Clean Energy mitigates this risk by investing in the usage of the commodity. With little to no exposure in the drilling of the product, the company is largely unaffected by these price fluctuations. The business model is similar conceptually to a credit card processor. The processors simply collect a fee every time a buyer uses a credit card without shouldering any of the credit risk. They key for the credit card company, and for Clean Energy, is for the card (or natural gas) to be accepted and used as widely as possible.
The concept is catching on. Big companies such as Caterpillar Inc. (NYSE:CAT) and General Electric Company (NYSE:GE) are investing in the technology to operate their rail and truck fleets on LNG. GE has committed to providing Clean Energy Fuels Corp (NASDAQ:CLNE) with a $200 million credit facility, providing working capital for the continued development of the technologies, deepening their relationship, and increasing industry commitment to LNG as a viable alternative fuel.
At Dec. 31, 2012, Clean Energy operated or supplied 348 natural gas fueling stations in 32 states, Canada, and Peru. 70 of these stations are part of the “America’s Natural Gas Highway” network, with 50-70 additional stations planned for completion in 2013.
Clean Energy Fuels Corp (NASDAQ:CLNE) has a unique business model that differentiates it from its traditional competitors in the natural gas business. It has strong partnerships with world class companies that are invested in the success of fuel alternatives. Electric energy is making headlines in the consumer vehicle markets with the recent successes of Tesla Motors, but Clean Energy Fuels is clearly the leader in developing viable clean energy alternatives for commercial transport.
The article Open Heart Surgery for America’s Highways – Clean Energy Fuels (CLNE) has the prescription originally appeared on Fool.com and is written by Jay Jenkins.
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