Clean Energy Fuels Corporation And Navistar International

A strategic partnership is a relationship wherein to or more companies agree to work together, usually formalized in a contract. Companies form strategic partnerships when they are unable to accomplish their goal alone, or it would be either too expensive or too risky to undertake the task alone. In the case of America’s Natural Gas Highway, the companies Clean Energy Fuels Corporation and Navistar International formed a strategic partnership in order to overcome the dilemma of consumers being unable to purchase cars that ran on eco-friendly fuels such as natural gas, electric, or biofuel because of a lack of fueling stations that supplied these fuels. There was a lack of these fuel stations because there were no customers for the fuels. To
First, is the growing interest in being environmentally friendly. Companies are pressured to use green alternatives by both the government, and consumer behavior. The government promotes eco-friendliness by offerings subsidies for using green fuels; these subsidies include grants or tax credits. The government deters environmentally unfriendly behavior by issuing fines for pollution and by passing stricter emission standards. Consumers influence the companies to eco-friendly by avoiding products or services from companies that pollute or harm the environment in another way. Alternatively, consumers may seek out a company’s products because they are an environmentally friendly company. Another contributing factor is the cost savings that are offered by natural gas. The average cost for a gallon of compressed natural gas in the United States is $2.11, a gallon of regular gasoline is $3.39, and a gallon of diesel is $3.89. A third factor is cultural. A move to natural gas powered vehicles could mean energy independence for the United States. The unrest and political turmoil in the Middle East has led to a desire for the United States to no longer depend on that region for oil. The introduction of fracking has led to an abundance of natural gas being harvested in both America and Canada. The last major contributing factor to the partnership is the lack of competition in the natural gas fuel station market. In
One threat is the low prices of gas. Since the advent of the plan oil prices, and subsequently gas prices, have gone down significantly. This disincentives trucking company from switching to natural gas powered shipping fleets because there is less cost savings in fuel. Companies need large cost savings in fuel to offset the expense of the natural gas powered semi-trucks. A semi-truck that is powered by natural gas costs about $200,000 which is double that of a diesel truck. Managers of the partnership can try to overcome this problem by lobbying the government to increase government subsidies for companies that purchase natural gas powered trucks. Additionally, they can lobby for stricter emissions standards which regular gas may struggle to meet. A second threat to the partnership is the environmental danger that fracking may pose. Without fracking the surplus of natural gas will decrease sharply, and as such, the price of natural gas will increase. There have been few studies done about fracking, but an increase in seismic activity and pollution has been correlated to fracking. These correlations could lead to a government ban of fracking, and has already led to public outcry. Managers of the project can work to save fracking by funding studies to prove its safety. Another threat to the