According To Oppenheimer Energy Director, Natural Gas Is Superior To Hydrogen And Battery Tech In Municipal And Private Truck Fleets
December 11, 2009 - The Wall Street Transcript has just published Oil & Gas Production and Distribution Report offering a timely review of the Energy sector. This Special Report contains expert industry commentary through in-depth interviews with public company CEOs, Equity Analysts and Money Managers. Please find an excerpt below.
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DAVID WOODBURN is a sell-side Research Analyst who covers green-tech companies in the alternative fuels and water resources industries for ThinkEquity, LLC. Having performed sell-side research for nine years, Mr. Woodburn started his investment career at Prudential Equity Group as a Research Associate on the newly formed global pharmaceuticals team in 2000 and gained his own coverage of specialty pharmaceuticals in 2004.
In 2006 he was named a "Master Stock Picker" in The Wall Street Journal's "Best On The Street" survey. His health care industry experience included corporate strategy and merger integration at Searle Pharmaceuticals, and product design, global marketing and business development within various divisions of Baxter Healthcare. Mr. Woodburn earned an MBA from the Booth School of Business at the University of Chicago, and he holds a B.S. in mechanical engineering from the University of Illinois at Urbana-Champaign.
TWST: We seem to be stuck at a 4.5, 5.5 price level for natural gas. Is that where we should be?
Mr. Woodburn: I'm not a natural gas analyst, but I do cover the companies that benefit from using natural gas as a transportation fuel. In terms of where we are with natural gas prices "stuck," it depends on which way you're looking at that. Stuck with the price on the way down if you're comparing today's price to the last six or seven years, or stuck on the way up from where we were in the summer. What I have been noticing lately is that the natural gas producers, the independents here in North America, have been working pretty hard not just exploiting the shale deposits in North America, but banding together and trying to stimulate demand because they've got plenty of natural gas they can supply. Obviously, compared to where it has been historically, they would certainly like to see the price go up with an increase in demand.
TWST: When you say you cover the companies that use natural gas, how do you define that?
Mr. Woodburn: There are three of them that trade in the U.S. One is Westport Innovations, the Nasdaq ticker is WPRT. Westport has technology to enable traditional engines to burn natural gas instead of diesel fuel. There is also Clean Energy Fuels (CLNE). They design, build and operate natural gas fueling stations for municipalities or private fleets. Some of these are also public access stations, often serving taxis and airport shuttles, and things like that. But you or I could pull up and refuel a natural gas vehicle there as well. Lastly, there's Fuel Systems Solutions (FSYS). They have a transportation business that enables passenger vehicles and light-duty commercial vehicles to run on gasoline or natural gas/LP gas. Over the past two years, most of their growth has come from outside the U.S., receiving vehicles directly from the factory, converting them so that they would run on both petroleum fuel and natural gas fuel, and then shipping them to the dealers where they're sold as new cars. They also have an industrial line of business for forklifts and things like that that run on natural gas.
TWST: Lets start with the last one, how big is that market?
Mr. Woodburn: In the U.S. it's almost nonexistent. Honda (HMC) is the only manufacturer that's had a factory-built natural gas vehicle. They were selling some in California a year ago when petroleum prices were still high; I doubt they're selling too many now. Now contrast that with Europe and in particular Italy. The data from last couple of months are showing that 26% of new vehicles registered are actually natural gas or LP gas-fueled vehicles.
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