Seal Beach-based Clean Energy Fuels Inc., which is backed by legendary oilman T. Boone Pickens, is angling to supply natural gas fuel to trucks as part of a bid to cut diesel pollution at the ports of Long Beach and Los Angeles.
The ports unveiled in late June a long-term plan to clean up polluted air at the nation’s busiest port complex. The plan calls for diesel trucks operating at the ports to be converted to engines that run on natural gas or be replaced within five years.
The South Coast Air Quality Management District is set to kick in $200 million over a five-year period to help terminal operators and truck owners offset conversion costs.
Clean Energy, which provides natural gas for buses, taxis and other vehicles, is looking for a piece of the fuel supply contracts.
“(The opportunity) will be significant,” said Andrew Littlefair, Clean Energy’s chief executive.
Littlefair said winning contracts in Southern California could lead to others in Oakland, Houston and elsewhere.
“All of the ports are watching this,” Littlefair said.
Clean Energy plans to bid on the fuel contracts through a partnership with Canada’s Westport Innovations Inc., which is an investor in Clean Energy.
Westport hopes to win contracts to do diesel-to-natural-gas engine conversions for some of the 5,000 18-wheel trucks that pass through the ports, according to Littlefair.
The ports initially are looking to convert about 125 trucks to get the program rolling. Bidding on the fuel supply contracts could begin in weeks.
Pickens, who has a home in Del Mar, founded Clean Energy as a tiny part of Dallas-based Mesa Petroleum in the late 1980s. He split it off in the late 1990s.
Clean Energy bills itself as the largest provider of natural gas for vehicles in North America. The company serves fleets of trash and other trucks, buses, shuttles, taxis and police cars.
Littlefair, a former vice president of public affairs at Mesa Petroleum, worked as an advance planner and scheduler for President Reagan in 1987. He was hand-picked by Pickens to lead Clean Energy.
Corporate Raider
Pickens, who gained notoriety in the 1980s as a corporate raider, owned 20% of Clean Energy until the latter part of last year, Littlefair said.
He had invested about $50 million in the company in recent years. Then, late last year, Pickens is believed to have paid more than $70 million to buy out a British Columbia company’s stake in Clean Energy.
Canada’s Terasen Inc., which held a 40% stake in Clean Energy, was bought by Houston’s Kinder Morgan Inc. for $6.9 billion in November, according to Littlefair.
In addition to its Clean Energy investment, Terasen sold off numerous positions in far-flung businesses in recent years prior to the Kinder Morgan buy.
Other Clean Energy investors besides Westport include New York private equity firm Perseus LLC.
The ports’ overall cleanup plan is estimated to cost $2 billion during the five-year period. Port officials say the plan will cut diesel particulate emissions and nitrogen oxide emissions.
In addition to the truck conversions, the ports’ plan calls for all major container cargo and cruise ship terminals to be equipped with onshore electric power hookups so that ships can turn off their diesel engines while docked.
Ships also would be required to use low-sulfur fuels and to reduce their speeds when entering or leaving the harbor area.
