To Our Shareholders

The McCommas Landfill in Dallas, Texas produces biomethane, a low-carbon renewable gas, for delivery into the pipeline. Clean Energy is developing its landfill biomethane business nationwide.

In 2009, we surpassed the 100-million-gallon mark for the volume of CNG and LNG delivered. At year-end, we operated 196 CNG and LNG stations fueling more than 390 fleet customers with approximately 17,800 vehicles, as well as numerous individual customers through public access at our stations. We completed 29 new stations or station upgrade projects during the year.

Revenue in 2009 totaled $131.5 million and at year-end total assets were $355.8 million, with $9.8 million in long-term debt. Our 2009 10-K in the following pages provides detailed financial information.

Clean Energy began fueling buses in 2009 for the Los Angeles County Metropolitan Transportation Authority, the largest natural gas fleet in the country. Natural gas buses comprise 32% of all transit buses in the United States.

2009 saw steady growth at Clean Energy as well as in our industry. Traditional fleet markets for natural gas vehicles, such as refuse, expanded nationwide, and new fleet markets, such as heavy-duty trucking for goods movement, emerged with widening fleet-owner acceptance. With lower gasoline and diesel prices at the beginning of 2009 not likely sustainable once world demand for petroleum recovers, fuel diversity becomes critical for these fleets now.

Key trends in 2009 focused on two major market segments for Clean Energy: refuse and regional trucking.

In refuse, or waste hauling, the conversion to natural gas fuel that started in Southern California with the aid of the South Coast Air Quality Management District’s initiative to clean the air moved nationwide. Our station in Smithtown, New York commissioned in 2007 represented the first municipal deployment of natural gas-fueled trucks outside California. In 2009, we served customers in 11 states as fleet implementations ranged from Washington and Idaho in the West to Florida and New Jersey in the East. Refuse trucks are a prime example of the benefits of natural gas fuel. In cities and towns with natural gas refuse trucks, the air quality is improved due to lower emissions. Fuel savings as high as $12,000 per vehicle per year pay back the incremental cost of the trucks in short order and significantly reduce waste hauling expenses for communities over the 10-year life of the trucks. There are about 180,000 refuse trucks operating in municipal and private fleets in the United States.

Clean Energy plans to serve goods movement by region, and through corridors connecting regions Step 1: Serve local/regional trucking hubs. Step 2: Serve corridors that connect the hubs.

Vans, buses and trucks for AT&T and other customers fill BAF’s headquarters production facility in Dallas, Texas as they are upfitted for natural gas fuel use.

In trucking, the arrival of robust, class-8 LNG-powered trucks from several manufacturers made regional trucking fleets a reality for shippers and fleet owners. This was prompted largely by the effects of the Clean Air Action Plan and Clean Truck Program, adopted by the Ports of Los Angeles and Long Beach, mandating wholesale changeover of thousands of trucks serving the ports to cleaner vehicles, including LNG trucks, thus providing a real market for manufacturers. The ports also provided a test bed for fleet owners and shippers to evaluate the efficiency, performance and cost-effectiveness of new LNG trucks. In June 2009, we opened the world’s largest public LNG truck fueling station (pictured on the cover) to serve the new fleets at the ports. Now we are in the process of developing the fueling infrastructure for the Southwest LNG Truck Fueling Corridor to serve the needs of goods movement shippers throughout the region. Currently, there are close to three million Class-8 trucks on the road across the country.

Converting waste hauling to natural gas fuel began wide implementation in 2009 with municipal and private fleets switching to gain the benefits of lower emissions and costs.

Transit fleets are long-term users of natural gas fuel, which still makes the most sense as an alternative to diesel. About 32% of the nation’s transit fleets use natural gas fuel and we fuel over 5,200 buses daily. Last year, we added transit fueling contracts in Los Angeles, CA, Washington, DC and Boston, MA, among other cities.

Other key market segments for natural gas fuel grew as well. These include taxi and limousine fleets in cities like San Francisco, CA and Las Vegas, NV, airport multi-fleet fueling stations in Oklahoma City, OK, Austin, TX and Ontario, CA, and airport-related parking shuttle fleets at Dallas-Fort Worth, TX, Houston, TX and Las Vegas, NV.

Airport-related vehicle fleets such as taxis, shuttles, buses and airport service vehicles increasingly use natural gas fuel, as at the Dallas-Ft. Worth Airport.

In Fall 2009, with demand growing for natural gas vehicles and American vehicle manufacturers not responding, we acquired BAF Technologies, Inc., the leading provider of natural gas vehicle systems and conversions in the United States. BAF provides natural gas vehicle conversions, alternative fuel systems, application engineering, service and warranty support and research and development for taxis, limousines, vans, pick-up trucks and shuttle buses.

AT&T announced it would deploy approximately 8,000 natural gas vehicles in the next five years and awarded BAF the initial 600 Ford E-Series converted CNG vans, which were completed in December 2009. Through March, 2010, AT&T has awarded BAF an additional 1,389 CNG van conversions.

Co-founders Andrew Littlefair and Boone Pickens preview the new MV-1, a purpose-built natural gas vehicle for the taxi and paratransit markets coming to market in late 2010. The taxi and airport-related markets for natural gas fueling are large and growing.

This new momentum in natural gas vehicle adoption is due, in part, to the continuing efforts by our co-founder and director, Boone Pickens and his Pickens Plan Campaign. The Pickens Plan was primarily responsible for the proposed NAT GAS Act now in Congress. If passed, the Act will provide a tremendous impetus to further development and deployment of natural gas vehicles in fleets of all sizes across the country.

Government support during 2009 included the award of $38.6 million by the U.S. Department of Energy in stimulus grants to customers and government agency partners of Clean Energy to offset the incremental cost of more than 800 new clean-burning natural gas-powered taxis, shuttle buses, refuse trucks and heavy-duty trucks. The awards also opened new markets in several states by helping to defray the cost of building 12 new natural gas fueling stations. Overall, Clean Energy obtained over $97 million in grant awards in 2009 for us and our customers.

Robust, clean, economical class-8 LNG-fueled trucks for goods movement are being deployed nationwide in 2010 and Clean Energy is committed to helping provide the fueling infrastructure for the regional and national trucking corridors.

To help fund current and anticipated growth, we completed a successful follow-on offering of common stock in mid-2009 with aggregate net proceeds of approximately $73.2 million.

Overall, we believe 2010 may be a year of substantive growth if current trends of natural gas vehicle acceptance, adoption and deployment continue.

Clean Energy is now a company with 229 employees and 10 sales offices across the country, doing its best to see that the trend toward using clean, domestically-produced natural gas continues and that it remains the leading provider of natural gas fuel in America’s future.

We thank our employees and management team for their continuing hard work in building our company, and particularly, our Board of Directors for their wise oversight and support.

Andrew J. Littlefair
President and CEO