Most U.S. news commentators highlight the blockage of Chinese investment in the U.S. companies for national security reasons. They do not give due attention to Chinese investments in the U.S. that advances U.S public policy objectives. Here is a case in point concerning cleaner energy
According to Reuters, “ENN Group Co Ltd, one of China’s largest private companies, is quietly rolling out plans to establish a network of natural gas fueling stations for trucks along U.S. highways.”
ENN Energy, located in Langfang Technology and Economic zone, midway between Beijing and Tianjin, has already built natural gas stations in China. Chinese long haul trucks have been using compressed natural gas and liquefied natural gas (LNG) for years, instead of expensive, high carbon emission diesel fuel. They have been practicing T. Boone Pickens preaching in the U.S. that vehicles should switch to natural gas to reduce dependence on imported petroleum and also reduce carbon pollution. China’s has thousands of compressed gas and LNG stations, while the U.S. currently has only 28 LNG public stations.
Nearly half of the garbage trucks sold in the United States last year run on natural gas, which are fueled at their home depots, not at public stations. To convince long haul truckers to switch to natural gas they have to have assurance that they can refuel at stations along their highway routes. Truckers can save $2 a gallon by switching to natural gas from diesel.
Two years ago ENN’s billionaire energy tycoon Chairman Wang Yusuo decided to put its expertise and $50 million of capital to build 50 natural gas truck stations in the U.S. He approached the preacher of natural gas T. Boone Pickens and his company Clean Energy for a partnership, Pickens rebuffed ENN. Clean Energy is already operating 70 LNG stations and prefers to be a competitor, rather than a partner.
ENN reached out to a small Utah company, CH4 Energy Corp, which had a single LNG and CNG fueling station in Salt Lake City with the help of federal stimulus funds. Together, they created Transfuels LLC, which operates as Blu LNG. ENN has a majority stake in the joint venture and controls its board of directors.
Blu plans to open 50 to 60 LNG stations this year and is planning to build another 500 stations. ENN has the capital for this roll out. The race is on between T. Boone Pickens and Blu. Shell has entered the picture with plans for 100 stations. Had Pickens put the $82 million he spent of advocating for natural gas transport into stations, at $1 million per station, he would be way ahead of Blu. All of the players are now competing for location partners for their LNG stations.
The U.S. natural gas bounty will eventually wean the U.S. transport industry off its dependence on diesel fuel made from imported crude oil. We have to give ENN’s $50 million investment, and more to come, some credit for spiriting a competitive race for cleaner energy.
Milton Kotler, 2/16/13