OKLAHOMA CITY - July 12, 2011: In an effort to help break OPEC’s 38-year
stranglehold on the U.S.
economy and to lower energy costs to American consumers, enhance
national security, stimulate economic growth, create hundreds of
thousands of high-paying jobs and improve the environment, Chesapeake
Energy Corporation today unveiled its plan for an achievable,
scalable and affordable pathway toward a transportation future that
runs
on America’s own abundant supplies of natural gas and
oil from deep
shale and other unconventional formations. Central to this
private-sector initiative to stimulate world-class technological
innovation and stronger economic growth is the creation of a $1.0
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.
To fund this effort, Chesapeake will redirect approximately 1-2% of
its
forecasted annual drilling budget away from efforts to increase
natural
gas supply toward projects that will instead stimulate increased
natural
gas demand. Over the next 10 years, the company anticipates
committing
at least $1.0 billion to CNGV initiatives.
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 $400 billion of American wealth to foreign countries, many
of
them often unfriendly to U.S. interests. As a result of our analysis,
Chesapeake has developed a three-pronged plan to move America toward
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
barrels a day through the acceleration of horizontal drilling and
hydraulic fracturing to develop the enormous unconventional oil and
NGL resources that underlie many parts of our country.
• 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 and provide American businesses and consumers
access
to vehicles that run on a cleaner fuel made by and for Americans
that
should be approximately $1.50 - $2.00 per gallon cheaper than
gasoline
and diesel.
• Deploy innovative and scalable GTL processes to convert natural gas
into a room temperature, tank-ready, liquid transportation fuel
that
can be blended with existing supplies of gasoline and diesel or
used
as a stand-alone replacement product that is cleaner and more
affordable and creates high-paying American jobs rather than
foreign
jobs.”
McClendon continued, “Chesapeake is so convinced of the
economic
attractiveness of this plan that we are redirecting approximately
1-2%
of our annual drilling cap-ex over the next 10 years, or at least
$1.0
billion in total, to stimulate market adoption of CNG, LNG and GTL
fuels. We also intend to take full advantage of the associated cost
savings and emissions reductions by accelerating the conversion of
all
4,500 of Chesapeake’s light duty and 400 of our heavy
duty fleet
vehicles to run on CNG, which will reduce our fuel costs by an
estimated
$15-20 million per year. In addition, we are converting at least 100
of
our drilling rigs and all of our planned hydraulic fracturing
equipment
to run on LNG. Just converting our rigs and hydraulic fracturing
equipment will cut the company’s diesel fuel
consumption by
approximately 350,000 gallons a day and save the company
approximately
$230 million annually, bringing our overall CNG and LNG fuel savings
to
approximately $250 million.”
