What happened

Shares of natural gas for transportation leader Clean Energy Fuels Corp (NASDAQ:CLNE) jumped nearly 10.5% on May 2. As of 2 p.m. EDT, the stock was up about 6% before surging in late trading to finish the day up by double digits. 

So what

Clean Energy Fuels didn't make any announcements on the day, and there wasn't any material news out about the company directly. However, two pieces of information that are related to its business probably played some role in the jump.

On May 1, heavy-duty enginemaker Cummins (NYSE:CMI) announced its first-quarter earnings and included a mention of its ISX12N engine, co-built in a joint venture with Westport Fuel Systems (NASDAQ:WPRT). The engine recently become the first class 8 on-highway truck engine to attain near-zero emissions certification by the California Air Resources Board (CARB). This natural gas-powered engine exceeds federal EPA emission standards by about 90% and is poised to take market share as stricter emissions standards are implemented. 

Class 8 trucks refueling at Clean Energy Fuels station.

Image source: Clean Energy Fuels Corp.

On May 2, at the ACT EXPO in Long Beach, Calif., AJR Trucking, PACCAR subsidiary Kenworth, and the California Natural Gas Vehicle Partnership announced that AJR had taken delivery of the first class 8 truck using this new engine. AJR will take possession of another 19 trucks with the ISX12N engine in coming weeks. 

As to Clean Energy Fuels, few companies are as well-positioned to benefit from the debut of this engine. As the biggest station operator and supplier of natural gas for transportation in the U.S., the company should benefit from higher oil prices and more focus on reducing emissions likely to drive many truck operators to consider this new engine. Its prospects get even better when you consider its dominant position in California, where a substantial number of trucks featuring this engine would operate. 

California is home to some of the worst air quality in the country, particularly in cities located where some of the country's biggest ports are: Los Angeles and Long Beach. The new CARB regulations, as well as other regulatory agencies in Southern California, are likely to increase ownership of this new engine in trucks that operate in Southern California's polluted cities. That's great news for Clean Energy Fuels. 

Now what 

In addition to prospects of more diesel trucks shifting to natural gas on adoption of the ISX12N engine, Clean Energy is well-positioned to profit from increased use of renewable natural gas, of which it is a major supplier. At the start of 2018, about 60% of California's natural gas vehicle fleets used renewable natural gas, and that number is expected to reach 90% by year end. 

Put it all together, and today's big jump is sort-of a "whisper" move, where investors are attempting to get ahead of the potential growth that broad adoption of this engine could mean for Clean Energy Fuels. But at the same time, we don't have any sales results for this engine, and it will likely take multiple quarters before we have any idea how much this new engine helps drive more fuel sales for Clean Energy Fuels. 

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.