What happened

Shares of Clean Energy Fuels (CLNE -0.34%), the producer and distributor of renewable natural gas (RNG) for use as a vehicle fuel, surged in Wednesday trading, and looked likely to jump again today. In early trading on the Nasdaq, Clean Energy shares jumped as much as 4.5% this morning before giving those gains back.

By 10:45 a.m. EDT today, Clean Energy was actually down a bit -- by 0.8% -- from yesterday's close.

Red arrow swoops up and blue arrow swoops down

Image source: Getty Images.

So what

Clean Energy shares have been exceptionally volatile all week. They initially surged as much as 25% on Monday on news of a deal to supply Amazon (AMZN -0.15%) with low- and negative-carbon RNG in 15 different states and to sell warrants to Amazon to purchase up to 53 million shares of Clean Energy stock.

But then the stock turned tail and fell 21% the very next day, after analysts at Raymond James (NYSE:RJF) panned the deal as only modest in size, and urged investors to take the gains and sell the stock.

And the stock continues to oscillate wildly today. On Wednesday, investors returned to it in droves, driving Clean Energy shares up 10.5% (after the shock of Raymond James' comments had passed). Today, they continued buying, only to give up and go back to selling as the day wore on.

Now what

On the one hand, the 53 million warrants seem to me to be a pretty big deal. Were Amazon to exercise all of these warrants, Clean Energy would get a big cash infusion from its new customer -- and grow its share count more than 25%, diluting existing stockholders by about 21% and potentially spooking other investors.

On the other hand, as my fellow Motley Fool Howard Smith pointed out earlier this week, Amazon's right to buy the warrants will be tied to the volume of RNG it purchases from Clean Energy, and might never be exercised in full. Call me a skeptic, but I just don't see Amazon buying a whole lot of RNG since it is converting its delivery fleet to largely electric power with a purchase of 100,000 electric vans from Rivian.

To me, the Clean Energy RNG sale just feels more like a pilot project -- albeit one with an option to go big if Amazon decides it prefers RNG to power its fleet. But viewed in the context of Amazon's much bigger electric truck project, I have a hunch we'll find this RNG project abandoned on the shoulder some ways down the road.