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This Is Clean Energy Fuels’ Competitive Advantage | The Motley Fool

Clean Energy Fuels (NASDAQ:CLNE) is a unique company, offering a network of natural gas fueling stations for long-haul trucks. By doing so, it targets a market that electric vehicles still can’t reach with cleaner cheaper fuel than gasoline.

In this segment of “The Five” on Motley Fool Live, recorded on Nov. 23, Fool contributors Taylor Carmichael and Jason Hall discuss why Clean Energy Fuels deserves a closer look with oil prices reaching recent highs.

 

Jason Hall: Taylor, you’ve got another one that I’ve covered now for a long time. I’ve actually interviewed the CEO a couple of times and interviewed the founder who you’ll talk about here too.

Taylor Carmichael: Awesome. It’s funny I always try to remember this name because I own the stock and I can never remember if it’s Clean Energy Fuels or Clean Fuels Energy.

Hall: Clean Energy Fuels. Ticker CLNE.

Carmichael: I always have to look it up every time. I love this company, to me, it’s actually the greenest company, the greenest stock you can buy. What they do is they’re competing with diesel trucks and they are providing liquid, basically, it’s renewable natural gas was called RNG. They are providing that resource. They get renewable natural gas, they get it from methane gas, they get it from farms, they get it from agriculture, they get it from landfills. They’re taking this nasty gas that’s very bad for the environment and they’re turning it into this renewable gasoline that we can use. To me, it’s almost like back to the future where you’re taking something that’s really bad and actually turning it into gas. It’s not only carbon neutral, it’s carbon negative. It’s wonderful the capacity of what they’re doing. It’s still early days, it’s very early days for this company, I think. But they have some big-name customers among them, UPS, FedEx, Amazon. They’ve got these major customers and this is all for big trucks. It’s competing with diesel. This is a $20 billion industry, the trucking industry. It’s a long-term play, but it’s basically diesel trucks are going to disappear and I think they’re going to be replaced with trucks that run on this fuel. I do not think the electric semi-truck is going to happen anytime soon from what I know, just from my research.

Hall: I can tell exactly why that’s the case, Taylor. If you are in the trucking industry, time and weight are your two biggest opportunities and threats. If you can shave off time, you’re doing good. If you add time, it hurts you. Every pound that you add to the weight of the vehicle is a pound that you can’t carry in cargo. The problem with electric vehicles is for a heavy-duty truck, the maximum weight is 80,000 pounds on U.S. roads. You can’t add 15,000 pounds of battery just to go electric because that’s an extra 15,000 pounds a cargo you can no longer carry. You can’t wait five hours for that to recharge versus a 20-minute truck stop. Natural gas resolves those issues. Renewable natural gas keeps fossil fuel natural gas in the grounds, and it removes that methane you were talking about that will just get released into the atmosphere from getting released in the atmosphere. Everything you said, you’re spot on.

Carmichael: It’s funny. People laugh when environmentalists talk about farting cows. Farting cows do produce a lot of methane gas and this is actually what fuels this fuel. It’s a powerful story. I think this, to my mind, and an oil stock is basically musical chairs. It can be a good investment in the short term, but I wouldn’t want to be caught holding it when it flips. I’m still driving a gas-guzzling car, but in 20 years from now, I don’t think I will be.

Hall: The financial decision pushes companies through renewable natural gas. The emotional decision puts us in electric cars. It’s a different story. I think you’re spot on here. I love the company. Love the recommendation.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.


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