Newport Beach, CA-based Clean Energy Fuels Corp., one of the nation's largest providers of natural gas transportation fuels and fueling infrastructure, said Monday it has formed a strategic alliance with the transportation finance unit of General Electric Corp. (GE) aimed at heavy duty trucking fleets.
Working with GE Capital's transportation finance unit, Clean Energy seeks to accelerate the conversion of more heavy duty vehicle fleets from diesel to natural gas.
It is the second collaboration between Clean Energy and a GE unit in the past month, following the formation of a consortium in September among Clean Energy, two GE units and Ferus Natural Gas Fuels to deliver more liquefied natural gas (LNG) for transportation uses around the nation (see Daily GPI, Sept. 20).
Under the latest deal with GE, truck fleet operators will work with Clean Energy to develop natural gas fueling contracts -- both LNG and compressed natural gas (CNG) -- and then they will apply for loans and leases from GE Capital to acquire trucks from manufacturers that produce commercial natural gas vehicles (NGV).
Clean Energy then would sweeten the pot for the fleet operators, helping offset the monthly cost of the new NGV trucks to make them consistent with the cost of diesel trucks, if the customer has made a fuel commitment, a Clean Energy spokesperson said.
Class 8 (heavy duty) trucks are the focus, and they can use CNG or LNG. Both versions of natural gas transportation fuels "cost significantly less" than diesel, which Clean Energy stresses is a key factor because 40% of the typical over-the-road fleet operator's operational costs go for fuel.
Technology and infrastructure issues have continued to delay more conversions to natural gas among over-the-road trucking operators, said the spokesperson, adding that the issues are being addressed as automakers come up with more advanced engines and vehicles.
Clean Energy said this was the third agreement it has struck with GE Capital. Two other deals are in place to help expand the natural gas fueling infrastructure.
Dan Clark, general manager for GE's transportation finance unit, said that this latest agreement will "open up the natural gas market" to long-haul trucking operators. "The alliance will support the parties' mutual goal of reducing the financial impact of transitioning to natural gas and lowering the industry's environmental footprint," Clark said.
Clean Energy CEO Andrew Littlefair said that with GE Capital his company can help "break down the barriers" that have prevented some fleet owners from making the transition to natural gas. "Our goal is to work with fleet operators to achieve a one-year payback on the incremental cost of natural gas heavy duty trucks," he said.