California fueling infrastructure moves forward

By Holly Jessen | February 09, 2010
Posted Feb. 12, 2010

Two California companies recently announced they received funding to expand E85 fuel infrastructure in that state. Propel Inc., or Propel Fuels, raised $20 million in equity funding while DMC Green Inc. was granted two DOE grants totaling $400,000.

The news came less than a week after the Southern California Association of Governments (SCAG) turned down $11 million to expand ethanol fueling stations in that state. SCAG said it didn't want the federal stimulus money due to concerns about environmental issues and grant application procedures.

Propel Fuels currently has five E85 stations in California and six biodiesel fueling stations in Washington. With a $12 million investment in the company by Craton Equity Partners, Nth Power and @Ventures and $8 million in debt financing, the company will "dramatically expand its station network" in California, according to a press release from Craton. "The company's modular fueling sites are typically co-located on the property of existing gas stations," the press release said, "creating a low cost approach to increasing the availability of ethanol and biodiesel to the millions of Flex Fuel and diesel vehicles on the road." Propel Fuels estimates 600 construction jobs will be indirectly created. In addition, 35 people will be hired at its new headquarters in Sacramento.

DMC Green will use the $400,000 DOE grant to help install E85 at 10 gas stations already in contract under the DMC Green California Dealers' Retrofit program, according to a company press release. The company offers existing station owners ethanol, biodiesel and electric car charging. Once the project is completed, many of the stations will be the first existing retail fuel station in the community or county to offer alternative fuels.

The stations are located in California counties San Diego, Orange, Los Angeles, Kern, Fresno and Madera. They were selected for high volume fuel sales and the fact that they are located near federal and state fleets. In addition, the location is by Interstate 5 and State Highway 99, the two largest traffic corridors in California.

Matt Horton, CEO of Propel Fuels called SCAG's decision to turn down funding to expand ethanol fueling stations disappointing. "Our success in Sacramento has shown us that despite what some government officials believe, consumers and fleets do want this fuel now," he told EPM. "Additionally, the recent announcement by the EPA that modern ethanol reduces carbon emissions by a minimum of 20 percent gives us confidence that we have solutions that will bridge the gap between today's first generation fuels and the advanced fuels of tomorrow."

F. Kent Leacock, director of corporate and regulatory affairs for DMC Green, also felt the SCAG decision was disappointing. The company had applied for funding from that grant, a clean cities grant. Leacock's message to the group is that building infrastructure for selling corn-based ethanol now would be a proactive step to benefit cellulosic ethanol in the future. "There will be no way to sell the fuels if you don't build the infrastructure," he said. In addition, corn ethanol does reduce greenhouse gas (GHG) emissions. "Yes, right now, maybe you're not happy with corn ethanol, but there is science that even corn ethanol brought in by rail still reduces green house gas over petroleum," he said.

The way Leacock looks at it, for each individual, there is an appropriate alternative renewable transportation choice. For someone that rarely leaves the city, perhaps that's an electric car. For a "road warrior" or for fleets, perhaps that's ethanol or biodiesel. "No one choice is going to take over," he said. "You need them all, and I think ethanol and biodiesel, in their renewable forms, are going to be there."