Suburban Propane Partners, a nationwide distributor of propane, fuel oil and related products and services, announced a deal to purchase a 39% stake in Oberon Fuels, Inc., based in San Diego, California.
Oberon is working to develop low-carbon, renewable dimethyl ether (rDME) transportation fuel, according to a Sept. 17 statement by Suburban, announcing the deal. Oberon’s rDME fuel is being developed as a zero-soot alternative to petroleum diesel, Suburban said.
Suburban Propane, based in Whippany, N.J., also said it committed to provide additional funding toward commercializing a rDME/propane blended product.
“The current clean-burning attributes of propane are a positive contributor to the goals of decarbonization, particularly when used as a replacement for gasoline and diesel in the transportation sector,” said Michael Stivala, Suburban Propane’s president and chief executive officer.
With recent grant funding from the California Energy Commission, Oberon is developing rDME for use as a blending agent with propane. Traditional clean-burning propane can offer immediate opportunities to reduce carbon emissions in the transportation sector compared to gasoline and ultra-low sulfur diesel, the companies said. They said rDME can be an ideal blending agent that can reduce the carbon intensity of propane.
Under the EPA’s Renewable Fuel Standard, rDME is eligible for renewable identification number (RIN) credits when produced from dairy biogas using the Oberon process, according to the statement. 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 said it will have exclusive rights to work with Oberon to market and sell rDME and rDME/propane blends in the United States, Canada and Mexico.
Oberon Fuels said its pilot plant in Brawley, California, produced fuel-grade DME that has been used by international OEMs for vehicle demonstrations. More information about Oberon Fuels is available at www.oberonfuels.com.
Oberon Fuels President Rebecca Boudreaux 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.
Boudreaux said, “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.”
Proskauer Rose LLP served as counsel to Suburban Propane and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as counsel to Oberon. For more information visit www.suburbanpropane.com/oberon/.