ExxonMobil’s acquisition of natural gas giant XTO Energy – the hot topic in the gas-field communities of Colorado’s Western Slope this week – has implications far beyond an industry typically dominated by smaller, independent operators.
According to National Public Radio, ExxonMobil, the largest, most powerful lobby in Washington, is now conflicted on the climate change legislation passed by the U.S. House this summer and now languishing in the Senate.
While the natural gas lobby has been battling hard to get more love from the Senate (in the form of tax incentives and other concessions) for what they point out is the cleanest burning fossil fuel and a bridge to a renewable future, ExxonMobil has spent millions fighting Congress on cap and trade and other aspects of a climate bill. Now ExxonMobil seems to be playing both sides of the fence – an interesting dilemma as pressure mounts on the Obama administration and Congress to produce a meaningful bill.
And Reuters today is reporting ExxonMobil can back out of the XTO deal if hydraulic fracturing, or “fracking,” is somehow deemed illegal or regulated to the point of being too expensive. The process of injecting gas wells with high-pressure water, sand and chemicals to free up more gas is the subject of U.S. Rep. Diana DeGette’s (D-Colo) FRAC Act, which seeks to remove a Safe Drinking Water Act exemption for the process and put in under EPA oversight.
Most natural gas industry officials and some state regulators say the process is being adequately handled by state regs and presents no real danger to groundwater supplies. But community activists and environmentalists continue to challenge industry claims on fracking.