Halliburton Company (HAL), Baker Hughes Incorporated (BHI): Another Fishing Expedition on Fracking

But with two agencies seemingly giving the procedure a green light to continue, the Justice Department is stepping in to investigate supposed anticompetitive practices. Halliburton Company (NYSE:HAL), the favorite whipping post of environmental activists, is the industry leader, with an estimated 29% share of the pressure pumping market, while Baker Hughes Incorporated (NYSE:BHI) had a 4% share. Schlumberger Limited. (NYSE:SLB), which is the second biggest services provider with a 21% share, hasn’t said whether it’s received any inquiries from the government.

Yet it’s a strangely timed investigation, since the onshore pressure pumping market peaked a few years ago, and like the industry they service, the pressure pumpers have seen margins fall as a glut of equipment flooded the market. While there is an offshore market for pressure pumping, it’s tiny by comparison, and analysts are left scratching their heads wondering what the Justice Department is actually trying to accomplish, particularly as both Halliburton Company (NYSE:HAL) and Schlumberger Limited. (NYSE:SLB) develop new technologies that minimize pressure pumping a a whole.

A stalled initiative by activists at the EPA and a clean bill of health by Energy could give some indication of why Justice is now involved, but while investigations don’t always lead to charges, this fishing expedition can still serve to make mischief.

The article Another Fishing Expedition on Fracking originally appeared on Fool.com is written by Rich Duprey.

Fool contributor Rich Duprey has no position in any stocks mentioned. The Motley Fool recommends Halliburton, owns shares of Nuverra Environmental Solutions, and has options on Nuverra Environmental Solutions.

Copyright © 1995 – 2013 The Motley Fool, LLC. All rights reserved. The Motley Fool has a disclosure policy.