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2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
2013 Energy Industry Outlook Survey (English)
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2013 Energy Industry Outlook Survey (English)

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En su undécima edición, este informe anual ofrece los resultados de una encuesta realizada a 103 ejecutivos de las empresas del sector energético durante la primavera de 2013. …

En su undécima edición, este informe anual ofrece los resultados de una encuesta realizada a 103 ejecutivos de las empresas del sector energético durante la primavera de 2013.

El estudio analiza las perspectivas de futuro en relación a distintos temas de actualidad, como los precios del petróleo y gas, los retos de la industria, el impacto del shale gas, las inversiones en energías alternativas, los avances en tecnología y otras tendencias de la industria.

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  1. 2013 Energy Industry Outlook Survey Is energy independence on the horizon? kpmgglobalenergyinstitute.com
  2. © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  3. 1 A new dawn for energy 2 Survey highlights 4 Detail findings 4 Industry and economic outlook 4 – Economy 5 – Energy independence 6 – Natural gas for industry growth 7 – Business challenges 8 Price stability 8 – Oil prices 10 – Natural gas prices 11 Business conditions 11 – Capital spending 12 – Geographic areas in focus 13 – Operating costs 14 – Global workforce 15 – M&A drivers 17 Diverse energy mix 17 – Alternative energy investment 19 – Benefiting the environment 20 TheTechnology Advantage 20 – Benefiting customers 21 – Realizing the value of big data 22 Smart Grid 22 – Investing in smart grid 24 Conclusion 26 Demographics and methodology 27 About the KPMG Global Energy Institute Table of Contents © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  4. © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  5. We are pleased to present findings from the 2013 Energy Survey. The survey, now in its eleventh year, reflects perspectives from U.S. energy executives on the outlook for oil and gas prices, business challenges, the impact of shale oil and gas, alternative energy investments, spending and growth, emerging technologies, and other industry trends. The results from this year’s survey highlight the growing importance of natural gas as an energy source. The increased U.S. production of shale natural gas and oil is changing the energy industry—and possibly the economy. Energy independence, economic growth, and the environment are critical issues in the industry, and the natural gas boom touches them all. As a result, many executives now believe energy independence is on the horizon and that low natural gas prices may lead to a resurgence in manufacturing and economic growth in the U.S. However, this enthusiasm is tempered by lingering uncertainty around the global economy. While executives may be bullish about the U.S. sector and the prospects for their individual company, they are less certain about the overall economic outlook. In 2013, executives say they plan on spending more capital investment dollars on geographic expansion, expanding facilities, and business acquisitions to enhance growth efforts. Technology will also play a key role, as more energy companies harness the power of data analytics to extrapolate insights. The industry is only in its early stages of being able to really exploit the potential of their applications. We expect this to be a continuing trend that can ultimately enhance business functions moving forward. Energy executives also expect to continue research and development (R&D) investment in alternative energy projects, with shale gas and oil as a key investment area. However, renewables such as wind and solar technologies remain firmly on the agenda. Such findings demonstrate the industry’s intent to explore all options to pursue a diverse mix of energy sources to meet worldwide needs. We hope you find the survey results useful in addressing market challenges and opportunities. John Kunasek Regina Mayor Partner, National Sector Leader Principal, Energy & Natural Energy & Natural Resources Resources Advisory Leader KPMG LLP (U.S.) KPMG LLP (U.S.) Anewdawn forenergy KPMG Global Energy Institute | 1 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  6. Rapidly advancing technology in the production of shale oil and gas may allow the U.S. to meet its own hydrocarbon needs in the future. As a result, nearly two-thirds of energy executives believe the U.S. has the potential to attain energy independence by 2030, and nearly a quarter think energy independence is possible by as soon as 2020. Seventy-nine percent of executives agree that the energy industry’s emphasis in developing environmentally friendly technologies should focus on natural gas. Executives also believe that low natural gas prices will lead to resurgence in manufacturing and economic growth in the U.S. Respondents expect the Northeast region of the country to reap the most benefits from this resurgence. Executives expect continued R&D investment in alternative energy projects this year. More than half anticipate investments will remain unchanged in 2013, but the percentage of respondents predicting a 10 percent increase in R&D investment nearly tripled. Forty-eight percent of executives surveyed said the best use of data and analytics technology was operational excellence. Companies are leveraging, leading edge, data driven technologies to improve process and supply chain efficiency as well as the overall connection with their customers. Smart grid and big data applications are beginning to be deployed to turn the huge volumes of data into insight that can improve decision making. Survey highlights Moving closer to energy independence Increasing the focus on natural gas Managing a diverse energy mix Leveraging technology 2 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  7. KPMG Global Energy Institute | 3 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  8. Detailed findings Source: KPMG International, 2013 Energy Industry Outlook Survey Industry and economic outlook Economy Fifty-one percent expect the U.S. economy to improve a year from now, while 32 percent expect it to remain the same, and only 17 percent expect it to get worse.  Q: A year from now, what are your expectations for the U.S. economy? 4% 3% 14% 47% 32% Moderately improved Significantly worse Significantly improved Moderately worse About the same 4 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  9. By 2030: 2013: 62% 2012: 52% Energy independence Most energy executives continue to believe that U.S. energy independence—the ability to meet most energy needs without depending on foreign energy sources—is years away.  Q:When do you think the U.S. could attain energy independence? 2020 2025 2030 2040 2050 Beyond 2050 Never 18% 18% 1% 5% 8% 8% 17% 27% 12% 8% 21% 22% 23% 12% 2013 2012 A strong majority (62 percent) think the U.S. can attain energy independence by 2030, up from 52 percent in last year’s survey. Of the 62 percent, nearly one quarter (23 percent) think energy independence is possible by as soon as 2020. Additionally, the percentage of executives who believe that U.S. energy independence will never happen dropped by 10 percentage points this year, from 27 percent in 2012 to 17 percent in 2013. Increased domestic production, particularly from shale assets, is having a profound impact on the global energy sector, introducing new sources to the energy matrix. This ‘shale gale’ seems to be contributing to the increased optimism among energy executives on the potential for U.S. energy independence and driving large investments into the development and production from these shale assets, including ‘greenfield’ investment plays. — John Kunasek, national sector leader for energy and natural resources for KPMG LLP (U.S.) Source: KPMG International, 2013 Energy Industry Outlook Survey KPMG Global Energy Institute | 5 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  10. Source: KPMG International, 2013 Energy Industry Outlook Survey Natural gas for industry growth If natural gas drives a resurgence in manufacturing and economic growth, the Northeastern region of the U.S. will benefit the most, according to 36 percent of survey respondents.  Q: Which region of the U.S. will benefit the most from this resurgence? Midwest 22% Southwest 17% West 9% South 16% 36% Northeast Natural gas production, particularly here in the U.S., has drastically shifted the energy paradigm and will be key likely to the future of the energy industry as exports grow. The high production rates of natural gas and its reputation as a low-cost alternative to other energy sources continue to contribute to the recent growth in manufacturing, and as companies begin to monetize these new assets, we’ll also see significant benefits for the local and national economies. — Regina Mayor energy and natural resource advisory leader for KPMG LLP (U.S.) 6 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  11. Business challenges More than half of respondents (56 percent) said regulatory concerns were the most significant challenges facing their company in the coming year, followed by economic uncertainty (34 percent), commodity prices (26 percent), and increases in operating costs (24 percent). Regulatory concerns Economic uncertainty Commodity pricing Aging workforce Increases in operating costs* Cost increases due to higher tax burdens* Staying on top of emerging technologies Ability to recruit certain types of skilled labor* Managing environmental risks adequately Geopolitical risks* Availability and cost of capital Exploration challenges Other* Access to hydrocarbon resources  Q: Which of the following are the most significant challenges facing your company in the coming year? % in 2013 % in 2012 % in 2011 56 47 55 34 40 37 26 44 41 24 16 23 24 32 17 11 16 7 16 16 22 13 11 33 13 13 8 20 25 5 6 12 3 1 5 2 10 18 Multiple Responses Allowed *Not asked in 2011 Source: KPMG International, 2013 Energy Industry Outlook Survey KPMG Global Energy Institute | 7 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  12. Oil prices Energy executives expect oil prices to be steady for the remainder of 2013. $105 – $115 22% 33% 25%  Q: At what price do you think Brent Crude oil will peak in 2013 (per barrel)? $116 – $125 39% $126 – $135 22% 27% $136 – $145 14% 9% $146 – $155 2% 2% 3%$156+ 1% 1% 2013 More than 80 percent expect Brent Crude prices to stay in the $105 to $135 range for the remainder of the year, while only 17 percent of the energy executives surveyed believe that Brent Crude prices will exceed $135 per barrel during 2013. The expectation of high oil prices is down considerably from 2012, when 42 percent of respondents expected prices to exceed $141 during the year. $171 - $180 $161 - $170 $151 - $160 $141 - $150 $121 - $130 $131 - $140 $181+ 2012 Price stability Source: KPMG International, 2013 Energy Industry Outlook Survey 8 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  13. Greater assurance of supply appears to be stabilizing commodity price environments and enabling large investments. At the same time, marginal production remains ‘shut in’ and could quickly be reinstated should the price picture become even more robust for gas. —Regina Mayor, energy and natural resource advisory leader for KPMG LLP (U.S.) KPMG Global Energy Institute | 9 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  14. Natural gas prices Given the potential of shale development, energy executives appear more confident as to relative price stability.  Q: What do you think will be the average natural gas price for the remainder of the year? Gas prices will rise above $5.01 or more 0% Gas prices will rise between $4.01 and $5.00 11% Between $4.01 and $5.00 1% $5.01 or more 1% Gas prices will remain steady between $3.01 and $4.00 73% Between $3.01 and $4.00 8% Gas prices will decline to between $2.01 and $3.00 15% Gas prices will decline to between $1.51 and $3.00 44% Gas prices will decline to below $2.00 1% Gas prices will continue to decline to below $1.50 10% Gas prices will remain steady at current levels 36% 2012 2013 Seventy-three percent of survey respondents believe the price will remain steady in the $3.01–$4.00 range for the rest of 2013. Only 16 percent believe prices of natural gas will fall below $3.00 and only 11 percent believe prices will rise to the $4.01–$5.00 range. This is a higher overall price forecast than in 2012, when nearly half (44 percent) of the executives surveyed expected to see prices between $1.51 and $3.00 and only 10 percent expected prices above $3.00. Source: KPMG International, 2013 Energy Industry Outlook Survey 10 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  15. Geographic expansion Employee compensation and training 17% 2% Expanding facilities Business model transformation 17% 7% Acquisition of a business Research and development 23% 10% Information technology Green/sustainability initiatives 24% Regulation/control environment Advertising and marketing/branding 28% 13% 12% New products or services Other 44% 15% Multiple responses allowed This is followed by expanding facilities (28 percent), the acquisition of a business (24 percent), and information technology (23 percent). Capital spending Industry executives indicated that their companies will increase capital spending most frequently in the areas of geographic expansion (44 percent).  Q: In which areas do you expect your company to increase spending the most over the next year? Business conditions Source: KPMG International, 2013 Energy Industry Outlook Survey KPMG Global Energy Institute | 11 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  16. Geographic Expansion Geographic expansion–within the U.S. Geographic expansion–into or among high-growth emerging markets outside the U.S. Geographic expansion–into or among other developed markets outside the U.S. 26% 13% 5% Source: KPMG International, 2013 Energy Industry Outlook Survey Geographic areas in focus Of the 44 percent of executives that plan on increasing capital spending on geographic expansion, most say they will focus on expansion within the United States. 12 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  17. Operating costs Sixty-four percent of respondents expect operating costs to increase over the next year. Source: KPMG International, 2013 Energy Industry Outlook Survey  Q: What do you anticipate will happen to your company’s operating costs in 2013? 2013 % of respondents % of expected increase 4 60 2 14 20+ 1-20 20+ 1-20 % of respondents % of expected decrease 2012 2011 Increase No Change Decrease 16% 17% 16% 19% 11% 20% 64% 67% 70% This is down slightly from 67 percent in 2012 and 70 percent in 2011. Only 16 percent of respondents anticipate a decrease in operating costs during 2013, down slightly from 17 percent in 2012. KPMG Global Energy Institute | 13 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  18. Source: KPMG International, 2013 Energy Industry Outlook Survey Global workforce Hiring continues along a growth trajectory, as almost half (45 percent) of survey respondents expect their workforce to expand during the next year.  Q: During the next 12 months, do you expect your company’s workforce to expand or contract? 2013 2012 2011 Increase No Change Decrease 34% 40%18% 11% 48% 49% % of respondents % of expected increase 3 5 37 10+ 6-10 1-5 % of respondents % of expected decrease 3 2 10 10+ 6-10 1-5 45% 40% 15% Meanwhile, 40 percent expect no change, and only 15 percent expect it to contract. Notably, the share of respondents who expect their workforce to expand during the next year has decreased each of the past three years. 14 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  19. Multiple responses allowed *Not asked in 2011 This was followed by competitive pressures (35 percent), strategic movement or diversity in company assets (31 percent), access to new markets (26 percent), and access to new resources (26 percent). MA drivers Almost half (47 percent) of respondents said cost pressures will be an important driver of alliances and MA in the energy industry. Source: KPMG International, 2013 Energy Industry Outlook Survey  Q: Which of the following do you think will be among the most important drivers of alliances, mergers, and acquisitions in the industry? % in 2013 % in 2012 % in 2011 Cost pressures 47 34 35 Competitive pressures* 35 30 – Strategic movement or diversity in company assets 31 46 48 Access to new resources 26 36 32 Access to new markets 26 30 35 Access to new capital 17 32 36 Access to new technology and products 16 22 19 Purchasing leverage 15 8 13 Improved ability to meet increased demand for energy supplies* 14 10 – Improved ability to fund new projects* 9 18 – Other 6 2 3 KPMG Global Energy Institute | 15 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  20. We see many clients aggressively looking to drive down production and operating costs while diversifying assets and exposure into oil and liquid-rich plays, away from dry gas— adding further strain on an aging, inadequate infrastructure. For those companies and institutions seeking additional capital, JVs and alliances with global and domestic partners, as well as the continued broadening of qualifying resources within MLPs, are providing needed financing to access and develop these new resources and infrastructure. —Drew Koecher, energy transactions and restructuring leader for KPMG LLP (U.S.) 16 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  21. Source: KPMG International, 2013 Energy Industry Outlook Survey Alternative energy investment Ninety-five percent of energy executives expect continued RD investment in alternative energy projects this year.  Q: What is your outlook for your company’s RD investment in alternative energy projects in 2013 versus 2012? 2013 2012 2011 Increase No Change Decrease % of respondents % of expected increase 1 9 30 20+ 11-20 1-10 % of respondents % of expected decrease 3 0 2 20+ 11-20 1-10 40% 35% 55% 5% 8% 4% 19% 73% 61% More than half of respondents (55 percent) do not expect a change in their company’s RD investment in alternative energy projects in 2013, down from 73 percent in 2012. Notably, the percentage of respondents predicting a 10 percent increase in RD investment nearly tripled, from 11 percent in 2012 to 30 percent in 2013. Additionally, 9 percent expect an 11­ to 20 percent increase, and only 1 percent expects investments will jump by 20 percent or more. Diverse energy mix KPMG Global Energy Institute | 17 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  22. What is exciting about these findings it that they demonstrate the industry’s intent to explore all options, despite barriers from cost and complexities, to provide a diverse energy matrix to meet the world’s future energy needs. —John Kunasek national sector leader for energy and natural resources for KPMG LLP (U.S.) 18 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  23. Benefiting the environment More than three-quarters (79 percent) of respondents said that natural gas should be a priority for the industry in its efforts to develop technologies that are environmentally friendly.  Q: Where do you believe the industry should place its emphasis in developing environmentally friendly technologies? Despite the shale gas boom and near historic low natural gas prices, it must be encouraging to the renewables sector to see that wind, solar, and biofuels remain firmly on the agenda for so many companies. — John Gimigliano Principal in charge, Sustainability Tax practice for KPMG LLP (U.S.) Natural gas Nuclear Solar Clean coal technologies Wind Biomass Hydroelectric Other 33% 35% 20% 27% 18% 13% 12% 4% 4% 19% 32% 35% 39% 46% 79% 78% 2013 2012 This is about the same as in 2012. Natural gas was followed by nuclear energy (39 percent), solar (33 percent), and clean coal technologies (32 percent). Source: KPMG International, 2013 Energy Industry Outlook Survey KPMG Global Energy Institute | 19 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  24. Multiple responses allowed Natural gas for transportation Solar power and the promise of cleaner but more expensive energy 19% Smart grid technologies and the promise of more efficient service and lower utility rates Wind power and the promise of cleaner but more expensive energy 20% Electric storage and the promise of lower energy bills None of the emerging technologies will have a significant impact on electric service 26% 1% Electric storage and the promise of electric transportation Other technologies show more promise 26% Home management technologies and the promise of lower energy bills 42% 12% 10% Fuel cell technologies that use natural gas to produce electricity 46% 14% Benefiting customers Natural gas continues to be a significant part of the energy outlook, as almost half of respondents (46 percent) said natural gas for transportation was the most promising new technology from a customer standpoint, while 42 percent said smart grid technologies.  Q:There are many new technologies emerging in the power and utilities segment promising new benefits and services to customers.Which of these technologies shows the most promise from a customer services standpoint? The technology advantage Source: KPMG International, 2013 Energy Industry Outlook Survey 20 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  25. Source: KPMG International, 2013 Energy Industry Outlook Survey Realizing the value of big data Almost half (48 percent) said operational excellence (operations, supply chain) was the best use of data and analytics, while 31 percent said risk management and 30 percent said competitive intelligence. Multiple responses allowed  Q: Considering the relevance of data and analytics at your company, which of the following items represent the best use of data and analytics in driving actionable insights? Product positioning Acquiring customers Competitive intelligence Human capital Operational excellence (operations, supply chain) IT infrastructure Finance Government regulation Risk management Other 16% 20% 19% 14% 30% 22% 48% 3% 15% 31% KPMG Global Energy Institute | 21 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  26. Source: KPMG International, 2013 Energy Industry Outlook Survey Investing in smart grid The most significant barriers to the implementation of the smart grid continue to be largely unchanged.  Q: Which of the following issues are the most significant impediments to the implementation of the smart grid? Multiple responses allowed Significant up-front investment Regulators will oppose and/or delay Customer lack of interest and knowledge Justifying the business case Technology development Compliance with regulations will hurt ROI Customer privacy concerns Maintaining commitment to implementation over time Uncertainty regarding funding after stimulus plan Consumer advocates will oppose Large customers will oppose Other 27% 23% 48% 23% 16% 14% 14% 16% 16% 13% 11% 4% 3% 17% 12% 5% 3% 25% 38% 28% 25% 40% 46% 57% 2013 2012 Slightly less than half (46 percent) believe that the considerable investment needed up front will hinder its implementation, down from 57 percent in 2012. More than a third (38 percent) cited regulator opposition or delay. Notably, only 27 percent think that the ability to justify the business case remains a substantial issue, down from 48 percent in 2012. Smart Grid 22 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  27. The benefits of the smart grid implementation continue to emerge. We see the promise of smarter assets in the areas of customer service, operational improvement, and risk management. —Ron Clanton smart grid leader for KPMG LLP (U.S.) KPMG Global Energy Institute | 23 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  28. Conclusion atural gas is growing in overall importance to the U.S. energy industry, according to this year’s survey. Executives expect the growth in shale natural gas and oil production to have profound changes on the prospect of U.S. energy independence, economic growth, and consumer technologies. Notably, executives expect to continue investment in RD for alternative energy projects. Not surprisingly, most executives are concerned that regulatory pressures and legislative uncertainties could present barriers to growth for their companies. Nonetheless, they anticipate an increase in both capital spending and hiring in the coming year. N 24 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  29. KPMG Global Energy Institute | 25 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  30. w n e ors Revenue CompanyType Title Demographicsand methodology KPMG’s 2013 Energy survey is the 11th annual energy survey conducted by KPMG’s Global Energy Institute. This year’s survey reflects the responses of 103 financial and business executives from global energy companies during the spring of 2013. Public companies Private companies $100 million to $249.9 million $250 million to $499.9 million $500 million to $999.9 million $1 billion to $4.9 billion $5 billion to $10 billion More than $10 billion Senior vice president/director C-class (CFO, COO, CTO, etc.) Executive vice president/ managing director CEO, president 16% 15% 7% 25% 11% 26% 66% 34% 9% 17% 15% 59% Source: KPMG International, 2013 Energy Industry Outlook Survey 26 | KPMG Global Energy Institute © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752
  31. ABOUT KPMG KPMG is a global network of professional firms providing Audit,Tax and Advisory services. We operate in 156 countries and have more than 152,000 people working in member firms around the world.The independent member firms of the KPMG network are affiliated with KPMG International Cooperative (“KPMG International”), a Swiss entity. Each KPMG firm is a legally distinct and separate entity and describes itself as such. The views and opinions from the survey findings are those of the survey respondents and do not necessarily represent the views and opinions of KPMG International and/or any KPMG member firm. About the KPMG Global Energy Institute Launched in 2007, the KPMG Global Energy Institute (GEI) is a worldwide knowledge-sharing forum on current and emerging industry issues. This vehicle for accessing thought leadership, events, and webcasts about key industry topics and trends provides a way for energy executives to share perspectives on the challenges and opportunities facing the energy industry—arming them with new tools to better navigate the changes in this dynamic arena. To become a member of GEI, visit www.kpmgglobalenergyinstitute.com. Presented by the KPMG Global Energy Institute, KPMG’s Global Energy Conference (GEC) is KPMG’s premier annual event for financial and business executives in the energy industry. The GEC attracts more than 700 professionals each year and brings together energy luminaries from around the world in a series of interactive discussions. The goal of the conference is to provide participants with new insights, tools, and strategies to help them manage industry-related issues and challenges. To learn more about the GEC, visit www.kpmgglobalenergyconference.com. KPMG Global Energy Institute | 27 © 2013 KPMG International Cooperative (“KPMG International”). KPMG International provides no client services and is a Swiss entity with which the independent member firms of the KPMG network are affiliated. NDPPS 180752 About the KPMG Global Energy Institute Launched in 2007, the KPMG Global Energy Institute (GEI) is a worldwide knowledge-sharing forum on current and emerging industry issues. This vehicle for accessing thought leadership, events, and webcasts about key industry topics and trends provides a way for energy executives to share perspectives on the challenges and opportunities facing the energy industry—arming them with new tools to better navigate the changes in this dynamic arena. To become a member of GEI, visit www.kpmgglobalenergyinstitute.com. Presented by the KPMG Global Energy Institute, KPMG’s Global Energy Conference (GEC) is KPMG’s premier annual event for financial and business executives in the energy industry. The GEC attracts more than 700 professionals each year and brings together energy luminaries from around the world in a series of interactive discussions. The goal of the conference is to provide participants with new insights, tools, and strategies to help them manage industry-related issues and challenges. To learn more about the GEC, visit www.kpmgglobalenergyconference.com.
  32. © 2013 KPMG International Cooperative (“KPMG International”), a Swiss entity. Member firms of the KPMG network of independent firms are affiliated with KPMG International. KPMG International provides no client services. No member firm has any authority to obligate or bind KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. NDPPS 180752 Contact Us For more information, contact John Kunasek Partner, National Sector Leader Energy  Natural Resources 713-319-3513 jkunasek@kpmg.com Regina Mayor Principal, Energy Natural Resources Advisory Leader 713-319-3137 rmayor@kpmg.com kpmg.com

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