Exxon, XTO Execs Defend Merger and Safety
of Shale Gas Production
By Jennifer A. Dlouhy
WASHINGTON—This week the heads of Exxon Mobil Corp. and XTO Energy Inc., sought to assure skeptical lawmakers that the techniques they use to produce natural gas from shale rock are safe.
“We can now find and produce unconventional natural gas supplies miles below the surface in a safe, efficient and environmentally responsible manner,” said Rex Tillerson, CEO of Irving-based Exxon Mobil Corp (pictured at right).
Bob Simpson, the founder of Fort Worth-based oil and gas producer XTO Energy, gave lawmakers the same assessment.
Their comments came before a House Energy and Commerce subcommittee hearing to vet the planned merger of Exxon Mobil—the world’s largest publicly traded oil company—with XTO, a pioneer in the use of a technique called hydraulic fracturing to produce natural gas from unconventional sources.
Under the terms of the all-stock deal—valued at upwards of $40 billion—Tillerson said Exxon Mobil can pull out of the merger if federal regulators or lawmakers prohibit hydraulic fracturing or make it “no longer commercial.”
In hydraulic fracturing, commonly called “fracking,” energy producers inject fluids deep underground under high pressure to break up shale rock and release gas locked within it. The technique, now regulated at the state level, has been criticized by some environmentalists who worry it could introduce harmful chemicals into water supplies.
Several bills aim to shed more light on the process, including a measure by Rep. Diana DeGette, D-Colo., that would force companies to disclose the chemicals used in hydraulic fracturing fluids. DeGette said she is confident Congress can support fracturing while ensuring that its use is environmentally sound.
Rep. Joe Barton, R-Ennis, said he has had discussions with members who would like to outlaw the practice or give the Environmental Protection Agency more authority over it. Tillerson said new federal regulations would add unnecessary costs, because state laws are better adapted to the needs of individual states and their geology.
“I’ve never seen a regulation that didn’t add a layer of cost,” Tillerson said, adding that the potential price tag of complying with new regulations on fracking could discourage production of marginal wells.