As 2018 comes to a close, it’s time to review the top energy stories of the year. This year there wasn’t an overwhelming choice for the top story as we have had in some previous years (e.g., the Deepwater Horizon spill), but many of the year’s biggest developments impacted oil prices.

Here are my picks for the stories that shaped the year in energy.

Oil price roller coaster

The price of West Texas Intermediate (WTI) opened the year at $60/bbl. Brent crude was just under $67/bbl. By early October, on the back of several developments that are covered in other stories below, WTI was closing in on $80/bbl and Brent was above $86/bbl. But then prices collapsed in part because the ongoing trade war with China caused them to stop importing U.S. oil, and in part because sanctions on Iranian exports were waived at the last moment — after Saudi Arabia had already increased production to compensate for Iran’s lost exports. The overall impact was a collapse in the price of oil. As we head into the last week of the year, WTI has fallen to $45/bbl and Brent crude is at $54/bbl.

U.S. shatters oil production record

Early in 2018, the Energy Information Administration (EIA) announced that the previous monthly record for U.S. crude oil production – 10.044 million BPD set in November 1970 — had been broken. U.S. oil production would continue to rise steadily throughout 2018, reaching 11.475 million BPD by September 2018 (the last month for which monthly numbers are available).

China slows solar program

China’s solar industry has been growing at a blistering pace in recent years, but it suffered a pair of setbacks this year. First, President Trump announced a 30% tariff on imported solar equipment for at least the next four years. Following that, the Chinese government announced that it would cut subsidies for renewable energy. China’s solar sector slumped on the news, which led to a slump in the global growth rate of solar power in 2018.

As its economy sunk deeper into crisis, Venezuela’s oil production continued to plummet. By November it had fallen to 1.137 million bpd — a decline of nearly 50% since 2016. Continued declines will threaten Venezuela’s status as a crude oil exporter, putting further pressure on the country’s economy. To make matters worse, ConocoPhillips won a $2 billion arbitration against Venezuela’s state oil company over the 2007 expropriation of two oil projects in Venezuela. Reuters reported that ConocoPhillips seized some of Venezuela’s Caribbean assets as payment for this debt.

Pruitt departs; ethanol industry celebrates

Environmental Protection Agency (EPA) administrator Scott Pruitt was a thorn in the side of the U.S. ethanol industry. He had opposed the country’s Renewable Fuel Standard (RFS) as Oklahoma’s Attorney General, and he seemed focused on weakening the program as EPA Administrator. Shares of most ethanol producers rose following the news of his resignation, and not long after his replacement had been named President Trump announced an end to restrictions on the year-round sale of fuel blends containing 15% ethanol (E15).

New carbon dioxide emissions record

When the 2018 BP Statistical Review of World Energy was released in June, it showed a new all-time high for global carbon dioxide emissions in 2017, which were 426 million metric tons higher than in 2016. This was 1.6% higher than the previous year and was higher than the 10-year average growth rate of 1.3%. China was the world’s top carbon dioxide emitter, with Chinese emissions totaling more those of the U.S. and the European Union combined.

OPEC raises then cuts production

Following OPEC’s 174th (Ordinary) Meeting in June, the cartel announced, in agreement with Russia, that it would increase production for the first time since implementing production cuts in November 2016. This news was a response to oil prices that had recovered back to the $70/bbl range. But a trade war between the U.S. and China began to raise concerns about demand growth. Then in December, following the oil price collapse in the fall — which was aided by Saudi Arabia accommodating President Trump’s request that they increase production — OPEC and its allies agreed to cut oil production by 1.2 BPD.

Permian Basin resource doubled; U.S. oil and gas proved reserves set a record

In December, the U.S. Geological Survey (USGS) revised the technically recoverable resource in the Wolfcamp formation in the Permian Basin to 46.3 billion barrels of crude oil and 281 trillion cubic feet of natural gas. The new estimate more than doubled the amount of estimated recoverable crude and increased the amount of recoverable natural gas by a factor of more than 17. The new assessment included the Bone Spring formation for the first time. The EIA also announced that proved reserves (a more restrictive category than “recoverable resource”) of crude oil in the U.S. increased 19.5% to 39.2 billion barrels, setting a new U.S. record for crude oil proved reserves. The EIA also announced a new record for proved reserves of U.S. natural gas.

Natural gas prices break out

After spending the past four years almost exclusively below $3 per million British thermal units (MMBtu), I warned in August that low inventories could cause prices to spike. Indeed, over the next three months, natural gas futures rose by 60% and set a monthly average above $4/MMBtu for the first time since 2014.

IMO 2020

The International Marine Organization (IMO) actually announced in 2016 that it would limit sulfur content in all marine fuels from the current 3.5% to 0.5% by 2020. But this year that issue entered the mainstream as concerns arose that there won’t be sufficient supplies available in time to meet demand. As I noted in an article earlier this year, the last time a major rule limited sulfur was implemented, it had a big impact on diesel prices.