Clean Energy Fuels Corp (CLNE), Cummins Inc. (CMI): More Love for Natural Gas

C2ES promotes policies that encourage development of distributed generation technologies. Distributed generation is simply the production of electricity where it is used, rather than at large central stations that require distribution across vast wire networks. Here again, C2ES is one of a growing chorus of voices that see this as the wave of the future.

Mircroturbines are an important distributed generation technology. CenterPoint Energy, Inc. (NYSE:CNP) installed its first one in 2000, and now includes microturbines among its offerings to commercial customers. Indeed, CenterPoint Energy, Inc. (NYSE:CNP) is heavily invested in natural gas in general and would be among the likely beneficiaries of broader natural gas adoption.

Watch out for risk
C2ES cautions, though, that natural gas is methane, itself a far more potent greenhouse gas than carbon dioxide. Natural gas producers must do a better job of preventing leakages — known as fugitive methane emissions — if the fuel is to be part of the solution instead of the problem. Right now, it’s hard to distinguish which companies are doing better than others here. None disclose their emission rates, largely because measurement techniques are still under development.

However, some are clearly more engaged than others. Encana Corporation (USA) (NYSE:ECA) and Talisman Energy Inc. (USA) (NYSE:TLM) have joined seven other natural gas producers to team up with the Environmental Defense Fund at the University of Texas at Austin to estimate their methane emission rates. It’s too soon to know what they will do with this information, but the very fact that they’re participating suggests that they intend to manage the problem.

All in all, the immediate future looks bright for natural gas, so long as it’s deployed thoughtfully as part of a diverse energy mix. Sounds a lot like how to manage a portfolio.

The article More Love for Natural Gas originally appeared on Fool.com and is written by Sara Murphy.

Sara Murphy has no position in any stocks mentioned. Follow her on Twitter @SMurphSmiles. The Motley Fool recommends Clean Energy Fuels. It recommends and owns shares of Cummins.

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