Clay Corbus, the new chief executive of Clean Energy Fuels, predicts that volatile diesel prices due to the war in Iran will prompt more trucking companies to take a favorable look at his firm’s renewable natural gas offerings.
“It’s easier to budget, and the CEO sleeps better at night knowing that he doesn’t have to worry about another conflict in the Middle East driving up his prices again,” Corbus told the Business Journal.
Newport Beach-based Clean Energy Fuels offers renewable natural gas (RNG) made from methane gas emitted from dairy farm manure, landfills and wastewater treatment plants for trucks and buses.
“When you have diesel prices where they are right now, it certainly opens a number of eyes,” Corbus said.
RNG looks better when compared to the price and environmental damage of diesel, he added.
The company has long been a subject of intriguing possibilities for alternative fuel sources, but growth has been stagnant for the past four years, hovering around $420 million annually. Shares have sunk about 75% in the past five years.
This year got off to a good start.
On May 7, it reported first-quarter sales jumped 13% to $117.6 million, easily topping analysts’ average estimate of $97 million.
In April, Corbus succeeded Andrew Littlefair, who co-founded the company with legendary Texas oilman T. Boone Pickens in 1997 to promote cleaner fuel use as he later became an advocate for alternative fuels.
The stock was trading at $2.08 apiece on May 12 with a market cap of $460 million. Its shares have gained about 8% in value over the last 12 months (Nasdaq: CLNE).
Diesel Prices Spike on Iran
The conflict in Iran highlights the volatility of diesel prices.
“For customers, that can be a real problem, always afraid diesel will shoot from $4 to $7 or whatever that price difference is,” Corbus said in the April 30 interview. The average price for diesel in the U.S. has been hovering above $5.60 per gallon since early May, about 30% higher than a year ago. The price is even higher in California.
“Renewable natural gas is a very stable price,” says the new CEO, mostly in the range of $2 to $3 per gallon for his company’s RNG.
He said the price is especially important for heavy-duty truck fleets, where fuel is the second-highest cost.
Trash trucks, transit agencies, trucking companies and airport station shuttle buses are among those using the company’s RNG fuel. Clean Energy fuels tens of thousands of trucks, buses, and shuttles at its stations across the country every day, representing approximately 500 different fleets, according to Corbus.
600 Stations Strategically Operated Across U.S.
Clean Energy says it is the largest provider of renewable natural gas for the transportation market in North America.
“We have over 600 stations that we own or operate, Corbus said, calling it a “nationwide footprint.”
The stations are strategically located along major freight transportation routes across the United States.
Clean Energy Fuels in early May announced the opening of six more stations located in California, New Jersey, Oklahoma, Michigan and Washington.
Clean Energy Fuels makes some of the renewable natural gas at its own facilities, while also producing the fuel in joint ventures with U.K.-based energy giant BP (NYSE: BP) and TotalEnergies (NYSE: TTE) of France. In addition, more than 100 outside suppliers feed into the Clean Energy distribution system.
Corbus Adds ‘Fresh Approach’ at the Top
Clean Energy Fuels said it was looking to a “fresh approach” when it named Corbus CEO on April 23.
“What I’m looking forward to is getting us back on a higher growth trajectory as we have this new market that’s open and available to us,” with the use of technological advances, he said.
Corbus has nearly 20 years of experience on the company’s senior leadership team.
Previously, he served as co-CEO of investment bank and financial backer WR Hambrecht + Co, which managed Clean Energy’s 2007 IPO.
Clean Energy Fuels employed 503 people as of Dec. 31. About 150 employees are based locally, Corbus said in the late April interview.
Tax Credits, Incentives
Clean Energy also benefits from federal tax credits and California state policy incentives.
“The growth story should be balanced against the fact that the business is still sensitive to both federal and state policy incentives (which are becoming more favorable),” said Raymond James Managing Director Justin Jenkins.
He added: “With a solid 2026+ outlook and attractive valuation, we reiterate our Strong Buy rating,” after the results were released in April. Analyst Jenkins has a $4 price target on the stock.
Corbus says the company’s top two competitors are Love’s Alternative Energy of Houston and Opal Fuels of White Plains, N.Y.
Clean Energy Fuels sees Bright Future with Cummins Engine
Clean Energy Fuels says it sees a great future for the 15-liter natural gas engine, made by Cummins of Columbus, Indiana.
“We’re eager to push the option of that and get that out on the road, which we think will be another real growth opportunity for us,” says Clean Energy’s newly appointed CEO Clay Corbus.
Clean Energy says the X15N engine allows long-haul and heavy-duty fleets to run smoothly, efficiently, and reliably on RNG.
Littlefair, Legendary Pickens Founded Clean Energy Fuels
Clean Energy Fuels goes back more than a quarter century, founded by energy executive Andrew Littlefair and the famous Texas oilman T. Boone Pickens.
They were “really pioneers in the area,” according to Littlefair’s CEO successor, Clay Corbus.
Pickens became interested in green energy relatively late, after making huge profits in the oil business.
He died in 2019.
“Words cannot express the sadness the Clean Energy family and myself feel at the loss of our co-founder, leader and friend. I worked closely with Boone for 32 years and he became a father-like figure and true mentor to me,” Littlefair said at the time.
Littlefair continues to be a member of the Clean Energy Fuels board, and is serving as a non-employee government relations consultant.
