.) That change removed the incentive for utilities to actively block rooftop solar and energy-saving technology, because lost sales no longer translate to lost income. But because utilities could still make money by recouping the cost of big infrastructure projects through increases to their customers’ bills, they had an incentive to build expensive stuff like power plants and big transmission hubs even if demand could be better met with efficiency and renewables.

Now, under New York’s most recent reform, a utility’s revenue will instead be based on how efficiently and effectively it distributes power, so-called "performance-based rates." This, finally, provides the incentive utilities need to make decisions that jibe with the state’s climate goals, because it will be to their advantage to make use of distributed energy systems.

But there’s a catch, one that had clean energy advocates in the state worried. If utilities were allowed to buy their own solar systems, they would be able to leverage their government-granted monopoly to muscle-out smaller companies. This could limit consumer options, drive up prices, and stifle innovation. That, in turn, could put a freeze on consumers’ interest in solar and ultimately slow down the rate at which it is adopted. But if small companies are allowed in, then the energy market starts to look more like markets for normal goods, where customer choice drives technological advances and pushes down prices.

"New York’s approach to limit utility ownership balances the desire for more solar with the desire to have competitive markets that we expect to continue to bring down the costs of solar," said Anne Reynolds, director of the Alliance for Clean Energy New York.

The upshot is that solar in New York will be allowed to thrive without being squeezed out by incumbent giants like Con Edison and National Grid.

"This is as exciting as the Public Service Commission gets," said Raya Salter, an attorney with the Natural Resources Defense Council in New York who worked with state regulators on the plan. "These are bold, aggressive changes."

The policy puts New York on track for a new way of doing business that many energy wonks now see as inevitable. In the past, the role of electric utilities was to generate power at a few central hubs and bring it to your house; in the near future, their role will be to facilitate the flow of power between countless independent systems.

"We need to plan for a primarily renewable system," said John Farrell, director of the Institute for Local Self-Reliance, which advocates for breaking up the old utility model as a key solution to climate change. "We want to pay [utilities] for doing things we want, rather than paying for their return on investment for the things they build."

So far, the response from utilities has been receptive; a spokesperson for Con Ed said the company looks forward to developing details for how the order will move forward.

The change in New York could become a model for other states, Reynolds said. Regulators in Hawaii are already considering a similar policy.

"Everyone is watching to see what’s happening here," she said. "It’s really a model of what a utility could be in the future." More

 

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IEA says ‘peak oil demand’ could hit as early as 2020

Little more that a year after the International Energy Agency added its voice to the chorus chiming that peak oil was dead, a new report from the uconservative adviser to industrialised nations suggests it has changed its tune. Only this time it is not peak supply that is on its radar, but peak demand.

The IEA’s Medium-Term Oil Market Report 2014 has predicted that global growth in oil demand may start to slow down as soon as the end of this decade, due to environmental concerns and cheaper alternatives, and despite boosting its 2014 forecast of global demand by 960,000 barrels per day.

While supply is forecast to remain strong – thanks largely to the unconventional, or “tight” oil revolution currently underway in north America – the IEA says it expects the global market to hit an “inflexion point”, by the end of 2019, “after which demand growth may start to decelerate due to high oil prices, environmental concerns and cheaper fuel alternatives.”

These factors, says the report, will lead to fuel-switching away from oil, as well as overall fuel savings. In short, it says, “while ‘peak demand’ for oil – other than in mature economies – may still be years away, and while there are regional differences, peak oil demand growth for the market as a whole is already in sight.”

It’s worrying news for the over-invested and under-prepared; not least of all oil importing nations, to which, as Samuel Alexander noted in this article last September, the economic costs of peak oil are especially significant.

“When oil gets expensive, everything dependent on oil gets more expensive: transport, mechanised labour, industrial food production, plastics, etc,” he wrote. “This pricing dynamic sucks discretionary expenditure and investment away from the rest of the economy, causing debt defaults, economic stagnation, recessions, or even longer-term depressions. That seems to be what we are seeing around the world today, with the risk of worse things to come.”

This then adds to the peak oil cycle, increasing governments’ motivation to decarbonise their economies – better late than never – “not only because oil has become painfully expensive, but also because the oil we are burning is environmentally unaffordable.”

This view has been echoed in numerous recent reports. US investment banks Sanford Bernstein raised the prospect of “energy price deflation”, caused by the plunging cost of solar and the taking up of market share by that technology as it displaced diesel, gas and oil in various economies. It predicted that could trigger a massive shift in capital.

Analyst Mark Fulton last month also questioned the wisdom of the private-sector investing over $1 trillion to develop new sources of high-cost oil production. While Mark Lewis, of French broking firm, suggested that $US19 trillion in revenuescould be lost from the oil industry if the world takes action to address climate change, cleans up pollution and moves to decarbonise the global energy system.

The IEA report also includes an updated forecast of product supply, which draws out the consequences of the shifts in demand, feedstock supply and refining capacity.

“Given planned refinery construction and the growth in supply that bypasses the refining sector, such as NGLs and biofuels, the refining industry faces a new cycle of weak margins and a glut of light distillates like gasoline and naphtha as a by-product of needed diesel and jet fuel,” it says.

It also predicts that “the unconventional supply revolution that has redrawn the global oil map” will expand beyond North America before the end of the decade, just as OPEC supplies face headwinds, and regional imbalances in gasoline and diesel markets broaden.

The report projects that by 2019, tight oil supply outside the United States could reach 650 000 barrels per day (650 kb/d), including 390 kb/d from Canada, 100 kb/d from Russia and 90 kb/d from Argentina. US LTO output is forecast to roughly double from 2013 levels to 5.0 million barrels per day (mb/d) by 2019.

“We are continuing to see unprecedented production growth from North America, and the United States in particular. By the end of the decade, North America will have the capacity to become a net exporter of oil liquids,” IEA Executive Director Maria van der Hoeven said as she launched the report in Paris. “At the same time, while OPEC remains a vital supplier to the market, it faces significant headwinds in expanding capacity.”

Beyond ageing fields, the major hurdle facing OPEC producers is the escalation in “above-ground woes,” as security concerns become a growing issue in producers like Iraq, and investment risks deter investment and exploration.

The report notes that as much as three-fifths of OPEC’s expected growth in capacity by 2019 is set to come from Iraq. The projected addition of 1.28 mb/d to Iraqi production by 2019, a conservative forecast made before the launch last week of a military campaign by insurgents that subsequently claimed several key cities in northern and central Iraq, faces considerable downside risk. More

 

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Iraq oil shock would kill world economic recovery, experts warn

As I have been warning people about for a number of years: Potential oil price spike in Middle East; What could this do to the Cayman Islands?

Open warfare between the government and rebels in Iraq would pose a threat to the global economic recovery should oil production from the war-torn Middle East state suffer a serious disruption, analysts have warned.

As violence threatens Iraq's oil industry, experts fear crude at $130 per barrel would damage the global economy

Open warfare between the government and rebels in Iraq would pose a threat to the global economic recovery should oil production from the war-torn Middle East state suffer a serious disruption, analysts have warned.

Brent oil prices climbed as high as $110.25 (£65.59) on Wednesday amid concerns that 3.5m barrels per day of Iraqi exports could be knocked out of the market by the violence that has seen al-Qaeda forces seize control of Mosul, Tikrit and Samarra.

"The worst case scenario is that we see production from Iraq slip down to levels in the last Gulf war, then oil could spike $20 a barrel very quickly," Ole Hansen, vice-president and head of commodity strategy at Saxo Bank told The Telegraph. "In that scenario, the entire economic recovery, which is still fragile, could stall and we could even slip back into recession in some regions."

Iraq's oil minister, Abdul Kareem Luaibi, who was attending a gathering of the 12-member Organisation of Petroleum Exporting Countries (Opec) in Vienna on Wednesday, tried to ease concerns by stressing that most of the country's crude was pumped from fields in the Shia-Muslim dominated South, where export facilities are "very, very safe".

Despite the deteriorating political situation in Iraq, where government forces have been seen fleeing from the Sunni-Muslim al-Qaeda insurgents, Opec decided to leave its production quotas unchanged. The cartel limits the output of its members to 30m barrels per day (bpd) of crude, roughly a third of the world's supply.

However, the group's ability to react to shocks to the oil market is limited, with Saudi Arabia the only producer with enough spare production capacity to cover any shortfalls. Riyadh maintains about 12.5m barrles per day (bpd) of production capacity, with 2.5m bpd - three-times Britain's output from the North Sea - lying idle at any one time.

Although Saudi's oil officials told reporters in Vienna on Wednesday that the kingdom and Opec could compensate for any Iraqi shortfalls, oil traders remain concerned.

In a note to Bloomberg, Helima Croft, Barclays' head of North American commodities research, said: "The shocking escalation in violence in Iraq raises the prospect of potential output losses. It comes as other key producers, like Libya, have also seen exports 'evaporate' amid rising unrest."

Helped by investment from international oil companies such as Royal Dutch Shell, BP and Lukoil, Iraq has increased its importance in the world oil market since recovering from the 2003 war.

The opening of the giant West Qurna-2 oilfield near Basra in March would allow Iraq to pump 4m bpd by the end of the year. Already the second-largest producer in Opec after Saudi Arabia, according to Reuters, Iraq has pumped an average of 3.5m bpd since the beginning of the year.

UK oil companies working in Iraq are understood to be closely monitoring the situation but at this point have no plans to withdraw workers from their fields.

Brent oil prices climbed as high as $110.25 (£65.59) on Wednesday amid concerns that 3.5m barrels per day of Iraqi exports could be knocked out of the market by the violence that has seen al-Qaeda forces seize control of Mosul, Tikrit and Samarra.

"The worst case scenario is that we see production from Iraq slip down to levels in the last Gulf war, then oil could spike $20 a barrel very quickly," Ole Hansen, vice-president and head of commodity strategy at Saxo Bank told The Telegraph. "In that scenario, the entire economic recovery, which is still fragile, could stall and we could even slip back into recession in some regions."

Iraq's oil minister, Abdul Kareem Luaibi, who was attending a gathering of the 12-member Organisation of Petroleum Exporting Countries (Opec) in Vienna on Wednesday, tried to ease concerns by stressing that most of the country's crude was pumped from fields in the Shia-Muslim dominated South, where export facilities are "very, very safe".

Despite the deteriorating political situation in Iraq, where government forces have been seen fleeing from the Sunni-Muslim al-Qaeda insurgents, Opec decided to leave its production quotas unchanged. The cartel limits the output of its members to 30m barrels per day (bpd) of crude, roughly a third of the world's supply.

However, the group's ability to react to shocks to the oil market is limited, with Saudi Arabia the only producer with enough spare production capacity to cover any shortfalls. Riyadh maintains about 12.5m barrles per day (bpd) of production capacity, with 2.5m bpd - three-times Britain's output from the North Sea - lying idle at any one time.

Although Saudi's oil officials told reporters in Vienna on Wednesday that the kingdom and Opec could compensate for any Iraqi shortfalls, oil traders remain concerned.

In a note to Bloomberg, Helima Croft, Barclays' head of North American commodities research, said: "The shocking escalation in violence in Iraq raises the prospect of potential output losses. It comes as other key producers, like Libya, have also seen exports 'evaporate' amid rising unrest."

Helped by investment from international oil companies such as Royal Dutch Shell, BP and Lukoil, Iraq has increased its importance in the world oil market since recovering from the 2003 war.

The opening of the giant West Qurna-2 oilfield near Basra in March would allow Iraq to pump 4m bpd by the end of the year. Already the second-largest producer in Opec after Saudi Arabia, according to Reuters, Iraq has pumped an average of 3.5m bpd since the beginning of the year.

UK oil companies working in Iraq are understood to be closely monitoring the situation but at this point have no plans to withdraw workers from their fields. More

Furthermore, if the insurgencies drag Iran into the fray will Kingdom of Saudi Arabia (KSA) be tempted to respond on the side of the Wahabi / Salafi axis? Remember that KSA recently spent 60 Billion or armaments. Where may any of this leave the Cayman Islands? Editor

 

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New York Moves to Revolutionize Power Grid with System That Boosts Solar and Wind Energy Read more: New York Moves to Revolutionize Power Grid With Distributed Electricity Generation | Inhabitat New York City

New York State is proposing a revolutionary change to how utilities operate that would move away from the 20th century business model of centralized power stations to a 21st century market-based distributed energy system that would givesolar and wind a big boost.

Last week, the Public Service Commission (PSC) released a report entitled Reforming the Energy Vision calling for sweeping changes in the regulatory structure of electricity utilities to make it easier for smaller renewable energy producers such as rooftop solar owners to feed into the grid.

“The 21st century grid is going to have a lot more distributed resources,” Audrey Zibelman, chairman of the PSC, told Bloomberg News. “The scope is comprehensive: solar, energy efficiency, storage. Let’s make it the core to the redesign, not ancillary.”

Making the grid cleaner and more efficient via the distributed generation model dubbed “Utilities 2.0″ will help the Empire State meet its greenhouse gas emissions reduction targets and Renewable Portfolio Standard. With rising sea levels and more extreme weather from man-made global warming, independent transmitters and microgrids could prevent large-scale power outages such as the ones we saw in lower Manhattan, parts of Brooklyn and other areas during Superstorm Sandy.

The PSC is also calling for a restructuring of rate incentives to encourage renewable energy and energy efficiency. The agency is proposing regulations that extend the length of utility rate plans to as much as eight years and connect utility profits with the pursuit of long-term customer value.

“For more than 100 years, the generation and distribution of electricity in New York has been largely unchanged, but today we’re taking a giant step from the status quo and leading the way on energy modernization,” Governor Andrew Cuomo said. More

Reforming the Energy Vision - Report and Proposal

 

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Ex govt adviser: "global market shock" from "oil crash" could hit in 2015

In a new book, former oil geologist and government adviser on renewable energy, Dr. Jeremy Leggett, identifies five "global systemic risks directly connected to energy" which, he says, together "threaten capital markets and hence the global economy" in a way that could trigger a global crash sometime between 2015 and 2020.

According to Leggett, a wide range of experts and insiders "from diverse sectors spanning academia, industry, the military and the oil industry itself, including until recently the International Energy Agency or, at least, key individuals or factions therein" are expecting an oil crunch "within a few years," most likely "within a window from 2015 to 2020."

Interconnected risks

Despite its serious tone, The Energy of Nations: Risk Blindness and the Road to Renaissance, published by the reputable academic publisher Routledge, makes a compelling and ultimately hopeful case for the prospects of transitioning to a clean energy system in tandem with a new form of sustainable prosperity.

The five risks he highlights cut across oil depletion, carbon emissions, carbon assets, shale gas, and the financial sector:

"A market shock involving any one these would be capable of triggering a tsunami of economic and social problems, and, of course, there is no law of economics that says only one can hit at one time."

At the heart of these risks, Leggett argues, is our dependence on increasingly expensive fossil fuel resources. His wide-ranging analysis pinpoints the possibility of a global oil supply crunch as early as 2015. "Growing numbers of people in and around the oil industry", he says, privately consider such a forecast to be plausible. "If we are correct, and nothing is done to soften the landing, the twenty-first century is almost certainly heading for an early depression."

Leggett also highlights the risk of parallel developments in the financial sector:

"Growing numbers of financial experts are warning that failure to rein in the financial sector in the aftermath of the financial crash of 2008 makes a second crash almost inevitable."

A frequent Guardian contributor, Leggett has had a varied career spanning multiple disciplines. A geologist and former oil industry consultant for over a decade whose research on shale was funded by BP and Shell, he joined Greenpeace International in 1989 over concerns about climate change. As the organisation's science director he edited a landmark climate change report published by Oxford University Press.

Industry's bad bet

Leggett points to an expanding body of evidence that what he calls "the incumbency" - "most of the oil and gas industries, their financiers, and their supporters and defenders in public service" - have deliberately exaggerated the quantity of fossil fuel reserves, and the industry's capacity to exploit them. He points to a leaked email from Shell's head of exploration to the CEO, Phil Watts, dated November 2003:

"I am becoming sick and tired of lying about the extent of our reserves issues and the downward revisions that need to be done because of far too aggressive/ optimistic bookings."

Leggett reports that after admitting that Shell's reserves had been overstated by 20%, Watts still had to "revise them down a further three times." The company is still reeling from the apparent failure of investments in the US shale gas boom. Last October the Financial Times reported that despite having invested "at least $24bn in so-called unconventional oil and gas in North America", so far the bet "has yet to pay off." With its upstream business struggling "to turn a profit", Shell announced a "strategic review of its US shale portfolio after taking a $2.1bn impairment." Shell's outgoing CEO Peter Voser admitted that the US shale bet was a big regret: "Unconventionals did not exactly play out as planned."

Leggett thus remains highly sceptical that shale oil and gas will change the game. Despite "soaring drilling rates," US tight oil production has lifted "only around a million barrels a day." As global oil consumption is at around 90 milion barrels a day, with conventional crude depleting "by over four million barrels a day of capacity each year" according to International Energy Agency (IEA) data, tight oil additions "can hardly be material in the global picture." He reaches a similar verdict for shale gas, which he notes "contributes well under 1% of US transport fuel."

Even as Prime Minister David Cameron has just reiterated the government's commitment to prioritise shale, Leggett says:

"Shale-gas drilling has dropped off a cliff since 2009. It is only a matter of time now before US shale-gas production falls. This is not material to the timing of a global oil crisis."

In an interview, he goes further, questioning the very existence of a real North American 'boom': "How it can be that there is a prolonged and sustainable shale boom when so much investment is being written off in America - $32 billion at the last count?"

It is a question that our government, says Leggett, is ignoring.

Crunch time

In his book, Leggett cites a letter he had obtained in 2004 written by the First Secretary for Energy and Environment in the British embassy in Washington, referring to a presentation on oil supply by the leading oil and gas consulting firm, PFC Energy (now owned by IHS, the US government contractor which also owns Cambridge Energy Research Associates). According to Leggett, the diplomat's letter to his colleagues in London reads as follows:

"The presentation drew some gasps from the assembled energy cognoscenti. They predict a peaking of global supply in the face of high demand by as early as 2015. This will lead to a more regionalised oil market, a key role for West African producers, and continued high and volatile prices." More

 

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