Who really knows what will happen... but "The survey Says"! Some encouraging and discouraging news. jhh

By TOM FOWLER Copyright 2009 Houston Chronicle
Dec. 9, 2009, 7:41PM

The North American natural gas business has its best days ahead, according to a survey of the industry taken by consulting and accounting giant Deloitte, but many expect more layoffs in the coming year and more cost-cutting.
Despite low natural gas prices, 84 percent of the oil and gas executive surveyed are bullish on gas because of the surge in production from plentiful shale and coal bed methane formations, combined with an expectation that climate change legislation will increase the demand for natural gas-fired power generation, said Gary Adams, vice chairman and leader of Deloitte's oil and gas practice.
The survey, released Wednesday at Deloitte's annual oil and gas conference in The Woodlands, was based on interviews this fall with 200 oil and gas professionals with at least five years industry experience, college degrees and annual salaries of at least $100,000.
Some of the results seem to reflect conventional wisdom in the business community.
For example, 85 percent believe domestic natural gas production will increase in the next five years, and 90 percent believe climate change legislation will lead to higher gasoline and natural gas prices.
But respondents see further cost-cutting in the industry.
Forty-four percent expect industry job cuts will increase over the next year, 75 percent say their companies are reducing operating expenses, and 56 percent say they're cutting capital expenditures.
Respondents are more optimistic about revenue in the next year.
Seventy-six percent expect revenue growth at national oil companies and international oil companies, 67 percent expect growth at independent exploration and production companies, and 61 percent expect growth at supply and service companies.
Only 35 percent, however, expect revenues to grow at refining companies.
Lack of mergers?
Contrary to some analysts' predictions of a wave of mergers and acquisitions, 86 percent of the surveyed executives don't see their companies going down that road.
“What we are seeing here is an underlying confidence in the sustainability of the oil and gas industry,” said Adams. “Oil and gas companies have survived severe volatility over the past decades, and despite the current recession, these companies have sophisticated, adaptable business models and believe they can post healthy revenues well into the future.”
The natural gas industry could also benefit if policymakers follow the advice of Deloitte senior consultant Joseph Stanislaw, who said in a white paper also released Wednesday that oil, natural gas and coal should be included in the country's plans for a cleaner energy future.
‘Level playing field'
“The principal goal of policymakers should be to establish a level playing field that makes it easier to identify the cleanest fuels producible at the lowest cost, while also reducing energy use through efficiency and other technologies,” Stanislaw said.
He calls for a “predictable price for carbon emissions” to help spur development of conservation and efficiency technology and practices, as well as efforts by the oil and gas industries to develop carbon-neutral technology.
tom.fowler@chron.com