Imagine filling up your tank for $5.

That's what some car owners are doing in Utah, where gas is selling for $0.638 per gallon.

The only caveat: it's compressed natural gas (CNG), not the unleaded liquid stuff we're used to.

According to the Natural Gas Vehicle Coalition, Utah boasts the country's lowest rate for the increasingly popular fuel. But no matter where you buy it, CNG is undoubtedly cheaper than the national average price of $3.60 for regular unleaded.

So you can see why the fuel—and the cars that burn it—are rapidly growing in popularity. Private ownership of natural gas cars and trucks in Utah has grown from basically zero to over 5,000 vehicles in just a few short years.

Use of the fuel is growing so fast that Utah's 20 public CNG stations are struggling to keep enough in supply. Fleets requiring CNG, including a local Coca-Cola distributor, may find it easier to come by at the state's 71 private fueling facilities.

Markets & Incentives for CNG

Of course, Utah probably has the cheapest CNG prices in the nation. But even in California, where the price stands at about $2.50 per gallon equivalent, the novel fuel is a bargain.

Still, the cheap prices haven't kept Utah-based utility Questar Corp. (NYSE: STR) from turning a tidy profit. Questar is the cheapest provider of natural gas in the continental U.S. And it can offer CNG at even lower rates thanks to federal tax incentives.

But don't let the cheap price of their product fool you. Questar stock has climbed 29% in the past three months. And if the current trend is any indication, this one is going to go higher. Take a look at the upward trend the company has been in for years:

You see, the utility isn't the only attendant at this natural gas party to receive incentives. Purchases of new, qualified used and some converted vehicles are also eligible for federal and state tax incentives—some up to $7,000. In many cases, the $7,000 incentive is enough to offset the associated premium of buying a CNG-fueled vehicle.

Right now, new CNG vehicles are only available in New York and California. And only one company, Honda Motor Co. (NYSE: HMC), is making them.

According to company executives, they can't make the specialized vehicles fast enough. Nonetheless, they're fast-approaching making new CNG vehicles available for sale in Utah to capitalize on the booming market.

Until then, consumers are doing all they can to get their hands on used CNG vehicles and to convert regular gasoline engines to run off the stuff.

Can you blame them? With oil less than a dime away from $120, you can bet the nascent natural gas vehicle market is on the cusp of exploding.

Investing in CNG

There are a number of ways to get a leg up on this emerging market. And they don't have to be strictly CNG-related.

As you may know, CNG is just a storage option for natural gas. Made mostly of methane (about 75%), natural gas can be stored in its original gaseous state or it can be liquefied (LNG) or compressed (CNG).

So at this point, any exposure to natural gas is probably good exposure.

Natural gas contracts for June 2008 have climbed from around $7.33 per million British thermal units (MBTU) to over $11.00 in the las five months or so.

One way to get in is through a sure bet like the aforementioned Questar Corp. The company is in a serious uptrend that I think will only go higher along with demand for more economical and environmentally friendly fuel and vehicles.

I've also talked to my colleague Keith Kohl about natural gas stocks. Without hesitation, he offered Range Resources (NYSE: RRC) and Chesapeake Energy Corp. (NYSE: CHK) as two of his favorite plays.

Both have been going gangbusters lately and are well-established companies in the sector.

But there's a younger company that could soon explode the way Range and Chesapeake have.

It's a manufacturing company with an engine that runs off CNG. The company has been loading up contracts from city and state fleets around the country.

And I want you to have first crack at it. All the details are included in this full CNG report.

Call it like you see it,

Nick

"Energy stocks... The only way a human is going to make any money."

-- Matt Simmons, Peak Oil's first and most vocal proponent,
and founder of the country's last pure play energy investment banking firm.

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I had heard about natural gas being used for an alternate fuel use for Vehicles, but hadn't not anything in years. Why has this alternate fuel source been put on the back burner? And, why hasn't this been manufactured in an abundance to relief some of the pressure of gasoline costing us an arm and a leg. The economic genus that discovered this product for use on vehiles could relieve a lot of pressure at the pumps. Is it because the millionaires didn't want the public to obtain the information beause it would cost them in their pockets? What's up with all this secrecy crapola, and why have we been kept in the dark? I believe and have for some time, thought that the Top Three Auto Makers prevented the production of alternate fuel vehicles, because they had other investments that took priority. The alternate fuel engines had been reated many years ago, but very little had progresses on there production in mass quanity. Why, I ask? I believe the answer is that the the three makers had too many gas/diesel engines already in stock, and wasn't ready for producing alternate fuel engines. Now we have the opportunity to lessen some of the demand on gasoline, and produce a more economic motor vehicle. The US Government should step in make this production begin in a large quanities to benefit the American People, and allow them to save at the pumps. It also would be a good thing because it would reduce the polution and give us some clear air. These alternate fuel vehicles will not go as fast as gasoline engines, which also just may reduce loss of lives on the highways. There would be many benefits from having Natural Gas vehicles, and these I mentioned would just be a few. One very important improvement would be the need to redue the demand for gasoline, and another would be a reduction in the cost of food. Major carriers could reduce the cost transportation whih would also effect most everything we need to survive. Any Alternative messaure we can take at this time will be beneficial in the long term. The dollar ontinues to be devaluated, and products purchased over seas is costing us more and more every day. We need to reduce the cost of products so that we may survive, and again do it with some dignity. We at this time in the year 2008, should not have to live like a third world country. This step, could be the first, to improve living conditions in this country and make life more bearable. Let's get the Natural Gas prodution going in mass quantities, and build fuel depots for storage and supply. Make the vehicles we need and meet the demand of the public. What are we wainting for? Complete Depression??

I had heard about natural gas being used for an alternate fuel use for Vehicles, but hadn't not anything in years. Why has this alternate fuel source been put on the back burner? And, why hasn't this been manufactured in an abundance to relief some of the pressure of gasoline costing us an arm and a leg. The economic genus that discovered this product for use on vehicles could relieve a lot of pressure at the pumps. Is it because the millionaires didn't want the public to obtain the information because it would cost them in their pockets? What's up with all this secrecy crapola, and why have we been kept in the dark? I believe and have for some time, thought that the Top Three Auto Makers prevented the production of alternate fuel vehicles, because they had other investments that took priority. The alternate fuel engines had been created many years ago, but very little had progresses on there production in mass quanity. Why, I ask? I believe the answer is that the the three makers had too many gas/diesel engines already in stock, and wasn't ready for producing alternate fuel engines. Now we have the opportunity to lessen some of the demand on gasoline, and produce a more economic motor vehicle. The US Government should step in make this production begin in a large quanities to benefit the American People, and allow them to save at the pumps. It also would be a good thing because it would reduce the polution and give us some clear air. These alternate fuel vehicles will not go as fast as gasoline engines, which also just may reduce loss of lives on the highways. There would be many benefits from having Natural Gas vehicles, and these I mentioned would just be a few. One very important improvement would be the need to reduce the demand for gasoline, and another would be a reduction in the cost of food. Major carriers could reduce the cost transportation which would also effect most everything we need to survive. Any Alternative measure we can take at this time will be beneficial in the long term. The dollar continues to be devaluated, and products purchased over seas is costing us more and more every day. We need to reduce the cost of products so that we may survive, and again do it with some dignity. We at this time in the year 2008, should not have to live like a third world country. This step, could be the first, to improve living conditions in this country and make life more bearable. Let's get the Natural Gas prodution going in mass quantities, and build fuel depots for storage and supply. Construct alternate Natural Gas Pumps wherever the demands will be so that the produt will be available for everyone. Make the vehicles we need and meet the demand of the public. What are we wainting for? Complete Depression??