Oil price will rise in 2015 and there will be no UK shale gas revolution, says Cebr Energy
This year has been a roller coaster for the world of energy. The American shale gas revolution led to falling prices and reshoring of industry while the price oil has plunged below $60 per barrel.
The fall in the price of oil has been cheered by industry and consumers while countries such as Russia and Venezuela have been on the sharp end of the price decline, suffering a massive fall in revenues.
The predictions of the Scottish National Party that an independent Scotland would reap a huge oil dividend lie in tatters and those who predicted a couple of years ago that we had reached peak oil, once again have egg on their face.
Looking ahead to 2015, energy consultancy Cebr Energy has laid out a series of predictions for the year ahead in energy. First off, the dramatic fall in oil prices experienced over the last few months will not continue and the oil price will bounce back, the organisation believes.
However, Cebr adds the caveat that "this will be limited because of the substantial over-supply against weak demand, unless the Saudis are forced under pressure to make a major cut in output".
Unfortunately for the UK, 2015 will not be the year it replicates the US shale gas revolution in any significant way. In 2014, very few wells were drilled and this is expected to continue next year. Natural gas prices are expected to slide and the organisation believes nuclear power will return to Japan.
Returning to Scotland, North Sea oil will decline further and "decommissioning will be the new business in Scotland". After the general election, Whitehall will be in for a major shakeup as the government looks for fresh efficiency savings. Cebr Energy believes one of these will be to merge the Department of Energy and Climate Change with the Department for Business Innovation and Skills. This could result in a major conflict over the future of climate change policy.