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CNG-NOW!
Chesapeake Energy Corporation is promoting the use of compressed natural gas (CNG) as an alternative to gasoline in cars. Chesapeake Energy Corporation is the second-largest independent producer and third-largest overall producer of natural gas in the United States.
They have launched a media campaign similar to the T. Boone Pickens plan that calls for reducing our importation of oil by substituting natural gas to power vehicles in this country. Their campaign, called CNG-NOW!, is being promoted by their CEO, Aubrey K. McClendon.
Chesapeake Energy has been active in promoting natural gas use for electric production instead of coal. Chesapeake Energy successfully presented a case to stop the construction of a coal-fired power plant in Oklahoma. It presented an economic argument that if the plant couldn’t operate because of carbon emission restrictions in the future then the utility shareholders shouldn’t be allowed to recover the cost of the power plant. The PUC agreed and the utility declined to take the risk of building the plant. This lead to George Bush trying to implement carbon emissions standards starting in 2025 that would have allowed more coal plants to be built. He was not successful and new coal plant construction in this country has been severely limited by a lack of funding.
Now comes the campaign to promote the use of natural gas for transportation. The benefits are clear:
• Natural gas has less carbon content than gasoline or diesel.
• Natural gas burns much cleaner than gasoline or diesel.
• Natural gas is a domestic energy source.
• Natural gas is much more abundant than oil in this country.
• Natural gas is a feedstock for many industrial chemicals and fertilizer.
Part of the reason that natural gas is so abundant in this country is due to new drilling technology that allows producers like Chesapeake Energy to pull large volumes of gas from shale deposits that previously were not economical to produce. Chesapeake Energy has been a leader in horizontal drilling through tight shale formations. By drilling horizontally and then fracturing the shale with high pressure water, they are able to open a large volume of the shale to extract the natural gas content.
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These types of shale formations are found all over the country and could provide a 40 year supply of natural gas. So much natural gas is being produced from shale that the increased supply might be responsible for pushing down the price of natural gas.
Note that the above map does not include new shale discoveries like the Haynesvill Shale formation in Louisiana and the Marcellus Shale formation in northern Appalachia that contain additional trillion of cubic feed of reserves.
It may be a self-serving campaign. Increasing natural gas demand would be good for Chesapeake Energy and its shareholders. The success natural gas producers are having is a double edged sword that might cut the price they get for the gas they produce.
I believe that natural gas is the bridge fuel that will buy us time while we develop transportation based on renewable energy. Natural gas is produced domestically, which will cut our huge trade deficit and should create more good paying jobs in this country.
