Deloitte LLP's latest research, the "2014 Oil & Gas Survey: The Next Chapter of the Energy Renaissance," uncovered many of the respondents believe the U.S. will be oil independent in the next five to 10 years.
The respondents of the survey are U.S. oil and gas decision makers. Their belief that America can become energy self-sufficient has increased 150 percent since the previous study in 2012, according to a release from Deloitte. Twenty percent of the respondents believe the U.S. can be self-sufficient in oil within five years.
Regarding natural gas, 90 percent of the respondents believe the nation now produces enough of the product domestically to meet the nation's growing demand. This may be contributing to the optimistic view that the overall energy situation in the U.S. has improved (80 percent) and that the country is headed for oil and natural gas independence, Deloitte pointed out.
What will Washington do?
While self-sufficiency appears inevitable, the respondents are still keeping an eye on lawmakers and prices because exportation and price fluctuations will greatly influence future profit and possible mergers and acquisitions. Sixty-five percent of respondents said potential federal regulations were their greatest concern followed by cost margins (38 percent).
"The industry is watching politics and prices closely especially when it comes to exports - an issue seen as crucial for continued success, with 83 percent of respondents indicating that exports are important for the long-term viability of unconventional oil and gas production in the U.S.," said John England, vice chairman of Deloitte.
Even with their watchful eyes, the respondents of the survey are as optimistic about capital spending and M&A's as they are future oil and gas independence. More than half of the respondents believe capital spending will increase in 2015 as well as M&A activity. More than 80 percent of the decision makers stated they expect profitability to either remain the same or rise over the next year.
Independence may need less energy demand
According to a report by John Miller published by The Energy Collective, the U.S. is unlikely to lower its demand for petroleum-based energy. Reducing demand would require more alternative energy and efficiency regulations at the federal level, but will be difficult in the transportation and industrial sectors, which require a large amount of oil. Controlling energy demand will also be challenging because of population growth, which is expected to rise 26 percent by 2050 in the U.S., Mill reported. While many oil and gas decision makers believe self-sufficiency will happen, it is more to likely come from increased production than by lowering U.S. demand.