Suburban Propane Partners LP, a nationwide distributor of propane, fuel oil, and related products and services, says it is purchasing a 39% stake in Oberon Fuels Inc., based in San Diego.
Oberon, a development-stage producer of low-carbon, renewable dimethyl ether (rDME) transportation fuel, 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. Pursuant to the agreements between the parties, Suburban Propane has also committed to providing additional funding to support continued development efforts to begin commercializing a rDME/propane blended product.
“Suburban Propane is making a bold statement that innovative approaches can drive sustainability across the industry,” says Rebecca Boudreaux, Ph.D., president and CEO of Oberon Fuels. “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.”
With recent grant funding from the California Energy Commission, Oberon is developing rDME for a novel use: 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. 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 U.S. 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 U.S., Canada and Mexico.
Proskauer Rose LLP served as counsel to Suburban Propane and Mintz, Levin, Cohn, Ferris, Glovsky and Popeo, P.C. served as counsel to Oberon.