Oil and gas executives say that the price-per-barrel of oil will drop significantly from the current high level by the end of the year, according to the results of a survey conducted by KPMG LLP's Global Energy Institute.
In the survey, which polled 372 financial executives from oil and gas companies in April, 55 percent of the respondents said the per-barrel price of crude oil will drop below $100 by the end of the year. Twenty-one percent think that the price will close between $101 and $110; 15 percent predicted $111 to $120; and nine percent believe it will close at above $120. Forty-four percent felt that prices would peak by the end of the year, while 39 percent thought that they would not peak until after 2010.
When asked what would most enhance U.S. energy security, respondents overwhelmingly felt that opening up drilling domestically is the best option. Specifically, 43 percent said that the Arctic National Wildlife Reserve should be opened for drilling and 28 percent cited opening up drilling in the Rocky Mountain region. Another 28 percent said that investment in renewable energy will enhance U.S. energy security the most.
However, oil and gas executives still do not see renewable energy is a serious near-term solution in the energy supply equation. Last year, 60 percent said that it will not be viable to mass produce any alternative fuels by the year 2010. This year, 54 percent gave the same response when asked about the year 2015.
Other findings:
When asked about natural gas' role in global energy supply, 54 percent said that it will grow significantly as a percentage of total energy supply and 37 percent it will grow somewhat. Seven percent felt that its percentage will stay the same and only one percent felt it will drop.
When asked which clean energy source will dominate in the next 20 years, gas led the field with 50 percent of respondents, followed by nuclear with 31 percent respondents. While only 4 percent cited wind, many expect growth in this area with 51 percent expecting U.S. wind energy capacity to grow by 10 percent next year and 24 percent expecting growth of 20 percent.
Sixty-three percent of oil and gas executives believe that accelerated demand in emerging markets is the major contributor to the high price of oil. The second highest contributor, according to 15 percent of the respondents, was the lack of access to new oil resources, and rising exploration and development costs. Ten percent attributed current pricing to growing demand in developed markets.
Sixty-two percent believe that while global warming is occurring, it is a natural weather cycle; 29 percent believe that CO2/mankind-induced global warming is occurring; and nine percent believe that global warming is not occurring.
A quarter of respondents believe that the issue of global warming should be addressed by the market and not government legislation; 11 percent say that the government should enforce mandatory carbon emission credits trading; and 16 percent say that the government should provide corporate tax incentives for investment in renewable energy sources.
Fifteen percent say it will be viable to mass-produce biodiesel by the year 2015; 12 percent say it will be viable to mass-produce ethanol; and 10 percent say it will be viable to produce cellulosic ethanol.
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