Alt.Energy.Austin, the blog of DieselGreen Fuels

On Sunday, September 7th, from 4-8PM, at a location to be announced, there is a planned meeting of Austin vegetable oil fuel enthusiasts. If you have a vehicle converted to run on vegetable oil, we NEED you to attend. If you’re interested in converting your car, or just want to see a bunch of converted cars, this is your chance to see them all together. We also plan to have at least one diesel mechanic to answer questions about general maintenance and repairs, as well as the DieselGreen team to answer questions about conversions. 

We are still in the early planning stages and are looking for one or two volunteers to help put the event together - make flyers, take to our retail locations, set up food, etc. Anyone interested should contact Andrew Taft at 703-585-1578 or taftandrew@yahoo.com.

We hope to build momentum with this meeting, perhaps establish a Meetup group, and establish a real community of vegetable oil fuel users. Please forward this to any interested parties or email lists.

Thanks!

Jason Burroughs
DieselGreen Fuels
512-247-FUEL x70
jason@dieselgreenfuels.com

Tags:   austin · biodiesel · dieselgreen · greaseup · meetup · wvo1 Comment

National News

Lots of exciting things going on in the world of alternative fuels these days. Congress is close to passing a bill that would close the “splash and dash” loophole, which would eliminate companies bringing in biodiesel from overseas, splashing in a bit of diesel to take a tax credit, then shipping it off to Europe for more subsidies. They are also (FINALLY) talking about upping the credit for WVO biodiesel to $1 to match that of new oil biodiesel. I guess someone finally figured out that recycled oil is a very good thing and should be encouraged.

The Sustainable Biodiesel Alliance is starting to build its core team, and we are proud to be on one of the working groups. A pioneer in Austin’s alternative fuel business, Jeff Plowman, was recently named Executive Director - pulling enough weight to bring the SBA headquarters to downtown Austin. The SBA will be a key player in the push toward responsibly produced biofuels, and we’re lucky to have them.

The City of San Francisco is now competing with established biodiesel producers for the grease generated by the many restaurants there, then trucking it out of state to be made into biodiesel for their own use. Opportunities abound for smart municipalities wanting to recycle waste into energy - however, I don’t believe that this is the way to do it. Sending health inspectors into restaurants to sign over the rights to their oil is unfair competition, and I’m certain we’ll be seeing a lawsuit by the end of the year.

Company News

This is a big one. After almost two years of doing all the work ourselves, we’ve hired our first employee. TJ Barr comes to us by way of Seattle, bringing with him 8 years of diesel mechanic skills. He is working with us on fuel deliveries, oil collection, transport of goods, and vehicle conversions. A hands-on helper is something we’ve talked about from the beginning, but we haven’t been able to justify it until now. Our first interview, our first paycheck, maybe even our first day off - it’s very exciting to take this step for our customers and for our own sanity. Next on our list will be a full-time relationship manager to work with restaurants and kitchens on oil recycling and/or an office manager to work on quickbooks and process flow (currently a large portion of what I do). We are not actively hiring for these positions yet, but resumes are being accepted at jasonat dieselgreenfuelscom

As the business has grown, our processes have evolved from verbal agreements to contracts, from handwritten sales logs to Quickbooks. Now that our oil collection has grown signficantly, we have been working behind the scenes to grow the business infrastructure to support our growing customer base. Rather than build a purpose-made facility to process oil at this larger scale, we have established a relationship with a business outside of Austin to perform this dirty task for us. This new partnership will ensure that we are able to keep up with demand, continue to scale as conditions require, and focus on our core business strengths. During this transition period, lasting until early July, we will not have any vegetable oil for sale of any kind. Once we get the system in place, we will have oil again, at a price that is $1.50 below biodiesel at our pump, including the federal road tax.

Announcing our new photo gallery - http://www.dieselgreenfuels.com/gallery is the home of our new site for pictures of customers, events, cool vehicles and equipment, and anything related to the Austin alternative fuel scene. Suggestions for content are welcome, and users can register to upload their own pictures as well.

Personal News

I’m in the early stages of working on a book about my experiences over the last few years as part of an emerging movement of green entrepreneurs. From driving a Viper and working for a tech startup, to driving a plant-powered Volkswagen and dumpster driving for grease, I’ve worked 80 hours a week to jump out of one career and into another. I’ve met so many others with the same ambition that I feel our country is on the verge of a major shift in skillsets - from a technology-based economy focused solely on growth to the reality of shrinking resources (and ice caps). Somewhere in between the hardcore environmentalists and the investment bankers is a growing legion of unsatisfied office workers and cube dwellers. From the arline mechanic running a biodiesel business during his off hours to the telecom executive running a coop on the weekends, our middle class is turning green. Without the pressure of fighting to survive, or the distractions of the super rich, middle America has the time and money to work to make a difference. I believe that this is a story not yet told, barely seen and rarely heard. Just as I’ve been inspired by the people I’ve met from all over the country, there are millions more who haven’t yet heard the call. I hope to write something that inspires, motivates, and entertains. It will be a slow process, and I am seeking individuals or organizations that would be interested in telling their story. Please contact me at jason@dieselgreenfuels.com.

Upcoming Events

July 18 - 20th  - Biodiesel Collective Conference, Golden CO (just outside Denver). This will be our third year attending the most important gathering of like-minded biodiesel enthusiasts in the country! For less than $100 plus travel, you can spend 3 days immersed in homebrew biodiesel, community-based oil collection, and cutting edge biofuels research presentations. Last year, we presented on the “failure” of our coop, and our evolution into a biodiesel distributor and oil collection/processor. This year, I plan to talk about the continued growth of the business, regulatory and legal issues related to our business, and absorb as much as I can from the other attendees.

September 17 - 18  - Texas Biodiesel Conference and Expo, Austin Airport Hilton. Save the date for this full day conference on biodiesel issues related to Texas. Lots of great speakers and panels planned, as well as a couple of great parties. We sat out last year because it was so depressing (thank you, TCEQ), but this year we are planning to attend.

October 17 - 18 - Austin Energy AltCar Expo, Palmer Auditorium. This FREE conference will show you all different types of alternative fueled vehicles. We will be there with our veggie powered 2004 Golf, giving demonstrations of the technology, talking about biodiesel, and representing Austin’s only source of these products. Come out and see us!

Important Links

Austin Eco Network - a fantastic email listserv dedicated to eco-happenings around Austin. 0-5 emails per day, moderated posting.

Austin Bootstrap Network - a loose organization of people starting their own businesses by “bootstrapping”, generally referring to self-funding and working on a small to non-existent budget. Free to join, and great resources for entrepreneurs. There’s even a Sustainability Subgroup for entrepreneurs interested in starting businesses related to renewable energy, green building, energy conservation, and related areas.

Please feel free to post comments to this blog below.

Thanks for reading,

Jason Burroughs, DieselGreen Fuels

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Today, I am happy to announce a major expansion of our business!

We now have 6 locations across Austin - from Bastrop to Oak Hill, from Manchaca to the UT Campus, we’ve got you covered.

The price varies by retailer, but is in the $4.40 - $4.50 range. Please see our Station Locator page (opens in a new window) for complete information, including Google Map.

We are actively seeking partners to expand north - we need locations on 183 North (Lamar to Leander), and I-35 North (183 to Georgetown). For a $5000 investment, an existing business can add a turnkey biodiesel station. Contact me at 512-247-3835 for more info.

Also, I want to remind everyone that we have an Open House at our facility every Tuesday night from 7-10pm. We sell biodiesel (B100) and vegetable oil for 10 cents off retail price, answer questions about everything we do, and show the public how we are transforming Austin’s used cooking oil into biofuels. We often have 10-20 people show up, some with alternative fuel vehicles.

I’d like to thank the many people who we met at the Austin Green Living Show we attended and presented at. There are so many people in Austin interested in helping the environment, it really helps to know that what we are doing is appreciated!

One last note - we are seeking additional restaurant partners to collect oil from for our Fryer to Fuel program. If you own or operate a commercial kitchen, or know anyone who does, please contact us to get started. It’s a free program, and we also pay a finder’s fee. Contact us for more info.

As always, thanks for your support, and we look forward to reducing pollution, lowering our dependence on foreign oil, and helping Austin be the greenest city in Texas.

Jason Burroughs

Tags:   biodiesel · news · svo · update · wvo1 Comment

First, I’d like to thank everyone reading this for supporting us. I recently made the switch from a somewhat stale messageboard over to this blog. I took the liberty of subscribing everyone to the blog that was on the site, so if you’re getting this with no idea why, feel free to unsubscribe. I apologize for duplicate subscription notifications, but now I’ve got all the bugs worked out. Going forward, I would expect a message a week at most, probably more like once a month. If you’d prefer to get updates via RSS or other method, go to the blog and choose that method.

BIODIESEL UPDATE:

For the second week, we are struggling to find adequate supply of B100 to support our Austin customers. We are completing a major expansion of our operation, and are practically crippled due to lack of biodiesel availability. We hope to have a small load delivered on Monday, and will be making an announcement of our new locations at that time. We hope the new load will be at the same price as before, but are bracing ourselves for upward pricing trends. This is a complex subject that we get lots of calls and emails about. There’s no 5 minute answer, but know that we are working every day to bring you the best quality biodiesel at the most competitive price. While we may not stay at or below the price of diesel forever, we will always provide you a product that you can feel good about using, and is good for your car or truck.

Lucky for us, we chose a somewhat challenging path early on - concurrent with our biodiesel sales, we are collecting used cooking oil from local restaurants. This biodiesel feedstock will prove to be the foundation for our business, and although the biodiesel industry as a whole is doing poorly right now, the large feedstock providers are thriving (think OPEC, but on a smaller scale). We always have plenty of filtered WVO for sale, and are working to produce enough to be turned into biodiesel for our customers.  We offer a $50 bounty for anyone who gets us a new restaurant source! We have promotional materials online at http://www.dieselgreenfuels.com/prospectus.pdf.

RECOGNITION:

Check out this month’s Austin Monthly magazine - we are featured on the table of contents, and in a full article! We saved a pdf of it at http://www.dieselgreenfuels.com/AMM.pdf.

We were also profiled in the Austin Chronicle last week for our position against TCEQ regarding the use of B99.99 biodiesel. I would never guess I would be at odds with a governmental environmental agency - but they are being unreasonable and regulating our industry in a manner that hurts the economy and ultimately has the opposite environmental effect of what they’re supposed to be doing. Read all about it here.

UPCOMING EVENTS:

In two weeks, join us at the Austin Convention Center for our second year at the Austin Green Living Show. We’ll have a booth set up, talking to the public about biodiesel and waste vegetable oil, and I’ll be doing a 30 minute presentation on Sunday at 3PM about biodiesel and veggie oil as fuels.

Every Tuesday night, we have our Open House at our warehouse, 5217 Cesar Chavez St. We invite the public to come out and see what we do, ask all those burning questions about renewable fuels, and see cars that have been converted to run on vegetable oil.

HOW YOU CAN HELP:

As the market for biodiesel grows, we are getting an increasing volume of calls, emails, and other inquiries. Help us by providing feedback on our business. Should we expand the FAQ on the website, make bigger signs at our retail outlets, provide more promotional material? We are always seeking alternative energy advocates to help us get our message out there. Although we have no paid positions available, we would welcome help on a volunteer basis on Tuesday nights to pump fuel, run occasional errands, work on making copies or getting supplies, and possibly answering the phone (cell phone you’d carry around during business hours). This is not a program that we have set up, nothing formal or pre-defined. We are seeking the right person with skills to work with restaurants about oil, customers about our products, and overall intern type work. If you are interested, send a resume and cover letter to info @ dieselgreenfuels.com

Tags: 3 Comments

For those interested in working with renewable fuels, here’s how I spent my Saturday:

1PM - Started my work day

• After eating breakfast and running personal errands, I went to Office Depot to get materials to make brochures and marketing materials. Then I went to Crump’s Plumbing to get a pressure reducing valve to repair a customer’s vegetable oil pumping station because the Fill Rite LP50 oil pump is not compatible with the Sotera 825 meter (made by Fill Rite and sold by them for this application).

• Replaced the vegetable oil filter in my converted 2004 Golf. Over the last week, I had started losing power at higher RPM’s, probably due to accidently bypassing the 1 micron filter on our retail pump, which allowed some extra crud to get into the system.

• Installed a 1 micron filter between our dewatering system and our retail pump to catch crud generated by the boiling process. Some non-oil particles carbonize, resulting in sludge build-up.

•  Drove to Round Rock and bought 2000 pounds of road base to even our our driveway, and to cover what used to be a grassy area in front of our tank farm, but is now a mess of dead grass from biodiesel spills. Spent a couple of hours shoveling it from the back of the truck.

• Pumped 1200 gallons of B100 out of our 10k tank to find out exactly how much inventory we have left. With the price of diesel at $4, we are burning through the fuel much faster than usual.

• Started a new batch of oil to dewater in order to be sold as fuel for converted vehicles

• Sold biodiesel to a group of people traveling the country in a school bus converted to run on solar power and waste vegetable oil -

10PM - Came home

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With the price of diesel nearing $4, it’s a good time to reflect on the relative value of biodiesel and used cooking oil, and ultimately answer a difficult question: Why does the cost of biodiesel seem to creep up with diesel?

This is the first in what may become a series of topics - future articles may explain the value of a distributor in the fuel supply chain (why it’s not always a good idea to cut out the middle man); the effects of government intervention (subsidies, tax relief, and environmental legislation) on the biodiesel industry; sustainability in biodiesel production; and any other topics suggested by readers.

First, let’s talk about the biodiesel supply chain, in a somewhat simplified model. Crops are grown and harvested, seeds are crushed to extract oil, and the oil is made available for sale. From that point, the basics of biodiesel production:

1. Biodiesel producer invests in plant (typically millions, although possibly less for a very small plant)

2. Producer sources “feedstock” (oil), and other raw materials (methanol and catalyst)

3. Producer converts the raw materials into biodiesel and finds a buyer (usually a distributor)

4. Distributor takes the biodiesel in bulk, blends if appropriate, and finds a buyer (fleet customers, retail outlets, etc)

5. Customer fills up with biodiesel, breathes easier

Most people do not understand the complexities of the supply chain, and think it’s as simple as “marking up” a product in order to make a profit. Unfortunately, there are a number of factors that make it more complex than this. I can’t emphasize enough - the biggest factor in biodiesel production is the price of the feedstock oil. Soybean oil is currently over $4 per gallon - just for the oil! Subtract the $1 per gallon federal subsidy, then tack on production costs, and it’s easy to see why B100 at the pump is over $3.50 per gallon. Even the cost of used cooking oil is over $2.50 per gallon.

Aside from the feedstock, 20% of the biodiesel reaction is methanol - a toxic chemical that has fluctuated wildly in price. In the past two years, it’s gone from $2 a gallon, up to $5, and most points in between more than once. Interestingly, methanol use could be cut in half with the right production system, but that costs several hundred thousand or more - a cost only worthwhile if methanol goes above a certain threshold, which we are at today.

Several years ago, when oil and methanol were about $2 per gallon, biodiesel investors flooded the market with money for new plants. My phone rang daily with someone offering the promise of B100 at a competitive price, just as soon as the plant was finished. Fast forward to 2008, and more than half of all plants in the country are shut down or operating at massively reduced capacity. What happened? The feedstock providers looked at the downstream value of their products, saw massive growth in the biodiesel industry, and raised their prices to take a chunk. While biodiesel investors planned on major market growth, they didn’t seem to plan for their margins to be eroded out from under them.

This leads me to my next point - vegetable oil as a fuel. With the market price of used oil as a feedstock starting to approach $3, we can’t afford to sell it for less than its market value. Based on our calculations, we could turn every bit of oil we have into biodiesel, at a market price of $2.60 per gallon. Therefore, it will be our policy going forward to sell our WVO at this market price. It is assumed that the price of WVO will generally stay about $1 lower than B100, which will roughly track the price of diesel. This was a hard decision that we came to only after much discussion, and the realization that we are not in business to subsidize the public’s fuel cost.

So, here we are - selling B100 for $3.50 per gallon, AFTER the 50 cent subsidy. Our meager profit unchanged; meanwhile, the price of feedstock and other materials continues to climb. While writing this post, I was IM’ed by a broker offering me B99 from soy for $4.26. I hope our customers ride this out with us - without our loyal following of fanatical fuelers, we have nothing. I would not be surprised if our costs (and therefore, price) jump 40-50 cents in the next 90 days.

Final thought - biodiesel IS a replacement for diesel fuel. Therefore, it has roughly the same market value as diesel. Let’s forever dispel the notion that it should be cheaper than diesel. In fact, it’s a premium product, renewable, made in the US, better for the environment, better for your engine, and better for the world. Just like organic food costs more than mass produced, factory farmed food; biodiesel will generally cost more to make than petroleum diesel. If you’re an organic food shopper, biodiesel should be on your shopping list.Jason

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Last month, as I was putting the finishing touches on a VIP customer’s vegetable oil fuel system (my own!), I was having trouble with intermittent stalling and hard starts. I pulled over as it died, and I cranked for minutes before it began a choppy idle. Of course, I was supposed to be meeting a customer at the shop, and I was within a hundred yards when I gave it that last rev, which killed it. I wanted to let it idle for awhile, so I locked up and ran to the shop to meet the customer. When I ran back to the car 10 minutes later, I found two police cars writing me a ticket!

 I tried explaining the situation to the police, but they didn’t understand or didn’t care. As I got my ticket ($150), I tried to drive away, but the car immediately died again. I flagged down the same cop, who expressed surprise when I said the car wasn’t working. She casually said “ah just go to court - the judge will throw it out”. So that’s just what I did - only to be told by the prosecutor that they only have to prove that I did indeed leave the car running, regardless of intent. Rather than face the prospect of $200 in court fees and even more in fines, I accepted the $65 fine and CONVICTION for leaving my car unattended.

 Quote of the day (as said by Izzy of Mean Green Trucking last year): “Shit, man, they should be paying US to do this stuff!”

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There is a guy in Louisiana who heard that farmers used to blend a little kerosene and gasoline into vegetable oil and run it in their diesel trucks. He added a commercially available cetane booster rebranded as his secret sauce, then sells the plans under the name “Diesel Secret”. He paid top dollar for Google adwords matches, so just about any search for biodiesel or WVO will generate his ads. Because of the success of the ads, the question has come up more and more - “can I use vegetable oil in my unmodified engine?”

While biodiesel is itself considered an experimental fuel, the use of WVO is sort of the stepchild. Most people in the biodiesel industry neither support nor endorse the use of unmodified vegetable oil as a fuel. However, there is a vibrant community of vegoil users - even a national organization (which, unfortunately, is shutting down) was formed to support these efforts. By using a heated second tank, it has been shown that vegoil can be used in most diesel vehicles with fantastic results. There isn’t much debate that it can be done, and most of the back and forth relates to either poorly designed systems or misconceptions/mistakes (in part due to poor cooperation among vendors).

…and then there’s Diesel Secret, aka DSE. With diesel prices hitting an all time high, and alternative energy being the buzzword of the decade, many people are confused about all the choices - ethanol, biodiesel, LPG, CNG, hybrid, etc. Then they hear that they can drive for FREE. Well not quite free, you still need a bit of nasty kerosene and gasoline and the special sauce - but they claim 40 cents or so per finished gallon. Some have tried and failed, while others have had good luck. Overall, there’s no consensus, no community, no knowledge base, not a single company who would make the finished product and stand behind it. Some say that this type of blending is the new “homebrew”, but I think it’s way too early to tell.

My personal opinion is that the risks are too high, the kerosene, gasoline, and special sauce too nasty for me to even consider it. As a business, I have to say that we don’t support, approve, endorse, or otherwise even like the idea of using a blend of vegetable oil and other chemicals directly in an unmodified diesel engine.

So, please stop calling and writing - we don’t want to hear about it, don’t want to give advice, and don’t want to get involved. I’m sure this may sound a bit harsh to some folks, and I mean no disrespect. But as a business, we have to draw the line somewhere - and that line is directly between the not-so-secret idea of blending oil with kerosene/gasoline and those folks applying heat to thin the oil, or converting it into biodiesel.

This is our official position and will not be changing unless some day there is a considerable body of scientific research and evidence to support an exact formula that will work for a given application. Until that day comes, I suggest the proponents of mixing should start their own messageboard and begin to build the kind of community that we have for vegoil and biodiesel.

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This was an exciting weekend. After a very rough week trying to find biodiese after the recent “ban”, I was able to relax a bit and enjoy the company of fellow “social entrepeneurs”. Met some very interesting folks and competed in a business plan competition - and took 3rd place! Considering the winner’s idea was GREAT and the second place went to a free library of sorts, it was a great win.

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This week is the one year anniversary of DieselGreen Fuels. After a year of trying to work in a cooperative environment with a dozen or so others, it became clear that the non-profit coop was not meant to be. This time last year, we spent a weekend in Denver hearing for the first time that many others had found the same path just as difficult, and would ultimately disband or turn into real businesses. This latter route is the direction we took, forming an LLC between myself, Elizabeth Patrick, and Michael Mullins.The past year has been a real rollercoaster ride - working nights and weekends while friends are out having fun; missing time with our significant others; learning the ropes of running a business; getting licenses for the various business activities we are working towards.

The first few months were spent trying to figure out what all we were going to do, and we have settled on the following:

• Biodiesel distribution - B99 (except during the coldest parts of winters) sold to retail stations - currently all retail sales go through Eco-Wise
• Biodiesel retail - B99 on a limited basis from our own warehouse. We don’t take credit cards and are only open 7-10pm on Tuesdays, but we service a select crowd of enthusiasts that were with us from the beginning. We feel this is an important part of staying close to our customers and the community
• VegOil distribution and retail - clean, dewatered vegetable oil collected by us for the purposes of burning in a diesel engine or as a feedstock for biodiesel.
• Home and commercial refueling stations - from 180 to 1000+ gallon systems, we offer a steel tank with pump, meter, filter, and auto-shutoff nozzle just like you’d find at a gas station
• Vehicle conversions to run directly on VegOil - our preferred vendor is Greasecar, but will install the kit of customer’s choosing

The next several months were spent getting licenses:

• Texas Rendering License to pick up vegetable oil for processing
• Texas Motor Fuels Tax License to haul diesel and biodiesel around, and sell it wholesale
• Sales Tax Permit to sell retail goods
• Business insurance, including auto
• IRS registration to pay excise taxes on fuel

The past six months have been us getting our first major customer (Eco-Wise) and taking our collection and delivery process through several generations into our current system of “suction, settling, centrifuge” for oil collection.

We’ve also taken on two interns, Adam and Matt, who we hope will help us build our restaurant clientele to the point where Michael can work full time starting in September.

I hope to update this blog regularly to include news about the business, thoughts on the industry, and offer a place for others to comment.

Jason Burroughs

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