Biofuel strikes oil in eateries
Restaurants could put biodiesel firm in fat city
By Ryan Tate
San Francisco Business Times
Updated: 5:00 p.m. PT May 28, 2006
Martin Wahl is a greasy businessman with a slimy operation -- and he's proud to say so.
Fueled by a new partnership with 150 of San Francisco's oil-rich restaurateurs, Wahl's Bay Area Biofuel Inc. pumps close to 12,000 gallons of biodiesel automobile fuel each month, up from virtually none six months ago.
At its current rate of growth, the Richmond company should be profitable by the end of the year. And that's only the beginning: Wahl estimates there is room to grow his customer base fivefold in San Francisco alone, to say nothing of the rest of the Bay Area.
"When (regular) diesel hits more than $3 a gallon, (biodiesel) becomes an attractive economic alternative, and it certainly does boost interest," Wahl said.
For restaurant owners, turning over used grease for biodiesel is more about principles than profits. A typical owner saves just $50 per month in collection fees by having used oil hauled away to make biodiesel instead of the traditional animal feed and cosmetics.
"We're a restaurant that recycles," said John Clark, a partner and an executive chef at Foreign Cinema. "So it came into our conscience as another way of using a substance we produce in a greener situation."
Cleaning up
A restaurant like Foreign Cinema will produce 100 to 150 gallons of spent cooking oil per month. After the sludge is collected from fryers, griddles, stoves and pots, it is stored for pickup. Bay Area Biofuel usually comes every two weeks using its own biodiesel-powered truck.
Prompt, reliable grease pickup is key. Chefs do not want to be cited for health code violations or have to pester Bay Area Biodiesel to come by.
After pickup, the grease is trucked to Bay Area Biodiesel's facility in Richmond, which is as much like a warehouse as a refinery. Cooking oil is considered safer for the environment than table salt, according to Wahl, so facilities like his are only lightly regulated.
Bay Area Biodiesel then removes naturally occurring glycerin from the oil through a process known as transesterification. This is typically performed by adding an acid or base -- for example, lye and alcohol compound or methanol and sodium hydroxide.
Removing glycerin allows the fuel to work smoothly in a normal diesel engine, in part by making it more fluid. Various schemes also exist to power diesel engines from unprocessed vegetable oil, either by mixing it with petroleum diesel or by heating it to increase fluidity.
Once biodiesel is created from the cooking oil, Bay Area Biofuel sells it in 55-gallon and 250-gallon increments to individuals and groups. Clark, the chef, buys some for his 1977 Mercedes 300 after an unhappy experiment brewing biodiesel in his home bathtub. The fuel also goes to contractors, farmers and consumer groups like the San Francisco Biofuels Cooperative.
Direct from Bay Area Biofuel, biodiesel costs $3.25 per gallon. Retail price from the cooperative is $3.90 per gallon.
Pushing toward profit
The company will not be profitable until it reaches 220 customers, and then only thanks to a 50-cent-per-gallon subsidy the federal government enacted last year. It could reach profitability by the end of the year, given that Bay Area Biofuel has added 90 customers over the past six months, thanks to a special agreement with the Golden Gate Restaurant Association.
"It is an emerging industry and there is competition," said association executive director Kevin Westlye. "We wanted to partner with someone who has all the right stuff."
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