Friday, May 8, 2009

EXCO's CNG Fueling Facility

EXCO Resources announced that it has opened a compressed natural gas fueling facility at its Vernon Field site near Chatham, LA. None other that T. Boone Pickens of The Pickens Plan fame helped cut the ribbon.

It is actions like this and the Shreveport decision to purchase CNG powered buses that are an important first step in creating strong and steady demand for natural gas. Face it, right now natural gas is cyclical and seasonal. It is dependent largely on the industrial market and the seasonal heating/cooling market. For this to be a strong, legitimate industry, the cyclicality and seasonality have to be "smoothed." It's impossible to reduce it, but the more uses for natural gas out there, the more stability the industry will have.

A big step in this process is the NAT GAS Act, H.R. 1835. This act supports the use of natural gas vehicles. It is supported by Boone Pickens and is a great first step. With all the attention that Mr. Pickens brings to the table, it has definitely gotten the attention of Congress.

If we are going to move to some kind of Natural Gas Standard in this country, suppliers have to get involved in creating the infrastructure. As much as producers would like to just suck the stuff from the ground, ultimately they are going to have to be more involved on the distribution end. Chesapeake Energy has realized this and has focused on PR efforts, like CNG NOW. It will require more in the end. Just like Shell, Exxon and Chevron have gas stations, it might be incumbent upon natural gas producers to have their own retail delivery system. Are Chesapeake CNG stations in our future?

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