Barron's Urges Investors Away From Pickens' Favorite Stock

Good times could be coming for T. Boone Pickens' Clean Energy Fuels (NASDAQ: CLNE - News), but according to Barron's that doesn't mean you should be buying it.

When it comes to the trucking industry, the case for natural gas is a strong one. At recent prices of less than 50 cents per gasoline gallon equivalent, nat gas is a steal compared to diesel, and Pickens has put significant emphasis on eradicating American dependence on foreign oil. Barron's notes that about $8,000 in upgrades are required before a truck can run on the fuel, but the industry is hopeful for government subsidies. Despite favorable economics, and the potential for government support, Barron's isn't a fan of Clean Energy Fuels, in which Pickens owns a majority stake. "The stock has risen by more than 50% since December, more than pricing in the business' prospects," explains the report, "With dilution looming, the stock is likely to drop by at least 30%."

Will they run on Natural gas or Propane.?

I have never seen a truck hauling natural gas, just propane.

I do know that Trucks that haul Propane are considered as hauling hazardous materials. I would assume a truck hauling natural gas would be the same, and a Tractor with two 100 gallon saddle tanks would be hauling hazardous materials. many tunnels have restriction on RV’s and other vehicles using Propane I would assume natural Gas is just as bad.

I know many places carry propane, but I do not know of any selling Natural gas on the highway.

From the Barrons article T. Boone Pickens' Gassy Stock - B, 2010 April 12, by Bill Alpert T. BOONE PICKENS SAYS HE STARTED PROMOTING natural-gas- fueled vehicles back in 1988, hoping to boost the price of his company's natural gas. "I predicted I would do it within three years," says the 81-year-old tycoon. "Now it's 2010."
After 22 years, he thinks it's finally happening. A Pickens-controlled company, Clean Energy Fuels, sells natural gas to trucks and buses at yearly volumes equivalent to 120 million gallons of gasoline. Shares of Clean Energy (ticker: CLNE) have quadrupled within the past 12 months, to around 21. With America's natural gas currently cheaper than OPEC's diesel fuel, Pickens is optimistic that Congress will enact energy bill that subsidizes the conversion of trucks to natural gas. He's lobbied politicians and the public with his "Pickens Plan" for oil independence: generate electricity with wind and solar power plants, fuel vehicles with the natural gas supplied by the likes of Clean Energy Fuels. .....

But T. Boone Pickens' Gas Venture Deflates - B, 2010 April 12

CLEAN ENERGY FUELS (ticker: CLNE) shares fell 7% in midday trading Monday following a critical story about the stock in Barron's.

Pickens spent a lot of money lobbying federal, state and municipal governments for getting special tax breaks and mandating taxpayers / ratepayers paying for expenditures on his "clean energy" ventures, like wind turbines. He took a bath on wind energy, but natgas may be a somewhat reasonable proposition under certain circumstances, so he is trying to push it well beyond its area of applicability to make it attractive, in volume, for "green"-friendly governments.

The other great thing about nat gas in internal-combustion engines is that it leaves virtually no carbon deposits.

A friend of mine had a taxi which he converted to nat gas. It was more economical per mile to run and he found he could put about twice as many miles on the engine before a rebuild. He said when he changed the oil it had not changed color at all.

Running diesels on nat gas makes alot of sense. As many trucks as there are on the road it could eventually help to reduce the dependence on middle east oil.

..... "The story's not that complicated. It's a low-carbon fuel that's cheaper and works pretty well for the right vehicles." For many frustrating years Pickens argued that the right vehicles included cars. .....
Gasoline was always cheaper in the U.S. than in Europe. .....
The Obama administration has not said much about natural-gas vehicles, but the Clean Energy gents are optimistic that some sort of energy bill will make it through Congress this year, with natural-gas fuel incentives tucked somewhere inside. .....

"natural-gas fuel incentives tucked somewhere inside"

You don't have to speculate about that. You just have to look at S 774 aka the National Energy Security Act of 2009, which has been on the floor of the Senate since last June after it was drafted in committee.

You could say that everything in S 774 is possible, and some of it is probable.

For instance, among those things probable, most people would say natural gas fuel subsidies and more loan guarantees for the Alaska pipeline.

OTOH, opening up the Destin Dome in the eastern gulf to drilling would be only possible and would depend on how severe the carbon reduction part of the final legislation is.

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