Consol Energy announced a $3.5 billion deal on Monday to acquire 1.5 million acres of potential natural gas fields and 9,000 existing wells from Dominion Resources, with a third of the acreage coming in the Marcellus shale region, reports Forbes.
Most gassy deals of late have involved global oil and gas supermajors, like ExxonMobil buying XTO Energy, and BP and Total picking up assets from Chesapeake Energy and others. Consol, in contrast is a coal company. What does a dirty-fuel player like Consol want with a clean-burning fuel like natural gas?
Diversification, for starters. "Gas is a perfect hedge against draconian moves on coal in the short term," Consol Chief Executive J. Brett Harvey reportedly said Monday. Yet for Consol, the thrust into gas isn't so much to diversify its coal assets, but to complement them. Harvey says he has no intention of reducing Consol's coal output, rather the goal is in part to glean some green cred while figuring out ways to get more profit out of coal regions it has worked for decades. A long-term goal: determine the potential for using coalbeds like a sponge to soak up and sequester carbon dioxide.
Original source: Forbes
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