Energy Independence Not Attainable Until 2030 or Beyond, Says KPMG Survey of Oil and Gas Executives

4 May 2009 13:51 Africa/Lagos

Energy Independence Not Attainable Until 2030 or Beyond, Says KPMG Survey of Oil and Gas Executives

Execs say mass production of alternative energy not possible by 2015; Over half now believe in global warming, but still don't support cap-and-trade or carbon tax

HOUSTON, May 4 /PRNewswire/ -- More than three-quarters of oil and gas executives surveyed by KPMG LLP's Global Energy Institute say that energy independence is not attainable until 2030 or beyond, despite the emphasis on alternative energy sources in current and proposed government energy policies. The executives also said mass production of alternative energy is not viable in the short term. While there is a marked shift upward in the number of executives who acknowledge that global warming is occurring, the vast majority still don't support proposed regulations to stem CO2 emissions.

The KPMG Global Energy Institute survey polled 382 financial executives from oil and gas companies in April 2009. A total of 63 percent of respondents believe energy independence will not be attainable until after 2030; sixteen percent say it can happen by 2030, while nine percent deem it possible before 2020.

"Despite the increased focus on domestic energy sources, energy infrastructure, and alternative energy sources, a realistic assessment of technology and investment in the industry suggests energy independence is not realistic for at least two decades," said Bill Kimble, executive director of the KPMG Global Energy Institute. "The executives' perceptions of energy independence mirror their views on the viability of alternatives in the near-term as well."

Executives expect alternative and renewable energy sources to receive the most focus in President Obama's energy policy, the KPMG survey found. However, 52 percent said it will not be viable to mass produce any alternative energy sources by 2015, compared to 54 percent last year and 60 percent two years ago.

Winners and Losers in the New Energy Policy

Although executives did not think alternative energy sources were immediately viable, they did have clear opinions on which ones would benefit most from the Obama administration's energy policy. Thirty-five percent of respondents said that wind energy would be the biggest winner as a result of Obama's policy, followed by 18 percent for natural gas and 17 percent for biofuels. Conversely, 42 percent of executives see coal as the biggest loser while 36 percent say oil.

"These results clearly show the momentum wind energy has gained as a clean energy solution," said Kimble. "But 93 percent of our respondents see wind generation growing to only six percent of our energy generation by 2015 and only 17 percent say wind energy is viable for mass production by that year."

Marked Shift: More than Half Now Acknowledge Human Impact on Global Warming

When asked which areas in the Obama administration's energy policy would receive the most focus after alternative energy, executives cited greenhouse gas emissions and cap-and-trade. And, though the EPA recently pointed to CO2 emissions from burning fossil fuels as the main cause of global warming, nearly half (47 percent) of executives still believe that global warming, is a natural weather cycle, although this number is down from 62 percent in 2008.

"Our data shows a noted swing in executive perceptions on the issue of greenhouse gases and global warming," said Kimble, "but there is clear reluctance to support proposed actions and regulations to stem CO2 emissions."

In fact, when asked if they would support a cap-and-trade or carbon tax to reduce CO2 emissions, KPMG found that 59 percent do not support either, 23 percent would support carbon tax, and 18 percent would support a cap-and-trade system.

Spending and Business Challenges

When asked about capital spending and key business challenges in the coming year, KPMG found that executives have a subdued view. Sixty-five percent of those surveyed expect their company to decrease capital spending, including 47 percent who predict a drop of greater than 10 percent. Only 17 percent expect an increase over 2008 levels. These views are in stark contrast to those from KPMG's 2008 survey, when 70 percent expected an increase in capital spending and only five percent saw a decrease.

While oil prices have stabilized after extreme volatility in 2008, KPMG found that executives still rank commodity pricing the most significant challenge facing their companies in the coming year. Other key business challenges in order of significance include the economy, access to capital and regulatory concerns.

Also, 63 percent believe eliminating intangible drilling costs (IDC) will result in companies drilling outside the U.S. and unconventional wells not being drilled, a factor that may further slow the race toward energy independence

"There is no question that the economy has had an impact on U.S. energy companies, both in terms of pricing and capital," said Kimble. "However, with the current regulatory and legislative environment, oil and gas executives are also faced with the challenges of an evolving and dynamic industry pushing toward non-traditional energy sources."

KPMG will be discussing these survey results during its Seventh Annual Global Energy Conference, the event for financial executives in the energy industry on May 12th and 13th at the Intercontinental Hotel in Houston. This year's keynote speakers will be Madeleine Albright, Former United States Secretary of State, and Marvin Odum, President, Shell Oil Company.

The KPMG Global Energy Institute (GEI) has been designed to provide an open forum where industry financial officers, risk officers, internal audit directors, and tax executives can share knowledge, gain insights, and access thought leadership about key oil and gas or power and utilities issues and emerging trends. It offers ideas and innovative tools that help organizations apply rigor to compelling, real-world business and energy issues. GEI interacts with their members through a variety of channels, including Web-based videocasts, podcasts, conferences, share forums, and a web portal, www.kpmgglobalenergyinstitute.com.

About KPMG LLP

KPMG LLP, the audit, tax and advisory firm (www.us.kpmg.com), is the U.S. member firm of KPMG International. KPMG International's member firms have 137,000 professionals, including more than 7,600 partners, in 144 countries.

Contact: Manuel Goncalves
KPMG LLP
Tel: (201)307-7735
mdgoncalves@kpmg.com

Source: KPMG LLP

CONTACT: Manuel Goncalves of KPMG LLP, +1-201-307-7735,
mdgoncalves@kpmg.com

Web Site: http://www.us.kpmg.com/

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President Bush Speaks On the Economy and Energy

Audio En Español

2 Aug 2008 15:06 Africa/Lagos


Radio Address by President Bush to The Nation

WASHINGTON, Aug. 2 /PRNewswire-USNewswire/ -- The following is the radio address by President Bush to the Nation:


THE PRESIDENT: Good morning. This weekend marks the beginning of August, the month when many Americans take their summer vacation. This year, however, the high price of gas is taking a toll on summer travelers. Congress is now taking a month-long recess of its own. Unfortunately, Democratic leaders are leaving town without taking any action to ease the burden of high gas prices on families across America.


The fundamental source of high gas prices is the fact that supply is not keeping pace with demand. To reduce pressure on prices, we need to increase the supply of oil, especially oil produced here at home. So in June, I called on Congress to lift the legislative ban that prevents offshore exploration of parts of the Outer Continental Shelf, or OCS. But the leaders of the Democratic Congress have refused to allow a vote.


Lifting the ban on this offshore exploration would benefit our economy in two important ways.


First, lifting the ban would allow our Nation to take advantage of a large and reliable source of domestic oil. Experts believe that these restricted areas could eventually produce about 18 billion barrels of oil. That's almost 10 years worth of America's current oil production.


Second, lifting the ban would create new opportunities for American workers and businesses. On Tuesday, I visited the Lincoln Electric Company in Cleveland, Ohio, a business that produces welding products used for offshore exploration. If Congress were to permit this exploration, it would mean new jobs at businesses like Lincoln Electric. American drivers are counting on Congress to lift the ban on offshore exploration, and so are American workers.


Bringing these resources online will take time, and that means that the need for congressional action is urgent. I've lifted the executive restrictions on offshore exploration. This means that the only thing now standing between the American people and these vast oil resources is the United States Congress. The sooner Congress lifts the ban, the sooner we can get this oil from beneath the ocean floor to your gas tank.


We also need to take other essential steps to strengthen domestic oil production. Congress needs to pass legislation that allows us to tap the extraordinary potential of oil shale, permits exploration in currently restricted areas of northern Alaska, and enables the expansion of America's domestic refining capacity.


It appears that the leaders of the Democratically-controlled Congress will let the entire summer pass without voting on any of these vital steps to help reduce pressure on gas prices. This failure to act is unacceptable to me and unacceptable to the American people. So when they return from their summer break, Democratic leaders should show that they've heard the frustration of the American people by allowing a vote on offshore exploration. If Congress does not act, they will owe families across America an explanation for why they're ignoring their concerns.


I know that high energy prices are making this a difficult time for many of our citizens, but it is important to remember that these high prices were not inevitable. They are partially the result of policy choices that have been made over the years by the United States Congress. Now Congress has an opportunity to begin reversing that damage. By opening up new resources at home we can help bring energy costs down. And that will help ensure that our economy remains the strongest, most vibrant, and most hopeful in the world.


Thank you for listening.


Source: White House Press Office

CONTACT: White House Press Office, +1-202-456-2580


Web Site: http://www.whitehouse.gov/

Senate Tax Bill's Defeat is Windfall for Consumers, Economy

11 Jun 2008 01:09 Africa/Lagos


Senate Tax Bill's Defeat is Windfall for Consumers, Economy

NCPA Expert Says Failure to Adopt Windfall Profits Tax Will Keep U.S. Competitive

WASHINGTON, June 10 /PRNewswire-USNewswire/ -- Failure of a Senate bill designed to tax the profits of the largest domestic oil producers and curb speculation in the oil futures market is a windfall for consumers and the economy, according to NCPA Senior Fellow H. Sterling Burnett.


"U.S. energy policy should focus on the supply of oil and gas, not raising prices for consumers as any windfall profits tax would have done," Burnett said. "The Senate considered this bill despite every government study and economic analysis, all of which prove that a windfall profits tax will only raise prices for consumers, make it more costly to develop and produce oil supplies and increase our dependence on foreign oil."


Burnett points out, for example, that a 1990 Congressional Research Service report estimated the windfall profits tax enacted in the 1980s reduced domestic oil production by 3 to 6 percent and increased oil imports between 8 and 16 percent. He also noted that a windfall profits tax would put U.S. oil and gas companies at a competitive disadvantage in the global energy marketplace.


"All this bill would have done is raise prices to consumers, reduce the value of investors' stock portfolios and retirement funds, and give government a slush fund to play with," Burnett said. "Profits siphoned off by government from domestic oil companies would not be available for investment in new production and refining capacity, but would be spent instead on pet government projects that have nothing to do with providing affordable energy to U.S. consumers."


"In order to lower gasoline prices, U.S. energy policy should focus on increasing the supply of oil and gas to meet world demand," Burnett added.


The NCPA is an internationally known nonprofit, nonpartisan research institute with offices in Dallas and Washington, D. C. that advocates private solutions to public policy problems. We depend on the contributions of individuals, corporations and foundations that share our mission. The NCPA accepts no government grants.


Source: National Center for Policy Analysis

CONTACT: Leah Gipson of NCPA, +1-972-308-6486, leah.gipson@ncpa.org