BERLIN, Dec. 30 (UPI) -- Record high oil prices and the lowest in four years, separated by just six months -- volatile oil and gas prices shocked Europe in 2008.
When oil prices in the summer of 2008 raced to nearly $150 a barrel, consumers in Germany were handed a severe blow at the gas stations: After a 21-percent increase in just over a year, a liter of unleaded gas in Berlin cost as much as 1.55 euros -- or $9.20 for one gallon of gas.
The high oil price threatened the energy-heavy German economy, which banks on exports of machinery, cars and engineering products. It also caused politicians to debate the role of speculators in pricing.
Because of the high prices, voices heralding the end of the Oil Age grew louder; 2008 became the first year that saw the peak oil theory discussed by the International Energy Agency and mainstream energy think tanks.
As oil and gas became more expensive, 2008 saw several major energy companies invest in clean coal technology.
In eastern Germany, Vattenfall in September unveiled the world's first coal-fired carbon sequestration and storage plant -- a project the industry hopes to become a breakthrough for climate protection.
The $100 million, 30 MW test plant captures the carbon dioxide emitted during the electricity generation process to liquefy it for temporary storage in tanks and eventually permanent storage in secure crates underground. The plant at Schwarze Pumpe is the world's most advanced CCS project to date. Over the next five years Vattenfall intends to test and improve CCS in order to build larger plants in the future.
But then, after some months of pressure, oil prices fell again, to below $40 by the end of the year. Experts said falling demand because of the financial crisis was the main reason behind the dramatic fall.
This volatility sowed uncertainty with major oil and gas producers, including OPEC and Russia. Both energy powers in 2008 made initial attempts to link themselves more closely to have greater influence on world prices, but analysts are unsure whether OPEC really wants to invite Russia into its club.
While Russia trails behind the likes of Saudi Arabia when it comes to oil, it leads the pack with its natural gas reserves.
Europe's dependence on Russian gas deliveries only increased in 2008, when Moscow and two German companies fired the opening shot for a major gas pipeline to be built under the Baltic Sea, directly linking Western Siberia's vast gas fields to Germany.
Yet because of the financial crisis, Russia is now considering scrapping the project called Nord Stream -- a catastrophe for all parties involved. Besides Gazprom, Germany's BASF and Eon Ruhrgas hold 25 percent each in the controversial project, which experts say could cost anywhere between $7 billion and $12 billion to build.
Europe may not be able to live without Russian gas for a while, but Brussels in 2008 paved the way for its very own energy transformation. The European Union early this year agreed on ambitious climate protection and renewable energy targets but later watered them down because of the financial crisis.
Brussels held on to its goal of cutting greenhouse gases by 20 percent, boosting the share of renewables in the energy mix to 20 percent and reducing energy consumption by 20 percent -- all by 2020. It also preserved a pledge that it would shoot for a 30-percent emissions cut if the world's other big polluters agree to their own binding reductions at the end of the U.N. process, at a summit to be held in Copenhagen, Denmark, at the end of 2009.
But individual parts of the body's Energy and Climate package had to be changed to accommodate the wishes of Germany, Europe's largest economy, as well as Poland and Italy, which both had threatened to veto the deal if their demands were ignored. These countries said their economies would suffer in competition with rivals from countries that haven't signed up for a binding climate deal.
Exactly such a deal was discussed in December at a U.N. climate summit in the western Polish city of Poznan, where world leaders agreed on a roadmap to find an ambitious successor by December 2009 to the Kyoto Protocol, which runs out in 2012.
The next year is key for the global climate, and observers in Europe are hopeful that U.S. President-elect Barack Obama can turbocharge the tedious negotiations to find a climate deal that can truly cool the world.