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Grease Rustlers in California Unite!
By Judy Dugan
Research Director
Consumer Watchdog
and OilWatchdog.org Project
This wacky tale of grease rustling at a Northern California Burger King spins off a lot of threads. The police report said the wild-haired suspect was siphoning his 300-gallon haul of used fryer grease into a tank on the back of his truck. He was headed for a biorefinery in Atasacadero, where this "yellow grease" would net $1.35 a gallon, as opposed to only 80 cents in his employer's territory, Nevada. Immediate question: Why the price difference? Does Las Vegas have the world's highest concentration of deep fryers?
Bigger question: Even if fry oil goes for $1.35, why does biodiesel sell for over $4.00 a gallon (if you can find it, but that's another story), same as regular diesel?
That turns out to be an easy answer: Most biodiesel is made from virgin soybean oil--which, like all commodities including petroleum, is through the roof on futures market trading. Brand-new biodiesel refineries are sitting idle because of the price.
Naturally, the big biodiesel plants were built to run on soybean oil because it's a known, industrially available, hedged and traded commodity. It's not far from the petroleum model, except for the lack of pipelines. Yellow grease, as the used cooking oils are known, takes a much different business model (even though most restaurants are still happy to give it away).
Yellow grease, which is also used in livestock feed, is a business of local haulers like this septic pumper who's using the same technology for grease gathering (though we hope not the same trucks) up to medium-sized regional companies. The business depends on contracts with individual restaurants.
So much paperwork, thinks the refiner. So many wacky characters to deal with. And what if the grease guy doesn't show up, or deep-fried taco bites go out of favor? But some biodiesel refiners are catching on, like this Earth Biofuels plant in Oklahoma that's buying from a professional fleet that combs the restaurants of Dallas-Fort Worth and beyond.
Grease rustling pre-dates biofuels, although it's more lucrative these days. Yet millions of gallons of rancid, refinable grease are still dumped into landfills, or illegally into sewers.
Final question: Couldn't the right kind of regulation employ the rustlers and run those shuttered refineries? It seems partly a matter of getting more of the new-age refiners to stop thinking like old Texas oilmen. To kick-start it, I propose a fat fee on landfill fry-oil oil disposal, spent to reward restaurants that contract with waste-oil recyclers. That bottom-up nudge would have fast-food chains lobbying for a more efficient pickup system, locking up the disposal bin and hiring their own wild-haired guys with pumper trucks.
Until, that is, Exxon, Chevron and friends get wind of the idea and mount a jillion-dollar media campaign on behalf of the "overregulated restaurant owner."
Judy Dugan is the Research Director of the Consumer Watchdog , a nationally-recognized, California-based, non-profit consumer education and advocacy organization. She joined them in March 2006 and is a former Deputy Editorial Page Editor for the Los Angeles Times. She most recently served as Senior Editorial Writer at the Times and was the Editor of a Pulitzer Prize-winning series on California government in 2004. Since 1987 she has held editorial positions with the Times including Assistant Op-Ed Editor and Voices Editor.
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