Exxon Mobil Faces Criminal Charges That Concern the Fracking Industry
Three years ago, Exxon Mobil (NYSE:XOM) acquired natural-gas producer XTO Energy for $34.9 billion, largely to take advantage of the company’s hydraulic-fracturing expertise. The purchase was the Exxon’s largest since former Chief Executive Officer Lee Raymond orchestrated the $88 billion merger with Mobil — and it tied the company’s future growth to fracking.
The XTO Energy purchase came at a time when hydraulic fracturing, a process that cracks rock deep underground to release oil and natural gas, was first beginning to make production possible in many previously untapped shale fields. The subsequent shale gas revolution swiftly changed the economics of natural gas. It prompted the industry to launch more than 100 new projects in the past several years specifically aimed at taking advantage of low prices, with investments totaling billions of dollars and 50,000 new jobs created. Even if the United States now produces more natural gas than it can use, pushing prices down. Natural gas is undoubtedly big business.
As natural has becomes a bigger business, and as the Department of Energy begins approving more proposals to export liquefied natural gas, it will become an even bigger business. In contrast, environmentalists fear that as natural gas grows more profitable, it will leave an even darker mark on the American landscape.