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Exxon can exit XTO deal if drilling technique restricted
A view of the Exxon Mobil refinery in Baytown, Texas September 15, 2008.
Credit: Reuters/Jessica Rinaldi
(Reuters) - Exxon Mobil Corp (XOM.N) said it can pull out of its $30 billion acquisition of XTO Energy XTO.N if U.S. lawmakers pass legislation on a controversial drilling technique used to tap oil and gas fields.
Exxon would be able to walk away from the deal if U.S. lawmakers make hydraulic fracturing "illegal" or "commercially impracticable," according to the merger agreement filed by Exxon with the U.S. Securities and Exchange Commission.
Hydraulic fracturing, or "fracking," injects a mixture of water, sand and chemicals into rock formations at high pressure to force out oil and natural gas. The practice is used to stimulate production in old wells, but is now also used to tap oil and gas trapped in shale beds across North America.
On Monday, Exxon said it plans to buy XTO Energy Inc in an all-stock deal. The combined companies will have 8 million acres of shale gas and other types of unconventional resources, the largest in the industry.
The oil and gas industry says hydraulic fracturing is well regulated and safe, a position that Exxon says it supports.
Critics say the drilling chemicals have polluted aquifers in Pennsylvania and Colorado and can cause cancer and other serious illnesses.
(Reporting by Ajay Kamalakaran in Bangalore; additional reporting by A.Ananthalakshmi and Shivani Singh; Editing by Lincoln Feast)
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When gas, water and Carbon Dioxide return to the surface mineral salts are suspended and yes, they can and probably to contaminate the water tables.
We are quickly approaching the point in time where our drinking water supplies will come more from underground than the rivers and lakes.
There has to be more work done on the technology and more work done on getting that information out to the public.
With EncapSol, XTO would just need to pump water and proppants with EncapSol into the formation — the EncapSol then attracts, encapsulates and releases the hydrocarbon molecules for exit out the well — no other toxic chemical additives are needed.
Because EncapSol repels and is immiscible to water — there is no contamination of the water either.
At the surface, the EncapSol+hydrocarbon solution is processed — separating the hydrocarbons and recovering the EncapSol solvent with 99.9% efficiency for re-use downhole.
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