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California leads nation in advanced bio-fuel companies, report says

February 07, 2013|By Ronald D. White
  • A Propel Fuels station in Fullerton. A new report from E2, Environmental Entrepreneurs, cites the 2008 move of Propel Fuels from Washington to California as an example of why California leads the nation in attracting advanced bio-fuel companies.
A Propel Fuels station in Fullerton. A new report from E2, Environmental… (Propel Inc. )

It isn't often that one gets to say that California has gotten it right in terms of attracting and supporting cutting-edge business enterprises. But in advanced bio-fuels, a new report says the state is leading the way.

E2, also known as Environmental Entrepreneurs, is a Washington-based group of "business leaders who promote sound environmental policy that builds economic prosperity."

E2's new analysis of the nation's advanced bio-fuels industry said that California had 30 of the more than 80 companies that now operate in 27 states.

Advanced bio-fuels, also known as second or third generation bio-fuels, can be developed from a broad array of feedstock, such as woody biomass, Brazilian sugar cane, algae, and much more.

California has more such companies than the next four states combined, which are Illinois (eight companies), Colorado, (six), Texas (five) and Iowa (four.)

Mary Solecki, an analyst at E2 and also the director of its clean fuels program, said there were several reasons why California leads in attracting, and so far keeping, such companies.

"California is the clean-tech hub of the country," Solecki said. "It has Silicon Valley. The brain trust coming out of the universities is significant, and California funds research into these areas, more so than other states."

As an example, Solecki cited Propel Fuels, which has pledged to open fuel pumps at 200 locations throughout California and has so far done so at 29 locations.

Some of the pumps are Propel stations, but others are Propel pumps located in high volume independent stations.

One of the latter is the Chevron station at 1250 Sepulveda Blvd. in Harbor City. Motorists there can buy Propel's E85 gasoline and bio-diesel that has been derived from vegetable oil.

Propel Fuels had been based in Seattle and had opened six stations there before it decided to move to California in late 2008.

"We recognized that California was a huge potential market for us," said Matt Horton, chief executive of Propel Fuels.

But Horton added that "it wasn't until we could get some matching infrastructure grants there and some legislative developments happened that California became the most important market for us to be in."

"The state has been a very good customer for us and consumers here are very interested in what we are doing," he said.

Horton added, "Most importantly, state policies have helped to create a level playing ground for us to compete with the existing petroleum industry."

Horton cited Assembly Bill 32, designed to reduce greenhouse gas emissions, and the state's Low Carbon Fuel Standard as important developments that helped convince him that California was the place to be.

The E2 analysis referred to the major goals of the Low Carbon Fuel Standard, which will require that fuel blenders, refineries, importers and distributors of transportation fuels reduce the carbon intensity of the fuels they sell by 10% below a 2010 gasoline and diesel baseline.

E2 said California was one of the few areas in the nation that appeared capable of meeting that standard, on schedule. That's in spite of the fact that California burns more fuel than many industrialized nations.

California burns a stunning 18 billion gallons of liquid transportation fuels a year. E2 said the state nevertheless was on pace to produce "well above what is needed to meet" the Low Carbon Fuel Standard.

By contrast, E2 said the rest of the U.S. appeared to be facing "a continued shortage" of production capacity needed to meet national goals on advanced fuels.

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