Exxon Facing Questions About Natural Gas Push
The Associated Press reports that Exxon Mobil Corp. rode higher oil prices to a $30 billion profit last year, but shareholders at its annual meeting Wednesday were more concerned about its big push into natural gas. Since buying XTO Energy last year for $29 billion, Exxon has become the largest natural gas company in the United States. It now owns more gas than crude oil. So far, the deal hasn''t paid off. Natural gas prices are around $4.42 per 1,000 cubic feet. That''s slightly below the price when the XTO deal closed and well below levels seen three years ago. That''s one reason, analysts say, Exxon''s stock has lagged behind that of rivals Chevron and ConocoPhillips. In January, Exxon said it expected natural gas to supply 26 percent of world energy demand by 2030, up from 22.1 percent in 2010. Oil is expected to provide 32 percent and coal will provide 21 percent, a drop from 34.2 percent and 25.3 percent respectively. Gas drilling is also attracting more attention from environmentalists and government officials who say it poses the threat of contaminating underground water supplies. Shareholders voted 3-to-1 to reject a resolution that called for the company to disclose more information about hydraulic fracturing or "fracking"—the pumping of tons of water and chemicals into the ground to break open rock formations and extract the gas.