Oberon Fuels combats Covid-19 economy with new hires, renewable DME facility upgrades

April 26, 2020 |

It’s a tale of optimism and hope during ‘Rona Cyclona as we look for any good news in the biofuels industry.

In comes news of public-private investments, rural economic development and employment, and even human health. With two new executive position veteran hires, up to 8 new plant managers, and putting to use a $2.9 million 2019 grant from the California Energy Commission, how their renewable DME can even help tackle human health and COVID-19, it’s a story to raise the spirits.

Making a conscious choice to push forward, despite the uncertainty of COVID-19, Oberon Fuels is fueling hope with the hiring of two veterans – one a veteran of oil & gas and renewable project development, and the other a veteran of the U.S. Navy, with deep experience in operations and program management. They also will be adding up to 8 plant managers beginning this summer and even better, these will be family-wage jobs in a part of California where the unemployment rate hit 20% (and that was before ‘Rona Cyclona hit).

How about that? A company creating jobs in the biofuels industry when many are unable to and plant upgrades for first-ever U.S. production of Renewable DME (rDME) fuel. Add to that a fuel that generates zero soot and particulate matter, which Harvard just determined as being a significant factor in advancing respiratory diseases like Covid-19, and you’ve got an interesting story.

Who is Oberon Fuels?

California-based Oberon Fuels, a producer of clean-burning dimethyl ether (DME) transportation fuel, monetizes biogas and industrial waste streams by converting these feedstocks into higher valued commodities. Using its proprietary small-scale process, Oberon makes DME (dimethyl ether) from methane, carbon dioxide, and/or methanol. In 2013, Oberon Fuels’ pilot plant in Brawley, California, produced the first fuel-grade DME in North America, which has been used by Volvo Trucks, Mack Trucks and Ford Motor Company for vehicle demonstrations around the world.

Check out “Dimethyl Ether – Zero Emissions, Carbon Neutrality?: The Digest’s 2020 Multi-Slide Guide to Oberon Fuels’ Renewable DME” here.

Creating jobs in a time of high unemployment

Record unemployment is hitting almost everywhere, and in March 2020, unemployment in California’s Imperial Valley hit 20% — before the full effects of Covid-19 were known, according to Oberon Fuels. Oberon is doing what it can, however, to help their local community and will be creating 8 family wage jobs, as well as numerous indirect jobs as it performs construction to upgrade the facility helping lower that high unemployment rate. Oberon’s two new executive hires are pretty impressive too.

One of them, John Valle who joins Oberon Fuels as Director of Operations is a 30-year veteran of the U.S. Navy and Navy Reserve. He is a member of the San Diego “Cohort” of FourBlock, a national organization dedicated to helping veterans transition from national service to the private sector. He designed, scaled, and optimized programs and operations across engineering, finance, human resources, and strategy, delivering critical, timely strategic solutions in support of our Nation’s defense.  Prior to joining Oberon Fuels, Valle was a Deputy Chief of Staff and Senior Program Manager for the Naval Air Force Reserve, not to mention is a nuclear-trained Surface Warfare Officer.

Bipin Patel joins as Director of Engineering and has more than 30 years of experience. Prior to joining Oberon Fuels, he was Chief Technology Engineer at Siluria Technologies, a company whose technology transforms methane into transportation fuels and commodity chemicals, where he led the development of the commercial units focused on its OCM and ETL technologies. Before joining Siluria, he was a project engineering manager at KiOR where he oversaw the execution of Front End Engineering Design (FEED) for converting 1,500 tons per day of wood chips into 3,000 barrels per day of naphtha and distillate.

Patel and Valle are both expected to play key roles in the facility upgrade. Oberon expects to hire additional personnel for facility operations in the coming months as it moves toward construction, commissioning, and full operation.

“We are thrilled and fortunate to have the caliber of expertise, experience, and passion that both Bipin and John bring to Oberon Fuels,” said Rebecca Boudreaux, Ph.D., President of Oberon Fuels. “We are excited to continue to demonstrate the symbiotic relationship between low carbon fuels, increased economic opportunity, improved air quality and community health. At this critical time in our nation’s history, we must forge ahead and build resilient individuals, communities and regional economies through cleaner energy sources such as rDME.”

Where’s the $2.9M from?

So where are they getting the money to hire people and to upgrade their facility, especially in a time like this? For that, we take a look at last year.

As reported in The Digest in July 2019, Oberon Fuels was awarded a $2.9 million grant from the California Energy Commission (CEC) for a first-of-its-kind, multi-phase project to produce the first renewable dimethyl ether (rDME) in the U.S. by upgrading its existing DME pilot facility to demonstration scale with a target production capacity of approximately 1.6 million gallons per year.

By making automation, design, and other system changes, Oberon expects the production capacity to double compared to current stable production volumes, as well as to be able to use a new by-product from the paper industry to produce the fuel.

This project unlocks the near- and medium-term decarbonization benefits of rDME, an economical fuel and key step in the development of a California-based, renewable hydrogen (rH2) pathway to zero-emission mobility.

“This project will simultaneously address two pressing problems afflicting Imperial Valley by reducing climate change impacts and creating badly-needed jobs,” said Assembly member Eduardo Garcia (D-AD 56). “I am thrilled that Oberon Fuels will be demonstrating this new technology in the 56thDistrict, and I look forward to their long-term success and towards making the region a centerpiece for clean fuels.”

In addition to scaling up the plant and testing new feedstocks, the project will also test modified diesel trucks fueled by rDME in the Imperial Valley and other Southern California locations. Oberon will work with commercial partners to assess the technical feasibility and economics of converting renewable methanol, a by-product of the pulping process, into rDME and developing an associated rDME fueling infrastructure.

This project is a key building block to statewide production of rDME from California’s methane, removing this potent greenhouse gas from waste streams and converting it to an ultra-low carbon or carbon-negative transportation fuel. Beyond this project, these technology enhancements will be leveraged into Oberon’s first commercial-scale facility converting dairy biogas to rDME. Oberon can then replicate its initial commercial production facility for statewide rollout of rDME production facilities. These commercial plants will convert in-state methane emissions from dairy manure, food waste, and agricultural waste to rDME.

Project partners and subcontractors include Alberta-Pacific Forest Industries Inc. (Al-Pac); CALSTART;Dynalectric – San Diego; EFR Environmental Services, Inc.; ETX, LLC a subsidiary of El Toro Export, LLC; Martin Transport; Northern Alberta Institute of Technology; Parafour Innovations; Performance Mechanical Contractors; Prins, a subsidiary of Westport Fuel Systems; Roddey Engineering; and SHV Energy. The CEC funding was a key milestone in the company subsequently securing a strategic partnership and investment from SHV Energy, the world’s leading distributor of propane.

All About rDME

Renewable dimethyl ether (rDME) is a clean-burning, ultra-low-carbon transportation fuel, and with quite an impressive carbon score as The Digest reported in February. And while most of the focus on DME has been on its application as a diesel fuel replacement, it can also serve as both a cost-effective, easy-to-transport hydrogen carrier and as a blending agent with propane to reduce propane’s carbon intensity when DME is made from renewable feedstocks. DME’s easy handling properties also make fueling and infrastructure relatively simple and inexpensive. Since rDME is an efficient hydrogen carrier, rDME can be transported to a hydrogen fueling station and then converted to renewable hydrogen to fuel zero-emission vehicles.

With only a 20 percent blend of dairy manure-based rDME, propane’s carbon intensity (CI) value is reduced from 82 to 10. With over 4,000 vehicles, including school buses, police cars, and shuttles, running on propane in California, rDME offers the potential to significantly reduce overall GHG emissions.

“Renewable DME provides an elegant solution to not only the state’s dairy methane challenges but also offers a pathway to zero-emissions for the state’s transportation sector,” said Elliot Hicks, COO and co-founder of Oberon Fuels.

DME is approved as a renewable fuel under the U.S. Environmental Protection Agency’s Renewable Fuels Standard, making it eligible for D-3 and D-5 RINs credits when made from biogas by the Oberon process.  California Air Resources Board (CARB) has estimated that dairy manure converted to DME by the Oberon process has a CI of -278 gCO2e/MJ compared to ultra-low-sulfur diesel which has a CI of 100 gCO2e/MJ. You can read about what those numbers really mean and how impressive of a carbon score this really is here.

So how exactly does rDME help those struggling with COVID-19?

Recent research from Harvard’s school of health has connected a higher rate of susceptibility to Covid-19 and other respiratory issues stemming from particulate matter from diesel engines. Oberon’s fuel, a diesel substitute, eliminates particulate emissions.

“New research is showing that people with existing lung health issues – the result of living in heavily polluted areas – are more susceptible to COVID-19 and other respiratory diseases,” said Elliot Hicks, co-founder and Chief Operating Officer of Oberon Fuels. “This adds a sense of urgency to develop new fuels that not only reduce global emissions but also help create healthier communities. Bipin and John will help Oberon Fuels play its part in delivering on both goals.”

Bottom Line

In a time where unemployment is skyrocketing and biofuel plants are either idling or closing, it’s reassuring to see some positive stories still coming in. Oberon Fuels gives us hope that there will continue to be some good news to share, and if there is a way to tie in the biofuels business into protecting lives from COVID-19 by reducing heavily polluted areas, even better.

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