Fueling Up With Natural Gas

Maybe there's something to this natural gas thing after all. Companies like Chesapeake Energy (NYSE: CHK  ) , ExxonMobil (NYSE: XOM  ) , and ATP Oil & Gas (Nasdaq: ATPG  ) continue to expand natural gas production in the U.S., and we continue to find new ways to use that gas.

Clean Energy Fuels (Nasdaq: CLNE  ) is attempting to turn a fuel that has traditionally been used to heat our homes and power our electricity into a fuel we'll fill our cars with. And the third quarter appears to be a major step in that direction.

Revenue for Clean Energy Fuels jumped 58% to $72.1 million as gasoline gallon equivalents delivered rose to 40.9 million. This has yet to translate into a profit, with non-GAAP loss growing to $8 million, or $0.11 per share. But when growth is the focus, a loss isn't the end of the world.

The growth should continue at a rapid rate with a record number of station and vehicle projects under way. Being developed are 92 truck stop stations to build a natural gas highway for trucking companies looking to make the switch to liquefied natural gas. It's this build-out that will take Clean Energy Fuels from a company that operates bus contracts into one that helps drive a natural gas fueling revolution.

All about dollars and cents
With natural gas production becoming less expensive from shale sources and oil prices rising, the future for natural gas fuel remains strong. Clean Energy Fuels has a long ways to go before its expansion is complete, but when it is, truck operators will have a viable fuel alternative to traditional diesel.

It will take more than fueling stations to make the transition, but major industry players like Westport Innovations (Nasdaq: WPRT  ) and Cummins (NYSE: CMI  ) are working together to make the natural gas engine a more widespread reality. As natural gas trucks, fueling stations, and lower-cost natural gas production come together, I see a bright future for Clean Energy Fuels. Sustained profit may be a ways away, but once the infrastructure is built, each new truck will add incremental profit and leverage the work the company is doing today.

Interested in reading more about Clean Energy Fuels? Click here to add it to My Watchlist, which will find all of our Foolish analysis on this stock.

Fool contributor Travis Hoium does not have a position in any company mentioned. You can follow Travis on Twitter at @FlushDrawFool, check out his personal stock holdings or follow his CAPS picks at TMFFlushDraw.

Motley Fool newsletter services have recommended buying shares of Cummins, Chesapeake Energy, and Westport Innovations. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.


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  • Report this Comment On November 13, 2011, at 1:21 PM, FarmGranny wrote:

    I joined with the com-on for WPRT. "If the Natural Gas Act Passes". Now what I find is that HR 1835 having been introduced in Apr '09 has this note: "This bill was proposed in a previous session of Congress. Sessions of Congress last two years, and at the end of each session all proposed bills and resolutions that haven't passed are cleared from the books. Members often reintroduce bills that did not come up for debate under a new number in the next session." Does it have a new number? I looked at the financials on WPRT and they were not impressive at all. I have been int he gov't sites to see if there is any discussion but don't see it.

    What about this David?

    Did I miss something? I have in the past.

    Please advise-Thanks

  • Report this Comment On November 18, 2011, at 12:24 PM, aldousworp wrote:

    The following is from a letter T. Boone Pickens provided for me to sign and email to my senators this week (11/17/11):

    The NAT GAS Act (S. 1863) is a bi-partisan, fully-funded bill which will

    help jump start the natural gas vehicle (NGV) industry in the United

    States.

    The bill -- along with similar legislation in the House (H.R. 1380) --

    will reduce our dependence on OPEC oil by half in just five years by

    moving our national fleet of 8.5 million over-the-road trucks from burning

    dirty imported diesel to running on cleaner domestic natural gas.

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