The T. Boone Pickens-backed Clean Energy Fuels has launched a "new" kind of clean and green automotive fuel called Redeem. You wouldn't know it from the breathless coverage of this product in the New York Times, but there's nothing new in the chemical and physical composition of this ---it's simply compressed natural gas. CNG has been marketed in the U.S. since at least 1980. Around the world there's some 17 million cars and heavy vehicles that run on the stuff. .
So what's different about Redeem? Because of where the natural gas ostensibly comes from, it's greener than your average CNG. This is landfill gas, a byproduct of rotting trash. They like to call it "biomethane" to somehow distinguish this gas from methane drilled and fracked out of the earth. Nevermind that all that more common methane was also formed by the biological decomposition of dead plants that lived millions of years ago rather than garbage entombed a couple years ago.
Does it make sense that landfill gas is greener than regular natural gas? When burned to make a vehicle go it generates just as much carbon dioxide. But state regulators in Calfornia have determined that landfill gas is the absolute greenest fuel there is. This is based on the assumption that were it not captured and used, this landfill gas would simply escape the dump and waft up into the atmosphere ---where pound-for-pound the methane has a global warming impact 24 times worse than carbon dioxide. Consider New York City's Fresh Kills landfill. Once the world's biggest dump, it used to emit an estimated 15 billion cubic feet of greenhouse gases a year, perhaps 2% of world methane emissions. But now that methane is captured ---on the order of 10 million cubic feet of natgas per day, enough to heat about 22,000 homes. Waste Management turns gas from the Altamont landfill in California into about 13,000 gallons of fuel a day ---enough to keep 300 garbage trucks running. (Good story on those efforts, here.) .
How much of a premium to Redeem buyers have to pay for this green benefit? Nothing. Clean Energy (NASDAQ:CLNE) says they'll sell the stuff at the same price as CNG from conventional natural gas ---which is about 50 cents cheaper than buying the equivalent energy in the form of gasoline or diesel. Read the full article...