Would you pay $2.10 for a gallon of gas?
I know I would. According to AAA, the nationwide average for a
gallon of gasoline is $3.59... Diesel is even more expensive at
Yet despite high fuel costs across the country, a select group
of drivers are paying only $2.10 a gallon... about $1.50 below the
What's the catch?
To be honest, there isn't one. These drivers aren't getting some
"special deal," and this isn't some publicity stunt that's only
available to a select few. They're simply filling up their tanks
with a different kind of transportation fuel -- one that could make
early investors alot ofmoney .
Let me explain...
Over the past decade, new technologies like horizontal drilling
and hydraulic fracturing have unlockedwaves of natural gas reserves
that were previously thought inaccessible. As a result, gas prices
have plummeted to $4.11 per million British thermal units... well
below the 10-year high of $10.79 hit in 2008.
With natural gas prices hovering near record lows, companies
across the board are looking for ways to take advantage of the new
cheap energy source... and who better to benefit than the
All over the nation, companies with heavy transportation costs
are introducing vehicles that run off natural gas into their
regular operations. In 2011,
United Parcel Service (NYSE:
added 48 trucks that run off natural gas to its shipping fleet,
bringing the total number of vehicles in its fleet running on
natural gas to 1,100.
Right now, the average compressed natural gas (CNG) equivalent
to a gallon of gasoline costs $2.10. With roughly 250,000
natural-gas vehicles already diving on U.S. roads -- and CNG prices
roughly $1.50 per gallon cheaper than gasoline -- the number of CNG
vehicles on the road is going nowhere but up.
But while there's ample incentive for truck owners to switch
from diesel to CNG, there's still one big obstacle: lack of
After all, you wouldn't want to be on a lonely stretch of
highway somewhere on the outskirts of Omaha running on 'E' without
a CNG station in sight.
Clean Energy Fuels (Nasdaq:
is in the middle of a bold initiative to install hundreds of
natural gas-based fueling stations along the nation's most
Clean Energy Fuels operates an interesting business. It's one of
the few companies focusing on putting natural gas fueling stations
along America's busiest corridors.
Judging by the pace at which the company continues to land new
customers, the plan appears to be working.
Since Clean Energy unveiled its plan lastyear to add fueling
stations to existing Pilot-Flying J truck stops in more than 30
states, the company has picked up more than 100
More and more of the nation's largest freight delivery firms are
willing to at least test-drive CNG powered trucks. Some are making
the full transition and converting their entire fleets.
And with fueling stations along the nation's busiest routes --
such as Los Angeles and Chicago to Atlanta, the Texas Triangle, and
major corridors in the Midwest and Northeast -- Clean Energy is
well-positioned to maintain its dominant lead in the fuelmarket
The company already fills up 25,000 vehicles at 273 locations
each week -- and I fully expect that number to continue
Risks to Consider:
There are, of course, a few things that could go wrong. If the
price of natural gas rallies, it could be a deterrent for companies
considering making the switch from traditional gasoline-burning
vehicles to those that run off CNG.
Action to Take -->
But seeing as America now has as much natural gas as Saudi Arabia
has oil, I think the trend of "cheap" natural gas is here to stay.
And with the price of CNG about $1.50 less than a gallon of
gasoline... this looks like a huge opportunity for investors in
Clean Energy Fuels.
-- Nathan Slaughter
P.S. - Compressed natural gas isn't the only transportation fuel
emerging from the abundance of shale gas... In fact, there's
another one that could be even MORE profitable for investors. It's
easily one of the best opportunities out there for investors in the
shale gas revolution. Click here to learn more.
Nathan Slaughter does not personally hold positions in any
securities mentioned in this article. StreetAuthority LLC owns
shares of CLNE in one or more of its "real money" portfolios.
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