A Bakersfield producer of biodiesel fuel additives has been sued by a Los Angeles competitor over claims the local company won a valuable state certification by fraudulently manipulating third-party tests of a product that allegedly doesn't work.
California Fueling LLC's Dec. 10 lawsuit against Best Energy Solutions and Technology Corp. — headquartered on Watts Drive in Bakersfield — which does business as Best Corp., and its Colorado-based distributor, Innospec Inc., estimates 1,000 metric tons of nitrogen oxides have been released into California's air during a six-month period as a result of the alleged fraud. Nitrogen oxides are a key component in the formation of smog.
An attorney for Best called California Fueling's claims "demonstrably false."
"We believe that Best Corp. has a superior and more cost-effective biodiesel additive than California Fueling, and that California Fueling has resorted to … filing this meritless lawsuit in a misguided attempt to kill competition through litigation rather than trying to make a better product," lawyer Stephen Larson said by email.
The legal fight illustrates the financial stakes biodiesel additive-makers have in California's efforts to lower the carbon intensity of transportation fuels used in the state. The suit in Los Angeles Superior Court asks for $3.2 million in restitution and damages of at least $1.5 million. It also seeks to halt sales of Best's additive, BC-EC1c.
Combining petroleum-based diesel with plant- or animal-based biodiesel reduces greenhouse gas emissions. But research shows without the right fuel additive, the combination also increases nitrogen oxides levels. That's why the state has taken to certifying fuel additives such as those made by Best and California Fueling.
A spokesman for the agency that certified Best's additive, the California Air Resources Board, said by email Wednesday it is looking into California Fueling's allegations "and is doing additional testing to determine if there is a reason to reconsider certification of BEST’s product."
In an attempt to slow global warming, California's Low Carbon Fuel Standard calls for reducing greenhouse gas emissions 20 percent below 2010 levels by 2030. Blending petroleum diesel with biodiesel is one way CARB hopes to achieve that goal.
California Fueling says it sold 140,000 gallons of its Vesta series of diesel-biodiesel fuel additives in the first half of 2018. But after the state certified Best's additive and the Bakersfield company marketed the product as being more efficient, the Los Angeles company's sales reportedly fell to just 2,500 gallons per month in October.
The Los Angeles company alleges Best fraudulently won state certification of its additive by providing a state-designated laboratory with pre-blended fuels for testing. It says this violated the lab's standard procedures and that the lab "acknowledged that it did not and could not have any idea what it was actually testing."
California Fueling's lawsuit goes on to say it paid for the same third-party lab to test Best's additive. It says the results show the product was ineffective at reducing nitrogen oxide emissions and that, when tested on three different state-approved fuels, it actually increased emissions of the chemical by more than 3 percent.