Theoretically, natural gas makes a lot of sense as a vehicle fuel in the United States. Natural gas produces far fewer emissions and costs significantly less than diesel fuel. According to Clean Energy Fuels (NASDAQ:CLNE), compressed natural gas (or CNG) costs the equivalent of $1.50 a gallon less than diesel, which translates into $15,000 a year in fuel savings for trash trucks. This has not gone unnoticed.

50% conversion rate
Republic Services
(NYSE:RSG) thumps its chest regarding its CNG truck fleet. Every year, the company replaces roughly 1,000 vehicles nationwide. In 2013, approximately 50% of these new trucks burned CNG. Which means, Republic could save about $7.5 million next year on fuel costs from these new trucks alone.

During its latest quarter, Republic reported earnings of $171.4 million, an increase from $152.7 million in the third quarter of 2012. So saving $7.5 million a year on new trucks helps, but not much. However, by 2016, Republic expects 20% of its truck fleet to burn CNG, up from roughly 8% today. Ongoing fuel savings will likely add up.

Not to be outdone...
Waste Management
(NYSE:WM) also sees the benefits of using CNG burning trucks. The company touts its "Think Green" mantra and CNG-burning vehicles are a part of it. Waste Management currently owns over 32,000 trash trucks and support vehicles, of which roughly 2,200 use natural gas. The company points out that in addition to fuel savings, CNG offers maintenance cost savings as well.

Waste Management partners with Clean Energy, but owns and finances its own fueling stations. Waste Management produces its own natural gas from landfills in California and Ohio, with a third plant announced for Illinois. The company also operates waste to energy plants.

As an investment, Waste Management looks better than Republic. Waste Management stock outperformed Republic over the past year and pays about the same dividend yield. The company underwent reorganization back in 2012 that should reduce costs. Planned streamlining of the company's back office should add even more savings going forward.

So where does this leave Clean Energy?
Clean Energy's primary business is operating natural gas refueling stations across the country. Obviously, the more natural gas burning vehicles on the road, the better it is for Clean Energy. The overall refuse truck fuel market stands at roughly two billion gallons a year, not a bad target for a company reporting over $330 million in annual revenue. While the refuses truck market helps Clean Energy, the big prize remains the heavy duty truck market.

According to Clean Energy, the annual heavy duty truck fuel market stands at 25 billion gallons. Roughly 60% of all new refuse trucks now burn CNG. In contrast, in 2013, only 0.8% of new heavy trucks used natural gas. In 2014, Clean Energy estimates (hopes?) that will rise to 3%.

Helping this growth in natural gas burning heavy duty trucks is the introduction of larger gas burning engines and the growth of fueling stations nationwide. Every major manufacturer of heavy duty trucks offers natural gas burning vehicles, although at a higher initial cost. According to Freightliner, this incremental cost is paid off by fuel savings in less than a year.

To improve access to natural gas, Clean Energy currently operates 76 truck fueling stations with 16 more under construction. During its latest quarterly earnings conference call, Clean Energy predicted even more stations opening in the upcoming three months. Relatedly, the company partnered with Pilot Flying J rest stops to offer natural gas to interstate truckers.

Final Foolish thoughts
Clean Energy is reporting encouraging trends regarding its revenues, sales and growth plans. Despite growth in the refuse truck business, Clean Energy still reported losses in its most recent quarter with no guidance regarding an anticipated break-even date. The chart below compares the company's revenues with earnings -- not encouraging.

CLNE Revenue (TTM) Chart

CLNE Revenue (TTM) data by YCharts

Compared to 2011, Clean Energy had greater debt and less cash at the end of 2012. That said, last September it was able to secure an additional $220 million in debt.

As I see it, Clean Energy needs refuse trucks and other fleet vehicles to keep it afloat while it builds out its business serving heavy duty trucks. Republic and Waste Management can quickly realize cost savings in part through centralized fueling stations; heavy duty trucks need a network of stations. When natural gas fuel becomes mainstream for interstate trucking, then I'll start to regain confidence in Clean Energy's long-term success.