Clean Energy Fuels on Auto-'Pilot': New Agreement Looks Promising

by: Michael Fitzsimmons

Flying under the radar screen last week was Clean Energy Fuels' (NASDAQ:CLNE) press release announcing that the company has signed an agreement with Pilot Travel Centers to build, own, and operate public access compressed and liquefied natural gas (CNG/LNG) fueling facilities at Pilot Flying "J" truck travel centers nationwide.

Pilot Flying "J" is the largest truck-fueling operator in the country and has over 550 truck travel centers in 43 states and 6 Canadian provinces. I have emailed both companies to get more information about this agreement, but have yet to hear back from them.

This is awesome news for those of us who have been pounding the table (and our heads against the wall....) for natural gas transportation. This single development may well have more long-term economic benefit for the country than all the "stimulus" spending put together. Not surprisingly, this stellar move to strengthen our country and reduce foreign oil imports was noticeably under-reported by U.S. mainstream "business" media.

Of course, I am still waiting for the Wall Street Journal, Barron's and Business Week to publish in-depth articles on natural gas transportation and its benefits for America, but alas, it's all too much for them. Too much for Congress too, which has pushed all the natural gas transportation legislation to the back burner.

I guess we'll have to wait for oil to hit $200/barrel for the light bulbs to go off. Apparently $145, a near depression and collapse of the U.S. financial system, and an S&P500 that has done nothing in a decade wasn't enough motivation. How come? Because natural gas is selling for around $1.40 per GGE (gas gallon equivalent) and gasoline is around $2.65/ gallon.

The oil companies who own Congress (not to mention the EPA and apparently the media as well) will do anything to protect that profit margin. That's over $1 on every gallon! The U.S. uses some 378 million gallons of gasoline every day .... let's see, that's $137,970,000,000 per year! That's alot of bones, no? Imagine what would happen to the U.S. economy if that amount of money was pumped back into the hands of middle class Americans.

But, in the meantime, we're stuck with an "environmentally friendly" President who was supposed to be different and yet is reading from the exact same "strategy" playbook of his predecessor: stay addicted to foreign oil, expand deficit spending, and increase our military imperialism overseas - mostly putting troops in the middle east on top of the oil deposits (oh, and to protect Israel).

Of course this is a failing "strategy". As a result, the Federal Reserve is printing money like mad (and of course distributing it to its richest cohorts that don't need it), the deficit is spiraling out of control, and no one asks the obvious question - who will protect Israel when its sole supporter (the U.S.) goes under and its Arab enemies are enriched beyond belief? Ahhh, but the cure is more tax-cuts! We know this is true because Joe Kernen and CNBC make it a point to tell us every morning.

Another related and under-reported item this week was General Electric's (NYSE:GE) announcement that it will buy Dresser Inc. for $3 billion. Dresser makes energy infrastructure equipment like motors, pumps, and valves. Its products are commonly used in natural gas distribution networks as well as LNG and CNG facilities. This is a very smart move and it appears GE is continuing to move back to its industrial roots by investing further into energy infrastructure.

GE appears to have learned a lesson after their foray into financial services. Of course, this lesson came at great costs to its shareholders who watched the stock and dividend plummet. Never fear though, CNBC comes to the rescue and continues to tout former CEO Jack Welch as a management genius.

But facts speak for themselves, and we now know that Welch was anything but. Regardless, GE seems to be on the right track now, and I wonder how many old-timers in Bradford, PA and Olean, NY are around to see the final destination for their over 100 year old Dresser Industries?

As long as I am picking on CNBC, I might as well point out that Kernen continues his record of being the best contrarian indicator on TV. Remember his often mentioned plea for 2 barrels of oil for $40?

Well, I sent him an email a few years back telling him that his favorite President's policies were going to lead to massive deficits and skyrocketing gold prices and silver prices. Poppycock, said Joe. Well, it should be no surprise that today we see gold over $1300/oz and has anyone noticed that despite all the talk of the yellow metal silver is outperforming it? This probably surprises no one but Joe, least of all Ron Paul.

While CNBC reports from all the fancy Federal Reserve buildings, and interviews all the "economists" that sit on the Fed's boards, Paul knows that this un-Constitutional entity is the one of the big reasons for the continuing decline of America. Without a Federal Reserve to print money out of thin air, (not to mention without Congressional oversight) the U.S. would not be able to "fund" its foreign oil addiction and its military imperialism.

In the meantime, oil is over $80 a barrel while unemployment in the U.S. is still very high and oil in storage is at 20 year highs! Somebody knows something....

What does all this mean for investors? More natural gas refueling stations means more business for Westport Innovations (WPRT) and CLNE. More tax-cuts, military spending, and yawning deficits mean gold and silver will continue to run higher. In the meantime, the country's biggest economic problem (foreign oil imports) continues to be ignored and points to much higher oil prices in the not too distant future.

Just about every oil company I can think of is undervalued: ConocoPhilips (NYSE:COP), Chevron (NYSE:CVX), Marathon (NYSE:MRO), and Occidental Petroleum (NYSE:OXY) should be owned. Even Exxon Mobil (NYSE:XOM) with its paltry dividend, deserves a look. Petrobras (NYSE:PBR) has been hammered lately and is probably a good buy in spite of continuing political concerns in Brazil.

The more things change, the more things stay the same. The U.S. continues its unwise monetary, fiscal, and militaristic policies. We now know there is very little difference between Bush and Obama - the same powers are still in the background and very much in control. We have missed a golden opportunity during this recession to put people back to work by building out a natural gas refueling infrastructure to reduce foreign oil imports and revitalize our economy.

In the meantime, it is discouraging that little work is being done to regulate the shale gas drilling industry and I am seeing more and more evidence that environmental problems are cropping up as producers take many shortcuts in order to increase margins because natural gas prices are so low. What a country!

The only short-term hope for the U.S. is if the Iraqi oil supplies our young men and women fought for come online and reduce the price of oil and stimulates our economy. But the question here is: will the increased Iraqi oil production make up for mature oil field depletion rates as well as increased demand from China, India, and the rest of Asia? Time will tell. In the meantime, I'll hold onto my oil stocks and laugh at the agenda for economic "progress" put forth by the geniuses on CNBC every day.

Disclosure: Author is long COP