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U.S. Energy Executives Believe Energy Independence is Achievable within 15 Years – Overwhelming Majority Support Fracking
70% of Energy Executives Believe That the United States Can Achieve Energy Independence Within 15 Years
88% Support Fracking as Either a Safe or Developing Technology
85% of Energy Executives Intend to Seek Financing in 2012
66% Believe That Regulations are the Biggest Concerns Facing the Energy Industry in the Long Term
40% Favor the Abolishment of the Department of Energy
Wednesday, January 25, 2012 08:30 AM
Mike Lorusso, Group Head of CIT Energy (Photo: Business Wire)
Renewable subsidies are necessary: Some problems are inevitable.

NEW YORK--(BUSINESS WIRE)--An overwhelming majority (70%) of executives at middle market energy companies see the potential for U.S. energy independence within 15 years, yet they expressed concern that the regulatory environment, along with trouble in the financial world and opposition to fracking, could dash that promise.

These are some of the findings detailed in the research study, “2012 U.S. Energy Sector Outlook” (cit.com/energyoutlook), released by CIT Group Inc. (NYSE: CIT) cit.com, a leading provider of financing to small businesses and middle market companies, in association with Forbes Insights.

The study gathered the views of more than 100 executives at middle market energy companies to assess their views on the industry and their outlook for their companies, energy prices, and trends in the coming years.

“Despite regulatory headwinds facing the industry, energy executives believe the United States can achieve energy independence within 15 years,” said Mike Lorusso, Group Head of CIT Energy. “Executives believe this drive toward energy independence will be accomplished through a combination of approaches, such as expanding the use of natural gas, increasing domestic production of oil, and expanding the use of renewable natural resources. The optimism in this industry is fueling growth ― 85% of energy executives intend to seek financing in 2012.”

Key Findings from the Study:

  • ENERGY INDEPENDENCE WITHIN REACH: Thanks to improving technologies, new discoveries have eliminated the need to import natural gas. Fully half of the respondents characterize these recent discoveries as a “crucial addition” to the U.S. energy mix. As a result, executives are more open to seeing a path toward U.S. independence—70% believe that such independence could be achieved within 15 years.
  • FRACKING IS CONTROVERSIAL AND ESSENTIAL: Fracking, the hydraulic fracturing of subterranean rock to facilitate the flow of gas and oil deposits, has become a lightning rod for criticism among many people who fear environmental consequences. Fully 88% of respondents support fracking as either a safe technology or, at worst, agree that it is a developing technology, but that side effects will decrease over time. Almost two-thirds of respondents believe that the industry should educate the population on myths about fracking.
  • OVERALL OPTIMISM LEADS TO EXPANSION AND REFINANCING: Due to their optimism about the country’s energy potential, 85% of energy executives intend to seek financing in 2012. Of those, 43% plan to use funds for infrastructure and capital expenditures, 36% to expand production, and 14% for exploration.
  • REGULATORY ENVIRONMENT UNDER FIRE: Many energy industry executives strongly criticize the regulatory environment—66% of respondents say that regulation is a long-term concern facing the industry, while a sizable minority (40%) favors 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% of executives expect to be affected in a negative way by federal and state legislation in the next year or two.
  • RENEWABLES ARE PART OF THE ENERGY MIX: Although executives generally believe 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 in 2011. However, nearly one-third of executives agreed with the statement: “Renewable subsidies are necessary: Some problems are inevitable.”

EDITOR’S NOTE: To download a free copy of the complete study, visit cit.com/energyoutlook. In addition, a free download of CIT’s Executive Spotlight with Mike Lorusso, in which he provides an overview of the U.S. energy sector, is available at cit.com/energyspotlight.

Individuals interested in receiving future updates on CIT via e-mail can register at http://newsalerts.cit.com.

About the Study

Survey respondents included 107 energy industry executives. Of these, 101 came from companies with revenues between $10 million and $1 billion. Six executives came from companies with revenues between $1 billion and $5 billion. Most companies (71) were privately held, either by families or private equity investors.

About Forbes Insights

Forbes Insights is the strategic research practice of Forbes Media, publisher of Forbes magazine and Forbes.com. Taking advantage of a proprietary database of senior-level executives in the Forbes community, Forbes Insights’ research covers a wide range of vital business issues, including: talent management; marketing; financial benchmarking; risk and regulation; small/midsize business; and more. forbes.com/forbesinsights

About CIT

Founded in 1908, CIT (NYSE: CIT) is a bank holding company with more than $34 billion in financing and leasing assets. A member of the Fortune 500, it provides financing and leasing capital to its more than one million small business and middle market clients and their customers across more than 30 industries. CIT maintains leadership positions in small business and middle market lending, factoring, retail finance, aerospace, equipment and rail leasing, and global vendor finance. cit.com

Contact:

CIT MEDIA RELATIONS:
C. Curtis Ritter, 973-740-5390
Director of Corporate Communications
Curt.Ritter@cit.com
or
Matt Klein, 973-597-2020
Vice President, Media Relations
Matt.Klein@cit.com
or
CIT INVESTOR RELATIONS:
Ken Brause, 212-771-9650
Executive Vice President
Ken.Brause@cit.com
or
FORBES INSIGHTS:
Debbie Weathers, 212-366-8848
Senior Director of Communications
dweathers@forbes.com