More oil and gas executives are growing increasingly confident that the US will be self-sufficient in oil in 5-10 years, said a Deloitte survey titled, “2014 Oil & Gas Survey: The Next Chapter of the Energy Renaissance.”
The latest survey results showed 90% of respondents believe the US now has enough affordable domestic natural gas production to meet rising and changing sources of demand. The survey was released during Deloitte’s annual energy conference in Houston.
John England, vice-chairman and oil and gas sector leader for Deloitte, noted falling oil prices are nothing new to the industry. He said survey results show 80% of respondents believe the US energy situation has improved vs. 5 years ago and is headed in the right direction.
Deloitte conducted the survey in late October and canvassed more than 250 oil and gas executives. Respondents were 48 years old on average and had an average of 20 years’ experience in the industry.
The survey was done before a slide in global crude prices and a ban on hydraulic fracturing within the city limits of Denton, Tex.
“The recent shake-ups in prices, politics, and regulations provide a compelling backdrop to evaluate the responses provided in the survey; as the industry tests the waters with respect to shale’s resilience during a cycle of low prices,” England said.
Only 15% of respondents said they were very or extremely concerned about a possible price collapse, he said. Meanwhile, 83% of respondents said exports are important for the long-term viability of unconventional oil and gas production in the US.
“The survey revealed continued positive momentum regarding the optimization of US shale,” England said. “Shale development remains the lynchpin of the North American energy renaissance, and improving extraction technologies and methods as well as improved midstream infrastructure are fueling the growth of production.”
The survey showed 66% of respondents believe technological advancements in shale extraction have improved the economics of shale. Nearly half (44%) point to the smaller environmental footprint of shale as a significant improvement, while 39% believe fresh water recycling has improved.
“Water is a big part of the story,” England said, adding the industry also needs to address the issue of climate change. “It’s a business-risk issue that really exists, and because of that it needs to be addressed.”
Mexico’s energy reform
Although most survey respondents believe the Mexican energy reform primarily will benefit supermajors and large independents, 39% believe Mexico’s ongoing energy reform will strengthen US competitiveness.
Two thirds of respondents believe the liberalization of Mexico’s oil and gas industry is at least somewhat critical to help North America achieve energy self-sufficiency.
“Whereas many in the industry have been focused on the oil and natural gas production onshore and offshore Mexico, one under-reported huge opportunity is in the build out of midstream infrastructure,” said Jorge Castilla, partner of Deloitte Consulting Mexico LLP.
Castilla said Mexico is keenly interested in being able to lower its electric prices for Mexicans.
The decline in oil prices is unlikely to put a damper on investment in Mexico, he said.
Contact Paula Dittrick at [email protected].
*Paula Dittrick is editor of the Unconventional Oil & Gas Report
