SoCalGas, Oberon Fuels to Produce Ultra-Clean Transportation Fuel Using Natural Gas Under RD&D Agreement

LOS ANGELES, Aug. 31, 2011 /PRNewswire/ -- Southern California Gas Co. (SoCalGas) and Oberon Fuels, a San Diego based low-emission alternative fuels company, today announced a joint research and development agreement to design and construct the first commercial facility in the United States to produce Dimethyl Ether (DME) from natural gas for use as a transportation fuel.  The facility will be located in Southern California and produce the ultra-clean fuel, which can be used as an alternative to diesel and propane, as well as for a variety of non-transportation uses.  

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"SoCalGas is committed to supporting the development and deployment of clean alternative transportation fuels," said Hal D. Snyder, vice president of customer solutions for SoCalGas. "Fifty-five billion gallons of diesel fuel are consumed annually in the United States, and the trucking industry is looking for cost-effective solutions that meet the rigorous air quality standards and support the common goal of cleaner air.  

"Using natural gas as a feedstock for DME is just another environmentally beneficial use for natural gas, an abundant, cost effective and domestic fuel.  We see DME as complimentary to other natural gas transportation solutions," Snyder said.

The planned demonstration facility will use Oberon's proprietary technology and process which will mix natural gas with carbon dioxide, or CO2, to produce DME in small-scale, skid-mounted modular units that will produce 3,000 to 6,000 gallons of DME per day.  DME is a particularly attractive fuel because it generates almost no particulate matter and produces ultra-low levels of smog-causing nitrogen oxides, or NOx. DME burns cleaner than diesel while providing improved engine performance.  With handling characteristics similar to propane, DME offers the potential to provide an alternative fuel solution that is cost effective, environmentally friendly, and operationally easy to adopt.

"We see great potential for widespread use of DME as a cleaner substitute for diesel and propane," said Neil Senturia, chief executive officer for Oberon Fuels. "We believe DME can be a key element in the overall solution to clean transportation in this country."

Oberon is working with a variety of policy leaders and state agencies to help ensure that DME becomes part of California's clean alternative transportation fuel arsenal.  The joint demonstration project is first targeting the "return-to-base" trucking segment.  In return-to-base applications, the trucks go out in the morning, make their deliveries and then return to the same location for re-fueling and re-stocking.

Today, DME is most widely used an environmentally friendly gas aerosol propellant in consumer products.  Research on DME as an alternative fuel for diesel engines began in the 1990s, and worldwide production has increased dramatically over the last decade.  Using DME primarily as a blendstock for propane gas, China has driven the growth in demand and prompted large plants to be built throughout Asia and the Middle East.

According to the U.S. Department of Transportation, there are nearly 11 million medium- and heavy-duty trucks operating in the United States. Several truck manufacturers have been testing new DME trucks for several years with excellent results, and existing diesel trucks can be retrofitted for DME with only modest modifications.

About Southern California Gas Co.

Southern California Gas Co. (SoCalGas) has been delivering clean, safe and reliable natural gas to its customers for more than 140 years. It is the nation's largest natural gas distribution utility, providing service to 20.9 million consumers connected through nearly 5.8 million meters in more than 500 communities. The company's service territory encompasses approximately 20,000 square miles throughout central and Southern California, from Visalia to the Mexican border. Southern California Gas Co. is a regulated subsidiary of Sempra Energy (NYSE: SRE).

About Oberon Fuels 

Oberon Fuels, based in San Diego, is focused on the development of small-scale, skid-mounted units that produce Dimethyl Ether (DME).

SOURCE Southern California Gas Co.