Chairman of Energy and Environment Subcommittee Investigates Merger

WASHINGTON, D.C. – Representative Edward J. Markey (D-Mass.), chairman of the Energy and Environment Subcommittee of the House Energy and Commerce Committee, today held a hearing on the ExxonMobil-XTO merger and its impact on U.S. Energy Markets.

Chairman Markey speaks at a hearing on the the ExxonMobil-XTO merger

READ CHAIRMAN MARKEY'S FULL STATEMENT HERE

Representative Edward J. Markey (D-Mass.), chairman of the Energy and Environment Subcommittee of the House Energy and Commerce Committee, issued the following opening statement at a hearing entitled “The ExxonMobil-XTO Merger: Impacts on U.S. Energy Markets:

“A little over a decade ago, this Committee gathered to review the largest industrial merger the world had ever seen. The product of that merger, ExxonMobil, is now the largest company in America, worth $328 billion and raking in $45 billion in annual profits.  Last month, ExxonMobil announced a $41 billion merger with XTO Energy, one of the country’s largest natural gas producers and a pioneer in the production of natural gas trapped in shale rock formations and other unconventional sources.  The combined entity will be, by far, the country’s largest natural gas producer and largest holder of natural gas reserves.”

 
“Remember the old commercial?:  ‘When EF Hutton talks, people listen.’  Well, it’s no secret that I disagree with ExxonMobil on many aspects of energy policy.  But when America’s biggest company makes a big move in the energy sector, policy makers need to listen and understand what it means.  That is why I have called today’s hearing.  This merger heralds a fundamental long-term shift in U.S. energy markets, and one that deserves our close attention.”

 
“Over the last decade, a small group of companies that most Americans have never heard of has been developing huge deposits of natural gas in deep shale formations across America.  Long believed uneconomic to produce, these reserves are now being tapped thanks to a revolution in technology.  Using a technique called hydraulic fracturing, companies are now able to extract the natural gas that is locked within shales and other rock formations deep under the Earth’s surface.  This involves drilling into these formations and breaking them up by injecting a high-pressure stream of fluid, composed mostly of water and sand, making extraction of the gas easier.  Horizontal drilling also plays a key role in making these reserves economical to produce.”

 
“Companies like XTO are using these complex techniques to turn mile-deep shale and other rock formations into producible natural gas.  XTO has been at the forefront of the shale gas boom of the past couple years, quickly growing into one of the largest gas producers in America and the second-largest holder of proven gas reserves in the country.”

“ExxonMobil is not the only big company getting into this space.  Today, six of the seven largest publicly traded companies in the world are oil and gas companies. With this merger and a recent joint venture agreement, all six will be significantly invested in unconventional natural gas development in the United States.” 

 
“This transformation in the industry is having a major impact on the forecast for U.S. energy supplies.  Last year, the Potential Gas Committee – a group of academics and industry experts – increased its estimate of U.S. natural gas reserves by 35 percent over the estimate from just two years before.  That increase was due mostly to shale gas, which now accounts for one third of estimated U.S. reserves.”

 
“The brightening outlook for domestic natural gas supplies changes the backdrop against which we consider energy policy here in Congress.  Natural gas will play a critical role as a “bridge fuel” – a lower-carbon alternative to coal and oil that helps America transition from a high-carbon past to a clean energy future.  An abundant domestic supply of natural gas – together with robust investment in efficiency and renewables – can help make crossing that bridge faster and less costly.”

“Natural gas can only play this role if it is produced in a safe and sustainable way.  Congress recently urged EPA to study the potential impacts of hydraulic fracturing on drinking water sources.  The results of that study will help to guide policy to ensure adequate protection of public health and the environment.”

 
“With that introduction, we’re here to listen and to learn what this ExxonMobil-XTO deal means for U.S. energy markets and energy policy.  For decades, America’s energy policy has been between a rock and the hard place due to our dependence on imported oil from the Middle East. But now, we are hearing that the natural gas trapped in American rock may offer us a pathway away from some of that dependence.  I look forward to hearing from our distinguished witnesses on this important subject — thank you both for being here.”

 
ExxonMobil CEO Rex Tillerson speaks at the hearing  

 XTO CEO Bob Simpson speaks at the hearing

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