Clean Energy Fuels Corp. (Nasdaq: CLNE) and GE Capital Transportation Finance this week announced a partnership to help heavy-duty trucking companies accelerate a transition from diesel fuel to natural gas.
This strategic alliance aims to remove arguably the biggest barrier to entry—cost—for fleets to try cleaner and cheaper natural gas fuel for trucks.
Fuel comprises nearly 40 percent of a typical over-the-road carrier’s operational costs, a point not lost on the industry. Class 8, or heavy-duty, trucks can use compressed natural gas (CNG) and liquefied natural gas (LNG). Natural gas currently costs about $1.50 less per gallon than diesel or gasoline, depending upon local prices.
“We think this alliance will help to open up the natural gas market for long-haul operators,” said Dan Clark, president and general manager of GE Capital, Transportation Finance.
By taking advantage of the partnership, fleet operators of Class 8 heavy duty trucks can negotiate a fueling agreement with Clean Energy Fuels while obtaining a lease/loan from GE Capital. Clean Energy helps to offset the monthly cost of newly acquired natural gas vehicle (NGVs) to make it consistent with the cost of a diesel truck, if the customer makes a fuel commitment. This helps eliminate financial guesswork on the part of the fleet, as their fixed lease cost will remain the same while they also save money on fuel.
One of the major factors delaying a transition to natural gas in the over-the-road trucking industry is related to infrastructure. While still an outlier, natural gas fueling stations are becoming more accessible. Today there are more than 1,100 natural gas fueling stations in the United States; about half of them are open to the public. Clean Energy Fuels maintains 360 natural gas fueling stations throughout the United States and Canada.
There are more than 13 million natural gas vehicles in use worldwide, according to Clean Energy Fuels. Vehicles that run on natural gas emit up to 30 percent less greenhouse gas emissions than gasoline or diesel vehicles. Nearly all natural gas consumed in North America is produced domestically.
Slideshow photo by Fellowship of the Rich.