The head of US producer Chesapeake Energy on Tuesday once again called for industry and government leaders to adopt policies aimed at stimulating demand for natural gas to take advantage of the nation's shale plays.
"There's no reason to believe that a 1% to 2% demand shift in next 10 years is not achievable," Chesapeake CEO Aubrey McClendon told the World Shale Gas Conference in Houston. "The US is in the early stages of a natural gas demand revolution."
McClendon predicted that the demand for gas would increase naturally as the US emerges from its recent recession and industrial demand for the fuel picks up, and as power generators increasingly turn to gas as older, coal-fired plants are retired.
In addition, he said the move to export liquefied natural gas from US ports will create new markets for the US' output in a few years, he said.
However, McClendon said the US government and industry leaders should do more to promote the use of gas as a highway transportation fuel. He said in this regard, the US trails developing nations such as Pakistan, which has "one of the highest numbers of natural gas vehicles on the road."
McClendon estimated that it would take about $2 billion to build a network of natural gas fueling stations across the US to stimulate the adoption of gas-fired vehicles by owners of commercial vehicle fleets.
In addition, he said he looks forward to a time when the 70% of Americans who have natural gas delivered to their homes can fuel their vehicles in their own garages. He said conversion kits to allow homeowners to fill their natural-gas fueled vehicles could be bought for about $1,000.
McClendon, who owns a vehicle fueled by natural gas, which he said costs the equivalent of about 60 cents per gallon, said such conversion kits would quickly pay for themselves in fuel savings.
In addition, McClendon pointed to a $155 million deal Chesapeake announced July with biodiesel company Sundrop Fuels to develop a "green gasoline," by combine feedstocks of natural gas and biomass. The widespread adoption of such a fuel could help reduce US demand for petroleum products from overseas, he said.
The dramatic ramp-up in the exploitation of US shale plays has led to a gas production boom, which in turn has caused producers such as Chesapeake to come up for more uses of their product.
"You can't stimulate a revolution in natural gas demand without a revolution in natural gas supply," McClendon said. He noted that in 2009 the US surpassed Russia as the world's number one gas producing nation.
"I believe this country is capable of producing as much gas as it puts its mind to," he said.
In addition, McClendon said that as other nations learn how to develop their own sources of shale gas, global gas supplies will become abundant for decades to come.
"Just as the 19th century was the age of coal and the 20th century was the age of oil, the 21st century will truly be the age of gas," he said.
McClendon, whose company is the most active gas drilling in the US, has long been an outspoken advocate of increased use of the fuel.
