Saying it wants to break OPEC's "stranglehold" on the US economy while creating jobs, the US' top natural gas producer said Monday it is forming a venture capital-like unit to invest more than $1 billion on transportation fuels derived from natural gas and a filling-station system to dispense them.
Oklahoma City-based Chesapeake Energy said it has already chosen investments for $305 million -- a Colorado gas-to-liquids technology company that creates "green" fuel from gas and cellulosic plant material, as well as investments in T. Boone Pickens-backed Clean Energy to build fueling stations for heavy trucks along the interstate system.
Chesapeake will invest $150 million over three years in publicly traded Clean Energy Fuels, based in Seal Beach, California, which is convertible to stock and an ownership stake in the Pickens-backed company to build 150 natural gas-fueling stations for heavy trucks, the company said.
Another $155 million will be invested over three years, also convertible to a 50% ownership stake, in SunDrop Fuels of Louisville, Colorado. SunDrop is perfecting a technology that combines natural gas and plant material to create a fuel suitable for cars, trucks and airplanes, Chesapeake said.
Chesapeake's SunDrop investment will fund construction of a plant that will produce 40 million gallons/year of the "green" fuel.
Chesapeake co-founder and CEO Aubrey McClendon said the investment capital is part of a three-pronged plan to wean the US off OPEC and on domestically produced fuels. Part of the plan is to create enough transportation fueling infrastructure to get the US to a "tipping point" where natural gas vehicles become regular choices, Chesapeake said.
"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 billion in total, to stimulate market adoption of compressed natural gas, liquefied natural gas and gas-to-liquids fuels," McClendon said.
