Chesapeake Energy Corp. has reached a milestone in its quest to convert its 4,200-vehicle fleet to run on compressed natural gas, the company announced Tuesday.
Chesapeake's 800th natural gas vehicle was completed last week, meaning the company's entire Oklahoma fleet has been modified to run on the alternative fuel.
CEO Aubrey K. McClendon announced the company's plan to switch to CNG in May. Chesapeake intends to convert its entire fleet by 2014.
Phase one of that plan was the conversion of Chesapeake's Oklahoma truck fleet, which will be used by field operations teams overseeing the company's drilling programs in the Anadarko Basin in western Oklahoma.
Switching to natural gas is expected to save Chesapeake at least $11 million a year in fuel costs amid rising gasoline and diesel prices.
Officials noted the price of CNG has remained steady at $1.39 a gallon of gasoline equivalent, despite the volatility in gasoline and diesel costs since the recent turmoil in the Middle East.
“As President (Barack) Obama stated last week, our country can no longer afford to lurch from energy crisis to energy crisis so we must take aggressive actions immediately to begin reducing OPEC oil imports,” McClendon said. “With fuel prices expected to exceed $4 a gallon nationwide as unrest continues in the Middle East, if ever it was time for American-produced natural gas to begin replacing expensive OPEC oil, it is now.”
Obama recently directed federal agencies to ensure by 2015 that all new vehicles purchased for the nation's fleet of 600,000 public vehicles will run on electricity or alternative fuels.
Chesapeake is one of several companies, including AT&T and UPS, to commit to using natural gas to fuel its vehicle fleet. Chesapeake executives are on board as well, with all 15 of the company's senior executives driving natural gas vehicles.
“We are blessed to have an abundance of domestic natural gas to meet our growing energy needs — natural gas is the cleanest, most affordable and most readily scalable alternative energy source we have,” McClendon said.
To prepare for its fleet conversion, Chesapeake officials worked with leading fuel retailers such as OnCue Express and Love's Travel Stops to add natural gas fueling stations to existing facilities in
In 2010, Chesapeake and its retail fuel partners opened 14 public CNG stations throughout Oklahoma, pushing the state's total to 42.
Chesapeake officials said they expect hundreds more stations to open nationwide in the next few years to support the transition to CNG by large fleet operators.
“Public CNG stations make it convenient for school districts, businesses, government and citizens to drive natural gas-powered vehicles and benefit from lower fuel prices,” said Tom Price, Chesapeake's senior vice president of corporate development and government
“Many local, state and federal leaders are recognizing the benefits of natural gas, and through close coordination with original equipment manufacturers, fuel retailers and heavy fuel consumers, we can assist American consumers and enable them to also realize the many benefits of CNG.”
Chesapeake will continue its fleet conversion in northern Texas and Louisiana, with plans to keep partnering with local fuel retailers to build CNG fueling stations, before turning its attention to its other operating areas in Pennsylvania, West Virginia, Colorado, Wyoming and South Texas.
Change helps Okarche companies
OEM Systems Inc. handled all of the conversions for Chesapeake, officials said.
OEM is the sister company of Okarche's Carter Chevrolet Agency. General Manager John Luber said increased interest in compressed natural gas has allowed the two companies to increase their workforce by about 40 percent.
In the past, mainly commercial entities were interested in switching to CNG, but lately more people have been asking about the conversion process, Luber said.
“With the price of gasoline going up and up every day, there are more and more people getting on board,” he said.
OEM can convert up to 50 vehicles a week to run on CNG, Luber said.