With 2016 having been one of the most eventful and interesting years for the U.S. domestic oil and natural gas industry in recent memory, 2017 is shaping up to possibly exceed its predecessor on both counts.

The energy world has always been far easier to write about in hindsight than to try to project into the future. In recent years, we’ve seen even some of the industry’s most astute observers end up being spectacularly wrong in their projections: Witness the late Matt Simmons’ long flirtation with “Peak Oil” theory and his assertions the Saudis were about to run out of oil of a decade ago, and the prediction by T. Boone Pickens of $70 oil by the end of 2015 to name just a couple.

Yes, making projections about what will happen in the oil and gas space in the future is most often a fool’s errand, and I figure I’m just the fool to do it.  So here we go with some predictions about what 2017 will hold for the U.S. oil and gas industry:

OPEC members will cheat on their production quotas  – If we know one enduring characteristic about the Organization of Petroleum Exporting Countries (OPEC), it is that it has always had a problem holding its member countries to their agreed-to production levels.  We should expect this most recent deal, finalized in December, to be no different.  So, while the agreement will likely help to dry up the excess supply which currently exists on the global market, achieving an ultimate balance between supply and demand will not be an easy task to achieve.

President-elect Donald Trump’s efforts to normalize relations with Russia could impact the market the incoming President has made no secret of his desire to seek a more healthy relationship with

A picture taken on June 21, 2013 shows President Vladimir Putin (L) and ExxonMobil Chairman and CEO Rex W Tillerson at a ceremony to present awards to the heads and employees of major energy companies in Saint Petersburg.  (Photo credit: MICHAEL KLIMENTYEV/AFP/Getty Images)

Russia and Vladimir Putin, and his selection of ExxonMobil CEO Rex Tillerson to be his Secretary of State is a clear signal that this will be a major priority of his foreign policy.  A normalization of relations between the U.S. and Russia would likely involve a lessening of U.S. economic sanctions implemented by the Obama Administration, and that in turn could incentivize Russia to produce more oil.  With the initial term of its deal to limit output with OPEC being six months, we should expect higher exports from Russia during the second half of 2017.

Regulatory relief from the Trump Administration will prove more difficult to achieve than many think make no mistake, the President-elect will have some significant low-hanging

FILE – In this Nov. 19, 2014 file photo, EPA Administrator Gina McCarthy speaks in Washington. The Obama administration issued new rules Wednesday to protect the nation’s drinking water and clarify which smaller streams, tributaries and wetlands are covered by anti-pollution and development provisions of the Clean Water Act. McCarthy said the rule will only affect waters that have a “direct and significant” connection to larger bodies of water downstream that are already protected. (AP Photo/Manuel Balce Ceneta, File)

fruit in this area to quickly dispose of upon taking office.  But that will mostly consist of regulations, like the EPA’s massive Waters of the United States regulation, that have not yet gone into effect, either due to court decisions or not having yet been finalized.  Elimination of regulations already on the books will be more difficult to achieve, and involve the expending of a good deal of political capital.  There is a good reason why the Congressional Review Act has only achieved modest success in rolling back regulations in the past.

Companies will benefit from a return to normal order – But the new administration will bring some relief on the regulatory front, and along with it something even more important:  a return to normal order.  The Obama Administration caused great harm to the nation’s energy sector by robbing it of any semblance of stability and predictability about how it would be regulated at the federal level.  I recently chronicled the decision by the Secretary of Interior to hold back promised permits to drill related to EnerVest’s operations in Utah, a move that the company estimates will cost it $46 million.  This sort of rule by fiat rather than adherence to the rule of law has been quite common in the Obama years, and the resulting lack of predictability has made it impossible for many companies to properly plan their business. The most important thing the Trump Administration can do to help the oil and gas industry is to bring a return to normal order and respect for the rule of law to the Departments of Interior and Energy, and to the EPA.

Domestic producers will drill themselves back into a lower price situation try as they might to maintain a price for oil in the $55/bbl range, OPEC and Russia can’t control the way U.S. producers will react to this higher price paradigm.  Nor can anyone else, for that matter.  We should expect U.S.

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