Exclusive: Chinese-backed Blu LNG slows down U.S. growth plans
By Nichola Groom
LOS ANGELES (Reuters) - Blu LNG, one of the biggest names in the move to wean U.S. trucks off diesel onto natural gas, has laid off 20 percent of its staff, ousted several senior executives and slowed down development of fueling stations as it waits for more truckers to embrace the switch to the cheap and cleaner-burning fuel.
The move, confirmed by the company's Chief Executive Officer, Merritt Norton, and other people familiar with the situation, marks an important pullback in a nascent sector that is expected to improve U.S. energy security, lower transportation costs and create jobs.
Just three days ago, President Barack Obama threw his weight behind the industry in his State of the Union speech. "Congress can help by putting people to work building fueling stations that shift more cars and trucks from foreign oil to American natural gas," Obama said.
Blu a year ago pledged to build dozens of liquefied natural gas fueling stations along U.S. highways in 2013 with the help of millions of dollars from ENN Group, one of China's largest private companies.
But fueling stations need customers, and trucks that run on natural gas have been slower to hit the market than many anticipated and are still far more expensive than their diesel equivalents, making even the allure of far cheaper fuel difficult to swallow for many fleet owners.
"This year is a year of trying to let the trucks catch up to us," Blu CEO Norton said in an interview.
Regarding Obama's remarks this week, Blu said it appreciated the president's comments and would like to see a federal effort to bring the fuels tax on LNG in line with that of diesel, which is far higher. The company also said it would like to see a cap on the federal tax for new natural gas trucks, adding that any incentives should be directed to vehicles.
Blu's retreat is coming to light months after Clean Energy Fuels Inc (CLNE.O: Quote), the market leader in natural gas fueling and backed by Texas billionaire T. Boone Pickens, said it had slowed development of LNG stations due to truck availability. Continued...