Global Clean Energy acquires Alon Bakersfield Refinery in California

Global Clean Energy Holdings (GCEH), a California-based renewable energy company,  through a subsidiary, has acquired Alon Bakersfield Properties, a subsidiary of Delek US, and the owner of the Alon Bakersfield Refinery.

The total cash consideration paid by Global Clean Energy to Delek US Holdings for the acquisition was $40 million.

Alon Bakersfield Refinery is an oil refinery built in Bakersfield, California. The refinery has historically produced diesel from crude oil.

Global Clean Energy said that it will immediately begin retooling the refinery for the production of renewable diesel from organic feedstocks like vegetable oils.

When repurposed as a renewable fuels refinery, the Alon Bakersfield oil refinery will vertically integrate to produce renewable diesel from multiple feedstocks, including Global Clean Energy’s fallow land crop varieties of camelina.

According to Global Clean Energy, camelina, which is usually grown in rotation with wheat,  is cultivated as an alternative to fallow so as not to displace or compete with food crops. The balance of feedstock will be supplied from multiple non-petroleum renewable feedstocks like cooking oil, distillers’ corn oil, soybean oil, and others.

Global Clean Energy acquires Alon Bakersfield Refinery in California. Photo courtesy of Harry Stilianou from Pixabay.

The renewable energy company said that no petroleum processing of any kind will take place hereafter at the oil refinery, either during or after the retooling effort. Instead, the Alon Bakersfield Refinery will be repurposed to become a low-carbon renewable fuel producer that addresses the requirements of the California Low Carbon Fuels Standard.

Fuels produced from the repurposed Alon Bakersfield Refinery will result in substantial reductions of greenhouse gas (GHG) emissions and also local air pollutants such as particulate matter. Global Clean Energy expects the retooling to take 18-20 months to complete, with the main work being carried out by union trades via a local Bakersfield EPC contractor, ARB, a Primoris Services Corp subsidiary.

Global Clean Energy said that as Alon Bakersfield is an existing oil refinery, it already has a significant portion of the required equipment in place for renewable diesel production.

The renewable energy company said that an estimated 100 union tradesmen from a diverse range of crafts will be used to carry out a complete turnaround and refurbishment of the required equipment to produce renewable diesel. After startup, which is expected currently to be in late 2021, the repurposed refinery is likely to supply a considerable part of the demand for clean-burning alternative diesel fuels in California.

Meanwhile, Global Clean Energy has entered into a couple of credit facilities to finance the work to be provided by ARB and other construction firms, the clean-up of the site, the operating costs of the facilities, and other project costs during the construction and initial post-construction phases.

Fuels produced at the Alon Bakersfield Refinery will be available to be blended into the California transportation fuel mix, said the renewable energy company. The blended fuel will cut down the overall GHG emissions and other harmful local pollutants in the San Joaquin Valley and in other parts of California.

Global Clean Energy intends to have all the renewable fuels produced at the repurposed refinery sold to, and thereafter, marketed and distributed via multiple partnerships, including one with a multi-national oil company.

Richard Palmer – CEO of Global Clean Energy said: “We are thrilled to announce this exciting new venture in Bakersfield, California; a venture that leverages the region’s core competencies in agriculture and both traditional and alternative energy.

“We expect that this project will be a catalyst for economic development and will  generate both direct and indirect job opportunities in Kern County and the region.”