By Lou Gagliardi, editor Cabot Global Energy Investor

I see compelling long-term fundamentals behind Clean Energy Fuels Corp. (CLNE). The company has excellent vertical integration and strong prospects for a leadership position in providing natural gas to long-haul truckers across America.

Currently priced significantly less than diesel or gasoline, American natural gas produces up to 30% lower greenhouse gas emissions in light-duty vehicles and 23% lower emissions in medium to heavy-duty vehicles. According to EPA data, replacing just 10% of diesel engines used in heavy-duty transportation with clean-burning natural gas engines could cut nitrogen oxide emissions (NOx) by as much as 200,000 tons per year, reducing air pollution.

Two roadblocks have appeared that could derail Clean Energy's upward ascent: Fourth-quarter 2011 earnings below consensus expectations and failure to pass the The NAT GAS Act (New Alternative Transportation to Give Americans Solutions Act) in the U.S. Senate. I think, however, the impact of both issues is temporary.

While passage of the bill would have been a positive "political" vote of confidence, Clean Energy Fuels Corp. does not need the tax incentives to survive.

Rather, the company has elected, along with a few partners, to move forward with building liquefied natural gas and compressed natural gas (LNG/CNG) stations across major U.S. trucking transportation arteries.

LNG fuels heavy duty trucks, while the CNG is better suited for light trucks and automobiles. That's called building or believing in your future and not waiting for government economic handouts.

Clean Energy Fuels Corp. is planning to build as many as 75 stations by the end of 2012 and 150 or more by the end of 2013. The company has raised $450 million in committed capital to help fund this infrastructure expansion project.

•  Clean Energy has partnered with Pilot Flying J, a major truck highway station owner with 450 truck stops that sell roughly eight billion gallons of diesel.
  
  
• The company has also signed up Coral's Petroleum, a mid-Atlantic truck fueling station with 180 locations.
  
  
• It built a compressor company and two LNG fabrication construction companies with a nationwide network of construction workers to build more and operate them.
  
  
• Additionally, the company has entered the waste transportation market, planning to initially build 12 or 15 refuse fueling stations in 2012, with both Republic Services and Waste Management. Waste Management has stated that roughly 80% of the trucks it intends to buy in 2012 will be natural gas-fueled.
  
  
• The CEO of Swift Transportation, the largest trucking company in the U.S., has said that he believes natural gas fleet penetration could reach 40% in just four years.
  
  
• Clean Energy Fuels Corp. has formed an exclusive strategic relationship with Navistar, one of the country's largest truck builders, to do joint marketing/fueling arrangements.

On balance, the future looks bright for Clean Energy. The company has clearly seized the first mover advantage in an energy-fueling story that becomes more compelling each day as natural gas prices sink lower and crude oil/gasoline prices move higher.

There's no doubt that the use of natural gas to power vehicles will increase. The question is: How much -- and to what extent do we think this will be a transformative event? Our price target is $28 over the next three months.

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