Last year the energy story that sent shock waves around the world was BP's huge oil spill in the Gulf of Mexico.
The catastrophe, which ended 13 lives and wreaked as yet untold environmental damage, was a so-called "black swan" event that no one was expecting or could easily have foretold.
Nevertheless, it will change the oil and gas industry in both large and subtle ways. Some of those changes will be welcome, such as any that encourage less cavalier attitudes to safety and make oil rigs safer places to work. Others could have mixed impacts: Moves to place large swathes of US coastal waters off-limits to drilling, while protecting the marine environment, could also shift investment to dirtier onshore oil resources.
Another very large black swan - the worst global economic downturn in six decades - arrived the previous year. That had far-reaching, unforeseen effects on energy supply and demand, effects with which the industry is still coming to grips.
Last year the sector was also visited by a white swan, in the shape of much more stable energy prices than in the previous several years. That benign episode, which may now be drawing to a close, gave many oil and gas firms renewed confidence to invest.
This year we do not see any black swans on the horizon. That does not mean none is lurking just out of view. Not being extraordinarily gifted forecasters, we therefore mainly predict a continuation of current energy trends with, perhaps, a few novel twists.
Acknowledging that we may be proved wildly wrong, here are our top five energy predictions for this year.
Oil to break $100
Crude has escaped the confines of the US$70 to $80 per barrel trading range that contained it for most of last year, last week closing consistently near 26-month highs above $90.
Is this an aberration or the beginning of a foray into triple-digit territory?
It is hard to tell, because the year-end rally above $90 occurred during a bitter northern hemisphere cold snap as the first widespread blizzard of the year hit the populous US north-east. Now weather forecasters are predicting a warmer than average January in the US, which could test investors' interest in the oil market.
But there are reasons to expect this not to happen: if crude has reacted at all of late to supply and demand signals, the response has been muted and delayed. Last week the US market was by no means short of oil, yet crude moved sharply higher.
Instead, the oil market has shown exaggerated sensitivity to non-fundamental factors such as fluctuations in the strength of the US dollar, movements in equity markets and economic sentiment. The fact of brimming oil stockpiles has been overshadowed by fears of future fuel shortages, stoked by frequent repetition of the International Energy Agency's mantra: "The age of easy oil is over".
Crude could easily rise above $100 for only the second time in history if this month is cooler than expected or quantitative easing causes further dollar weakness.
Eventually, fundamentals always reassert their influence on errant markets. This year's spring cuckoos could portend a crude correction.
The gas glut lives
International gas markets are glutted, to the chagrin of regional exporters of liquefied natural gas (LNG) such as Qatar and Yemen.
With gas in New York trading at about a quarter of the price of oil, who can blame traders for proclaiming that "gas is trash"?
The great US shale gas boom, which has made North America self-sufficient in gas, may have reached its peak last year. Drilling is due to drop off as many leaseholders have now satisfied the three-year drilling commitments that came with their purchased access to US public lands. Moreover, environmentalists are agitating about dangers to groundwater from the chemicals used to extract gas from shale deposits.
In other parts of the world, however, shale gas projects are just getting started. China, in particular, is keen to deploy the technology that has recently made gas from this widespread unconventional source easier and cheaper to access than some conventional deposits in increasingly remote locations.
By 2035, shale gas could represent 62 per cent of the total gas produced in China and 50 per cent of Australian gas output, predicts the energy and resources team at Deloitte.
That is good news for the environment, as most of that gas will be used to displace coal in Chinese power plants, resulting in lower carbon emissions.
It is not so great for Qatar, Yemen and the Big Daddy conventional gas producer, Russia. All are competing for a share of the growing Chinese gas market.
Carbon makes a comeback
In the past few years, much of the action in oil exploration has been in deep waters off the coasts of Brazil, west Africa and the US Gulf of Mexico.
Last year, deepwater drilling hit a snag when BP's Macondo well blew out and leaked more than 4 million barrels of crude into the Gulf of Mexico. The ensuing hue and cry about the biggest oil spill in US history cost BP's chief executive, Tony Hayward, his job, while the company launched a US$30 billion (Dh110.19bn) divestment programme to help pay clean-up costs and damages.
Environmentalists proclaimed deepwater oil extraction to be "dirty, dangerous and expensive".
Side effects have included support for higher crude prices, as the marginal cost of oil production is widely perceived to have risen because of the increased regulatory scrutiny now likely for offshore drilling. North American environmentalists have also switched their attention to offshore oil from some of their previous targets.
Those include Canadian oil sands, a vast, high-carbon northern resource that can be exploited economically only when crude is above $70 per barrel. Sure enough, many oil sands projects that were put on hold during the downturn are now making a comeback, with new interest from Chinese investors.
China and India, with soaring energy needs, are at the same time becoming huge net importers of coal. South Africa, Indonesia and Australia are the main suppliers, and there are also plans to mine high-quality coal deposits in Mozambique.
With even Dubai, Ajman and Oman in the Gulf turning to coal-fired power generation to supply growing electricity needs, the demand outlook for high-carbon fuels remains bright.
For the environment's sake, we hope for more deployment of "clean coal" technology as well as carbon capture and storage projects.
Petrochemicals move east
As production facilities in North America and western Europe age, petrochemical production will continue migrating east to serve emerging markets in Asia and the GCC.
The facilities being built in these regions will not only be more modern and better located than the ones they are even now replacing, but also larger and more efficient.
As well as China, India could become a significant Asian petrochemical player. William Yau, the chief executive of the marketing arm of Borouge, the chemicals joint venture between Abu Dhabi National Oil Company and Austria's Borealis, said recently that the next Borouge plant might be in the manufacturing hub near Delhi.
Preliminary deals between multinationals and state petrochemical producers are likely to be firmed up in the coming year, especially in the Gulf, where Royal Dutch Shell is likely to formalise a $6bn petrochemical joint venture with Qatar Petroleum.
If all goes as planned, the GCC chemical sector will expand dramatically in the next two years, doubling the capacity of 2007 and reaching further down the value chain into the speciality and performance chemicals sector.
Chemical producers will create significant education and employment for the growing ranks of young GCC nationals, according to Khalid al Falih, the chief executive of Saudi Aramco.
Petrochemical firms in the region will also recruit more scientists to boost their research and development efforts.
"There is absolutely no reason we can't set in motion a tidal wave of innovation and creativity in our region, given that our researchers have just as many grey cells as the researchers and innovators in other parts of the world," Mr al Falih told the Gulf Petrochemicals and Chemicals Association last month.
Solar goes mainstream
Solar panels will flood the market this year, bringing the technology down to a price that perhaps even the mainstream consumer can afford.
The lower prices could give substance to what has long been a mirage in most parts of the world: grid parity, the point at which the cost of renewable energy becomes competitive with traditional power sources such as coal and gas.
But the glut of solar power systems could also trigger an industry contraction, with the supply rate predicted to be double demand this year.
The recent blooming of the solar industry has been catalysed by western government incentives, which may fall by the wayside as countries roll out austerity packages. Germany cut its subsidies last year and is considering more reductions this year. But continued incentives for solar power in the US, India, Italy and China could carry the market, which is forecast to grow from 16 to 20 gigawatts this year.
Masdar, Abu Dhabi's clean energy company, could be poised to take advantage of the solar boom. In 2009, the company's PV unit completed a solar panel factory in Germany, and it plans to build a factory in the emirate.
But even the staunchest solar proponents do not foresee power from the sun supplying a significant share of the Gulf electricity market until large subsidies for oil and gas are slashed.
ayee@thenational.ae