We Have So Much Energy

 | Sep 12, 2012 | 12:24 PM EDT
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How much oil and gas do we have in this country for heaven's sake?

That's my takeaway from the monster deal announced this morning of Chesapeake (CHK) selling $6.9 billion in assets to Royal Dutch and Chevron (CVX) in order for Chesapeake to pay down debt and continue to grow the company.     

While I think the Permian assets, an ancient but productive field, are great ones, Chesapeake can do it because it's so asset rich. Chesapeake expects to sell $17 to $19 billion of assets, 150% of its market cap, and will still be able to increase its production and reserves by approximately 20% through 2012 and 2013. That's because there's so much oil and gas in so many places in this country, including the Utica basin in Ohio, Marcellus in Pennsylvania as well as the huge field in Eagle Ford. That's not including the Prudhoe-Bay-like find in North Dakota, which Continental (CLR), Hess (HES) and EOG (EOG) dominate.

I point this out because once again the Mideast is erupting with violence and once again our lack of a domestic oil policy remains the biggest threat to our national security.

These remarkable finds made by Chesapeake and others have given us the possibility to be self-sufficient in oil in North America if only Washington recognized the imperative of using natural gas, of which Chesapeake is the second largest producer, as a surface fuel. Do you think that we would have to kowtow to Middle East interests that hold us by the jugular because of their bountiful oil supplies if we were to harness what Chesapeake, Continental Resources, EOG, Cabot Oil and Gas and so many others have found in the last few years?

All Washington has to do is announce that it supports natural gas as a surface fuel and will switch the nation's multiple vehicle fleets, including the Post Office's trucks, to natural gas. That would then cause the big oil companies to convert their gas stations to include liquefied natural gas and compressed natural gas that would enable us to dramatically cut back our oil imports for trucks, which represent 25% of the fuel we import.

We've heard multiple reasons why we should switch to natural gas, including that it would lead to cleaner skies and much cheaper fuel costs for Americans. But it's the national security angle that matters more than any, as we see from what's going on in the Middle East. Neither candidate seems to realize that we can indeed wean ourselves off the Middle-East-Centric OPEC hammerlock.

When you consider that Chesapeake is one of many companies that keep finding oil in new places, and when you consider the remarkable technological innovations in the oil patch, you know this continental energy sufficiency is within reach.

The only question is do we have the political will to do so. The horrendous acts in Libya, a major oil producer, tell us that harnessing our natural gas and oil must occur if we are going to be strong enough to face off against the enemy that we subsidize every day with our needless energy imports.



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