Transportation is Getting Greener

U.S. pipeline and energy infrastructure company Kinder Morgan Incorporated (NYSE:KMI) (Houston, Texas) said its renewable diesel facilities are now in commercial operation in California, a state that's setting the bar in clean transportation.

Kinder operates northern and southern California renewable diesel hubs that combine for a total throughput of 41,000 barrels per day.

"These projects present a significant opportunity to participate in the transition to lower emissions energy sources of the future while continuing to provide fuels still in demand today," Dax Sanders, Kinder's president of products pipelines, said.

In part due to its size, California is the largest vehicle market in the country, but it's also one of the cleanest. Greenhouse gas emissions declined by just over 12% between 2000 to 2019, to discount the impact of the COVID-19 pandemic.

Last week, the federal Environmental Protection Agency sanctioned California's plans to tighten rules on tailpipe emissions and phase out diesel-powered trucks. Tailpipe rules are now stricter than the federal government requires.

Kinder's Southern California hub connects maritime supplies coming into the Ports of Los Angeles and Long Beach to inland markets in part by the company's regional pipeline network. The Northern California hub does the same, but through the San Francisco Bay area.

The U.S. Energy Department explains that renewable diesel can be derived from almost any biomass feedstock and it's easy to incorporate.

"Renewable diesel is a biomass-based diesel fuel similar to biodiesel, but with important differences," the government explained. "Renewable diesel is a hydrocarbon that is chemically equivalent to petroleum diesel and can be used as a drop-in biofuel and can be transported in petroleum pipelines and sold at retail stations with or without blending with petroleum diesel."

Elsewhere, British energy company BP (NYSE:BP) (London, England) last week joined forces with ride-hailing company Uber (NYSE:UBER) (San Francisco, California) in the Pulse program of high-speed charging stations. Uber itself set a target for zero-tailpipe emissions by 2030 in the U.S., Canadian and European markets by 2030 and globally by 2040.

Both companies have lofty ambitions. Uber wants to have an all-electric fleet by 2040, while BP wants to become a net-zero company by no later than 2050.

Describing it as a "compelling combination," BP in February made a $1.3 billion cash offer to acquire full-service fueling outlet TravelCenters of America. While still catering to conventional vehicles, BP said it would add everything from charging stations to biofuels at TravelCenters of America.

Ford Motor Company (NYSE:F) (Dearborn, Michigan), for its part, has billions of dollars in investments planned for electric vehicles, rolling out an electric line of its popular F-150 truck. Buying one could qualify for up to $7,500 in tax credits from last year's Inflation Reduction Act.

But on emissions, the International Energy Agency (IEA) said post-pandemic pollution from transportation is on the rise -- some 8% year-on-year 2021.

To get on track, the IEA estimates that CO2 emissions from transportation need to drop by 3% per year to 2030, but transport is still largely dependent on crude oil and natural gas. Progress has been made in alternative fuels, however, with biofuel consumption increasing from less than 0.5% in 1990 to nearly 4% in 2021, but even that might not be enough.

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