Natural gas is relatively cheap and plentiful today because new drilling methods have unlocked vast reserves that were once too expensive to tap. That's resulted in huge industry shifts, such as natural gas displacing coal in the utility industry. Another big shift is just starting to take shape as the nation's fleet vehicles start to shift from diesel and gasoline to natural gas.

Summing it up
In July, Scott Wicker, the chief sustainability officer at United Parcel Service (UPS 1.41%), told Bloomberg: "It's really the vehicles that are on the freeways that burn the most fuel." That pretty much sums up the opportunity that Clean Energy Fuels (CLNE 3.62%) is trying to take advantage of.

Clean Energy is building the fuel-station infrastructure to support a nationwide shift from diesel and gasoline to natural gas. It started small, first getting fleet vehicles with mostly local routes to make the switch. That's included everything from taxis and buses to garbage trucks. Today the company has operations in 47 states and 37 airports, and more than 120 fueling stations on America's interstate-highway system.

All of the local route businesses, however, add up to only about one-fifth the size of the truck fleet opportunity, which the company believes is a potential $25 billion market. This is why Clean Energy has been burning cash to build out its interstate fuel-station network, even though there isn't enough demand to support it just yet. That's led to years of losses but positions the company to be a leader in a potentially big market.

How big?
Taking a look at the swift adoption of natural gas by trash haulers like like Waste Management (WM 1.15%) and Republic Services (RSG 0.34%) makes that $25 billion bogey seem pretty attainable. Waste Management recently celebrated the opening of its 50th natural gas fueling station, up from 40 at the end of 2012.

It has a fleet of more than 2,200 "alternative fuel" vehicles, only a small portion of the 32,000-plus cars and trucks the company owns, so there's still plenty of room to go. That said, more than 70% of its truck purchases in 2012 were powered by natural gas. So, clearly, it's heavily invested in this shift on both the truck front and with its investment in its fueling infrastructure.

About 10% of Republic's fleet is powered by natural gas, with 50% of its 2013 truck purchases earmarked for the alternative fuel. That means about 500 natural-gas trucks on average, since the company buys around 1,000 trucks a year. New trucks typically displace older diesel trucks, so its fleet will increasingly be turning to natural gas, too.

Both Republic and Waste Management highlight the environmental benefit of this shift, but it's also an economic decision. According to Clean Energy, around the middle of the year, natural gas was as much as 33% cheaper than both gasoline and diesel. That discount helps to explain why just 3% of garbage truck purchases were natural gas driven in 2008 but around 60% of purchases in 2013 are expected to be natural gas driven.

The big market
Saving money and improving their environmental footprint is a dual win for Waste Management and Republic. However, as UPS said, the big costs are on the highways. UPS has been testing the technology since 2010, when it built an LNG (liquefied natural gas) station on the West Coast. Today it has around 100 long-haul tractors that use LNG, unlike most fleet vehicles, which use compressed natural gas. Liquefied natural gas provides the additional engine strength needed for heavy loads and long distances.

Interestingly, the company noted in its annual sustainability report that "In 2012, liquefied natural gas (LNG) vehicles finally became a viable option worthy of broad-scale deployment..." That should both save UPS money as it increases its investment here and enhance its image as an environmental steward. However, those words are clearly music to Clean Energy's ears.

Using the adoption trend from the waste business, Clean Energy projects that natural gas powered long-haul trucks will go from a less than 1% share of annual truck purchases in 2013 to around 35% by 2017. That's a huge increase and might create enough demand for natural gas as a truck fuel to shift Clean Energy's business from red ink to black ink.

Bigger picture
As more and more industries turn to natural gas to both reduce emissions and save money, the cost of natural gas is destined to rise. That's good news for some, like coal, but could dampen the long-term demand that Clean Energy is hoping for. So natural gas' success could bring with it risks.

That said, there's no doubt that this shift is taking place now and will likely last for years. If you are interested in tagging along for the ride, Clean Energy is leveraged to the opportunity. That said, UPS, Waste Management, and Republic are all less risky ways to benefit from the same transition.