Law heralds birth of new industry, official say
BRAWLEY — A local lawmaker, a renewable energy manufacturer and local dignitaries took a victory lap Tuesday morning over a recently passed law they say opens opportunities for an emerging new industry.
Assembly Bill 2663 was sponsored by Assemblymember Eduardo Garcia, D-Coachella, and signed into law by Gov. Gavin Newsom in September. It effectively lowers the excise tax on dimethyl ether (DME) when it is used as a diesel replacement or to blend with propane to the same rate as other alternative fuels.
DME is a clean-burning, ultra-low-carbon transportation fuel generated from converting commercial-grade methanol via a reactive distillation process. Since 2013, San Diego-based Oberon has been involved in a pilot project at its plant on Kershaw Road to product the first fuel-grade DME in North America.
The passage of AB 2663, lowers the excise tax on DME from 18 cents per gallon to 6 cents per gallon.
On Tuesday, Garcia invited Oberon President and CEO Rebecca Boureaux, Plant Manager Adrian Plascencia, Brawley Mayor Norma Kastner-Jauregi, Imperial Valley Economic Development Corp. President and CEO Tim Kelley, and others to celebrate passage of the law and the economic opportunities it creates.
According to a background sheet provided by Garcia’s office, DME not only burns cleanly and quietly, but it can also reduce greenhouse gas emissions by 68 percent to 101 percent, depending on the feedstock used. It can be blended with propane to reduce propane’s carbon intensity score
(the amount of carbon by weight emitted per unit of energy consumed), “while servicing thousands of propane-fueled police cars, shuttles and school buses on California’s roads today without any need to modify the vehicles or the existing fueling infrastructure.”
However, for that option to be attractive to fleet owners, the tax issue had to be addressed. That’s where Garcia’s bill, which passed through the Legislature unanimously, comes into play.
“The science is part of the story,” he said. “When the rules were written, DME didn’t exist.”
Oberon Fuels is in the middle of upgrading its Brawley plant from pilot to demonstration scale, thanks in part to a $2.9 million grant from the California Energy Commission in summer 2019.
The company recently added nine full-time, family-wage jobs to the facility. The plant is expected to produce 1.6 million gallons of DME from more than 5,500 metric tons of waste material when operating at full capacity.
Rebecca Boudreaux, president and CEO of Oberon Fuels, said she expects the plant to reach that capacity within the first half of 2021.
“Oberon is creating an industry,” IVEDC’s Kelley said at Tuesday’s event.
“I’m really thrilled about this particular project,” said Brawley Mayor Kastner-Jauregi. “Any time we have any new employment, we celebrate that.”
On Sept. 17, Oberon announced a strategic partnership with SHV Energy, the world’s largest distributor of propane, as well as Suburban Propane’s acquisition of a 39 percent stake in the company.
Suburban Propane is a publicly traded, nationwide distributor of propane, fuel oil and related products and services.