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Chesapeake creating $1B fund to boost natural gas use in transportation

Chesapeake Energy Corp. is creating a $1 billion venture capital fund to boost demand for natural gas as a transportation fuel. Chesapeake will start advancing its plan by investing more than $300 million in two companies, including one owned by T. Boone Pickens.
BY JAY F. MARKS Modified: July 11, 2011 at 9:25 pm •  Published: July 11, 2011

Mike Cantrell, president of the Oklahoma-based Domestic Energy Producers Alliance, praised Chesapeake's ambitious plan.

“I have always been an advocate of letting the marketplace decide the fuel of choice for Americans. It seems to me that is exactly what Aubrey is doing,” he said. “He is venturing out in the marketplace to see if investors want to invest in accelerating what is already happening.

“This is an extremely bold initiative by one of Oklahoma's most aggressive companies. We should all wish them well.”

McClendon said Chesapeake intends to accelerate the conversion of nearly 5,000 vehicles to run on CNG, a move expected to reduce the company's fuel costs by as much as $20 million a year.

Chesapeake also is converting at least 100 drilling rigs to run on LNG. Its planning hydraulic fracturing equipment will operate on LNG as well.

“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,” McClendon said.