California Air Resources Board

FRESNO -- San Joaquin Valley farmers will have a more secure diesel fuel supply starting today thanks to a cooperative effort by the California Air Resources Board (ARB) and Kinder Morgan, Inc. The installation of an 80,000 barrel diesel fuel terminal in Fresno gives area farmers a reliable fuel supply of California's cleaner-burning diesel fuel formula. This action was taken in response to concerns over price spikes due to tight fuel supplies during the fall harvest and spring planting seasons.

California Environmental Protection Agency Secretary Winston H. Hickox said, "Valley farmers have suffered with seasonal tight diesel fuel supplies and the resultant high prices for years. We heard the concerns of the agricultural community and through this public-private partnership, we are confident the Kinder Morgan facility will help alleviate past fuel supply issues."

Diesel fuel is typically ordered from refiners several weeks in advance and on-site supplies are shipped in weekly units. Because exact timing for planting and harvest seasons cannot be accurately predicted weeks in advance, fuel supplies can run low when farmers add to the demand. Difficulty in determining when farmers will require increased fuel supplies lead to price spikes when the supplies do not meet demand.

The Fresno diesel terminal is expected to alleviate supply issues, giving farmers and non-seasonal customers alike increased fuel supplies. This action is also expected to reduce the possibility that ARB will receive requests to allow the use of dirtier federal diesel fuel because cleaner California diesel is unavailable.

Kinder Morgan, Inc., completed the project in one year, using $388,000 in ARB settlement money to complete the facility several years earlier than planned.  The estimated total cost for the project is $1.6 million. The California Energy Commission, the state's primary energy policy and planning agency, played an advisory role. The ARB is required to use settlement money to offset air pollution emissions through such air quality projects as this.