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Regulator Moves to Shut Down Diesel Generators at East Oakland Cannabis Facility

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Two giant diesel generators parked outside cannabis production facility in Oakland, California.
Two of the diesel-fueled generators that have been supplying power to cannabis production facilities at East Oakland properties owned by Denver-based Green Sage. (Amaya Nicole Edwards/KQED)

Regional air regulators are moving to shut down a set of giant diesel generators that have been used for more than a year and a half to power a major cannabis-growing facility in East Oakland.

In a complaint issued Wednesday, the Bay Area Air Quality Management District formally accused a Denver-based firm called Green Sage of installing the heavily polluting generators as a long-term substitute for standard grid power in violation of state and regional regulations.

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"The impacts of these generators are serious," Damian Breen, the district's deputy operations chief, said in an interview. "East Oakland suffers from more air pollution than other parts of the Bay Area, and diesel particulate matter can have a significant impact."

As many as nine of the huge diesel units have operated simultaneously outside the two buildings. Portable diesel generators emit diesel particulate matter, nitrogen oxides, carbon monoxide and other pollutants.

The complaint seeks an order from the district's independent hearing board requiring Green Sage and cannabis tenants at its two San Leandro Street properties to shut down the generators until they get permits to operate them. The complaint also makes it clear that permits are available only for temporary generator use — for instance, during short-term emergencies or to provide power during electrical upgrades — not as a long-term replacement for the conventional grid power.

Breen said it could take 30 to 60 days for the hearing board to convene and deliver an abatement order to halt use of the generators, the first of which was installed in July 2020.

Green Sage bought two large San Leandro Street buildings, known as The Tinnery and The Cannery, in 2016 and 2017, and began leasing space to cannabis operations. The company is owned by Ken Greer, 41, a former Massachusetts stockbroker with addresses in Denver and San Diego County, and Bruce Miller, 70, a real-estate agent listed with residences in Los Angeles, Wyoming and Montana.

Residents of The Cannery, a live-work space that has housed artists and artisans for nearly 50 years, have raised alarms for the past 20 months about the industrial generators and the pollution they're emitting in a part of Oakland that has long suffered from hazardous air quality due to proximity to Interstate 880 and factories in the area.

When power demand from energy-intensive growing operations overtaxed the existing transformers and other electrical infrastructure at the buildings, Green Sage began renting semi-trailer-sized diesel generators as its primary source for tenants' electrical needs. The generators consume thousands of gallons of fuel a day, and cannabis operators at the complex report monthly fuel bills in the hundreds of thousands of dollars.

A large tanker truck delivers
A tanker delivering diesel fuel to industrial generators outside the Green Sage cannabis complex on San Leandro Street in East Oakland. Seven generators at the site require daily fuel deliveries and burn more than 2,000 gallons of fuel a day. (Amaya Nicole Edwards/KQED)

The formal air district complaint follows a February notice of violation the agency issued because Green Sage had failed to get permits to install or operate the generators.

The city of Oakland has slapped the company with a pair of violation notices for running the generators without permits and for a host of code violations. The most recent notice, sent last month, gave Green Sage until Friday, April 22, to end use of the generators. But as of Thursday, just a day before that deadline, the generators continue to run 24 hours a day, seven days a week.

Green Sage did not respond to a request for comment on the latest violation notice. In answer to the air district's February notice of violation, a Green Sage lawyer wrote the agency a letter saying the company had filed "application materials" for the diesel-powered generators at San Leandro Street.

The letter from San Francisco attorney Darrin Gambelin went on to say that Green Sage also was preparing to submit an application to install cleaner-burning turbines that would be powered by gas derived from dairy waste. The turbines would "immediately reduce emissions and expeditiously install a permanent clean, renewable, net-negative carbon power source."

The company floated the potentially expensive turbine proposal despite the fact it appears to be in extreme financial straits. Green Sage apparently stopped making payments last August on a $54.5 million dollar loan it had gotten to underwrite construction at the San Leandro Street properties and was placed in default in December. The buildings are currently set to be sold at a May 4 foreclosure auction in Oakland.

In any event, the air district says Green Sage has yet to file a complete application for either the diesel generators or the proposed turbines. And Breen said Wednesday it's long past time for the company to have complied with agency regulations.

"The correct course of action would have been to notify the air district before [the generators] were moved into the area," Breen said. "We could have done a health risk analysis. We could have made sure that the folks in East Oakland who suffer from disproportionate burdens from air pollution were protected."

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