Suburban Propane Partners, L.P., a nationwide distributor of propane, fuel oil and related products and services, as well as a marketer of natural gas and electricity, is purchasing a 39% stake in Oberon Fuels, a San Diego, CA-based development-stage producer of low-carbon, renewable dimethyl ether (rDME) transportation fuel.
Oberon has been focused on the research and development of a practical and affordable pathway to zero-emission transportation through its proprietary production process. Oberon’s rDME fuel is a cost-effective, low-carbon, zero-soot alternative to petroleum diesel. With recent grant funding from the California Energy Commission, Oberon is developing rDME for a novel use: a blending agent with propane. (Earlier post.)
Pursuant to the agreements between the parties, Suburban Propane has also committed to provide additional funding to support continued development efforts to begin commercializing a rDME/propane blended product.
Traditional clean-burning propane can offer immediate opportunities to reduce carbon emissions in the transportation sector compared to gasoline and ultra-low sulfur diesel. With an estimated Carbon Intensity (CI) value of -278 according to the California Air Resources Board, and similar handling and storage properties as propane, rDME can be an ideal blending agent that can reduce the carbon intensity of propane.
Under the United States Environmental Protection Agency’s Renewable Fuel Standard, rDME is eligible for renewable identification number (RIN) credits when produced from dairy biogas using the Oberon process. During 2021, Oberon is expected to begin production of rDME from pulp mill waste (with an annual production capacity estimated at 1.6 million gallons) at its demonstration facility in California’s Imperial Valley. Suburban Propane will have the exclusive rights to work with Oberon to market and sell rDME and rDME/propane blends in the United States, Canada and Mexico.
In connection with the transaction, Oberon Fuels President, Rebecca Boudreaux, Ph.D., has been named President and Chief Executive Officer, taking over from longtime investor and former CEO, Ruben S. Martin III, who now owns an equal equity stake in Oberon with Suburban Propane.
Oberon’s co-founder and longtime Chief Operating Officer, Elliot Hicks, will continue leading Oberon’s operational and engineering efforts, and the management of Oberon will retain their current ownership interests in Oberon.
This is an opportunity for two molecules—DME and propane—to come together and provide the world with a cost-effective, clean-burning fuel that offers a pathway to carbon neutrality. We could not be happier to be working with Suburban Propane to bring this technology to the market and meet the increasing demands for lower emissions.—Rebecca Boudreaux