Whippany-based Suburban Propane Partners LP on Thursday said it will purchase a 39 percent stake in San Diego-based Oberon Fuels, a development-stage producer of low carbon, renewable dimethyl ether (rDME) transportation fuel, marking its official entrance into the world of renewable energy.
Oberon has been focused on the research and development of a practical and affordable pathway to zero-emission transportation through its proprietary production process. Its rDME fuel is a cost-effective, low-carbon, zero-soot alternative to petroleum diesel, the company says.
Suburban Propane also committed to provide additional funding to support continued development efforts to begin commercializing a rDME/propane blended product. Oberon is already working toward that effort with recent grant funding from the California Energy Commission.
According to Suburban 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.
“At Suburban Propane, we recognize the need to reduce the nation’s carbon footprint and improve overall air quality,” said President and Chief Executive Officer Michael Stivala in a press release. “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. Through our Go Green with Suburban Propane initiative, we are committed to the development of innovative solutions to further reduce the emissions profile of propane and to creating a pathway to zero carbon emissions.
“Our investment in Oberon Fuels is perfectly aligned with our strategic growth initiatives, and our commitment to being a pioneer in the transition to a sustainable energy future,” Stivala adds. “We are very excited to partner with the team at Oberon Fuels to realize our joint vision of bringing DME technology together with propane to dramatically lower the carbon footprint.”
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.
Proskauer Rose LLP served as counsel to Suburban Propane, while Mintz, Levin, Cohn, Ferris, Glovsky and Popeo PC served as counsel to Oberon.