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CIT Study Finds U.S. Middle Market Energy Executives Upbeat; Majority Believe Policies Inhibit U.S. Energy Development
81% of Energy Executives Describe 2013 as Profitable
65% Believe Energy Policies Inhibit U.S. Energy Development
56% Say Fracking Concerns Need to Be Addressed
Monday, March 31, 2014 08:30 AM
They believe that with policies that are more supportive to the growth and investment in the energy sector, the U.S. will continue to advance towards its goals.

NEW YORK--(BUSINESS WIRE)--Eighty-one percent of middle market energy executives describe 2013 as profitable, and their expectations for 2014 are nearly identical, with 82% anticipating continued profitability. However, although two out of three (67%) agree that current energy policies are hampering U.S. energy development, nearly half (49%) believe U.S. energy independence remains a distinct possibility in the foreseeable future. These are some of the findings detailed in the latest research study, “2014 U.S. Energy Outlook” (cit.com/energyoutlook), released today 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.

“Consistent with current market observations, U.S. middle market energy executives are optimistic as they find themselves in the midst of a boom propelled by oil, natural gas and power,” says Mike Lorusso, Group Head and Managing Director, CIT Corporate Finance, Energy. “They believe that with policies that are more supportive to the growth and investment in the energy sector, the U.S. will continue to advance towards its goals.”

Key findings from 2014 U.S. Energy Outlook study:

  • OUTLOOK FOR THE ENERGY INDUSTRY IS POSITIVE: More than 8 out of 10 (81%) executives describe the past year as profitable (50%) or very profitable (31%). Expectations for 2014 are nearly identical, with 82% anticipating a profitable (50%) or very profitable (32%) year. The three-to-five-year energy sector outlook is even more positive, with 91% of executives anticipating they will be profitable (53%) or very profitable (38%), and 23% describing their outlook as “aggressive” (above average investment and growth).
  • ENERGY PRICES RISING IN BOTH THE SHORT AND LONG TERM:

OIL: Nearly 6 in 10 (57%) see rising oil prices over the next 18 months, and 66% expect higher oil prices over the next three to five years.

NATURAL GAS: Middle market energy executives expect natural gas prices to rise over the next 18 months (65%). Over the next three to five years, 68% expect higher prices.

POWER: Approximately 60% of middle market energy executives believe electricity prices will rise over the next 18 months. Nearly three out of four executives (72%) see higher power prices through 2019.

  • POLICY MAKERS PICKING FAVORITES IN THE ENERGY MARKET: Overall, 65% say that current policies inhibit U.S. energy development and 54% say current policies are “pro” natural gas development. Regarding oil, only 23% say current policies are “pro,” while 56% describe policies as “con.” Nearly 8 in 10 (79%) say government policies regarding coal are “con.” Policies for green energy sources are regarded as “pro” by 80% or more of executives (81% for solar).
  • ENERGY A HOT-BUTTON ISSUE DURING 2014 AND 2016 CAMPAIGNS: Three out of five (60%) believe energy policy will be one of the most critical issues in the 2014 Congressional races; two out of three (67%) say the same for the 2016 election cycle. Two-thirds (67%) agree that current energy policies are hampering U.S. energy development – 36% of these saying “severely.” More than 6 in 10 (64%) agree that current energy policies are hampering U.S. job creation, with 36% of these saying “severely.” More than half (55%) say that by regulating carbon as a pollutant, the Environmental Protection Agency is overstepping its mandate, with 69% saying such actions are spurring higher energy costs. More than half (52%) say this role will be a key issue in the 2014 elections.
  • EXECUTIVES SEE U.S. INDEPENDENCE AS A FAST-EVOLVING REALITY: Nearly half (49%) say energy independence is likely in the foreseeable future, with 40% saying within 6-10 years. Key factors include expanded natural gas production (cited by 74% of respondents), significant new domestic energy discoveries (60%) and approvals of infrastructure projects (e.g., the Keystone XL Pipeline – 57%).
  • FRACKING CONCERNS NEED TO BE ADDRESSED – GREEN ENERGY YEARS AWAY FROM BEING COMMERCIALLY VIABLE: Forty-eight percent of middle market energy executives believe fracking is safe. Only 10% say it’s potentially very dangerous. Close to six in 10 (56%) believe more needs to be done to address known environmental concerns about fracking. Nearly 6 in 10 (56%) of executives say government restrictions on traditional energy sources subsidize green energy.

Individuals can download a free copy of the complete study at cit.com/energyoutlook.

EDITOR’S NOTE:

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About the 2014 U.S. Energy Outlook Study

The study, conducted in partnership between Forbes Insights and CIT, included insight into the views and strategic plans of 141 senior, U.S.-based middle market ($25 million – $1 billion in annual sales) energy executives. The survey was conducted in February 2014.

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, and small/midsize business. forbes.com/forbesinsights

About CIT Corporate Finance, Energy

CIT Corporate Finance, Energy provides value-added financing products and services to growth-oriented companies throughout the energy sector, including oil & gas and power. By combining extensive industry experience, structuring expertise and underwriting capacity, we create comprehensive solutions to our clients’ most critical strategic and funding needs. CIT Corporate Finance, Energy currently manages a large, diverse portfolio, which includes investments in all asset classes across the energy sector. cit.com/energy

About CIT

Founded in 1908, CIT (NYSE: CIT) is a financial holding company with approximately $35 billion in financing and leasing assets. It provides financing, leasing and advisory services to its clients and their customers across more than 30 industries. CIT maintains leadership positions in middle market lendingfactoringretail and equipment finance, as well as aerospaceequipment and rail leasing. CIT’s U.S. bank subsidiary CIT Bank (Member FDIC), BankOnCIT.com, offers a variety of savings options designed to help customers achieve their financial goals. cit.com

Contact:

CIT MEDIA RELATIONS:
C. Curtis Ritter, 973-740-5390
Senior Vice President 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:
Barbara Callahan, 973-740-5058
Senior Vice President
Barbara.Callahan@cit.com
or
FORBES INSIGHTS:
Mia Carbonell, 212-620-2288
Senior Vice President of Corporate Communications
mcarbonell@forbes.com