Deloitte: Executives see US self-sufficiency for gas, but not oil

The US is expected to be a self-sufficient producer of natural gas within 10 years, said most oil and gas executives participating in a recent Deloitte survey. But they were less optimistic that the US can meet its oil demand with domestic supplies.

Of more than 250 survey participants, 75% believe the US already is gas sufficient or will be within 10 years. Meanwhile, 54% of survey participants believe the US never will be completely oil self-sufficient while 26% said oil self-sufficiency is achievable in the next 10 years.

If the question of oil self-sufficiency had been expanded to include all of North American, the results would have been more sanguine, Delotte said in results released at its 2012 Deloitte Oil & Gas Conference in Houston.

“Given North America’s remarkable success with unconventional oil–both tight oil in places like North Dakota and oil sands in Canada–something closely resembling self-sufficiency is arguably within reach,” said Peter Robertson, an independent senior advisor to Deloitte and former vice-chairman of Chevron Corp. “When you combine unconventional oil supplies with the recently established increase in shale gas reserves, you could have the makings of a true energy renaissance.”

Deloitte conducted the survey in late October. Respondents were an average of 48 years old with 20 years’ experience in the industry. Each participant earned more than $100,000/year.

John England, Deloitte LLP vice-chairman and leader of Deloitte’s oil and gas practice, said it was no surprise that oil and gas executives are enthusiastic about gas “given burgeoning supplies, America’s comparatively low cost of extraction, and its relative cleanliness.”

England stated, “What is surprising is that natural gas is a fuel source that we were aggressively preparing to import at high world prices just a few years ago.”

Separately, when asked about 2013 gas prices, 86% of oil and gas executives surveyed said they expect Henry Hub gas prices will stay at less than $4/MMbtu.

Survey participants expect light, sweet crude oil prices will stay relatively strong next year, and 57% said West Texas Intermediate oil on average will be $80-99/bbl during 2013.

Nearly 60% of executives expect increased capital spending in 2013 while only 6% expect spending will decrease. Most expect mergers and acquisitions will remain steady next year: 53% expect “much more” or “a little more” activity; 42% believe it will “remain about the same.” Only 5% expect less activity.

Contact Paula Dittrick at paulad@ogjonline.com.

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