(Source: Tulsa World)
By DAVID KOENIG; CHRIS KAHN
DALLAS - Exxon Mobil Corp.'s big push into natural gas is
threatened by opposition to drilling techniques that have unlocked
buried reserves. Now the oil giant is trying to change public
opinion about how it gets the gas.
CEO Rex Tillerson said Wednesday that the company is running
advertisements, conducting town hall meetings and talking to
regulators to convince Americans that drilling using a method known
as "fracking" is safe. Exxon is also paying for polling, but
Tillerson said it's too soon to know whether its campaign is
working.
Exxon Mobil placed a bet on natural gas by paying $29 billion for
XTO Energy last year.
That made Exxon the largest natural gas company in the U.S. It
now owns more gas than crude oil.
So far, however, the deal hasn't paid off. Natural gas prices are
about $4.42 per 1,000 cubic feet. That's slightly below the price
when the XTO purchase closed and well below levels seen three years
ago.
That's one reason, analysts say, Exxon's stock has lagged behind
those of rivals Chevron and ConocoPhillips.
At Exxon Mobil's annual shareholder meeting Wednesday in Dallas'
ornate symphony hall, Tillerson boasted about the company's success
- it rode higher oil prices to a $30.5 billion profit last year -
and defended the new emphasis on natural gas.
Exxon predicts that natural gas will be the fastest-growing
energy source, overtaking coal and ranking second only to oil in
total use by 2020.
Much of that gas will be produced through "unconventional"
methods, including hydraulic fracturing or fracking - the pumping
of tons of water and chemicals into the ground to break open rock
formations and extract the gas. The practice has attracted fierce
opposition from landowners, environmentalists and government
officials who say it poses the threat of contaminating underground
water supplies.
About 28 percent of Exxon shares were voted for a resolution that
called for the company to disclose more information about fracking.
At Chevron Corp., which has boosted its own natural gas business in
the past year, 41 percent of shares were cast for a similar
resolution at its annual meeting Wednesday.
Michael Passoff of As You Sow, a San Francisco group that lobbies
companies to adopt environmental policies, said the votes showed
that mainstream investors are concerned about fracking and its
financial risks for companies.
Originally published by DAVID KOENIG & CHRIS KAHN Associated Press.
(c) 2011 Tulsa World. Provided by ProQuest LLC. All rights Reserved.
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