House Panel to Hold Exxon-XTO Merger Hearing Wed
WASHINGTON (Dow Jones), Jan. 19, 2010
A U.S. House panel will hold a hearing on Wednesday on Exxon Mobil Corp.'s planned purchase of natural-gas producer XTO Energy Inc. (XTO), an event that could put a spotlight on a controversial drilling technique that is allowing access to vast new domestic supplies.
U.S. Rep. Ed Markey (D., Mass.) will preside over the 9:30 a.m. EST hearing in the U.S. House Energy and Commerce Committee's subcommittee on energy and the environment. Exxon Chief Executive Rex Tillerson and XTO Chairman Bob Simpson are slated to testify.
XTO confirmed Simpson has been invited to the hearing and that he has agreed to testify next week. ExxonMobil didn't immediately respond to requests for comment.
Hydraulic fracturing involves pumping water, sand and other fluids into shale under pressure, creating fissures in the underground rock that allows the gas to escape. Critics fear the practice could pollute drinking water if the drilling mixture escapes. The industry says the practice is safe.
The completion of the Exxon-XTO deal depends in part on how the practice is viewed within Congress, where some lawmakers have been considering tougher oversight of hydraulic fracturing, or fracking. The companies have included language in their merger agreement allowing Exxon to terminate the deal if Congress makes the practice "commercially impracticable."
"If it can be extracted in an environmentally safe way, then why would you want to ban it?" U.S. Energy Secretary Steven Chu told reporters on Friday. He said that fracking "can be done responsibly," and that most of the shale beds lay below water tables.
The politics of gas drilling are complicated because natural gas -- which emits less carbon-dioxide than coal -- has been embraced by some environmentalists as an answer to climate change. More demand for natural gas would require more supplies in order to avoid a surge in prices. That means the considering trade-offs, such as the risk that shale drilling would cause water pollution.
(Russell Gold contributed to this article.)
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