Nearly three-quarters of U.S. energy industry executives are convinced that the nation can get out from under its massive foreign fuel dependence by exploiting the natural resources beneath its own soil.
Given the size of the country’s estimated natural gas deposits (proven deposits are equal to 12 years of annual U.S. demand now), energy managers are able to envision eventual freedom from energy imports – or at least a high level of independence.
In fact, a new study conducted by Forbes Insights, in association with small business and middle market lender CIT, found that, not only are energy executives not opposed to fracking (hydraulic fracturing) to reach the massive deposits of natural gas and oil beneath the Marcellus and Eagle Ford shales – but fully 88 percent support it. Such new discoveries, along with the multibillion-barrel oil deposits in the Williston Basin of the Dakotas and Montana, have heartened executives about the state of the industry.
Fully half of the respondents characterized these recent discoveries as a “crucial addition” to the U.S. energy mix, while one-quarter agreed with the statement: “They are a game changer: They will secure our energy future for the foreseeable future.” Just 6 percent believed the importance of the Williston, Marcellus, and Eagle Ford resources is overblown.
Backing that up, 70 percent of the 107 respondents agree there is good potential for U.S. energy independence within 15 years, yet they expressed concern that the regulatory restrictions on drilling (33 percent) – along with environmental concerns (16 percent), and a lack of investment in energy due to low commodity prices (14 percent) – could dash that promise.
They have reason to worry: Until recently, environmental and regulatory objections to fracking had been based mostly on the fear that the technique could potentially contaminate drinking water supplies. The foes of fracking have grown louder since – on Christmas Eve and again on New Year’s Eve – Youngstown, Ohio, experienced earthquakes, measuring 2.7 and 4.0 on the Richter Scale, respectively.
According to a report in Scientific American, scientists quickly determined that the likely cause was fracking – although not from drilling into deep shale or cracking it with pressured water and chemicals to retrieve natural gas. Instead, they suspect the disposal of wastewater from those operations, accomplished by pumping it quickly back down into equally deep sandstone.
Almost two-thirds of respondents believe that the industry should educate the population on myths about fracking. In addition, the same number (66 percent) harshly criticized the regulatory environment, while a sizable minority (40 percent) favored the abolishment of the Department of Energy (DOE). At the core of the anti-DOE sentiment appears to be the divide over ways to handle new climate change and air quality standards issued by the Environmental Protection Agency, cap-and-trade of carbon emissions credits, and national clean energy standards. Fully 55 percent of executives expected to be affected in a negative way by federal and state legislation in the next year or two.
On the other hand the factors identified by the respondents that could further help the U.S. achieve independence included:
- Expansion of nuclear power,
- Yet-to-be-discovered Arctic oil fields, and
- Generating a significant percentage of the nation’s energy mix coming from clean energy, such as wind and solar.
Due to their optimism about the country’s energy potential, 85 percent of respondents intended to seek financing in 2012. Of those, 43 percent planned to use funds for infrastructure and capital expenditures, 36 percent, to expand production; and 14 percent, for exploration.
Although executives generally believed that renewable energy can and should be a part of the U.S. energy mix moving forward, they are less supportive of subsidizing renewable energy companies –perhaps because there were several controversial failures, capped by the Solyndra bankruptcy, in 2011. However, nearly one-third of executives agreed with the statement: “Renewable subsidies are necessary: Some problems are inevitable.”
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Stay in touch with everything happening at ITEXPO. Follow us on Twitter.Cheryl Kaften is an accomplished communicator who has written for consumer and corporate audiences. She has worked extensively for MasterCard (News - Alert) Worldwide, Philip Morris USA (Altria), and KPMG, and has consulted for Estee Lauder and the Philadelphia Inquirer Newspapers. To read more of her articles, please visit her columnist page.
Edited by Jennifer Russell