Is Natural Gas Finally Changing the Fuel Industry?

Business is so good at EQT's (NYSE: EQT  ) natural gas fueling station that the company is adding a second fueling island at the station. That's really good news for the Pittsburgh-based exploration and production company -- it's a validation that natural gas is beginning to catch on as a transaction fuel in the region. The company, which is one of the lowest-cost producers of natural gas in the Marcellus, is just one of many companies investing to increase demand for natural gas.

The EQT station, which incidentally is just down the road from my home, is a steady reminder of how cheap natural gas is as a transportation fuel. Every time I pass the station it's at least a dollar and a half cheaper than regular gas. Apparently, that difference was not lost on its growing customer count, who have deemed the difference being worth the cost of conversion.

The station has seen its monthly transaction count spike from just 200 last January to more than 1,000 by December. While the company had anticipated that customer growth would come, it never had anticipated that it would need to expand the station after just 18 months in operation.

EQT, of course, is not the first producer to make an investment in natural gas fueling infrastructure. The nation's No. 2 natural gas producer, Chesapeake Energy (NYSE: CHK  ) , invested $160 million for a stake in Clean Energy Fuels (NASDAQ: CLNE  ) . That deal provided Clean Energy with big cash infusion to help fuel the build-out of America's Natural Gas Highway (pictured below).

Source: Clean Energy Fuels

While Chesapeake is looking to divest of its stake in Clean Energy, that has nothing to do with the future of the natural gas fuel business. Clean Energy is growing rapidly; its gallons delivered jumped 25% year over year to 194.9 million gallons. The company believes it's well-positioned for an exciting year in 2013 as its sees the beginnings of a transition to natural gas by the heavy-duty trucking industry.

That means a bright future for natural gas engine partners Cummins (NYSE: CMI  ) and Westport Innovation (NASDAQ: WPRT  ) . While there are currently 16 million natural gas vehicles in use around the world, just 126,000 of them are in North America. The industry believes this number will explode over the coming decade with more than 50 million natural gas vehicles in use across the world. That could yield explosive growth for the Cummins Westport joint venture given its technical leadership in the industry. 

While lack of refueling infrastructure had been holding back the growth of natural gas vehicles in the U.S., that burden is quickly being lifted thanks to companies like EQT and Clean Energy. This is a really exciting time in the energy industry -- each passing day we take one step closer to a natural-gas-powered future. 

This movement toward a natural gas future is really gaining momentum. That means Clean Energy Fuels, which focuses its natural gas efforts primarily on trucking and fleets, is poised to make a big impact as this future becomes a reality. Learn everything you need to know about Clean Energy Fuels in The Motley Fool's premium research report on the company. Just click here now to claim your copy today.


Read/Post Comments (10) | Recommend This Article (14)

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  • Report this Comment On March 27, 2013, at 7:55 PM, Paulson545 wrote:

    When everyone starts using Nat Gas and we start exporting it, what do you think will happen to the price? We should use coal to make electricity and Nat Gas to heat our homes and power our cars, If we really want to reduce our need for OPEC oil we have to use everything we have here in America $ Canada first.

  • Report this Comment On March 27, 2013, at 8:01 PM, bobinmurphy wrote:

    You're buying energy in both gasoline and natural gas. You can't really compare the price per gallon or price per cubic foot because they aren't comparable measures of energy, You need to convert both to the same units, in this case BTUs. If you do that you'll find that even if natural gas is $1.50 a gallon cheaper at the pump, it's still about twice the cost of gasoline on a BTU to BTU comparison. You're getting suckered.

    One gallon of natural gas is about 35 cubit feet. A gallon of gasoline has about 125,000 BTUs, a cubit foot of natural gas has about 1,035 BTUs. So one gallon of natural gas gives you about 35,000 BTUs compared to the 125,000 BTUs you get from a gallon of gasoline.

  • Report this Comment On March 27, 2013, at 8:13 PM, Cimerian wrote:

    bobinmurphy you are looking at it wrong. When they say natural gas is 1.50/gal cheaper it isn't a gallon of natural gas. It is the equivalent of a gallon of gasoline. In other words. For enough natural gas to equal 1 gallon of gasoline you will pay 1.50 less. Hope that clears it up for you.

  • Report this Comment On March 27, 2013, at 8:41 PM, mortmain wrote:

    Natural gas is good for big industrial users and home heating. It sucks as individual car power.

  • Report this Comment On March 27, 2013, at 9:48 PM, TOPTEMP1 wrote:

    Add to your map, ng station in Elmira, NY. Good article. Except, ng like oil, even produced in the USA has to sell at the world market price. But it is still cheaper, produce more American jobs, and be less dependant on foreigners. thanks

  • Report this Comment On March 27, 2013, at 11:19 PM, Dadw5boys wrote:

    Americans are about to get snowed when the switch to natual gas is complete watxh them begin selling off the U.S. Oil Reserves from Public Lands faster and faster.

    What will we have to fall back on if we need oil a lot later ?

    One big earth quake could cut gas lines and leave everyone without any fuel.

  • Report this Comment On March 27, 2013, at 11:28 PM, 5eagles wrote:

    "massive build-out". What's a build-out?

  • Report this Comment On March 28, 2013, at 12:00 AM, spiritpen wrote:

    In order to find natural gas deposits, we have to destroy marine life with 260db underwater sonic blast shock waves. Millions of whales and dolphins and everything else, down to the plankton. Natural gas is not green at all. Ever heard of solar power? Photovoltaic panels on your rooftop with which to charge your electric car? Goodbye fossil fuels, global warming, war, debt, asthma, nuke waste, fracking, oil spills and gushers, - HELLO SUN.

    joey racano on facebook: stop the diablo canyon seismic testing wwwdotEV1dotORG

  • Report this Comment On March 28, 2013, at 12:20 AM, DJG77 wrote:

    If the company wants to promote the use of natural gas, it should inform people how they can get their cars converted to run on natural gas.

  • Report this Comment On March 28, 2013, at 7:35 AM, TMFmd19 wrote:

    @5eagles - A build-out is basically building a large scale network. You've heard of "what came first, the chicken or the egg?" Its the same thing with switching fuels, do we build engines or fuel stations. Well, the network of fueling stations are being built so they run coast-to-coast.

    Matt

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