Rank the Top 10 Oil Stories of 2008

As I recover from a backlog of work, one of the stories I plan to write is a post covering the top energy stories of 2008. Around that theme, Platts just put up a request for reader input on the top oil industry stories of 2008. Their poll runs until Christmas:

Rank the top 10 oil industry stories of 2008

Below is the way I would rank the Top 10. I had an easy time ranking the top five, but then it was more difficult to sort them out.

My top 10 oil industry stories of 2008:

  1. Crude prices soar in 1H, WTI tops $147, Brent right behind
  2. Prices collapse below $50 in 2H as demand retreats
  3. Ethanol’s struggles: VeraSun bankruptcy, others barely profitable, spreads collapse
  4. Push begins to lift offshore drilling ban in US; Obama and McCain differ on approach
  5. Capital crunch and low prices lead to deferred investment
  6. Shale gas supply in US surges, a new factor in supply/demand balance
  7. Credit crunch slows activity for once free-wheeling traders
  8. Diesel surges, gasoline/naphtha plunge; traditional cracks skewed
  9. Russian oil output to fall in 2008, first time in a decade
  10. Brazil subsalt finds continue to lift nation’s upstream prospects

A couple of options that weren’t on the list (I placed them in the suggestion box) were:

  • Peak oil becomes fashionable, then unfashionable again
  • Obama elected; potential major impact on energy policy
  • Feel free to share your own input. What other stories do you consider to be Top 10 material (not limited to the oil industry)?

    18 thoughts on “Rank the Top 10 Oil Stories of 2008”

    1. Robert – your top picks seem to be oil and biofuels centric. Here are a couple of suggestions to round out the top 10:

      + Boone Pickens launches the “Pickens Plan” for energy independence, then withdraws the plan.

      + DOE cancels FutureGen

      + More Power plant permits denied over CO2 issues (Georgia, Utah)

      + Somali pirates hijack supertanker, hold for ransom

      + Record 3rd Qtr profits recorded by US energy companies

      + Avalanche cuts Juneau, AK main electric line, forces drastic conservation.

      It might also be fun to post our predictions for the top 10 energy stories of 2009.

    2. “your top picks seem to be oil and biofuels centric.”


      That’s no doubt why he titled his blog, “Rank the Top 10 Oil Stories of 2008″

    3. King, as Doug alluded to, my Top 10 was directly from the categories Platts had put out there for oil stories. My own Top 10 will be all energy stories, so feel free to add those kinds of things here. The hijacking is definitely one that didn’t spring to mind, and should have been on Platts list.

      I like your idea about predictions for 2009. Do you have some you want to throw out there?

      Cheers, Robert

    4. Yeah, I have a correx: Oil goes below $40 (not $50 as RR says) in second half, and that is by far the biggest story of 2008.

      It is trading at $38 right now Brent spot market.
      Sheesh, this thing may go below $30 by yearend, and Merrill Lynch says maybe $25 by next year. I say $10.

      Guys, the oil story is deader than my dreams of playing for the Los Angeles Dodgers, and I am over 50 years old. Dead, dudes. Jimmy Hoffa dead.

      This will years in recovery. Maybe 10 years, maybe more.

      I hope I am wrong, and we have a rapid global economic recovery. But right now and “L-shaped” recession looks possible.

      If you can buy that Hummer dealership, you might want to buy it now cheap.

    5. “It might also be fun to post our predictions for the top 10 energy stories of 2009.”

      I question whether it will be fun, but I predict that some terrorist group will test BHO causing a sharp spike in oil prices.

      That attack will be to blow up a supertanker, or to do serious damage to the Saudi oil distribution and processing system.

    6. Doug N.-
      The bad guys already seized a supertanker. Been there, done that. They have the tanker right now. Oil collapsed afterwards.
      The tanker’s load is depreciating rapidly in value. The Saudis don’t seem to give a poop whether they ever get it back. Maybe it was insured for more than what it is worth now.
      By the time the Saudis get the tanker free, nobody will want the oil at all — where to store it? The bad guys ar estoring it for free. Good deal. Leave it there until 2015, when it might have a market.
      There is a honking global glut to the moon of oil. It will get worse and worse and worse through 2009-10. Some little punk terrorists can do nothing about it. Even OPEC can do nothing. Even $10 oil won’t dent it.
      The Mother Of All Gluts.
      After the last spike (1979) it was 29 years until oil prices hit that peak again (2008). And then, only for the blink of an eye.
      Maybe it will be 29 years until we see $147 again.

    7. I should have read more closely. We’ve been grilled not to think of just oil but more broadly about energy, so maybe I was skipping over it.

      I’d add one 2008 oil story:

      + Retail stations in Tennessee and Georgia run out of gasoline.

      Pickens withdrew his advertising campaign – the plan may still be on life support though. Pickens lost his ballot proposal in California. That also might make a good top ten energy story of 2008:

      + Voters reject alternative energy proposals in several states.

      Ask the people of Matoon, IL – they will tell you that FutureGen got cancelled. So far DOE hasn’t had many takers on the restructured program.

      As for my predictions for 2009:

      + WTI on NYMEX hits the low $30’s.

      + Retail gasoline at the pump will sell below $1 somewhere (my guess is Tulsa, OK) in the US.

      + A US refinery temporarily shuts down because of negative refining margins

      + A US and European major international oil company merge to reduce costs and improve profitability

      + Oil rebounds by year end 2009 to $60

    8. Thought-provoking question, RR. It can be hard to recognize the significance of events as they happen — for example, is the 2008 spike & collapse in oil price the beginning of Benny's 30 year glut, or simply larger-than-normal volatility? Time will tell.

      Two possible events in the broader field of energy that might have longer-term impact:

      First, Bussard fusion continued to make progress below the radar of politicians & pundits, with support from the US Navy. Within a few years, we may have the solution to the world's long term energy supply. Maybe!

      Second, 2008 may have marked the high water of the eco-nut anthropogenic global warming movement. The world is getting colder, both literally and metaphorically. Hard to argue for increasing costs & unemployment by taxing & regulating fossil fuels during a recession, especially when temperature data clearly shows a decline.

    9. Kinu-
      The AGW argument is fascinating. But I think even if CO2 is warming things up, we better be very careful about cooling things down.
      Most people do not seem to realize that lately (as in the last few million years) Ice Ages have been the norm. Indeed, when man came to North America, the sea level was 60 meters (!) lower than today. Now we waa-waa about 2 feet by 2100.
      As recently as 10,000 years ago, the Mojave Desert had large lakes in it! I have found glaciated rock in the Mojave, although the experts say glaciers never got that far south. Well, ice was thick and heavy enough to smooth rock, I have seen it myself.
      I would rather take a few degrees up, than have another Ice Age.
      Maybe we better hope that Bussard doesn’t get anywhere, so that the coal-fired plants can keep us toasty.
      Why do you say temps are declining (a worrisome sign)?

    10. KoK, yeah, it does seem like the Pickens plan and FutureGen are on life support, maybe as good as dead, but could linger on in a coma for decades.

    11. “Even OPEC can do nothing. Even $10 oil won’t dent it.
      The Mother Of All Gluts.”

      It’s being dented already Benny. Do you know how many oil sands projects have been cancelled or put on hold in the last few months? What happens when oil drops below production costs and 2M barrels a day of tar sands isn’t worth processing anymore? We’re close to that point now. There won’t be any deepwater drilling at these prices either. Not with costs approaching $90 per barrel. No,this glut won’t last long Benny. Production costs are much higher than they were 20 years ago.

    12. Maury-
      Yes, in time the cycle will begin again. But, if demand falls 10 percent, and recovers slowly (a not unlikely scenario), we will have gluts for years.
      Maury, we could see 9 mbd taken off the table in demand, and perhaps 2-3 of fresh net mbd come onstream (already in the pipeline).
      $10 won’t last, anymore than $147 can last.
      The global recession looks ugly. There seems no refuge — not Asia, Europe, South America, North America. Not manufacturing, retailing, construction, real estate, and now even the oil business is cranked.
      Meanwhile, what if Iraq settles down, and Iran makes nice. They have cheap oil a-plenty.
      You know, one thing people never address: We are seeing this Mother Of All Gluts now, despite: 1)Venezuela being run by a lunatic 2) Mexico rotting away, not maintaining it fields 3) Iraq in a mess 4) Iran in a mess 5) Nigeria in a mess 6) KSA cutting production 7) Libya just getting back in the game 8) ANWR off limits 9) Russia run like a backward fiefdom
      On the demand side, we are seeing the glut despite 1) PHEVs just getting commercialized now 2) much of th world subsidizing oil consumption (Mideast, China, and most oil-producing states. 3) Many palm oil plantations nearing maturity
      This glut could last for years.

    13. “The bad guys already seized a supertanker. Been there, done that.”


      I said “blow up” a super tanker, not seize one. We haven’t “been there, done that.” There is a huge psychological difference between Somali pirates holding a tanker for ransom, and a terrorist group blowing up tankers and threatening to shut down the seaborne oil pipeline.

      That’s always what terrorists are after ~ the psychological effect.

    14. First, Bussard fusion continued to make progress below the radar of politicians & pundits, with support from the US Navy

      I was under the impression that the State of California (under the Governator) had thrown some money in that pot, too. I know there are a lot of long shots out there but that’s one I’m really keeping an eye on.

    15. OK, nevermind. I just went back and tried to find a reference for the state of CA picking up funding for Dr. Bussard’s work and couldn’t find any.

      Wishful thinking on my part, maybe. I just hope the guy didn’t take any key pieces of the puzzle to his grave, a la Fermat.

    16. Here’s a new Top 10 Story:
      EIA predicts global oil demand to fall in 2008, first time in quarter century

      Details are at:

      The drop in US oil consumption is sending greenhouse gas emissions down ~2.5% in ’08, and even China emissions are falling this quarter as electricity consumption falls a record in November. See details at: http://setenergy.org/2008/12/05/china-power-generation-falls-record-amount-climate-hope-alive/

      The real challenge will be how we continue emissions reduction once the economy picks up again. Here’s my hope for 2009: http://setenergy.org/2008/12/07/obama-co-make-2009-year-of-efficiency/

      If you find the SET daily blog on major energy and climate developments useful at http://www.setenergy.org , please consider adding it to your blogroll.

      Onwards to sustainability,

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