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ExxonMobil Bets on Natural Gas Future with Purchase of XTO ExxonMobil’s purchase of XTO Energy, the U.S.’s largest natural gas producer, indicates that the company anticipates natural gas shedding its short-term difficulties and emerging once again as a fuel whose profits are competitive with oil.
ExxonMobil has a reputation for being a company that acquires conservatively and ignores short-term market fluctuations.
The fact is, after a difficult year, most analysts agree that natural gas prices are now starting a gradual climb. While 2008 saw gas priced at $9 per million BTUs, and 2009 saw that figure closer to $4, projections are for prices to be in the $6 to $7 in a year or so.
If new shale gas development becomes more difficult in response to growing environmental concerns, the current supply glut could end with a serious rebound in prices. In addition to betting on an economic recovery, ExxonMobil may be putting its money on natural gas becoming the fuel of choice for a nation trying to reduce its carbon emissions while maintaining energy independence in the area of electricity generation—and on it regaining any lost ground related to the last year or so of unexpected development and slow economic activity. |
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