The Roundest Fuel That Ever Was – Suburban Propane acquires a 39 percent stake in Oberon Fuels – the how, the why, the progress with DME fuels

They’re calling it “the circular economy” these days — a vision for a fully sustainable society using renewable resources in a circle of sourcing, production and use. Which raises the question of which is the most circular of fuels — the roundest, if you will — right now, it’s looking like rDME.

DME doesn’t stand for Doesn’t Make Emissions or Dirty Methane Eliminated but might as well, since Dimethyl Ether has the potential to do both. Lots of fuels can reduce or eliminate greenhouse gas emissions, and several technologies use methane.

What makes this one so special? Well, DME could also stand for Doesn’t Move, Ever — meaning, in Oberon Fuel’s program it is sourced locally from stranded resource, produced locally at feedstock scale, and used locally. Most renewable fuel technologies hit at least one of these marks, some reach two — Oberon Fuels hits all three which makes it the Roundest Fuel in the world.

Let’s look at it this way — the technology has an estimated Carbon Intensity (CI) value of -278 according to the California Air Resources Board, At $200 per ton for carbon, which is roughly where the Low Carbon Fuel Standard sits these days, that’s around $5.30 for the carbon, add that to the $1.12 for the diesel, you have a $6.40 fuel, per gallon — in terms of value. That drives people to scour the streets looking for feedstock and turning it into Circular-Economy-Gone-Wild’s liquid fuel gold. That’s what makes this the Roundest Fuel in the World.

Accordingly, we’d like to update the traditional stick-and-ball representation of DME, thus:

To something more reflective of its circularity, thus:

The 3 Whyfores of rDME

DME has a number of attributes of note, we’ll focus in here on three.

1. DME is the absence of carbon=carbon bonds (black-to—black in our diagram), which reduces the potential for soot. Also, you see that very nice bit of oxygen, the red molecule. Yes, DME is not strictly a hydrocarbon, it carries its own oxygen around with it, how nice of it, like a guest who brings his own fine wines to a party.

2. It handles similar to propane and works in engines similar to diesel, so it’s easier to use in existing heavy transport infrastructure than other relatively novel fuels.

3. You can make it from stranded methane, something the world is all too awash in. Think food waste, seepage from gas wells, dairy waste, landfill waste. Lots of odious things to bring into the circular economy and thereby mitigate. DME is like a big can of Waste BeGone that you spray on emission-related problems.

The 3 Wherefores

1. For some time to come, look for Oberon technology wherever there’s a Low Carbon Fuel Standard — that’s where the economics become liberated. Specifically, think California for now, where there’s waste and heavy transport customers in relative abundance.

2. Where LFCS goes, bio-DME follows. Think Oregon, too, which is almost but not quite an anagram of Oberon — the state has a small but vigorous LCFS of its own. Washington state may follow suit soon, too. There’s talk of an LCFS in the Midwest which the Great Plains Institute is working on. And, there’s talk of expanding an LCFS to the Northeast and New York is leading in that discussion.

3. If an LCFS is not available, what is generally going to be required is a strong heavy transport sector and one committed to “net zero carbon by XXXX”, plus a ready supply of liquid or solid wastes or stranded gases. Scandinavia pops into mind. However, also think “Australia” – lots of heavy truck demand in the mining industry, and renewable natural gas produced from wastes in the city and injected in Western Australia’s extensive pipeline network could be readily claimed in the north of Australia. So perhaps think of towns like Karratha, which once hosted companies interested in algae biofuels and searching for CO2.

The Howfore

We profiled the Oberon process here. And you can view this multi-slide guide here, and this presentation from Rebecca Boudreaux at ABLC via BioChannel.TV here.

The Suburban Propane gambit

Yes, Suburban Propane has acquired a 39 percent stake in Oberon — clearly, aiming to push along the technology while ceding control to the existing investors. 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. 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.

Next commercialization milestone

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.

Boudreaux becomes CEO

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. Mr. Martin is a veteran of the midstream oil and gas industry and transportation space, serving as President of Martin Resource Management Company since 1981 and its publicly traded affiliate, Martin Midstream Partners, L.P. 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.

Reaction from the stakeholders

“At Suburban Propane, we recognize the need to reduce the nation’s carbon footprint and improve overall air quality. 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,” said Michael Stivala, Suburban Propane President and Chief Executive Officer. “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. 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.”

“Suburban Propane is making a bold statement that innovative approaches can drive sustainability across the industry,” said Rebecca Boudreaux, Ph.D., Oberon Fuels President and Chief Executive Officer. “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.”

The Bottom Line

It’s a substantive change — clearly pointing Oberon to commercialization at its facility in the Imperial Valley, as of next year. For all the technical and value-based reasons cited above — not to mention the values-based ones — it’s a great advance for the bioeconomy.

I sometimes wonder what happens to someone with an idea that they persuade themselves to undertake hazardous and arduous adventures, for worthy yet incomprehensibly difficult goals that rarely gain one-thousandth of the attention given to 16-year old campaigner Greta Thunberg for crossing the Atlantic Ocean in a sailboat. No one from Oberon will make the cover of Time Magazine before the age of twenty, as Greta Thunberg did — and yet the odds are greater against them, so why do it? It can’t simply be that financial success makes the hard work worthwhile. After all, heroin dealers can have financial success. And it can’t simply be for the esteem of friends, for people can gain that by hosting an evening fund-raiser for deprived children.

I once asked the editor of Harper’s, Lewis Lapham, whom he thought of as the finest writer in America, Without hesitation and with finality, he said “Evan Connell,” which struck me at the time because Harper’s wasn’t publishing anything by Connell, and I think he had been publishing with The Atlantic, if memory serves, which at Harper’s was a worse crime than burglary or an act of public indecency. So I made a study of Connell, and found that Connell greatly esteemed the writer Anatole France. France once wrote something that reminds me of Oberon and its team, and the improbable force which they have applied to the problem of renewable DME and brought it as close to fruition as an climber might feel emerging from Camp Four in the race for Everest’s summit.

“Desire has driven my entire life. I can say that my existence was only a long desire..” Of course, he wrote it in French and about the many things in life that range beyond the bioeconomy, but still. I think they do these improbable things because they are drawn to challenge themselves; the possibility of success is the thing that harnesses desire into sustained effort over the long haul, and it has been a long haul, but the port beckons, and the journey will have been worth it.