It’s no secret that the oil and gas industry has been one of the few bright spots in the U.S. economy, which is still recovering from a recession, in the last few years. But future investment decisions by the energy sector could be impacted the most by environmental regulations, some fear. Results of a recently released EY survey show a segment of accounting, finance and accounting professionals in the energy industry are more concerned about the possible impact such regulations could have on the industry—even more so than tax reform. The EY 2013 Energy Tax and Policy Survey showed that 88% of the respondents believe the U.S. Environmental Protection Agency’s (EPA) efforts to regulate hydraulic fracturing will impact domestic natural gas development. And 93% of the oil and gas respondents believe the EPA will slow or stall domestic production. This comes as growing oil and gas production—boosted by unconventional resources from shale plays across the U.S.—further positions the nation to become an exporter of oil and gas. But in a display of optimism and in the spirit of innovation, 60% of the participants said they believe the industry will comply with the new regulations by deploying technologies. Another interesting finding concerned the amount that natural gas prices are predicted to rise over the next three years. Prices are already moving upward, although they are still much lower than many places on the other side of the globe. But 57% of the respondents said they believe the spot price of gas at Henry Hub will increase between 1% and 49%. “Mining and metals respondents were the most likely to forecast an increase of that magnitude; 68% said the spot price would rise at least 49%, compared with 65% of oil and gas producers and 57% of utilities,” according to EY. Although environmental regulations and price increases are predicted to become, or rather remain, part of the energy industry’s future, survey respondents think major tax reform is unlikely to be passed by Congress during the current economic period. Just more than 70%, for example, said the repeal of IRC Section 174 would not impact their companies, while 26% said that a repeal of IRC Section 199 would increase their companies’ federal tax liability. “The conventional wisdom is that the energy industry is fearful of changes to the tax structure," Andy Miller, Americas mining and metals leader, said in a news release about the survey results. “But the response to the questions in this survey shows something different. It shows respondents recognize that Congress is not likely to pass meaningful tax reform during a time of slow economic growth.” But most believe state and local government bodies will have no problem raising taxes for natural gas producers. However, the majority of those surveyed don’t expect these increases to impact domestic production overall, according to EY. If anything, tax hikes will cause companies to move to other parts of the U.S. with more favorable tax conditions. Other highlights from the survey include: • 51% said their companies had broadly increased capital spending in the U.S. in the last four years; • 72% believe less than 50% of LNG facilities will be permitted and constructed; and • 58% believe Congress will not modify the Clean Air Act to remove carbon emissions. “One of the major takeaways from this survey is that these major energy sectors—oil and gas, power and utilities, and mining and metals—are united in a belief that the U.S. needs comprehensive energy and environmental legislation that defines a clear path for the future,” said Deborah Byers, the oil and gas leader for Ernst & Young LLP in the U.S. “A common theme we hear is that it is difficult for companies to plan and invest for the long-term without regulatory and tax certainty.” Just less than 170 accounting, finance and tax professionals who work in the US energy sector— including oil and gas, power and utilities, and mining and metals—participated in the survey. About half of the respondents represented energy companies with energy operations in the US, while 34% represented U.S.-based companies that also have operations abroad, according to EY. Contact the author, Velda Addison, at