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Chesapeake plans huge investment in American natural gas highway system

Oilfield Technology,

Chesapeake Energy Corporation has announced an investment plan to create a natural gas fuelled highway system across America and effectively reduce American dependence on OPEC and imported fuel whilst creating American jobs and boosting the economy.

Chesapeake is creating a US$ 1 billion venture capital fund, Chesapeake NG Ventures Corporation (CNGV), dedicated to identifying and investing in companies and technologies that will replace the use of gasoline and diesel derived primarily from OPEC oil with domestic oil, natural gas and natural gas-to-liquids (GTL) fuels.

Aubrey K. McClendon, Chesapeake’s Chief Executive Officer, commented, “We have analyzed the U.S. transportation sector during the past four years to determine how to create the best pathway to move our country away from dependence on OPEC oil and the resulting yearly transfer of more than US$ 400 billion of American wealth to foreign countries, many of them often unfriendly to U.S. interests.” Chesapeake has developed a three-pronged plan to move America towards greater energy independence and enhanced national security during the next 10 years:

  • Increase existing domestic onshore oil and natural gas liquids (NGLs) production of approximately 8 million barrels a day by 3 - 4 million bpd.
  • Invest in enough publicly accessible compressed natural gas (CNG) and liquefied natural gas (LNG) fueling stations to reach a tipping point where original equipment manufacturers (OEMs) of all vehicular classes will have sufficient confidence to increase their production of CNG and LNG vehicles.
  • Deploy innovative and scalable GTL processes to convert natural gas into a room temperature, tank-ready, liquid transportation fuel.

Demand-enhancement investments in CNGV

Chesapeake has agreed to invest US$ 150 million in newly issued convertible debt of Clean Energy Fuels Corp. based in Seal Beach, California. Clean Energy will use Chesapeake’s US$ 150 million investment to accelerate its build-out of LNG fueling infrastructure for heavy-duty trucks at truck stops across interstate highways in the U.S., thereby creating the foundation for ‘America’s natural gas highway system.’

Chesapeake has also agreed to invest US$ 155 million in a 50% ownership stake in Sundrop Fuels, Inc., a privately held cellulosic biofuels company based in Louisville, Colorado. The investment over the next two years will fund construction of the largest nonfood biomass-based ‘green gasoline’ plant in the world, capable of annually producing more than 40 million gallons of ultra-clean gasoline from natural gas and waste cellulosic material. The investment promises to accelerate the development of an affordable, stable, room temperature, natural gas-based fuel for immediate use in today’s automobiles, diesel engine vehicles and aircraft.

McClendon added, “The clean, abundant and affordable qualities of American shale natural gas are well documented. With Sundrop Fuels’ efficient synthesis gasification process, natural gas becomes the enabling technology for a safer, stronger and greener economy. Natural gas supplies the missing link – hydrogen – needed to turn our nation’s biomass waste stream into a bountiful flow of truly green biogasoline that can fuel our cars, trucks, aircraft and industry. This breakthrough technology creates extraordinary economic and environmental upside for our country by decreasing our dependence on OPEC oil and lowering greenhouse gas emissions.”

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