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Oberon Fuels Brings Production Units Online, Launching the First North American Fuel-grade DME Facilities

Oberon partnering with Volvo Trucks in North America and Safeway, Inc. to test heavy-duty commercial vehicles powered by clean-burning dimethyl ether (DME) produced from biomass –SAN DIEGO – June 6, 2013 – The first-ever North American production units for clean-burning, fuel-grade dimethyl ether (DME) have been developed by Oberon Fuels, and will go online in June in the Imperial Valley region of southern California. The production facility and Oberon’s cooperation with Volvo Trucks in North America and Safeway, Inc. were announced at a press conference on the steps of the Capitol in Sacramento today. The three companies are partnering to test DME performance in heavy-duty commercial Volvo trucks driven by Safeway for operations in the San Joaquin Valley.

Oberon Fuels has developed an innovative process that cost-effectively produces DME, an economically- and environmentally-advantageous fuel, on a small scale. DME, which has been proven as an energy source in many countries around the world, is a non-toxic, sulfur-free and clean-burning (generates no particulate matter) fuel that offers a clean alternative to diesel fuel for trucking operations. To date, it has not been used as a transportation fuel in North America, in part because of the cost of developing large-scale production facilities.

Oberon’s small-scale production allows it to take advantage of smaller volume feedstocks that typically go unused. The units’ modular design makes it easy to deploy to remote stranded-gas locations that are otherwise costly to access, and also to industrial operations where waste CO2 streams can be captured to increase output. Huge reserves of natural gas make efficient conversion to DME a natural next step toward promoting greater energy independence for the United States while reducing environmental impacts of the transportation sector. In addition, feedstocks—such as shale gas and biogas from animal, food, and agricultural waste—can be converted to DME and monetized using the Oberon process. Because DME can be produced from a variety of methane- containing feedstocks, it has the potential to be a renewable resource. Since production is not dependent on the price of crude oil and the Oberon process uses multiple feedstock sources, the price of DME is expected to be more stable than that of diesel.

Oberon CEO Neil Senturia says, “This is one of those rare opportunities that comes along when we have the opportunity to both do good and do well. This fuel can actually make a difference in not only America’s energy independence, but also our environmental impact on the planet. We welcome partners who want to get on board with us now to change the face of alternative fuels for the future.”

Volvo Trucks in North America has announced its intention to commercialize DME-powered vehicles for North America by 2015 and is working with Oberon in field tests. Working with both Volvo and Safeway, Inc., one of the

largest food and drug retailers in North America, Oberon Fuels has received support from several governmental programs and agencies, including the San Joaquin Valley Air Pollution Control District and the California GO-Biz office.

“It’s exciting to have a global leader like Volvo Trucks partnering with California companies to develop innovative technology in the Golden State,” said Kish Rajan, director of the Governor’s Office of Business and Economic Development (GO-Biz). “The State of California continues to attract the most dynamic companies in the world, and GO-Biz looks forward to helping Volvo and Oberon maximize the benefits of DME as a commercial transportation fuel.”

A representative from Governor’s Brown’s office, Senior Energy Advisor Cliff Rechtschaffen, also spoke at the press conference about the promising development of clean-burning DME as a commercial transportation fuel. California has the nation’s most stringent regulations regarding air pollution from vehicles.

Göran Nyberg, president of Volvo Trucks North American Sales and Marketing, says, “We believe DME has great potential in the North American market – and when produced from biomass, it can provide a 95 percent reduction in CO2 compared to diesel. Our field tests with Oberon Fuels will allow us to show the performance value of this fuel in heavy-duty trucking and prove our role as a leader in alternative fuel and driveline development.”

The Brawley plant is presently starting up and is expected to be producing fuel-grade DME in June. This unit will produce 4,500 gallons of DME per day; subsequent units will have the ability to produce up to 10,000 gallons per day. These small-scale Oberon production units enable the development of regional fuel markets that service local customers engaged in regional haul, bypassing the need for a national infrastructure. Initial investment to construct an Oberon unit is low compared to the construction of a large-scale plant. Therefore, capital expenditures are in sync with market growth. As the DME market develops, more small-scale production units will be deployed in each region, and new regions will be added across North America.

President of Oberon Fuels Rebecca Boudreaux, Ph.D., says. “DME is an excellent alternative fuel because it is a cost-effective diesel replacement that also has the potential to substantially reduce the carbon footprint of heavy- duty transportation. The Oberon process utilizes two greenhouse gases – methane and carbon dioxide – and converts them to a clean-burning fuel, DME. This is a monumental step forward for the transportation sector and the environment.”