SEAL BEACH, CA -- Renewable Dairy Fuels, an affiliate of major Indiana milk producer Fair Oaks Dairy, has contracted with Clean Energy Fuels Corp. to build and operate a new compressed natural gas (CNG) fueling station.

The Fair Oaks Station will dispense CNG fuel to power the initial fleet of 42 CNG milk-hauling trucks that the dairy plans to deploy later this year. The Renewable Dairy Fuels CNG trucks will transport milk to processing plants owned by Kroger Co. in Indianapolis, Ind.; Murphysboro, Tenn; and Winchester, Ky.

Set to open in the fall of 2011, the Fair Oaks Station will also offer public access and will be located near the dairy farm adjacent to Interstate 65 in Fair Oaks, Ind. -- about 70 miles south of Chicago.

The station will supply the Fair Oaks CNG milk-hauling truck fleet, as well as other CNG vehicles operating in the area. A second CNG station is planned for late 2011 in southern Indiana adjacent to the Kentucky border along Interstate 65.

Renewable Dairy Fuels also plans to produce biomethane from dairy cattle waste and pipe the biogas directly to the Fair Oaks Station for onsite conversion to CNG vehicle fuel. The biogas will be made available for vehicle fuel use once the conditioning facility for the biogas is completed, which is anticipated within 12 to 18 months.

The dairy’s CNG truck fleet will transport 53 loads of milk per day, which equates to 7.5 million gallons a month or 90 million gallons of milk per year. The trucks will replace diesel-powered models, and are projected to use more than 1.5 million diesel gallon equivalents of CNG per year.

“Fair Oaks Dairy is a leading proponent of sustainable farming practices and their use of natural gas and renewable biogas to power natural gas trucks is a model that can be replicated by dairy operations throughout America,” said James Harger, Clean Energy Fuels’ chief marketing officer. “We are delighted to have this opportunity to work with Fair Oaks as they move to control fuel costs in a volatile energy environment, reduce dependence on foreign oil, and curb the global warming impact of their fleet operations.”