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In a surprising turnaround, the amount of carbon dioxide being released into the atmosphere in the U.S. has fallen dramatically to its lowest level in 20 years, and government officials say the biggest reason is that cheap and plentiful natural gas has led many power plant operators to switch from dirtier-burning coal.

Many of the world’s leading climate scientists didn’t see the drop coming, in large part because it happened as a result of market forces rather than direct government action against carbon dioxide, a greenhouse gas that traps heat in the atmosphere.

Michael Mann, director of the Earth System Science Center at Penn State University, said the shift away from coal is reason for “cautious optimism” about potential ways to deal with climate change. He said it demonstrates that “ultimately people follow their wallets” on global warming.

“There’s a very clear lesson here. What it shows is that if you make a cleaner energy source cheaper, you will displace dirtier sources,” said Roger Pielke Jr., a climate expert at the University of Colorado.

In a little-noticed technical report, the U.S. Energy Information Agency, a part of the Energy Department, said this month that total U.S. CO2 emissions for the first four months of this year fell to about 1992 levels. The Associated Press contacted environmental experts, scientists and utility companies and learned that virtually everyone believes the shift could have major long-term implications for U.S. energy policy.

While conservation efforts, the lagging economy and greater use of renewable energy are factors in the CO2 decline, the drop-off is due mainly to low-priced natural gas, the agency said.

A frenzy of shale gas drilling in the Northeast’s Marcellus Shale and in Texas, Arkansas and Louisiana has caused the wholesale price of natural gas to plummet from $7 or $8 per unit to about $3 over the past four years, making it cheaper to burn than coal for a given amount of energy produced. As a result, utilities are relying more than ever on gas-fired generating plants.

Both government and industry experts said the biggest surprise is how quickly the electric industry turned away from coal. In 2005, coal was used to produce about half of all the electricity generated in the U.S. The Energy Information Agency said that fell to 34 percent in March, the lowest level since it began keeping records nearly 40 years ago.

The question is whether the shift is just one bright spot in a big, gloomy picture, or a potentially larger trend.

Coal and energy use are still growing rapidly in other countries, particularly China, and CO2 levels globally are rising, not falling. Moreover, changes in the marketplace — a boom in the economy, a fall in coal prices, a rise in natural gas — could stall or even reverse the shift. For example, U.S. emissions fell in 2008 and 2009, then rose in 2010 before falling again last year.

Also, while natural gas burns cleaner than coal, it still emits some CO2. And drilling has its own environmental consequences, which are not yet fully understood.

“Natural gas is not a long-term solution to the CO2 problem,” Pielke warned.

The International Energy Agency said the U.S. has cut carbon dioxide emissions more than any other country over the last six years. Total U.S. carbon emissions from energy consumption peaked at about 6 billion metric tons in 2007. Projections for this year are around 5.2 billion, and the 1990 figure was about 5 billion.

China’s emissions were estimated to be about 9 billion tons in 2011, accounting for about 29 percent of the global total. The U.S. accounted for approximately 16 percent.

Mann called it “ironic” that the shift from coal to gas has helped bring the U.S. closer to meeting some of the greenhouse gas targets in the 1997 Kyoto treaty on global warming, which the United States never ratified. On the other hand, leaks of methane from natural gas wells could be pushing the U.S. over the Kyoto target for that gas.

Even with such questions, public health experts welcome the shift, since it is reducing air pollution.

“The trend is good. We like it. We are pleased that we’re shifting away from one of the dirtiest sources to one that’s much cleaner,” said Janice Nolen, an American Lung Association spokeswoman. “It’s been a real surprise to see this kind of shift. We certainly didn’t predict it.”

Power plants that burn coal produce more than 90 times as much sulfur dioxide, five times as much nitrogen oxide and twice as much carbon dioxide as those that run on natural gas, according to the Government Accountability Office, the investigative arm of Congress. Sulfur dioxide causes acid rain and nitrogen oxides lead to smog.

Bentek, an energy consulting firm in Colorado, said that sulfur dioxide emissions at larger power plants in 28 Eastern, Midwestern and Southern states fell 34 percent during the past two years, and nitrous oxide fell 16 percent. Natural gas has helped the power industry meet federal air pollution standards earlier than anticipated, Bentek said.

Last year the Environmental Protection Agency issued its first rules to limit CO2 emissions from power plants, but the standards don’t take effect until 2014 and 2015. Experts had predicted that the rules might reduce emissions over the long term, but they didn’t expect so many utilities to shift to gas so early. And they think price was the reason.

“A lot of our units are running much more gas than they ever have in the past,” said Melissa McHenry, a spokeswoman for Ohio-based American Electric Power Co. “It really is a reflection of what’s happened with shale gas.”

“In the near term, all that you’re going to build is a natural gas plant,” she said. Still, she warned: “Natural gas has been very volatile historically. Whether shale gas has really changed that — the jury is still out. I don’t think we know yet.”

Jason Hayes, a spokesman for the American Coal Council, based in Washington, predicted cheap gas won’t last.

“Coal is going to be here for a long time. Our export markets are growing. Demand is going up around the world. Even if we decide not to use it, everybody else wants it,” he said. Hayes also said the industry expects new coal-fired power plants will be built as pollution-control technology advances: “The industry will meet the challenge” of the EPA regulations.

The boom in gas production has come about largely because of hydraulic fracturing, or fracking. Large volumes of water, plus sand and chemicals, are injected to break shale rock apart and free the gas.

Environmentalists say that the fluids can pollute underground drinking water supplies and that methane leaks from drilling cause serious air pollution and also contribute to global warming. The industry and many government officials say the practice is safe when done properly. But there have been cases in which faulty wells did pollute water, and there is little reliable data about the scale of methane leakage.

“The Sierra Club has serious doubts about the net benefits of natural gas,” said Deborah Nardone, director of the group’s Beyond Natural Gas campaign.

“Without sufficient oversight and protections, we have no way of knowing how much dangerous pollution is being released into Americans’ air and water by the gas industry. For those reason, our ultimate goal is to replace coal with clean energy and energy efficiency and as little natural gas as possible.”

Wind supplied less than 3 percent of the nation’s electricity in 2011 according to EIA data, and solar power was far less. Estimates for this year suggest that coal will account for about 37 percent of the nation’s electricity, natural gas 30 percent, and nuclear about 19 percent.

Some worry that cheap gas could hurt renewable energy efforts.

“Installation of new renewable energy facilities has now all but dried up, unable to compete on a grid now flooded with a low-cost, high-energy fuel,” two experts from Colorado’s Renewable and Sustainable Energy Institute said in an essay posted this week on Environment360, a Yale University website.

How much further the shift from coal to natural gas can go is unclear. Bentek says that power companies plan to retire 175 coal-fired plants over the next five years. That could bring coal’s CO2 emissions down to 1980 levels. However, the EIA predicts prices of natural gas will start to rise a bit next year, and then more about eight years from now.

Despite unanswered questions about the environmental effects of drilling, the gas boom “is actually one of a number of reasons for cautious optimism,” Mann said. “There’s a lot of doom and gloom out there. It is important to point out that there is still time” to address global warning.

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The U.S. Bureau of Safety and Environmental Enforcement on Thursday gave teeth to its policy that its inspectors can issue citations to oilfield service contractors operating offshore as well as the energy companies that control offshore leases.

The agency affirmed in an interim policy document that contractors as well as the oil companies they work for can be issued “incidents of non-compliance” for violating the rules. The factors inspectors must consider are the seriousness of the violation, the harm that resulted, and what control, if any, the contractor had over the situation.

Prior to the 2010 Deepwater Horizon disaster, in which a deepwater well operated by BP PLC (BP, BP.LN) experienced a catastrophic explosion that killed 11 and unleashed a giant oil spill, regulators took a top-down approach to their oversight of offshore drilling, with well operators being held responsible for any violations.

But in 2011, the BSEE issued incidents of noncompliance not just to BP, the operator and lease holder of the ill-fated Macondo well, but also to rig owner Transocean Ltd (RIG) and cementing contractor Halliburton (HAL) for separate violations the agency found contributed to the explosion.

The document released Thursday indicates this will continue to be the agency’s practice. Leaseholders and well operators will continue to be the primary focus of enforcement actions, the BSEE document states, but contractors can be cited “in appropriate circumstances…for serious violations of BSEE regulations.”

Brian Petty, the International Association of Drilling Contractors’ senior vice president for government affairs, said the group is “very nervous” about the impact the agency’s policy could have on contractors’ insurance rates.

He said contracts allow well operators to collect damages from contractors if the latter are found to have been negligent. A government agency stepping into the process upends the system currently in place, and could cause a spike in the insurance rates contractors have to pay, Mr. Petty said.

Analysts say drilling activity in the Gulf of Mexico has returned almost to pre-Deepwater Horizon levels. But Mr. Petty said if the BSEE is aggressive and “cavalier” about enforcement actions against contractors, some might decide it isn’t worth it to drill there.

“At the very least it will be more expensive,” he said, adding that in some cases the additional costs that come with exposure to civil penalties could be a “deal-killer” for drilling contractors.

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The United States is increasing its dependence on oil from Saudi Arabia, raising its imports from the kingdom by more than 20 percent this year, even as fears of military conflict in the tinderbox Persian Gulf region grow.

The increase in Saudi oil exports to the United States began slowly last summer and has picked up pace this year. Until then, the United States had decreased its dependence on foreign oil and from the Gulf in particular.

This reversal is driven in part by the battle over Iran’s nuclear program. The United States tightened sanctions that hampered Iran’s ability to sell crude, the lifeline of its troubled economy, and Saudi Arabia agreed to increase production to help guarantee that the price did not skyrocket. While prices have remained relatively stable, and Tehran’s treasury has been squeezed, the United States is left increasingly vulnerable to a region in turmoil.

The jump in Saudi oil production has been welcomed by Washington and European governments, but Saudi society faces its own challenges, with the recent deaths of senior members of the royal family and sectarian strife in the eastern part of the country, making the stability of Saudi energy and political policies uncertain.

The United States has had a political alliance with the Saudi leadership that has lasted for decades, one that has become even more pivotal to Washington during the turmoil of the Arab spring and rising hostilities with Iran over that nation’s nuclear program. (Saudi Arabia and Iran are bitter regional rivals.)

The development underscores how difficult it is for the United States to lower its dependence on foreign oil — especially the heavy grades of crude that Saudi Arabia exports — even as domestic oil production is soaring. It is a development that has alarmed conservative and liberal foreign policy experts alike, especially with oil prices and Mideast tensions rising in recent weeks.

“At a time when there is a rising chance of either a nuclear Iran or an Israeli strike on Iran’s nuclear facilities, we should be trying to reduce our reliance on oil going through the Strait of Hormuz and not increasing it,” said Michael Makovsky, a former Defense Department official who worked on Middle East issues in the George W. Bush administration.

Senior Iranian officials have repeatedly threatened to close the Strait of Hormuz, the narrow neck through which most Gulf oil is shipped, and the Iranian navy has held maneuvers to back up the threats. Most analysts say it is doubtful the Iranians would take such an extreme measure because that would block exports vital to the country’s economy, but the United States Navy has been preparing for such a contingency.

Many oil experts say that the increasing dependency is probably going to last only a couple of years, or until more Canadian and Gulf of Mexico production comes on line.

“Until we have the ability to access more Canadian heavy oil through improved infrastructure, the vulnerability will remain,” said David L. Goldwyn, former State Department coordinator for international energy affairs in the Obama administration. “The potential for an obstruction of the Strait of Hormuz therefore poses a physical threat to U.S. supply as well as a potential price shock on a global level.”

Obama administration officials said they were not overly worried for several reasons. In the event of a crisis, the United States could always dip into strategic petroleum reserves; domestic production continues to climb; and Gulf of Mexico refineries could be adjusted to use higher-quality, sweeter crude oil imported from other countries.

“There are going to be tensions in the Middle East whether that oil is going to the United States or going to somewhere else,” said Adam Sieminski, administrator of the Energy Department’s Energy Information Administration. “And if oil prices go up because of a problem in the Middle East, that causes a problem for the world in general and not one that is specific to the United States.”

In the United States, several oil refining companies have found it necessary to buy more crude from Saudi Arabia and Kuwait to make up for declining production from Mexico and Venezuela, insufficient pipeline connections between the United States and Canadian oil sands fields, and the fallout from the 2010 BP disaster, which led to a yearlong drilling moratorium in the Gulf of Mexico.

“As refiners, we buy from wherever the supply is readily available and where we can get the best price,” said Bill Day, a spokesman for Valero Energy, the largest domestic refiner.

The United States imported a daily average of more than 1.45 million barrels of Saudi crude over the first five months of this year, compared to a daily average of roughly 1.15 million billion barrels over the same period last year, according to Energy Department estimates. Similar increases have come from Kuwait and Iraq, even while total OPEC and non-OPEC imports declined. The United States has imported little Iranian oil in recent years.

In recent years, United States oil imports have been trending lower, although total imports are little changed from the end of last year. But the big change came in imports from the Persian Gulf, spiking to 2.6 million barrels a day in May from 1.9 million barrels a day last December, now roughly 23 percent of total imports, compared with about 17 percent before.

Domestic oil production has been surging the last three years and is up 10 percent this year. But most of the new production is coming from shale oil fields in North Dakota and Texas that produce high-quality sweet grades. Many of the refineries on the Gulf of Mexico coast are designed to refine the heavier oils that the United States has traditionally imported from Venezuela, Mexico and Canada.

Mexican and Venezuelan production has been sliding the last few years, and much of that oil has been replaced by Canadian oil from oil sands. While Canadian production has been increasing rapidly in recent years, there is not enough pipeline capacity.

There are also echoes from the disastrous BP Gulf of Mexico well explosion and spill in 2010, which led to a federal moratorium on Gulf drilling. Before the accident, Gulf oil production was 1.75 million barrels a day, and it was projected to increase to 2.2 million barrels a day by this year.

Instead, because of the yearlong halt on new drilling, production is about 700,000 barrels a day lower than forecast. Much of that oil is heavy and is being replaced by Saudi imports, experts said.

The boost in Saudi shipments to the United States also represents a swing for the kingdom, which had been shifting exports to China in the wake of the 2008 financial crisis and recession.

“The U.S. market for sour crude is looking very good for Saudi Arabia this year while the Chinese market is looking pretty bad,” said Edward Morse, Citigroup global head of commodity research. He noted that demand for crude in China grew by less than 1 percent over the first half of the year.

Saudi oil experts said the kingdom was merely following the markets.

“This is strictly, totally business,” said Sadad Al Husseini, a former executive at Saudi Aramco, the state oil company. “Saudi production is flat out. Where you send it is a matter of where you make the best profit.”

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American car companies are moving ahead with a plan to produce natural gas powered cars and trucks for public fleets in state-sponsored efforts to create a wider public market for the vehicles.

Representatives of the Big Three carmakers, and Honda, as well as auto dealers and companies that convert conventional engines to run on compressed natural gas, met with leaders of a consortium of states in Oklahoma City this month to discuss a request for proposal that has been issued by the states to the car makers.

The carmakers have been invited to bid on production of seven vehicle categories from compact cars to four-ton trucks to cargo vans. The bids are due by September 7 and will be announced in early October, based on demand from participating states and other levels of local government.

The RFP follows a memorandum of understanding initially issued by four states late last year, and now signed by 10 others, calling on the carmakers to produce CNG vehicles that would be purchased by state, county and municipal fleets, creating demand for the vehicles and, they hope, stimulating their increased use by businesses and individuals.

A total of 22 states have now joined the RFP process, and all others, plus counties and municipalities, are welcome to join, said Oklahoma’s Republican Governor Mary Fallin, who has led the initiative, along with Colorado Governor John Hickenlooper, a Democrat.

In the interests of stimulating public demand for the vehicles, the RFP requires that NGVs produced under the initiative are comparably priced to equivalent gasoline models, and that they are subject to the same standards of reliability and warranty.

“More people are becoming aware of what we are doing with this initiative to create demand for CNG vehicles,” Gov. Fallin told AOL Energy.

Soaking up each region’s gas

Natural gas vehicles are a potentially major source of demand for the current abundance of shale gas that’s being produced by states including Oklahoma, Colorado, Wyoming and Pennsylvania, all of whom have signed the MOU.

Low-priced natural gas could save money for cash-strapped state and local governments while helping them meet federal clean-air standards, and reducing US dependence on volatile sources of foreign oil, the initiative’s backers argue.

But widespread adoption of NGVs is challenged by a shortage of natural gas filling stations, of which only about 1,000 currently exist nationwide, Gov. Fallin said in an interview.

She said public acceptance of the vehicles – which are typically used currently by fleets such as transit, refuse and delivery services — is subject to a “chicken-and-egg” question over whether to build the vehicles or the refueling infrastructure first.

“We hope to create market demand so that there will be more infrastructure built,” she said.

The number of NGVs resulting from the initiative won’t be known until the RFP bids are in but Gov. Fallin said a total of 5,000 vehicles built in the first year would be seen as a success.

One automaker has indicated that 2,000 orders for a sedan car would be enough to spur production of such a model for the private market, she said.

Robert Schmitt, Director of Fleet Operations for Chrysler, said the August 8 meeting was an opportunity for automakers and other interested parties to ask questions about the RFP process. He said Chrysler has no specific targets for the number of NGVs it will produce under the initiative but said there is a good level of interest across the industry.

“We believe the market for these vehicles will grow,” he said.

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On Shanghai’s Huangpu River, a barge hauls coal upstream to one of the power plants that keeps this city booming. China is the world’s biggest energy guzzler, and it gets three-quarters of its power from coal.

But coal is one of the dirtiest fuels around. It’s the main reason so many of China’s cities are choked with smog, and why China is now the world’s biggest greenhouse gas polluter.

China energy analyst Bill Dodson says it’s “one of the disappointments in China’s rapid development… that it chose to use technologies that are about 200-years-old.”

But these days China is scrambling to find newer and cleaner technologies. And it thinks it’s found a promising one in hydraulic fracturing, or fracking.

Fracking is a relatively new way of getting at cleaner-burning natural gas. It uses pressurized water and chemicals to fracture soft shale rock deep underground and pump out natural gas trapped inside. The technology is revolutionizing energy markets and helping gas take a big bite out of coal use in the US.

“We’d like to repeat the same successful story in China,” says Yang Fuqiang, with the Natural Resources Defense Council (NRDC) in Beijing,

Yang says China is already making big strides in pollution-free power sources like wind and solar, but they’re still likely to provide only 15 percent of China’s energy by 2020.

“That is not enough’” Yang says. “So I think another way is to develop more natural gas and shale gas.”

China has huge untapped shale gas deposits, and supporters hope they can be a bridge between coal and broader use of renewables. The country has drilled several dozen trial wells, and in March, state-owned PetroChina signed its first production agreement with Shell. China has also invited other global energy players to bring in their technology and expertise.

But no one’s sure the investment will pay off.

“There is no guarantee that the technology will be suitable for China,” says Tao Wang, a scholar at Beijing’s Carnegie-Tsinghua Center for Global Policy. Much of China’s shale may be difficult to fracture. It also tends to be under rugged and remote terrain. So Tao says the Chinese are tempering their hopes for fracking.

Then there are the perhaps more formidable challenges.

Perhaps the biggest is that fracking requires huge amounts of water. That’s a big concern in a place like China, where the country’s age-old problem of water shortages is written into traditional songs like “The Yellow River is Dry.”

Energy analyst Bill Dodson says China’s water problems are only getting worse, and fracking would have to compete for the ever-scarcer supplies with industry, agriculture, and growing cities.

But others say that’s not a deal-breaker.

Ming Sung, a former chemical engineer for Shell who’s now with the Clean Air Task Force, says he’s cautiously optimistic about the environmental benefits of fracking, in part because there are now technologies that allow fracking operations to recycle the water they use. Researchers are also exploring chemical alternatives to water.

But that just gets to other concerns about fracking.

Opponents say the chemicals used in fracking already pose a hazard to water supplies. There’s also concern about leaks of methane into the atmosphere. Ming says such leaks could undermine one of fracking’s major benefits, because as a greenhouse gas, methane “is 20-some to 100 times worse than CO2.“

All of these environmental concerns have led to a significant public backlash against fracking in the U.S. The NRDC’s Yang says many Chinese environmental groups still don’t know much about the technology. But it’s just a matter of time before they learn. And China’s environmental movement is becoming more assertive. In July, a protest against plans for a new waste water pipeline in Qidong led authorities to scrap the project the very same day.

For now at least, the Chinese government has modest hopes for fracking. Its targeted shale gas production will cover just two or three percent of the country’s energy needs by 2020.

But like so much else in China these days, the energy picture is changing fast. And what happens with fracking here could ultimately have a major impact around the world.

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Budgeting for fuel consumption has been on the increase both as a household commodity or even at the state level, suggesting why a cheaper source of fuel would not only help budgeting, but also guarantee some savings.

CNG stands for compressed natural gas and is one of the most viable alternative vehicular fuels. Natural gas is available locally in abundance and use of CNG as a vehicular fuel will reduce the dependence on imported oil, which in turn will reduce the subsidy burden on the Federal government.

The benefits of the commodity are lower operating cost: on mile to mile basis, CNG will be cheaper than petrol by over 40 percent and as compared to diesel, it will be over 55 percent. This is based on the prevailing price (as on 01.02.2011) of CNG & liquid fuels.

The cost of maintenance is also low. Due to the absence of any lead or benzene content in CNG, the lead fouling of spark plugs is eliminated. CNG fuel systems are sealed, which prevents any spill or evaporation losses. There is an increase in the life of lubricating oils, as natural gas does not contaminate and dilute the crankcase oil.

When it comes  to  the issue of environment, the  commodity is friendly: natural gas has less carbon per unit energy available as compared to petrol & diesel and hence reduces vehicular exhaust emissions carbon monoxide , carbon di-oxide, unburnt hydro-carbons etc) significantly. This in turn will help you to live in a clean environment.

Flexibility and ease of use: the basic engine characteristics of a vehicle are retained while converting it to run on CNG. The vehicle therefore is capable of running either on petrol or CNG at the flick of a switch mounted on the vehicle dashboard.

Its social benefits is reduction in importation of liquid fuel, which in turn reduces subsidy burden on the government.

Petrol vehicles converted to natural gas are subject to a marginal power loss ( about 10 percent to 15 percent) when running on natural gas; however vehicles designed specifically to run on natural gas will have no loss of power and may even have greater power and efficiency. Natural gas has a 120 to 130 octane rating, compared with 87 to 96 octane rating of petrol.

The petrol system is retained during conversion for CNG so that the vehicle will still run on petrol. A switch on the dashboard allows one to make instant change-over from one fuel to other.

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An article by Stone Fox Capital about Clean Energy Fuels Corp (CLNE) stimulated some great conversation about the small natural gas company. There were many good points to both the pros and cons of investing in the up-and-coming fuel supplier. As it is one of the largest holdings in my portfolio, I decided to re-evaluate the investment. After debating in the comments section of Stone Fox Capital’s article and a close reading of the latest earnings call, I continue to believe Clean Energy is a worthy holding.

Natural Gas

Compressed natural gas (CNG), liquefied natural gas (LNG), and the engines they burn in are cleaner for the environment than gasoline or diesel. Hydraulic fracking is the method used to draw the gas out of the ground. This method has been subject to environmental concerns, blamed to be harmful to groundwater. However, the concerns are just that; concerns. There is no shortage of fracking these days. With the rise in nat gas prices and more efficient drilling techniques, the shale formations in which the gas is found have been on a roll.

The United States consumes more than 25% of the world’s oil…no wonder we are in mind-boggling debt. Ever since I learned about natural gas, I’ve wondered why the in the heck we aren’t utilizing it. It could reduce our debt, increase our GDP, and reduce our dependency on foreign countries. We claim to be the #1 country, yet our every-day lives depend on the Middle East’s supply of oil. Why are we not taking advantage of the huge reserves of natural gas believed to be right under our feet? Democrats and republicans are constantly debating on taxes, government spending, and health care to try and fix our debt crisis when a simple solution is right in front of them. I’m not suggesting that using natural gas is some kind of panacea, but it does make sense for the economy.

Clean Energy’s Advantage

As outlined in Stone Fox Capital’s article, Clean Energy’s selling point is America’s Natural Gas Highway. The goal is to be able to provide truckers a nat gas supply to get them from coast to coast without gasoline or diesel. A novel idea, yes; but easier said than done. The company has been spending like crazy to build this highway, so the profits are yet to be seen.

A great point brought up in the comments was the competition that Clean Energy faces. It’s $1.2 billion market cap pales in comparison to the likes of Exxon Mobil’s (XOM) $406.8 billion and Chevron’s (CVX) $222.3 billion market caps. The argument I made is that, while these companies are behemoths compared to CLNE, they have not made much of a splash in the nat gas markets. CLNE has a jump on them, with many stations already built in partnership with Pilot-Flying J Travel Centers. So what’s stopping the big blue chips from coming in and taking over? Nothing. However, I believe their entrance into the market could be welcome by CLNE. An easy way to for them to do that could be to simply buy Clean Energy. These companies could easily reach into their wallets and scoop up the company. Another reason they could be welcomed, as Stone Fox Capital so wisely pointed out, is that Clean Energy cannot expect to supply the entire nation with natural gas themselves. They simply do not have the money for it. If an Exxon, Shell, or Chevron decided to hop on board the nat gas train, it would just elevate the market. Do any of these companies supply every American with gasoline? No. Most of us fill up our tanks at all of them. That’s not to say they do not compete with each other, but that we consume so much oil that all of them can be very profitable in the same market.

The Stock – What we’re really here for

Politics aside, CLNE is a volatile stock with a relatively small market capitalization. It comes with a 2.1 beta and swings that would scare plenty of investors away. I am in this one for the long haul though, so I don’t focus too much on the daily moves. From a technical standpoint, CLNE is in somewhat of a double bottom formation (I usually like to see the first bottom lower than the second, but oh well). It is also trading below its 40-day moving average.

Conclusion

I continue to believe in the Clean Energy story. While CLNE does pose substantial risk, its potential seems to be worth it. As I don’t expect them to be an over-night sensation, I am willing to hold on through the swings and volatility. They have the strong support of T. Boone Pickens, who is a powerful man to have on your side. I think natural gas is a key component to our country’s well-being, and CLNE seems to be headed down the right path to profit from it.

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The first of about two dozen trucks carrying parts to assemble a drilling rig pulled into the Bayou Corne community around 11 a.m. Wednesday, Assumption Parish Sheriff Mike Waguespack said.

They rig will be put to work drilling an observation well to search for a possible connection between a closed well on the property of Texas Brine Co. of Houston and a sinkhole that developed earlier this month near La. 70 and Bayou Corne.

Texas Brine spokesman Sonny Cranch said the first 10 tractor-trailers carrying rig components bound for the site of the 2.5-acre sinkhole adjacent to the Napoleonville Salt Dome arrived on schedule in Assumption Parish. The rest were to arrive Thursday.

Once the rig is assembled, Texas Brine officials expect the well to be completed in about 40 days. The rig, which will stand 140 feet high, will be assembled on a well pad about 900 to 1,000 feet from the sinkhole, Cranch said.

The Louisiana Department of Natural Resources ordered Texas Brine last week to drill the well to see whether one of its salt dome caverns may have failed and caused the sinkhole.

DNR officials have said they suspect Texas Brine’s cavern may have been carved too close to the Napoleonville Dome’s outer rim, causing the sinkhole to form Aug. 3 and swallow up forested swamps on Texas Brine property.

The company also is working to install instruments that will measure ground movement surrounding the sinkhole, Cranch said, and he expects that work to be completed within a couple of days.

Company officials are working with state and parish officials to establish an evacuee fund, Cranch said, adding the company has received a list of residents affected by the evacuation order.

The sinkhole is now 476 feet by 640 feet; the natural growth of the sinkhole was expected and could continue.

Officials monitoring the sinkhole via regular flyovers reported the change in size Wednesday, but said it is still much smaller than the maximum projected size that scientists said it could grow.

“Hopefully, we’ll have this (rig) completed by late Friday or Saturday,” Cranch said. “They’re going to work 24 hours a day to assemble the rig. As soon as they get the rig completed, they’re going to start driving their casings.”

DNR personnel are referring to the well as an “observation well,” Cranch said, rather than a relief well because officials “don’t know if it’s going to relieve anything.”

“If there’s any buildup of natural gas, this would be a conduit to relieve the pressure,” he said. “That’s not expected. It will, however, will be used as a conduit to insert imaging equipment to see if (the sinkhole is) related to the cavern.”

The Governor’s Office of Homeland Security and Emergency Preparedness also hosted a unified command meeting Wednesday to ensure the response is coordinated, the agency reported, adding the organization compiled an updated situational summary for the parish and posted it online at http://gohsep.la.gov.

The state Department of Environmental Quality is conducting air-monitoring tests by boat where natural gas is bubbling to the surface of Bayou Corne, collecting air samples in the Bayou Corne community and deploying its Mobile Air Monitoring Lab for air-quality monitoring and sampling in the area. To date, none of the samples showed any health threats related to air pollution.

In addition to DEQ’s analysis, the state Department of Health and Hospitals has been analyzing environmental samples from DEQ. DHH’s environmental epidemiology staff has not detected a health threat.

Meanwhile, DNR officials continue to ensure that Texas Brine conducts its drilling well operations in accordance with its emergency order.

State Department of Transportation and Development officials said they continue to monitor the roads around the sinkhole to make sure they are structurally sound.

“DOTD, at this time, has no concerns related to the integrity of its state roads, specifically La. 70 in Assumption Parish,” DOTD spokeswoman Lauren Lee said.

Lee added DOTD engineers are watching elevation levels at four locations along La. 70 to make sure there are no changes.

“If conditions change, DOTD crews are prepared to close roads immediately to ensure public safety and will announce appropriate detours,” she said.

The 1-by-3-mile Napoleonville Dome salt formation was pushed up vertically from ancient sea beds and has been used for decades for brine production.

Caverns in the solid salt formation left by brine production often are used later to store natural gas, butane and other hydrocarbons. Brine, meanwhile, has several industrial process uses.

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