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Industry Beat U.S. Oil and Gas CFOs are Bullish on Shale Prospects for 2013 Yet majority of survey respondents indicate pessimism regarding economy���s negative impact on gas, oil demand. As shale production in the U.S. continues at a rapid pace, 77 percent of U.S. oil and gas chief financial officers expect the domestic supply of oil to increase in 2013. In addition, 69 percent of CFOs also see natural gas supplies on the rise. If there is reason to temper the industry���s excitement with shale, it would be that only 50 percent of CFOs expect demand for oil to increase in step, concerns fueled in part by ongoing doubts about the strength of the U.S. economy. These are among the findings from the 2013 BDO Energy Outlook Survey, by BDO USA, LLP. The survey found that 31 percent of U.S. energy companies plan to increase their capital investments for 2013 in nonconventional areas, including shale, while only 26 percent plan to invest in more environmentally friendly exploration and processing technologies. The study examined the opinions of 100 chief financial officers at U.S. oil and gas exploration and production companies. Companies are banking on a combination of continued development of shale plays, an increase in prices and new production technologies to help turn their investments into a profit. Additional findings from the 2013 BDO Energy Outlook Survey include: U.S. and global economic uncertainty drives down confidence. Sixty percent of CFOs say they feel more pessimistic this year than last on the state of the U.S. economy and its impact on demand for oil and gas. This is reflected in a drop in sentiment about accessing capital and credit. Regulations stymie growth. Government regulation continues to be on the minds of industry leaders, with 63 percent reporting that state Federation of Canadian Municipalities Advocates 20-Year Plan to Fix Crumbling Infrastructure With the Canadian federal government wrapping up nearly six months of consultations on its long-term infrastructure plan, the Federation of Canadian Municipalities (FCM) said Canada needs a 20-year plan with predictable funding to fix its crumbling infrastructure. ���A long-term federal funding commitment that reflects the life cycles of the infrastructure it is meant to fix is needed to allow municipalities to invest wisely and strategically in priority areas over decades, not just years,��� said FCM president, Councillor Karen Leibovici. ���It also means breaking away from budgets built on application forms and providing a predictable funding envelope for all municipalities.��� The FCM recommendations include an increase in annual federal investments dedicated to municipal infrastructure from $3.25 billion to $5.75 billion to bring it in line, as a percentage of GDP, with historical levels from the 1950s and/or federal regulations have resulted in delays or terminations of projects during the past 12 months, compared with 56 percent a year prior. As the next Congress convenes in January, 36 percent fear more restrictive government regulation in 2013, followed by 28 percent who think tax proposals targeting the energy sector, including possible corporate tax hikes, lie ahead. A skeptical industry awaits a new round of legislation. Half of the CFOs surveyed say legislative issues will be the biggest factor inhibiting growth of the sector moving forward. And, for the fourth consecutive year, more CFOs (37 percent) see legislative changes posing the sector���s greatest financial challenge heading into 2013, ahead of low prices (36 percent) and access to capital and credit (17 percent). THE ROAD TO JOBS AND GROWTH: Solving Canada���S MuniCipal infraStruCture Challenge to the mid-1970s that allowed proper infrastructure maintenance and growth. FCM is proposing maintaining the existing permanent gas tax transfer, but with a cost-of-living indexation to protect its buying power. It is also proposing a new federal program designed to efficiently leverage matching investments from municipalities and provinces with a minimum of red tape and bureaucratic costs. NOvEMBER 2012 Submission to the Government of Canada���s Long-Term Infrastructure Plan Consultation by The Federation of Canadian Municipalities www.fcm.ca 14 | www.cedmag.com | Construction Equipment Distribution | January 2013 14_industry beat_KP.indd 14 12/21/12 1:14 PM