About 45 percent of CFOs surveyed for consultant firm BDO Seidman's 2010 Energy Outlook Survey said legislative changes will be the most important issue in 2010. Demand for oil and gas received 28 percent of the CFO vote for most important factor driving growth this year. Access to capital or credit; new production technologies; and mergers and acquisitions also made the list, although they trailed considerably behind demand and legislation.
Last year, CFOs said increasing demand was the most important factor driving growth, according to the survey results.
Oil and gas companies face a number of legislative and regulatory hurdles in 2010. The Environmental Protection Agency deemed greenhouse gas emissions a danger to public health, a finding that allows the government agency to begin regulating GHGs under the Clean Air Act.
Congress also is expected to grapple with climate-change legislation in 2010, although some -- including the chairman of the Senate Energy and Natural Resources Committee-- are doubtful a bill aimed at reducing GHGs will actually happen. There also is legislation aimed at regulating hydraulic fracturing, a technique used to access hard-to-reach shale gas. In New York, state regulators have proposed new regulations for the shale gas industry due to concerns that drilling in the Marcellus Shale formation contaminates drinking water.
CFOs also provided outlooks on employment, demand and oil and gas drilling. Sixty-five percent of CFOS said employment levels will remain stable and 27 percent plan to hire more people in 2010, a result that surprised BDO partner Charles Dewhurst.
"Given continued tough market conditions, tightened credit access and lower demand, it's somewhat surprising that only eight percent of CFOs expect their companies to decrease employment levels in 2010, Dewhurst said in a statement. "Apparently, the industry experienced such steep cuts to price, demand and personnel in 2009, there is really nowhere to go but up."CFOs on oil and gas demand:
- 21 percent say global demand for oil and 13 percent of domestic demand will increase "substantially;"
- 51 percent say global and 25 percent say domestic demand for oil will increase "some;"
- 55 percent say global and 48 percent say domestic demand for natural gas will increase "some"