Biodiesel in California: the danger of DIY

Converting your car or truck to run on biodiesel instead of petroleum cuts emissions and minimizes our reliance on oil. Plus, it’s supposed to be cheap. Picking up used grease at local restaurants, running it through a machine and making your own fuel can’t cost nearly as much as the $4.50 or so gas stations are now charging per gallon. Or so you’d think.

It turns out that there are hidden costs for those who wish to be eco-friendly and enterprising. And if you don’t pay, you risk the wrath of the state of California.

“It’s really difficult for a person who wants to do the right thing on the bigger-picture level,” said Steve Bash, who runs the Sacramento Biofuels Network, part information clearinghouse and part biodiesel buyers cooperative.

It’s difficult because the state makes biodiesel do-it-your-selfers jump through all sorts of hoops before their grease burners are deemed street-legal.

For example, to recycle used cooking oil from a neighborhood restaurant, you are expected to get a grease-hauling license from the California Department of Food and Agriculture. Then you need to get registered as a “fuel supplier” through the state Board of Equalization, so the state can tax you for every gallon of biodiesel you make, buy or “borrow.”

Some biodiesel enthusiasts are well-versed in the state requirements for legally hauling used kitchen grease from restaurants and turning it into a fuel for use in the gas tank. On the other hand, Bash said he knows dozens of people who run their cars on biodiesel and used vegetable oil who remain blissfully ignorant.

“Even if they do know, they just want to deny it anyway,” Bash said. “To have to pay the taxes and the transporter’s license—on top of the fact that it’s already risky and you’re already doing the right thing—is hard for the average individual to justify.”

Not too long ago, the only trucks picking up kitchen grease discarded by restaurants were owned by large companies, like renderers, who would get paid to haul the used oil, sometimes hundreds of miles, to recycling plants.

Since biodiesel has become more popular—approximately 250,000 people in the United States, the largest portion of whom live in California, are driving biodiesel-run vehicles—more and more individuals find themselves expected to adhere to laws meant for big companies.

Just registering as a grease hauler costs $100. Then the California Department of Food and Agriculture, specifically the Meat and Poultry Inspection Branch, charges $300 per vehicle. Before you even apply, though, you must be insured on that vehicle for at least $1 million in liability in case of a spill. Not surprisingly, there are only 14 registered grease haulers in Sacramento County.

And while the independent biodiesel wrangler may have the best intentions, he can be a nuisance, too.

“Even if they just want to save money, this is a good thing,” Bash said. “What’s not good is if they make a big mess behind the restaurant, or start stealing grease.”

Theft has in fact become a huge problem, as evidenced by increased fees and annoyed renderers. The per-car registration for hauling grease used to cost $75. At the beginning of 2008, it was hiked up to $300.

“There was a problem with theft of the kitchen grease,” said Steve Lyle, director of public affairs for CDFA. “The registration was created to help solve that problem—to be able to investigate thefts.”

Chris Ottone, who owns North State Rendering Company, which picks up all animal byproducts—including kitchen grease—from Sacramento to Fort Bragg, agreed that stealing has been a problem for the past two years, since the price of gas started to rise.

“It’s become an epidemic,” Ottone explained. “And it’s not just me; it’s every renderer. In L.A., they’re having wars almost.”

The other trouble spot for biofuel enthusiasts is the state’s road tax. The California Board of Equalization charges an 18-cent-per-gallon road tax on biodiesel. The diesel fuel tax applies here to biodiesel and anyone who processes it, even for their own use. And if you make your own biodiesel, you are technically supposed to get a diesel fuel supplier’s license. According to the Los Angeles Times, there are only 70 people in the state who carry such a license.

“I understand people don’t want to be regulated,” said Bryan Gabbard of Ecocab, a Chico taxi company that started with an old Mercedes converted to run on vegetable oil. “But at the same time, if somebody starts using vegetable oil instead of gas, they’re no longer paying the road tax and aren’t contributing to our state and our roads.”

But in order to pay the tax, drivers have to be aware of it. Even Gov. Arnold Schwarzenegger, who runs biodiesel in one of his Hummers, didn’t know about the road tax. He only started paying it after an L.A. Times story pointed out that he was breaking the law.

Buying pre-made biodiesel eliminates many of the hurdles people must jump through in the process. A grease hauler’s license isn’t needed, because you’re picking up a fuel rather than used kitchen grease. And the road tax is taken care of—it’s built into the price of the fuel. One downside to commercial biodiesel is the cost: It’s a commodity, so it follows the basic rules of supply and demand, and, as Bash pointed out, it usually follows the petroleum prices.

As far as Gabbard is concerned, biodiesel is out and the hybrid is in. He recently replaced his biodiesel taxi cab with a brand-new Prius. “The future is electric vehicles run on solar on your house,” he said.

There is hope on the horizon for the DIY biodiesel folks, though. A bill going through the state Assembly (Assembly Bill 2240) would make biodiesel exempt from the diesel road tax. Another piece of legislation, an amendment to the Food and Agricultural Code (Assembly Bill 1846), would waive the $300 per-vehicle hauling registration charge for individuals carrying not more than 50 gallons of used kitchen grease for their own use.

“That’s a step,” Bash said of A.B. 1846. “It keeps everybody licensed. The law is just written mostly for the industrialist because a new way hasn’t been shown yet. It doesn’t really account for or support the grassroots movement.”