40 Biogas Fuel Stations Open in California

Fleets can now fill their vehicles with fuel made from methane and other kinds of organic waste at 40 "gas" stations in California, thanks to Clean Energy Fuels Corp. (Nasdaq: CLNE).

The company, which is backed by T. Boone Pickens, expects to sell 15 million gallons of "Redeem" this year in California and has plans for a nationwide network of 400 "gas" stations. 

Biogas Redeem

Customers already include AT&T, Verizon, Mattel and Williams-Sonoma as well as large fleet operators like Hertz and SuperShuttle. 

Besides gas stations, Clean Energy Fuels delivers direct to customers to fuel heavy-duty and refuse trucks, airport shuttles, taxis, and buses. 

How It Works 

We’ve written extensively about the benefits of biogas, an organic form of natural gas made from methane waste from landfills, dairies and sewage treatment plants. It’s the perfect way to make natural gas from recycled sources – no fracking necessary.

Besides transportation, biogas can heat and cool buildings.

Clean Energy Fuels collects methane gas from these sources and then processes it at its biogas facilities. Then Redeem is shipped via natural gas pipelines direct to large customers or to its growing network of gas stations. 

Three facilities produce Redeem, with plans for more: Dallas, Texas; Canton, Michigan; and one under construction in Millington, Tennessee. The company also sources biogas from third parties to market and distribute as Redeem vehicle fuel.

Any vehicle that runs on natural gas can fill up with Redeem.

Biogas emits 90% less carbon emissions than diesel or gasoline, according to California Air Resource Board estimates, and requires less energy to extract and process. And it obviously makes use of methane that would otherwise be released into the atmosphere.

For this reason, biogas plants are being set up at many large-scale farms, wastewater treatment plants and landfills, providing endless sources of fuel (and fertilizer is a by-product). 

And the price for Redeem is lower than diesel and the same as gasoline.

Because of the surge in fracking and its low prices, the transportation industry is beginning to shift to natural gas vehicles. 

"Redeem is the lowest carbon footprint fuel commercially available and the only affordable renewable fuel for heavy duty trucks. We believe this creates an environmental and economic incentive for companies inside and outside California who are looking to make a major reduction in the greenhouse gas emissions from their fleet operations while still saving on their fuel bill. Redeem makes that possible," says Harrison Clay, president of Clean Energy Renewable Fuels, a subsidiary of Clean Energy Fuels.

Why The Price is Competitive

Incentives in California and the US Renewable Fuels Standard are responsible for the low price. They allow Redeem to be sold at the same price as gasoline and at lower prices than diesel even though it’s more expensive to produce, says Clean Energy Fuels. It also protects companies from volatile gas prices that depend on geopolitics.

California’s low carbon fuel standard, which was just upheld in court, gives suppliers tradable credits when they reduce emissions during the production, transportation and use of the fuel. The law requires the oil industry to gradually reduce the "carbon intensity" of transportation fuels by at least 10% by 2020. 

Currently, "renewable" fuels consist of ethanol from corn and the nascent cellulosic biomass industry. The US Renewable Fuel Standard requires gasoline and diesel producers to blend 36 billion gallons of biofuels a year into their products by 2022, including 16 billion gallons of cellulosic fuel (which now includes algae fuels). Because so little of this fuel has been available so far, EPA has repeatedly cut the targets.   

The standard requires Beyond Redeem, Clean Energy Fuels is the largest provider of  natural gas fuel for transportation in North America. They operate compressed natural gas (CNG) and liquefied natural gas (LNG) fueling stations; manufacture CNG and LNG equipment and technologies, and convert taxis, vans, pick-up trucks and shuttle buses to natural gas. This much more controversial side of the business is its mainstay.

Here’s a map of Redeem fueling stations:

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