Jan 2, 2006
ConocoPhillips agreed to spend 36 billion dollars to buy Burlington Resources, a natural gas producer. This is the biggest takeover in the energy industry since 2001. A financial analyst said of the deal, “A buyout will signal that ConocoPhillips sees natural gas prices staying higher for longer than people expect,” which means it is betting we’ll be paying these outrageous prices for heating gas for a long time to come.
In a much smaller takeover, but important still, Southern Union bought the Bass family’s natural gas pipeline company for 1.8 billion dollars. This makes it the third biggest pipeline company in the country, and is added to its recent acquisitions of the Cross Country Energy pipeline from Enron and the CMS Panhandle Companies. Not surprisingly, the price of Southern Union stock has increased by more than 45% in the last two years.
Instead of putting their billions into quickly bringing more natural gas to the consumer, the giant energy companies use that money to buy up other companies, increasing their monopoly control still more, and furthering their ability to raise the price of gas.
That’s the rules of the capitalist game.