Sunday, February 07, 2016

Politics in a full world

When Scientific American published Herman Daly's "Economics in a Full World" in September 2005, few people knew what lay ahead: oil climbing to $147 a barrel, the relentless rise in global temperatures due to greenhouse gas emissions, the food riots of 2008 sparked by rising food prices, the economic crash that followed, and the development of an increasingly yawning gap between the rich and everyone else in subsequent years. For the vast majority of people on the planet, growth effectively stopped in 2008. Their incomes have essentially flatlined or declined.

Daly's thesis seems more relevant than ever as government policymakers puzzle over lackluster global economic growth despite unprecedented government spending (and debt) and ground-hugging interest rates in the seven years since the crash. Maybe we have reached the point, as Daly would argue, when economic growth is uneconomic, when the costs outweigh the benefits (except, of course, for a very narrow strata of people at the top who get to put the costs on everyone else).

If we are moving toward a low-growth or even no-growth world because growth is becoming much more difficult and problematic, then Daly's outline of a new economics will need a companion outline: politics in a full world. I have a preliminary candidate for that outline: Bruno Latour's The Politics of Nature. Daly's steady-state economics always implied a revolution in governance without being explicit about it.

Latour never mentions Daly and may never have read him. But Latour clearly understands that the natural world--which politics has always held at arm's length while nevertheless dealing daily with nature's demands--must now explicitly invite that natural world to the bargaining table.

This is not about being a "nature lover" who only cares about animals and plants, but not about humans. On the contrary, it is about observing and interrogating a nature which we had previously assumed could not be questioned, but which just "was." Instead, we must grapple with what Latour calls the "parliament of things," no longer separating the world into distinct social and natural compartments to be governed separately. We must bring the human and the nonhuman together for careful consultation in order to govern them jointly.

But how to do this? Doesn't nature stand mute? How can we make it speak? Well, it is already speaking in the language of heat waves and hurricanes, floods and droughts, fisheries collapse, soil erosion, water depletion and thousands of other ways available to our senses and our intellects. In this regard nature is not a god, but rather an active participant and agent in our world. We need to understand what it is saying in order to govern ourselves appropriately.

Nor should we think of the natural world as monolithic. Our perceptions of that world are mediated by poetry as much as biology. And even in the sciences, the red-blooded world of field biology reveals a much different universe to us than does the manufactured environment of the physicist's particle accelerator.

Science with a big "S," as Latour likes to call it, wants to throw out the poetry at the beginning as merely irrational and fanciful before any deliberations begin. But Latour would like to keep the poetry in the discussion, and the sociology and history and philosophy and even religion so that we might consider for a time what disciplines help us see the world better and help us to govern ourselves better in our households, our communities and our countries.

The word "Science" in Latour's outline is a misnomer. We have sciences--plural--which reveal a world with astonishing variety that is seemingly impossible for us to unify under one coherent heading. We move in his schema from what he calls "mononaturalism" mixed with multiculturalism to "multinaturalism" mixed with multiculturalism.

If nature as we've imagined it is not just one gray mass of primary qualities--height, width, depth and mass--but also a riotous display of color from the rainbow, then we will encounter it with more attention and fewer preconceptions--or at least ones that we now regard as merely provisional.

Much of the new politics which Latour outlines is devoted to what he calls "taking into account." This step must not be rushed, and those things which beg to be considered must not be dismissed too quickly. We must, however, finally sort through the things and people we encounter in our deliberations to determine which we will listen to and which we will screen out. (The screening process, however, only temporarily dismisses people and objects until we are obliged to reconsider them in another round of consultation in another context.)

Latour's politics does not embrace relativism, so much as it embraces deliberation. It does not dismiss the sciences or any other endeavor as merely a social construct with nothing to tell us about the world outside ourselves.

But what he insists on is that we not draw any dogmatic conclusions from our investigations. There are always new objects, people, animals, chemicals, machines, buildings, roadways and unfamiliar phenomena jostling for our attention. We must with all due deliberation take these into account, consulting with the relevant parties who have something at stake, before we decide how to move forward.

To govern is to choose, and choose we must. But our current way of choosing starts out with choosing to exclude so much from our consideration that we as an entire species could not see the colossal dangers of climate change until we reached a point very late in the game. We moderns had understood wrongly that the world is something humans act upon--not something that acts upon us as well. It is the endowment of agency in others--especially nonhuman others--that opens us up to a world very much alive with consequences which we don't control, a world with a mind of its own that is often inscrutable to us.

The sciences have indeed been bringing the natural world to us, just not in the way we thought. We thought they were bringing us Science, a unified, coherent, utterly rational world that essentially determined our destiny and yet also strangely left us entirely free in the social and political realm. Instead, we find the world to be broadly variegated and full of more questions than answers--so much so that we may now have to talk about going for a walk in natures (plural) as well as visiting other cultures.

Just because the world we now live in is all mixed up with cows and lions and trees and rocks in the midst of human endeavors, all acting as colleagues or enemies--just because we find ourselves in such a world does not mean our lives or our societies are ungovernable. They are governable, but by different more deliberative processes. We must now make the invisible, visible; the implicit, explicit; the excluded, included.

For we can no longer afford to imagine that we live in an empty world in which we can safely ignore or abuse the nonhuman beings and objects in it with minimal consequences. Rather we live in a full world, cheek by jowl with all its inhabitants crowding into our lives with real, tangible consequences--inhabitants that now ask to be considered before the voting begins.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 31, 2016

'Occupied' Norway a window into our fossil fuel addiction

Okay, I admit that the premise of Norwegian television's new political thriller series "Occupied" is far-fetched. But that premise is a window on just how addicted to fossil fuels we are.

In "Occupied" Norway's Green Party wins parliamentary elections and makes good on its (not-altogether-fictional) promise to shut down oil and natural gas production in the country as a way of addressing climate change. This fictional Green Party simultaneously builds a thorium-fueled reactor to provide electric power. The Greens promise many more reactors as they embrace the electrification of transportation to reduce Norway's need for liquid fuels.

Norway's oil and gas customers--the countries of the European Union and Sweden--object to the loss of critical fossil fuel supplies. They conspire with Russia to force Norway to restart oil and gas production. At first this involves a smallish invasion by Russian soldiers and a takeover of offshore oil and gas platforms which are restored to production by Russian work crews.

When the series was conceived, Norwegian television thought the idea was too implausible. But with the Russian annexation of Crimea and the war in Ukraine, "Occupied" has touched a nerve in a newly anxious Scandanavian population who now see Russia as more of threat. (And, of course, there is the memory of Germany's occupation of Norway during World War II that still arouses fear and loathing in the hearts of many Norwegians.)

Coincidences aside, it does not seem surprising that the world would react strongly to a major oil and gas exporting nation deciding it will end all oil and gas production. If we were to substitute Saudi Arabia for Norway--where a partial shutdown is plausible if radical Saudi elements were to come to power in a messy coup--I can confidently predict that the United States and other Western powers would use whatever force is necessary to turn the oil spigots back on full blast.

Attempts to control the flow of oil have led to war after war. But little Norway--peaceful, democratic, white, European--could never be the target for such violence under these unusual circumstances, could it?

Of course, if Norway were to do the improbable and shut its oil and gas taps, it's more likely the Russians would be celebrating rather than assisting in opening those taps. It would mean Europe would have to import more Russian natural gas and possibly more Russian oil. Hey, maybe Great Britain would like to join Norway and shut down its production, too? The Russians could only dream of such an outcome.

Naturally, it is inconceivable that any country would voluntarily shut down production of one of the most valuable commodities in the world and the lifeblood of the world economy. No country would choose to go without the economic benefits that significant domestic oil and gas production bestow.

And, that is perhaps the point of "Occupied" after all. It shows us what we must do to prevent catastrophic climate change, and in doing so, simultaneously demonstrates that we simply won't be able to bring ourselves to do what we know we must. At least, not yet.

Despite all the rhetoric coming out of the Paris climate summit--and it was very encouraging rhetoric--any country with significant oil and gas production which decides to curtail or end such production would quickly be prevailed upon to resume that production--perhaps not today with the current glut, but surely just 18 months ago and surely in the future when the glut comes to an end. Governments around the world believe that oil is just too critical to let any country make such a decision all on its own.

Regarding "Occupied" as a piece of entertainment, once you forget about the implausible premise, you can focus on the changing allegiances and calculations of the Norwegian and Russian characters. It is a delicate and tense dance that these characters perform--the Norwegians not wanting to provoke an all-out war, a war that would surely demolish them; the Russians not wanting to resort to undue force for fear that they will get bogged down in a guerrilla conflict that could drag on for years.

Will each side get its calculations right? For the answer you'll have to watch. And, I think you will like what you see even if the most implausible part of the series is that we will someday go cold turkey to end our addiction to fossil fuels.
_________________________________________________________________

"Occupied" poster courtesy of YellowBird Entertainment.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 24, 2016

Volatility, oil and stock markets

"Down" is such a downer word. That's why when prices fall for practically anything Wall Street wants to sell you, Wall Streeters talk about volatility instead.

Volatility allows for the possibility that prices will recover soon and go to new highs. Any setback is just temporary. The market turbulence, it seems, is merely designed by invisible market gods to test your character as a long-term investor. Don't give in to panic, the investment people say, and you'll be rewarded.

Until you aren't!

A year ago I said the crash in commodity prices signaled a weak economy and that financial markets would eventually have to reflect this fact. The widely watched S&P 500 Index closed at 1,994.99 on January 30, 2015 just prior to the publication of the linked piece. Last Friday's close was 1906.90. The U.S. stock market hasn't exactly reflected the weakness in commodities, but it hasn't gained any ground either.

In addition, last August I wrote that low oil prices were also a reflection of this weakness and that all the talk about cheaper oil giving a boost to the economy was misplaced because of the immediate loss of oil-related employment and of revenues to companies and to governments which, of course, tax the oil. The S&P 500 is down about 200 points since then, but any significant adjustment still looks like it lies in the future.

Of course, starting in August stock markets around the world began to fall. Central banks reacted with words of support, and the U.S. Federal Reserve Board of Governors put off a long-anticipated interest rate hike because of weak market conditions.

Stock prices then rebounded to near their previous levels and all was forgotten...until the beginning of this year. The continuing rout in oil prices began to underline not only the weakness in the global economy, but also the unclear situation at major banks holding large energy-related loan portfolios. The Dallas Federal Reserve Bank was reported to have encouraged banks in its jurisdiction to forebear on energy loans. Essentially, the Dallas Fed was telling banks to ignore losses in their energy portfolios until further notice so as not to cause a panic. The reserve bank quickly denied any such guidance to member banks.

The truth in this particular instance may not matter since what we do know--that energy-related junk bond losses are at 2008 crisis levels--could suggest that energy-related losses at the world's banks may end up being the size associated with the subprime mortgage crisis that brought the global economy to its knees in 2008. It is worth remembering that in 2007 then-Federal Reserve Chairman Ben Bernanke assured the U.S. Congress that "the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained."

These and other anxieties moved stock markets and oil down sharply last week before a bounce that was in part inspired by central bankers in Europe, Japan and China who all signaled the possibility of more easing.

What many average investors don't seem to know is that rallies in bear markets tend to be steep and dramatic, while rallies in bull markets tend to be more muted, taking place over longer periods. It should also be said that corrections in bull markets are often the kind we saw in August and January, dramatic and steep. But there comes a time in the life of every bull market when the dramatic, steep corrections just keep going and turn into a crash. Just ask those playing the oil market.

Perhaps we are not yet there for stocks. Bull market psychology is very hard to dent, especially after one of the longest positive runs in history. Even though stock prices have become detached from economic realities--crashing commodities being the reality I watch closely--stocks have continued to rally back after steep losses based on investors' buy-the-dip psychology. The last recession began in December 2007, but the crash didn't come until almost a year later.

Investors in oil and other commodities and in commodity-related companies have had their heads handed to them. Stock markets in commodity-exporting countries have also fallen steeply. The central banks can't control commodity prices the way they control money and credit. For that reason, I think commodities are a better overall gauge of strength in the economy.

The question for investors this year will be something like this: Can central banks keep stock markets around the world afloat despite poor fundamentals? I'm doubtful. They didn't prevent a crash in 2001 or 2008, the first the result of a tech bubble and the second the result of a housing bubble. Both bubbles were caused by easy credit due to low-interest rate policies by central banks that stoked overinvestment. With short-term interest rates near zero for seven years in major economies, central banks are repeating the same mistake again.

Contrary to popular belief, central banks are not omnipotent. The oil and commodity bubbles they helped to blow have already burst. Most of the world's stocks markets are already in bear territory as of January 20. Before the late-week bounce, the U.S.-based S&P 500 Index was down 14 percent from its high in May last year. The Nasdaq Composite was off 16 percent. It's doubtful that any major stock market will simply continue to ignore what is happening in the real economy for too much longer.

Oversupply in the oil market may explain much of the drop in the oil price from $100 per barrel to $40. Some will say that recent additional weakness was due to the lifting of sanctions against Iran, a move that opens the way for substantially higher oil exports.

But oil traders have known about this for months, and it was already priced into futures markets. In my view, only exceptional weakness in the global economy explains oil dipping into the $20 range. In doing so, the oil market has provided a warning for anyone who is willing to see it.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 17, 2016

The great condensate con: Is the oil glut just about oil?

My favorite Texas oilman Jeffrey Brown is at it again. In a recent email he's pointing out to everyone who will listen that the supposed oversupply of crude oil isn't quite what it seems. Yes, there is a large overhang of excess oil in the market. But how much of that oversupply is honest-to-god oil and how much is so-called lease condensate which gets carelessly lumped in with crude oil? And, why is this important to understanding the true state of world oil supplies?

In order to answer these questions we need to get some preliminaries out of the way.

Lease condensate consists of very light hydrocarbons which condense from gaseous into liquid form when they leave the high pressure of oil reservoirs and exit through the top of an oil well. This condensate is less dense than oil and can interfere with optimal refining if too much is mixed with actual crude oil. The oil industry's own engineers classify oil as hydrocarbons having an API gravity of less than 45--the higher the number, the lower the density and the "lighter" the substance. Lease condensate is defined as hydrocarbons having an API gravity between 45 and 70. (For a good discussion about condensates and their place in the marketplace, read "Neither Fish nor Fowl – Condensates Muscle in on NGL and Crude Markets.")

Refiners are already complaining that so-called "blended crudes" contain too much lease condensate, and they are seeking out better crudes straight from the wellhead. Brown has dubbed all of this the great condensate con.

Brown points out that U.S. net crude oil imports for December 2015 grew from the previous December, according to the U.S. Energy Information Administration (EIA), the statistical arm of the U.S. Department of Energy. U.S. statistics for crude oil imports include condensate, but don't break out condensate separately. Brown believes that with America already awash in condensate, almost all of those imports must have been crude oil proper.

Brown asks, "Why would refiners continue to import large--and increasing--volumes of actual crude oil, if they didn’t have to--even as we saw a huge build in [U.S.] C+C [crude oil plus condensate] inventories?"

Part of the answer is that U.S. production of crude oil has been declining since mid-2015. But another part of the answer is that what the EIA calls crude oil is actually crude plus lease condensate. With huge new amounts of lease condensate coming from America's condensate-rich tight oil fields--the ones tapped by hydraulic fracturing or fracking--the United States isn't producing quite as much actual crude oil as the raw numbers would lead us to believe. This EIA chart breaking down the API gravity of U.S. crude production supports this view.

Exactly how much of America's and the world's presumed crude oil production is actually condensate remains a mystery. The data just aren't sufficient to separate condensate production from crude oil in most instances.

Brown explains: "My premise is that U.S. (and probably global) refiners hit in late 2014 the upper limit of the volume of condensate that they could process" and still maintain the product mix they want to produce. That would imply that condensate inventories have been building faster than crude inventories and that the condensate is looking for an outlet.

That outlet has been in blended crudes, that is heavier crude oil that is blended with condensates to make it lighter and therefore something that fits the definition of light crude. Light crude is generally easier to refine and thus more valuable.

Trouble is, the blends lack the characteristics of nonblended crudes of comparable density (that is, the same API gravity), and refiners are discovering to their chagrin that the mix of products they can get out of blended crudes isn't what they expect.

So, now we can try to answer our questions. Brown believes that worldwide production of condensate "accounts for virtually all of the post-2005 increase in C+C [crude plus condensate] production." What this implies is that almost all of the 4 million-barrel-per-day increase in world "oil" production from 2005 through 2014 may actually be lease condensate. And that would mean crude oil production proper has been nearly flat during this period--a conjecture supported by record and near record average daily prices for crude oil from 2011 through 2014. Only when demand softened in late 2014 did prices begin to drop.

Here it is worth mentioning that when oil companies talk about the price of oil, they are referring to the price quoted on popular futures exchanges--prices which reflect only the price of crude oil itself. The exchanges do not allow other products such as condensates to be mixed with the oil that is delivered to holders of exchange contracts. But when oil companies (and governments) talk about oil supply, they include all sorts of things that cannot be sold as oil on the world market including biofuels, refinery gains and natural gas plant liquids as well as lease condensate. Which leads to a simple rule coined by Brown: If what you're selling cannot be sold on the world market as crude oil, then it's not crude oil.

The glut that developed in 2015 may ultimately be tied to some increases in actual, honest-to-god crude oil production. The accepted story from 2005 through 2014 has been that crude oil production has been growing, albeit at a significantly slower rate than the previous nine-year period--15.7 percent from 1996 through 2005 versus 5.4 percent from 2005 through 2014 according to the EIA. If Brown is right, we have all been victims of the great condensate con which has lulled the world into a sense of complacency with regard to actual oil supplies--supplies he believes have been barely growing or stagnant since 2005.

"Oil traders are acting on fundamentally flawed data," Brown told me by phone. Often a contrarian, Brown added: "The time to invest is when there's blood in the streets. And, there's blood in the streets."

He explained: "Who of us in January of 2014 believed that prices would be below $30 in January of 2016? If the conventional wisdom was wrong in 2014, maybe it's similarly wrong in 2016" that prices will remain low for a long time.

Brown points out that it took trillions of dollars of investment from 2005 through today just to maintain what he believes is almost flat production in oil. With oil companies slashing exploration budgets in the face of low oil prices and production declining at an estimated 4.5 and 6.7 percent per year for existing wells worldwide, a recovery in oil demand might push oil prices much higher very quickly.

That possibility is being obscured by the supposed rise in crude oil production in recent years that may just turn out to be an artifact of the great condensate con.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.

Sunday, January 10, 2016

No post this week

Circumstances have conspired to prevent me from writing a post this week. I should be back next week Sunday, January 17.

Sunday, January 03, 2016

Taking a short break--no post this week

I'm taking a short break and expect to post again on Sunday, January 10.

Sunday, December 27, 2015

Five energy surprises for 2016: The possible and the improbable

Many energy analysts like to make predictions at the end of the year for the coming year. Instead, I'll point to five possible surprises in energy--surprises because few people expect them to happen. I am not predicting that any of the following will happen, only that there is an outside chance that one or more will occur. Naturally, these surprises would move markets and policy debates in unexpected directions.

1. Crude oil ends 2016 below $30 per barrel. With oil hovering in the mid-$30 range it doesn't seem implausible that at some point in the not-to-distant future, crude oil will dip below $30 per barrel, if only briefly. What would surprise most people is if the crude oil price finished next year below $30 per barrel. The conventional wisdom is that cheap oil is giving a boost to the economy that will lift worldwide economic growth and thus demand for oil. There is also a belief that high-cost producers will simply have to stop drilling new money-losing wells after more than a year of financial Armageddon in the oil markets. This will bring down supply just as economic growth is rising, sending prices much higher as the year progresses.

The alternate view is that oil in the mid-$30 range is a reflection of an economy that has been weakening since the middle of 2014 and foreshadows a worldwide recession which should hit in full force by the end of 2016. In addition, with Iran almost certain to add to the current oversupply as sanctions are lifted and with the continued determination of OPEC to destroy the viability of tight oil deposits in the United States, the oil price could surprise on the downside, even testing $20 per barrel.

2. U.S. natural gas production declines. Despite persistent low U.S. natural gas prices, U.S. production has continued to grow. Most of the growth has been coming from two places: the Marcellus Shale where ample deposits continued to be economical in the range of $3 to $4 per thousand cubic feet (mcf) and Texas where furious fracking for oil locked in deep shale deposits also produced associated natural gas without concern for the price of that gas.

With oil drilling across the United States in precipitous decline because of low oil prices, we won't see nearly as much new natural gas associated with oil drilling as we saw in 2014 and 2015. With natural gas now hovering around $2, even the very sweetest of the sweet spots in the Marcellus are unlikely to be profitable to exploit.

Having said all this, U.S. natural gas production growth has continually defied predictions that it would dip in the face of low prices. Part of this had to do with desperate drillers carrying heavy debt loads who had to produce gas at any price in order to pay interest on that debt.

3. Several approved U.S. liquefied natural gas (LNG) export projects are postponed or abandoned. One of the memes of the so-called shale gas revolution was that the United States would produce far more natural gas than it consumes and that that would open the way for liquefied natural gas exports to other energy-hungry countries. Two things went wrong. First, U.S. production, while growing, has not exceeded U.S. consumption. Despite the highest natural gas production in history, the United States had net imports of natural gas of about 3 percent of its consumption so far this year.

Second, with the price of landed LNG around the world between $6 and $7, LNG exports from the United States are currently uncompetitive. Even with U.S. natural gas at $2, when the cost of liquefying and transporting gas--about $6 per mcf--is added to the American price, landed LNG prices would have to rise to about $8 just for American suppliers to break even. And, of course, just breaking even is not a proposition investors are very much interested in.

Now, some of the export projects have already undoubtedly received commitments from buyers to take U.S. LNG under long-term contracts, usually priced at Henry Hub plus a certain amount for liquefying and transporting the gas (plus something to reward investors, of course). If those contracts are in place, then the builders of the LNG export projects don't care what U.S. prices are. They make money no matter what. And, it doesn't matter whether they export so much LNG that the United States is forced to IMPORT more from Canada via pipelines or possibly in the form on LNG itself.

Whether buyers make out under such an arrangement will all depend on how world spot LNG prices unfold over the next couple of decades. Undoubtedly, many of those with long-term contracts today would be better off buying in the spot market. But, of course, when prices are high, they have no protection.

What we'll find out this year is which projects have contracts from buyers and which do not. The ones that do not yet have such contracts will almost certainly be postponed or abandoned. For those that proceed, investors who are not careful to understand how much of the capacity of the project has been taken up by long-term contracts and how much will be sold on the spot market may be in for rude surprises if they are too exposed to the spot market and that market remains soft.

4. Bipartisan support for climate change measures emerges in the U.S. Congress. You will certainly think I'm reaching here, and it would be a surprise if this does happen. But expectations for the recent climate conference in Paris were extremely low. And yet, world leaders hammered out an agreement that committed the parties to emissions limits with regular reviews. True, there is no enforcement mechanism. But even so, this result was better than most anticipated.

The same could go for a U.S. Congress stalemated on the climate issue. Even though the Republican majority has taken the view that regardless of the science, Republicans are better off opposing any measure to address climate change, not all Republicans have taken this extreme position. If enough of them peel off and join Democrats on even a small measure, it will mark progress--though it will certainly be a surprise coming in an election year.

5. World oil production declines. In the past world oil production has declined only during recessions or once in the early 1980s following a long period of rising prices and the most severe recession since World War II (that is, until 2008). We've had a long period of price rises from 2000 onward, followed by a severe recession. But production continues to eke out some growth.

According to figures from the U.S Energy Information Administration, worldwide production of crude oil including lease condensate (which is the definition of oil) grew by 15.7 percent in the nine-year period leading up to 2005. In the nine-year period from 2005 to 2014, production grew only 5.3 percent despite record prices and investment.

If worldwide production declines, it will almost surely be because drillers simply lay down even more rigs and companies delay development of tar sands mining projects in Canada to wait for higher prices. This restraint would have to counterbalance additions to world production expected from Iran which will have sanctions lifted in 2016 allowing it to increase its oil production and exports substantially. If peace breaks out in Libya, then the rise in Libyan oil production will probably prevent an overall decline in world production.

Recap of 2015's list of possible surprises

1. U.S. crude oil and natural gas production decline for the first time since 2008 and 2005, respectively. While U.S. crude oil production in 2015 looks like it will exceed total production in 2014, production began to slide in June this year and continues downward. So, there was a surprise for those who thought the so-called shale revolution could go on without high prices. Natural gas production continued to rise so there was no surprise there.

2. World crude oil closes below $30 per barrel. This hasn't happened yet and probably won't with only a few days left in 2015. But a price in the mid-$30 range has certainly surprised a lot of people, especially those who were touting the midyear recovery of prices to around $60 as the beginning a new oil bull market. So, this did come as a surprise, but not quite (yet) the $30-per-barrel variety.

3. Developments in solar thermal energy show that it can solve the storage problem for electricity from renewable energy. Perhaps the biggest obstacle to broader use of electricity generated by renewable energy is the high cost of storing that energy for use when people need it. A Maryland inventor is still trying to put together funding for a prototype of a possibly revolutionary solar thermal capture device that he claims has 90 percent efficiency. There's no prototype yet. Perhaps in the coming year we'll find out whether the claim can be confirmed. So, no surprise here yet.

4. A climate agreement in Paris calls for binding greenhouse gas emissions limits. Okay, the greenhouse gas limits weren't binding. And, of course, that's not a surprise. What surprised me is how unanimous the world's leaders were about the problem of climate change and how specific they were about limits in the agreement.

5. Oil prices reach $100 per barrel before December 31, 2015. This possible surprise was premised on a robust world economy and an OPEC relenting on its war on frackers in America and tar sands in Canada. The OPEC war continues, and the world economy seems weaker at year-end than when it began.

Kurt Cobb is an author, speaker, and columnist focusing on energy and the environment. He is a regular contributor to the Energy Voices section of The Christian Science Monitor and author of the peak-oil-themed novel Prelude. In addition, he has written columns for the Paris-based science news site Scitizen, and his work has been featured on Energy Bulletin (now Resilience.org), The Oil Drum, OilPrice.com, Econ Matters, Peak Oil Review, 321energy, Common Dreams, Le Monde Diplomatique and many other sites. He maintains a blog called Resource Insights and can be contacted at kurtcobb2001@yahoo.com.