Markets

Did Someone Put the Brakes on Natural Gas Vehicles? Not So Fast

Henry Hub Natural Gas Spot Price Chart
Henry Hub Natural Gas Spot Price Chart

Henry Hub Natural Gas Spot Price data by YCharts .

The wholesale price of natural gas has declined sharply, while diesel prices have continued to rise. As of August 12, natural gas was $3.97 per MCF, which puts it at $0.50 per gallon equivalent. Add in the costs to transport, compress, and liquefy, and it remains cheaper than diesel by upwards of 30%.

Opportunity for big fuel users

As the table shows, fuel delivery growth is accelerating across the board.

Data source: CLNE SEC filings.

While much of the company's stock underperformance over the past couple of years is tied to its heavy spending to build out a network of stations for heavy trucking, it's now sitting on around 60 unopened, completed stations located at Pilot/Flying J truck stops. This has dragged on the bottom line, with debt expense pushing $40 million per year, but the expense means the company is prepared to open stations with only a few weeks' notice to support trucking customers.

Pilot/Flying J is America's largest truck stop operator, so those stations are in favorable locations.

Second half could be the onramp to acceleration

It's been a disappointing two years for investors in either of these companies; my portfolio has the scars to prove it. Both companies continue to lose money, though they have provided metrics to show the trends point toward profitability.

Investing is often about being able to identify long-term trends early, and it's looking like an acceleration in adoption will shift both companies to profits before either faces a cash crunch. There's risk here, but the payoff could be enormous if those trends continue.

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The article Did Someone Put the Brakes on Natural Gas Vehicles? Not So Fast originally appeared on Fool.com.

Jason Hall owns shares of Clean Energy Fuels and Westport Innovations, and holds options in Clean Energy Fuels and Westport Innovations. The Motley Fool recommends Clean Energy Fuels and Westport Innovations. The Motley Fool owns shares of Westport Innovations. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.


The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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