FUELING AMERICA’S FUTURE

AUBREY McCLENDON ON THE POTENTIAL OF NATURAL GAS IN THE 21ST CENTURY

 The enormous potential of the 21st century’s “Age of Natural Gas” is now fully in view. Vast new reserves of natural gas in shale reservoirs deep beneath our country have been  discovered in the past five years. These shale reservoirs are now estimated to contain more than two quadrillion cubic feet of natural gas, more than doubling America’s  previously estimated natural gas reserves, and giving us close to a 200-year supply of clean, affordable, American natural gas. These unconventional reservoirs are a  remarkable addition to America’s bountiful natural resource endowment.

 They are also essential to retaining our nation’s prosperity. Because of our reliance on dangerous and expensive foreign oil to power our cars and trucks and on dirty coal to  produce 50% of our electricity, America’s position of global economic and environmental leadership for the next century is unfortunately in doubt. It need not be. Underneath  many parts of the U.S. lies a buried treasure of natural gas that is quickly becoming the envy of the world — it’s clean, affordable, abundant, American, and brought to you by  public independent natural gas producers such as Chesapeake.

 Two quadrillion cubic feet of America’s natural gas represent more energy than Saudi Arabia’s 200 billion barrels of oil reserves — but America’s natural gas is much cleaner  and 70% cheaper than Saudi oil. In 2009, the U.S. passed Russia as the biggest producer of natural gas in the world, but how many Americans realize this remarkable achievement? Our political leadership must begin to acknowledge and celebrate this tremendous accomplishment and to recognize the strategic and practical benefits of more aggressively using our enormous new reserves of natural gas.

NATURAL GAS IS THE BEST SUBSTITUTE FOR FOREIGN OIL

The U.S. imports approximately 60% of the oil that we consume — a dangerous addiction that costs our country $1 billion per day. This percentage will likely rise in the years ahead as oil prices inevitably increase to choke off demand in the industrialized countries to make room for burgeoning oil demand from rapidly developing countries in Asia, the Middle East and in South America. This is an addiction America cannot afford in good economic times and certainly not in the tough economic times the nation is facing today.

But if our political leadership would awaken and recognize that this addiction could be overcome by converting some of the current demand for foreign oil to new demand for domestic natural gas, America’s economic future would be much stronger and our environmental outlook would be brighter. Natural gas has only 50% of the carbon that gasoline has, but more importantly, natural gas vehicles emit little to no harmful pollutants such as carbon monoxide (CO), nitrogen oxide (NOx), and toxic volatile organic compounds (VOCs) that gasoline and diesel consumption currently produce.

The best way to begin breaking this foreign oil addiction is to endorse the NAT GAS Act (H.R. 1835 and S. 1408) now pending in Congress. For details on these bills, please visit www.cngnow.com. These bills would gradually and efficiently introduce clean, American natural gas as the fuel of choice for heavy-, medium- and light-duty truck fleets in the U.S., replacing diesel refined from expensive foreign oil.

Once truck fleets have been converted to natural gas (in the form of liquefied natural gas, or “LNG”) and natural gas refueling pumps have been added to many of our nation’s truck stops, we can then begin converting passenger cars to natural gas (in the form of compressed natural gas, or “CNG”). This conversion process would save American consumers billions of dollars because natural gas is 70% cheaper than oil. Americans also would enjoy the added benefits of cleaner air and water and greater national security.

Speaking of national security, let’s not forget that the real price of oil is far more than the $85 per barrel that it costs today. When the American military’s cost of defending the world’s oil shipping lanes and fighting wars in the Middle East and nearby areas is considered, some experts say the true cost of oil to Americans may be over $200 per barrel. The current practice of  spending $1 billion per day to import 11 million barrels of oil from foreign countries is simply not sustainable — it’s a dangerous, dirty and expensive habit that must be curtailed.

I drive a converted Chevy Tahoe that runs on natural gas from my home, and I can assure you it feels great to refuel my vehicle at $1.00 per gallon with a clean fuel that is made in America and creates American jobs. My goal is to make sure all Americans one day have the opportunity to enjoy that same great feeling.

We must demand that our leadership begins acting now to make the transition to clean, affordable, abundant, American natural gas before oil reaches $150 per barrel (bringing the price of gasoline to $4.50–5.00 per gallon) and we find ourselves right back in another recession, or perhaps even worse, a depression. These are serious issues, and our nation does not have one day to waste in beginning the transition to a transportation system based on natural gas rather than on expensive foreign oil.


NATURAL GAS IS THE BEST SUBSTITUTE FOR DIRTY COAL

A recent survey Chesapeake commissioned showed that most Americans believe their electricity comes from coal, nuclear or wind — very few people know that natural gas provides 22% of America’s electricity. It is critical for Americans to realize how their electricity is generated. As more Americans take responsibility for the environmental impact they create through their electricity consumption, they need to know there are alternatives to burning dirty coal besides constructing new nuclear power plants or new wind and solar facilities. Nuclear plants are prohibitively expensive and time consuming to build. Wind and solar facilities are not economic without taxpayer or ratepayer subsidies. They also cannot provide baseload power because of the lack of sunshine at night and on cloudy days and because of the unpredictability of the wind. These alternatives also require the enormous expense of building unsightly power lines over long distances.

The only scalable, affordable alternative to burning dirty coal is to burn clean natural gas. And the best news is that it would be relatively easy to shut down the dirtiest 33% of America’s coal plants (better known at Chesapeake as the “Filthy 100”) and replace their electrical output with natural gas-fired electricity. That is because coal plants generally run about 75% of the time while natural gas power plants only run about 25% of the time. The U.S. has enough natural gas to ramp up natural gas power plants to run at least 50% of the time so that we can decommission the Filthy 100.

Doing so would eliminate the following annual estimated pollution: 600 million tons of carbon dioxide (implicated in global warming concerns); 700,000 tons of nitrogen oxide (exacerbates respiratory and heart diseases); 1.5 million tons of sulfur dioxide (the main ingredient of acid rain); 19,000 tons of mercury (one of the deadliest toxins known to mankind, and nonexistent in natural gas); and millions of tons of particulates (which the American Lung Association says kill 24,000 Americans per year).

Confronted with these facts, the coal industry responds with two claims: first, that natural gas is more expensive, and second, that coal can be made clean. Natural gas today sells for around $4 per mcf, making it nearly equivalent in cost to coal, but far cheaper when you factor in the social and environmental costs from coal pollution. And to say that coal is clean or can be made clean is extremely misleading. No scalable, affordable technology exists today to make coal clean. It remains an expensive fantasy on a distant horizon.

In addition, so-called “clean coal” still retains 50% of coal’s original carbon, which ironically would place “clean coal” at a carbon level equivalent to natural gas. So why not just use the reality of clean natural gas today and save hundreds of billions of dollars and several decades of time associated with the daunting challenge of trying to make coal clean? And remember, the carbon removed from coal to make it “clean” doesn’t just go away — it has to be disposed of somewhere. Right now the “clean coal” plan is to pump more than 100 million gallons of liquid carbon dioxide underneath the ground every day and hope it stays there. That process is expensive, unproven and is projected to consume about 30–35% of a typical power plant’s electrical output. No wonder the coal industry favors the “clean coal” idea so much — it would actually increase coal consumption by 30–35%! This insanity must stop! Our country needs to recognize that the future should belong to clean, affordable, practical energy sources — and natural gas is the only ready-to-go, scalable alternative to dirty coal.

Natural gas provides an affordable, environmentally friendly substitute for foreign oil and dirty coal — while also stimulating America’s economy and strengthening its energy security. Let’s embrace a clean and prosperous energy future through the substitution of American natural gas for foreign oil and dirty coal.

The time for action is NOW.

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