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This week a brand new alternative fuels company will begin trading on the Nasdaq.
As recently as March, natural gas as a vehicle fuel was 36 cents cheaper than gasoline.
After making billions of dollars in the oil industry, Pickens started singing another tune: Peak Oil.

Alternative Energy Companies: New IPO on the Horizon

This week a brand-new alternative fuels company will begin trading on the Nasdaq.

The company is called Clean Energy Fuels, and will use the symbol CLNE. The IPO expects to raise $340 million by selling 10 million shares between $13 and $17 a share.

What's interesting about this company is that it's not an ethanol company, or biodiesel either. In fact, when you think of alternative fuels, this company's idea doesn't really fit in the traditional sense.

But it's one of the cleanest-burning fuels available… and the idea's not really that new. At least one auto manufacturer, Honda (HMC:NYSE) already makes a vehicle that can run on this fuel. And some mass transit buses run on it, too.

I'm talking about natural gas.

While not renewable, natural gas does offer some benefits.

First, it burns much cleaner than gasoline, and is more cost effective. As recently as March, natural gas as a vehicle fuel was 36 cents cheaper than gasoline. Actually, it was cheaper than any other alternative fuels, and probably still is.

Second, data shows that natural gas vehicles last two to three years longer than conventional gasoline or diesel vehicles. The time between maintenance was also longer.

But most importantly, natural gas is a domestically abundant fuel, unlike oil. And the natural gas we do import comes mostly from our nearby, friendly neighbors: Canada and Mexico.

Again, unlike oil.

So we find it's not a far-fetched idea to consider natural gas as an alternative fuel, and perhaps a better choice than some others.

It's no surprise then that the founder of Clean Energy Fuels is oil tycoon T. Boone Pickens.

(On a side note, what a name, eh? It conjures up old scenes of tumbleweeds and gun duels in the Wild West and the oil rush of wildcatters to East Texas oilfields.)

After making billions of dollars in the oil industry, Pickens started singing another tune: Peak Oil. It's now the infamous impetus for all things green. (Or at least one of them, global warming now the other.)

Even from a non-environmental standpoint, Pickens still makes a lot of sense… at least in the relative short term. Natural gas certainly does not get us away from a Peak Oil scenario happening with this alternative fuel. After all, natural gas is not a renewable fuel.

But it could help solve some more pressing problems, like our addiction to foreign oil.

And that's something both sides of the aisle can get behind.

***

S.R. Nunnally is a commodities expert and technical analyst for Taipan Financial News. She is the editor of Material Profits, a monthly newsletter providing in-depth, cutting-edge research in the commodities sector. She is also the founder of Material Profits Wildcatter, employing an elite group of aggressive investment strategies.

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Related Resources

EERE: Clean Cities Alternative Fuel Price Report
Alternative Fuels Data Center: Natural Gas Vehicles
Energy: Will an Oil Mogul See Green?