Washington (Platts)--4May2009

More than three-quarters of oil and natural gas executives surveyed by
KPMG's Global Energy Institute said US energy independence is not attainable
until 2030 or beyond, despite the emphasis on alternative energy sources in
current and proposed government energy policies. The executives also said mass
production of alternative energy is not viable in the short term.

The survey also found that although there is a marked increase in the
number of executives who acknowledge that global warming is occurring, the
vast majority still don't support proposed regulations to stem carbon dioxide
emissions.

KPMG's Global Energy Institute survey polled 382 financial executives
from oil and gas companies in April. It said 63% of respondents said they
believe energy independence will not be attainable until after 2030, while 16%
said it could happen by 2030. Some 9% believe it is possible before 2020,
according to the survey.

"Despite the increased focus on domestic energy sources, energy
infrastructure, and alternative energy sources, a realistic assessment of
technology and investment in the industry suggests energy independence is not
realistic for at least two decades," Bill Kimble, executive director of the
KPMG Global Energy Institute, said in a statement.

He added: "The executives' perceptions of energy independence mirror
their views on the viability of alternatives in the near-term as well."

The survey found that the executives expect alternative and renewable
energy sources to receive the most focus in President Barack Obama's energy
policy. But 52% said it will not be viable to mass produce power from
alternative energy sources by 2015, compared with 54% in 2008 and 60% two
years ago.

Although executives said they do not believe alternative energy sources
are immediately viable, they did have clear opinions on which ones would
benefit most from the Obama administration's energy policy, KPMG said.

Some 35% of respondents said that wind energy would be the biggest winner
as a result of Obama's policy, followed by 18% for natural gas and 17% for
biofuels. Conversely, 42% of executives see coal as the biggest loser, while
36% said oil would lose the most as a result of the policies.

"These results clearly show the momentum wind energy has gained as a
clean energy solution," Kimble said. "But 93% of our respondents see wind
generation growing to only 6% of our energy generation by 2015 and only 17%
say wind energy is viable for mass production by that year."

Asked which areas in the Obama administration's energy policy would
receive the most focus after alternative energy, executives cited the White
House's push to establish a cap-and-trade system for greenhouse gas emissions.

And, though the US Environmental Protection Agency recently pointed to
CO2 emissions from burning fossil fuels as the main cause of global warming,
nearly half (47%) of the executives said they believe global warming is a
natural weather cycle, although this number is down from 62% in 2008's survey.

"Our data shows a noted swing in executive perceptions on the issue of
greenhouse gases and global warming," said Kimble, "but there is clear
reluctance to support proposed actions and regulations to stem CO2 emissions."

When asked if they would support a cap-and-trade program or a carbon tax
to reduce CO2 emissions, the survey found that 59% do not support either, 23%
would support carbon tax, and 18% would support a cap-and-trade system.

In addition, the survey found that 65% of executives polled expect to cut
capital spending this year. Of those, 47% predicted a drop of more than 10%.
Only 17% expect an increase over 2008 levels. In the 2008 survey, 70% of the
executives surveyed expected an increase in capital spending and only 5% saw a
decrease.

While oil prices have stabilized after extreme volatility in 2008, KPMG
said its survey found that executives still rank commodity pricing the most
significant challenge facing their companies in the coming year. Other key
business challenges in order of significance include the economy, access to
capital and regulatory concerns.

Further, 63% of respondents said they believe eliminating intangible
drilling costs will result in companies drilling outside the US and
unconventional wells not being drilled.

"There is no question that the economy has had an impact on US energy
companies, both in terms of pricing and capital," said Kimble. "However, with
the current regulatory and legislative environment, oil and gas executives are
also faced with the challenges of an evolving and dynamic industry pushing
toward non-traditional energy sources."