June 11, 2006

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Bio fuel home brewers battle big refiners in Utah's grease war
By Patty Henetz
The Salt Lake Tribune

Graydon Blair displays a sample of biodiesel one of his clients made from waste vegetable oil. Blair, who is trying to mediate the escalating grease war, sells biodiesel-brewing equipment from a shop at his home. (Melinda Hom-Williams/The Salt Lake Tribune)
Correction: A story Sunday about the people who use waste cooking oil to produce biodiesel fuel or livestock feed supplements incorrectly characterized Archer Daniels Midland Co. as “big oil.” The company is one of the world's largest agricultural processors, now building a 50 million gallon biodiesel plant in North Dakota.
   The number of backyard biodiesel refiners is growing in Utah as word spreads about how easy it is to make this alternative fuel from used frying oil that restaurants are glad to give away.
   But the biodieselers, as they call themselves, are making enemies in Salt Lake County.
   Big collection and rendering companies are turning to the health department to challenge the hobbyists who make the fuel solely for their own use. They claim biodieselers shouldn't be allowed to reap the "yellow grease" - so valuable it is traded on the commodities markets - unless they play by the rules.
   The Salt Lake Valley Health Department is listening.
   That means the little guys who make their own biodiesel who introduced the biodegradable, low-pollution, sustainable fuel to Utah long before anyone sold it commercially - already are the losers in this grease war, said Graydon Blair, a member of a 100-member grassroots group called the Utah Biodiesel Cooperative.
   "It doesn't matter if you're doing it for yourself, you're pretty much screwed," he said. "This has pretty much killed [home-made] biodiesel in Salt Lake County."
   The conflict began about six months ago, when Salt Lake Valley company Renegade Oil began complaining to the health department about grease thefts and the unequal treatment of biodiesel hobbyists who tend to ignore environmental protection laws that the big companies have to observe.
   Rendering companies like Renegade process the grease for use in animal feed. Commercial biodiesel is manufactured with unused "virgin" oil from sources such as soybeans and canola. Their products have to pass rigorous U.S. Environmental Protection Agency quality tests.
   But hobbyists make biodiesel for themselves or others who don't care that the grease-based product isn't regulated.
   In December, big renderers including Renegade, John KuhÂni Sons of Juab County and Bonneville Livestock in Lehi met with Blair and Andre Shoumatoff, also a Utah Biodiesel Cooperative member, to argue their case.
   The upshot was a directive Shoumatoff posted on the Web telling biodieselers not to steal from renderers' barrels or collect grease on their own without a permit from Salt Lake County. Shoumatoff also suggested working with health department officials to create a "reasonable" price for purchasing refined grease from renderers that already have agreements with restaurants.
   But the co-op is a small group with no control over the state's backyard biodiesel producers, and the renderers aren't willing to sell their product to biodieselers because of possible liability.
   Mary Pat Buckman, the county environmental health official who is mediating the dispute while maintaining vigilant rules of enforcement, said it's "quite easy" to get a permit to haul grease.
   The permit costs $125 and covers up to five trucks. Individual cities also would issue business licenses.
   The insurance is the snag, Blair said. It would be impossible for backyard refiners to pay for $1 million in insurance even if a broker agreed to sell them policies, which so far they haven't, he said.
   Buckman said she's trying to figure out how much time and money they want to spend on enforcing the rules, or even whether they ought to apply to hobbyists.
   "Do we say if you're picking up more than three [grease] barrels a month, you have to do this? We've had a guy who carried it across the street in a bucket," she said. "We're really grappling with this. At what point does [enforcement] make sense?"
   Blair and Buckman said they knew of only one biodieseler who has managed to satisfy all the regulations: Magna resident Kevin Newman, a drywall contractor who uses homemade fuel to power the six trucks owned by his company, Detail Builders.
   Newman has service agreements with six restaurants. After six months of brewing fuel, he says he's just reaching the break-even point for his $5,000 upfront investment in biodiesel-making equipment he bought from Blair, who sells his gear mostly on the Internet. Soon, Newman said, he will start seeing real savings.
   Some of Newman's restaurants allow him to put his barrel next to Renegade's barrel. Restaurant workers don't care in which barrel their waste oil gets dumped, he said.
   But they


ought to, said Randy Tietjen, spokesman for Bonneville Livestock.
   "The liability doesn't end at the restaurant where you pick up," he said. He uses that point as a selling tool for his services with restaurateurs who allow biodieselers to gather grease without proper permits and insurance.
   Tietjen also cautions that backyard brewing involves the use of methanol and lye, with a glycerin byproduct that is difficult to dispose of legally.
   Dennis Brunetti of Renegade Oil said his company's service agreements with restaurants include a flat fee for cleaning the grease traps that catch oil from drains, a promise to pick up the grease in a timely manner and keep clean the Dumpster area where the 55-gallon barrels sit.
   Brunetti said the biodieselers have as much right as the big companies to strike agreements with restaurants.
   "But we would expect them to have the same credentials we do," he said, and receive equal treatment from the health department's regulators.
   Beverley Miller, who runs Salt Lake City's Clean Cities program, which promotes the use of alternative fuels, said backyard biodieselers ought to be supported.
   "They raised interest in biodiesel long before it appeared here commercially," she said. "If we hadn't had the biodieselers brewing, talking about it, it would have inched forward much more slowly."
   Making biodiesel is like brewing your own beer, Miller said. But the comparison unravels because beermakers buy their feedstock while biodieselers want it for free.
   "Maybe they should turn into more of a business," like a food co-op, Miller said. "They're not ready for that."
   Biodiesel facts
   * Biodiesel is a clean-burning vehicle fuel produced from renewable plant resources. It is biodegradable, non-toxic and virtually free of sulfur and aroma. Biodiesel contains no petroleum but can be blended with conventional diesel.
   * Biodiesel made from used fry oil is not the same as commercial biodiesel, which is made from virgin oil from sources such as soybeans and canola and must pass rigorous U.S. Environmental Protection Agency testing.
   * The National Biodiesel Board, an industry group, reports that biodiesel sales have increased from 500,000 gallons in 1999 to 75 million gallons in 2005. Board spokeswoman Amber Thurlo-Pearson said the industry is on track to sell 150 million gallons this year.
   * Biodiesel is sold in 5 percent and 20 percent blends with conventional diesel. At least two Utah stations sell 100 percent biodiesel, which can't be used in winter because it becomes too thick in cold temperatures.
   * This past week, the American Automobile Association reported conventional diesel in Utah was selling for an average of $3.21. By comparison, DalSoglio, a station in Salt Lake County, was selling 20 percent biodiesel for $3.07 per gallon and 100 percent for $2.94 per gallon.
   * Utah's first biodiesel manufacturing plant, BioUSA, started operations this spring.
   * Any diesel-fueled vehicle can run on biodiesel with minimum modifications to the engine such as replacing rubber gaskets.
   * Biodiesel emissions are far below those coming from petroleum diesel. Sulfur oxides and sulfates, major components of acid rain, are almost completely eliminated.
   * Big agriculture is into biodiesel. Archer Daniels Midland Co., for example, announced last fall it will construct a new 50 million gallon biodiesel plant adjacent to the company's canola crushing plant in Velva, N.D.