As natural gas grows in quantity across the United States, its popularity is increasing as well.
Just last week, General Motors (NYSE: GM) and Westport Innovations (NASDAQ: WPRT) announced a joint venture to develop natural gas-burning engines for passenger vehicles.
Now Chesapeake Energy Corporation (NYSE: CHK) is looking to aid the development of natural gas vehicles by investing.
Chesapeake officials have announced an investment plan totaling $1 billion that will go to support natural gas as a transportation fuel, a plan that will span over 10 years.
And it has started with an investment in Clean Energy Fuels (NASDAQ: CLNE).
Clean Energy plans to build over 150 liquid natural gas fill stations across the country at Pilot-Flying J Travel Centers.
The natural gas supply would be available to truckers stopping to fill up their tanks.
One of the major problems in using natural gas in place of gasoline has been that very few fill stations exist across the country.
Though this construction plan wouldn’t totally knock out the problem on its own, it would be a good way to propel even more building projects like this.
Chesapeake has plans to put $150 million toward the new natural gas fill stations.
Another $155 will go to a Colorado company called Sundrop Fuels.
Sundrop Fuels is making plans to build a commercial biorefinery that will use agricultural waste to produce fuel using the methanol-to-gasoline process of ExxonMobil (NYSE: XOM), according to the Wall Street Journal’s “Market Watch”.
Another Sundrop refinery, planned for 2016, will have an annual output of 200 million gallons of biofuel.
Chesapeake Energy uses horizontal drilling and hydraulic fracturing to obtain natural gas.
It has turned its focus to replacing gasoline and diesel with this cleaner-burning fossil fuel, and along with investments, Chesapeake plans to convert its drilling rigs to be powered by natural gas.
It will also speed up its own vehicle conversions, switching them all over to natural gas.
These combined efforts will cut down on Chesapeake’s carbon emissions and save the company around $250 million a year.
Natural gas is cheaper than gasoline, costing a mere $2 a gallon when gasoline prices are at $4.
Chesapeake believes transportation fuel will be a great way to make use of the country’s large quantities of low-priced natural gas.
After the announcement of Chesapeake’s investments, Clean Energy went up 7% and Chesapeake rose 13 cents, according to Reuters.
That’s all for now,