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How viable is compressed natural gas as a replacement fuel for gasoline in cars and trucks? On Monday's show Jim interviewed the CEO of Clean Energy Fuels [CLNE Loading... ()
], which makes and operates natural gas fueling stations, because we believe that this is the single best near-term replacement fuel. But there are skeptics, first among them The New York Times.In an article about the fuel's widespread popularity and increasing availability in Utah ("Surge in Natural Gas Has Utah Driving Cheaply"), Clifford Krauss wrote, “Advocates for these cars see...brisk sales as a sign that natural gas could become the transport fuel of the future, replacing much of the oil the nation imports. While that remains a distant dream, big increases recently in the country’s production of natural gas do raise the possibility of making wider use of the fuel.”
Is it really a "distant dream?" I wonder. Argentina started using compressed natural gas as a fuel in 1994, and by 2002 its adoption had become widespread. I don't think eight years is a distant dream. The next President, if re-elected, could get this done in two terms, and that's assuming we're as slow on the uptake as Argentina. With oil prices much higher now than they were from 1994 to 2002, and compressed natural costing about 50% less than its equivalent in gasoline, I bet we could make huge strides toward adopting compressed natural gas all over the country in less than eight years.
I was surprised that the Times article didn't mention Clean Energy Fuels, which builds natural gas fueling stations, or Fuel Systems [FSYS
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], which makes and installs the technology needed for cars, trucks and industrial machinery to run on compressed natural gas and has a stock that's up an incredible 40% since we recommended it on Aug. 1. These are the companies, along with Honda [HMC
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], the only automaker currently making a car that can run on compressed natural gas right off the lot, that could make widespread use of this fuel anything but a distant dream,
How about distribution? The Times article makes a big deal about Utah's natural gas infrastructure, "a fueling infrastructure that few states can match." I don't buy that line of thinking. Consider this: For $4,000 ($3,000 when you take into account the $1,000 tax credit you'd get) anyone whose house is connected to a natural gas line, and 70% of homes are, can fuel up at home using this device. The Times story also says that one drawback of compressed natural gas vehicles is that they have about half the range of regular cars, but if you can fuel up at home, and a large majority of Americans could, that's not much of an issue. Consider also that you don't have to buy a new car, you can convert your old car to run on compressed natural gas, and this looks more like a soon-to-be reality than a distant dream.
And now that some state governments are getting behind this fuel -- I'm thinking of the $5 billion dollar ballot initiative in California to replace 70,000 trucks and 150,000 cars with vehicles that run on compressed natural as, liquefied natural gas and other clean fuels, and several other big budget projects in California like a $2.9 billion fund to pay for incentives to purchase vehicles that run on alternative fuels -- I think it wouldn't be that hard to become a nation that runs on compressed natural gas, rather than gasoline.
Not convinced? Check out the two-page advertisement in the Sept. 2 Wall Street Journal for compressed natural gas as the fuel of the future. I have to believe they ran that ad to counter the some of the skepticism in The New York Times piece. From where we're sitting, it worked.
Cliff Mason is the Senior Writer of CNBC's Mad Money w/Jim Cramer, and has been that program's primary writer, in cooperation with and under the supervision of Jim Cramer, since he began at CNBC as an intern during the summer of 2005. Mason was the author of a column at TheStreet.com during 2007, which he describes as "hilarious, if short-lived." He graduated from Harvard College in 2007. It was at Harvard that Mason learned to multi-task, mastering the art of seeming to pay attention to professors while writing scripts for Mad Money. Mason has co-written two books with Jim Cramer: Jim Cramer's Mad Money: Watch TV, Get Rich and Stay Mad For Life: Get Rich, Stay Rich (Make Your Kids Even Richer). He is 100% responsible for any parts of either book that you did not like.
Mason has also had a fruitful relationship with Jim Cramer as his nephew for the last 23 years and will hopefully continue to hold that position for many more as long as he doesn't do anything to get himself kicked out of the family.
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