About Jason Burroughs

Owner of DieselGreen Fuels in Austin, TX

Open Letter to the City of Austin

Last night, I spoke to the ZWAC, a commission put together by the Austin City Council to discuss issues related to the Universal Recycling Ordinance. We’ve long had problems servicing food trailers.

Here’s what I said:

Good evening, and thank you for the opportunity to speak. My name is Jason Burroughs and I am the owner of DieselGreen Fuels. Since 2006, we have been collecting used cooking oil from restaurants in Central Texas – mostly Austin – to be recycled into clean-burning biodiesel. We have five employees, including myself, and we have displaced millions of gallons of petroleum products since we began operations.

Over the years, we have worked with brick and mortar restaurants, commercial kitchens and institutions, as well as the emerging Austin food trailer community. In the summer of 2011, we received our first call from a trailer customer who said that the city had come out and told them they had to remove their grease bin, or face being shut down. Within a week, we had similar calls from other trailers, and continue to get calls regularly.

I spoke with the city code compliance team, and ultimately had more than a few phone calls and emails with their staff. They claimed that all “liquid waste” must be serviced at the trailer, or driven back to their commissary (the commercial kitchen that every trailer must be associated with). I did my research and confirmed what I had learned from being in this business – used cooking oil, called yellow grease by the industry, is NOT liquid waste. EPA defines liquid waste to include raw sewage, and trap grease – the wastewater coming out of sinks and hand washing stations.

I explained this to the city, and provided documentation. They did not disagree with me, but next claimed that trailers must return to their commissary to “be serviced” with no definition of what servicing is. Because they are mobile, the city claimed, they can not have a permanent container for their oil. I came back with a contract with the landlord for the property, so that the container belonged to the property owner, and the trailer could put the oil in there, by way of contract with their landlord.

The city said that the trailers are not allowed to put anything in external containers, no matter if the landlord provides them or not. I explained that ALL trailers use dumpsters for solid waste, either provided by a landlord or otherwise. Code Compliance told me that even the dumpsters are not allowed to be used. When I pressed them, they said that “nobody has complained about that” but agreed with my assessment that if one person took a picture of a trailer employee throwing a trash bag in a dumpster, the city would then have to start enforcing that rule as well. Even stranger, if a trailer’s customer ate at the trailer, they would be allowed to throw their plates and trash in the dumpster – but if a trailer employee picked up the customer’s trash and threw it away, it would be a violation.

I’m here today asking for common sense, and uniform enforcement of the mobile vending rules. I ask that the city allow trailers or property owners to contract with a licensed used oil hauler such as myself, to recycle the used oil in a responsible and safe manner. Without this, oil finds its way into the sewers and the landfill – something nobody wants. Thank you.

Save the Date – Saturday, May 21st Biodiesel Bash in Austin!

More details to come in a couple of weeks, with probably an Evite to encourage RSVPs, but I wanted to get this information out now for planning purposes. In coordination with the Sustainable Biodiesel Alliance, DieselGreen Fuels will be having a get together for our customers, partners, and friends of the business. Please save the date and make plans to visit with the DieselGreen team – Jason, Mike Patrick, Laurie, and Moya. Jeff Plowman of the SBA will be there, and we are hoping to have Pacific Biodiesel join us as well, from Hawaii. Stay tuned for more information. Please check out our Facebook page (links open in a new window) as well.

Other news:

Biodiesel (B100 from used cooking oil, collected in Austin by us, produced by Pacific Biodiesel) is still cheaper than diesel at Ecowise ($3.40 – $3.50 as of 4/26)! 110 West Elizabeth St., 326-4474.

I will be in Austin from May 15 – 25. If you’ve been wanting a business meeting with me, contact me at jason@dieselgreenfuels.com to set up a meeting during this time period.

Jason’s end of 2010 update – The Good, the Bad, and the Ugly

Hi everyone,

It’s been awhile since I gathered my thoughts with an update on biodiesel, the business, and some personal things, so I’d like to take some time and put it down. Topics include my taking a job out of state, the price of biodiesel, the effect of unethical competition on good people, a potential get together in the spring, and more. Hope you’ll read through with me.

The Good: Lower prices!

The Bad: The usual ups and downs in the biodiesel world

The Ugly: Fuel theft, oil theft, dirty competitors

As some of you know, I recently took a job in Seattle. I’d like to explain my decision, what it means to DieselGreen, and to our customers. Anyone who has been a customer for long knows that it has been a struggle in many ways since the beginning. Whether it is TCEQ’s Morris Brown saying that biodiesel is bad for the environment (all links open in new window), or the World Bank falsely claiming (then quietly retracting years later) that biodiesel causes world famine, our attempt at making renewable fuel from local waste has been one of the most challenging endeavors of my life.

I could write a book (and still might) about the lessons learned. I’ll share a few here:

  • Don’t start a business with people you don’t know.
  • Having the right employees, partners, and vendors in places is just as important as having the right idea.
  • Everything costs twice as much and takes twice as long as you think it will.
  • The right tools for the job can save the day, and even a life.

First, I’ll talk about people. When we started as a cooperative, we had a mix of passionate people, hobbyists, and people just chatting about biodiesel. We wound up with three of us who were serious about trying to eventually do it full time, and we made a business out of it. We kept our day jobs, with no salaries, just working nights and weekends. After two years together, and a lot of time and money (mostly debt in my name), I demanded a larger role and one partner decided to leave. After six months with the one remaining partner, I had very strong feelings that it was time to part ways and forced the issue – legally taking over the loans we had, still no salary, and giving the other partner the veggie conversion side of the business. It was unfortunate that two people that had become friends were no longer going to be a part of my life. I wasn’t close with either of them before, but it is definitely a lesson learned in many ways. I could go into detail about the personality conflicts that led to me taking full ownership, but the last straw was when my former partner forged a legal document to a trailer we had bought and broke off the serial number, all to avoid having to deal with the original owner who had not properly registered it. This put our business in legal jeopardy, and I was not willing to do business that way. I basically fired him, paid him off, took over his debt, and gave him the conversion business to get him out of my life.

Regarding financing – when the three core members of the Austin Biodiesel Cooperative started DieselGreen Fuels in 2006, we used mostly my own good credit and name to get started. We spent almost $200k to buy equipment and other resources, and figure out what we were going to do. We must have built every system and process three or four times, and along the way, carried around two or three versions of each one. After all those years, I was recently able to cut loose all of our old baggage. At the end of 2010, we are lean and mean. We own little more than our collection vacuum truck and our delivery fuel truck.

The truth is, DieselGreen makes no money. I haven’t taken a salary since we started. My projections show that most of our “profit” will go to pay down our debt until 2013 or so. Everything else keeps the lights on and pays our two employees – Laurie King (my mother), who answers the phones, and Steve Baribeau, our driver – both of whom live in the Austin area. Our web host is Austin-based Source Spring, owned by the fabulous Mellie Price, and supported by the awesome Jesse Jack. Our software, Biodiesel Control Center, was written for us by Austin-based developer Chris Continanza. Our biodiesel is produced by Pacific Biodiesel Texas, a joint venture with Willie Nelson, among other investors. Sure, it’s partially owned by people living in Hawaii, but that’s ok with me. They happen to employ people living in Hillsboro, have been making ASTM-spec biodiesel commercially longer than anyone else in the United States (seriously!), and are a major part of the Sustainable Biodiesel Alliance. I’m on the board of the Biodiesel Coalition of Texas, and have been asked to stay on. Since I’m still active in the Texas biodiesel community, apparently I’m still considered an asset.

Also, this isn’t the first time I’ve taken a job outside Austin. Although I’ve considered Austin home for most of the past 15 years, I chased a couple of startups to Silicon Valley in the early 2000’s, each time returning to Austin to where most of my family lives. Now that I’m married, and both mine and my wife’s extended family is in the central Texas area, we’ll return at some point. Since we own a house in a great neighborhood where we have plans to raise our son (who is now 2 years old), that eventuality will probably be when he’s ready to start kindergarten at Maplewood Elementary.

I should also mention that I didn’t start DieselGreen to spend my nights, weekends and holidays working for free! I did it in the hopes that it would be a full time job that could provide a living wage for my employees, and eventually for me. Although it seemed like we were headed in that direction in 2008, the biodiesel industry faltered with the rest of the economy, and we’ve had to push back our hopes for that possibility several years. If things go as planned, I will leave my long-time technology career in the next five years, run DieselGreen full time, and be back in Austin, in the house that we had a 3.4KW grid-tie custom solar system with battery backup, built to support a biodiesel-powered generator in our basement! Until that happens, I will continue to have a full time job managing data storage networks, and count on my employees to handle the day to day work. Hope to see you all when we are in town, and looking forward to serving your biodiesel needs for the long term.

Now, I’d like to talk about the price of biodiesel. Since DieselGreen started, we’ve seen the price of fuel go from as low as $2.65 to as high as $4.95. The seemingly random fuel pricing has been a constant source of frustration for us and our customers, and has led to speculation that we are “price gouging” when the price of diesel is high. I could write at length about the various factors at play – the intersection of the agricultural commodity market and the energy commodity market (diesel fuel and vegetable oil), the tax subsidies, the get rich quick schemes implored by “splash and dash” tankers, and a lot more. The short answer is that it’s a lot more complicated than it should be.

The good news is that there IS something we can do and have done about this. Having some control over the supply chain from end to end – raw materials to manufacturing to distribution to retail – is the only way that you can truly control the cost of biodiesel to the consumer. Of course, if the price of diesel goes to $10 a gallon, and the retailer charges $2 for biodiesel, every diesel owner within 100 miles is going to drive there until it’s gone, leaving no fuel for regular customers. Since there isn’t an unlimited amount, we have to decide on a single policy – price it so that we sell every drop at the absolute highest price, or sell it at the lowest possible commodity value to compete with diesel and get the volume up. My belief is that the best thing we can do is be honest about our pricing and tell you where the price is coming from and where the money is going – and let you make your own decision from there.

That leads me to where the cost of biodiesel comes from. It is generally accepted that to produce a gallon of biodiesel from used cooking oil, a biodiesel producer expends about $1 on chemicals, labor, and other costs (including their profit margin). It is also generally accepted that it costs about $1 per gallon to collect used oil from restaurants. So you could safely assume it costs us about $2 per gallon to collect and process a gallon of oil into biodiesel. Since about 20% of the raw oil you collect is water or sludge (french fries, wontons, etc), and 10% is lost to by-products, that raises our cost to $2.60. Road tax is 25 cents, and transportation is about 10 cents. So now we are in the $3 per gallon range. Let’s just say biodiesel costs $3 per gallon to collect, make, transport, and sell (wholesale), fully loaded, irrespective of any government subsidies or incentives. Diesel at the pump is $3 per gallon right now, so how much should biodiesel cost?  Well luckily, the $1 per gallon Federal Excise Tax credit was just reinstated.  Then, add in a credit for “RINs”, which have been as high as 60 cents per gallon, and it’s getting better. Unfortunately, you can’t bank on that credit year after year, and the RIN system comes with some real baggage (not every producer offers them, nor is obligated to pass them on, and the regulatory overhead to report them is many thousands of dollars per year). So you have this crazy, up and down system that you sort of have to count on not being there to pay your bills with, and rely on the basics of your cost plus margin, minus your expenses to be in business. Any subsidies that come through might allow expansion or help you stay in business when times get tough.

Now, to all of this, tack on the fact that some oil collection companies are talking about paying the restaurants for their old dirty grease, on the idea that there is a commodity value for their product. We’ve seen this in the past, when the market was really high – desperate people started fledgling businesses going after our accounts by promising to pay up to a dollar a gallon, then went bust when the market dropped to a level where that was a ridiculously high amount (it was stupid to begin with). My goal is that once DieselGreen is a profitable company, and I have begun to earn a living at it, then I would be happy to offer a dividend back to our oil sources – so long as my biodiesel customers are still able to buy fuel at a reasonable price. We just dropped our price again, after hitting an important milestone with our producer – collecting enough oil to not only make into our own fuel, but to sell to pay for the chemicals and labor. So now our overhead is lower, and we’ve passed that savings straight to the end user. This was followed by the extension of the tax credit, which I expect to NOT be renewed beyond 2011. The conclusion to this pricing talk is that biodiesel in Austin has come down from our historic high into the mid $3 range, where we hope it will stay for the long term.

Another subject is WVO, aka SVO. For reasons I will discuss in detail below, we are unable to sell filtered, dewatered vegetable oil. We don’t have it, won’t have it, and can’t tell you where to buy it. I wish I had a better answer about this, and hope that eventually there is a better answer. A group of WVO users should really consider banding together and setting up a coop of sorts to filter and dewater in bulk. I would be happy to work some very favorable pricing out with you for raw oil. I just can’t do the processing. If this is something you’d like to explore, please contact me. If you are one of the customers we did a conversion for, thinking we would have oil for you for many years to come, I must humbly apologize. It is very unlikely that we will every have the kind of clean, dewatered vegetable oil that we used to have on our Tuesday nights and at Ecowise. One reason is because the City of Austin fire marshall said that even though vegetable oil is not flammable, the International Fire Code changed in 2009 to treat combustibles as flammables – and therefore we would have to have a mountain of fire safety tanks and equipment that would be impossible to afford with our volumes. This is something we could have never predicted in 2007. The second reason has to do with the legality of the rendering license, and more details are below.

Finally, I have something very ugly to talk about. I have avoided speaking publicly about this, but I feel I have no choice at this point.

First, the prelude. In 2006-2007, DieselGreen had what is known as a Texas Rendering License. We took used cooking oil and filtered it so that we could sell it as WVO for fuel, based on our IRS permit – which we were one of only a handful in the entire country to have. We were also in the business of buying and reselling biodiesel. Over time we started collecting so much oil that we had enough oil for the WVO customers, and started taking the extra oil to Pacific Biodiesel to be “tolled” into biodiesel. This lowered our cost substantially, which was a big step towards being competitive with diesel.

One fateful day in 2007, a certain partner of mine failed to show up to help me receive a biodiesel delivery, and we didn’t have a person to hold the 100 gallon per minute hose into our holding tank. Wouldn’t you know it, it popped off, leaving me with a very big mess to clean up. This left us with a bunch of oily rags, which were piled up by our well-meaning interns. The next day, they spontaneously combusted (actually just smoldered), and got us kicked out of the property we had worked so hard to get licensed in – and we lost our site-specific rendering license. We moved to another property, and in the 18 months in between, so many people had gotten into biodiesel, the state decided to raise the bar for compliance and we were told there was no way we could get the same license without a huge financial investment.

Because of losing this critical license, we subcontracted a one man operation out of Natalia, run by a guy who lives on the property of his rendering plant. He was charging us an outrageous amount per gallon to contract render, but was the only game in town – and even that was 140 miles south, so it was killing our bottom line. We were spending almost $4000 per month paying him to do little more than pump from our truck into a holding tank, remove the water and sediment, then pump into another truck for shipment to Pacific. He refused to negotiate a lower price when our volume increased, and the quality of the WVO we received went from good to bad – as reported by our customers, and reflected by our own experiences running the stuff in our vehicles. The FFA was high, water content was high, and there was nothing we could do about it. Having nowhere else to turn for rendered oil, I started considering options in the summer of 2009. We sold some raw oil directly to renderers, entertained the possibility of selling the company completely, and made another run at getting our rendering license again.

In December of 2009, I made a personal decision that the biodiesel business was more important to me than the oil collection. The renderer and I came to an agreement whereby he would purchase the oil collection side of the business, and I would continue to operate the biodiesel business. At an agreed upon monthly payment over a period of time, the buyer would collect all the oil from our 200 accounts, get to use the DieselGreen name, and get our vacuum truck and a set of tanks and other equipment. I provided hard copies of all our restaurant agreements, and access to our web-based software so that he could verify all of our historical collection data. After running the oil collection business for about four months, payments stopped coming in. Meanwhile, all the oil was still being taken away, and I was buying biodiesel from Pacific at market price, which had crept up and up over time. When asked, Pacific told me the price went up because my buyer had raised the price of the oil to them to a level above market. (This fact will become important later). After a couple of months of non-payment, and failed attempts to collect, I eventually repossessed the business and re-established control in July 2010.

In August 2010, my good friend Moya Hallstein, of Piedmont Biofuels, flew down and spent a week in the vac truck with me, collecting almost 10,000 gallons of oil and literally saving the business from ruin. During the months that my buyer was operating the business, Pacific had been hard at work getting their own rendering license, and we were able to take that oil directly to Pacific, cutting out the middleman and their high contract rendering charge, and saving 280 mile per load driving!

Things were great at first; then a series of events happened – best laid out in list format:

  • The bank that we used to borrow money from years ago called to say that my co-borrower had just declared bankruptcy. No effect to the account, since I legally removed him from our books in 2008, but interesting.
  • The next week, I see a press release announcing a new company promising to pay restaurants for oil and make biodiesel out of it in Austin. I find a similarly named company in San Antonio. Research finds no registration with state agencies (State Comptroller and Secretary of State), and not even a properly filed DBA with Travis County. Phone number is my former co-borrower. Internet research finds a connection to my former delinquent buyer.
  • One of my customers calls to say that my former partner walked in and said “I am taking over for Jason in Austin.” They send me the contract via email. At the bottom is my former buyer’s business name. Now I have learned that my former partner and former buyer have found each other and are working together to go after all the customers that the buyer was collecting from while operating my collection business.
  • My buyer had approached our biodiesel customer, offering their own biodiesel at a lower price – which was easy to do considering they were responsible for the high price of oil to Pacific, and therefore the high price of biodiesel we had been charging.
  • I researched the former buyer to find that membership with National Biodiesel Board (a requirement to produce and sell fuel in the United States) from years earlier has long since expired. There has been no inspection for RFS2, therefore no RINs can be generated, and no legal fuel can be sold. I am advised that any fuel sold by that entity is not legal for sale for on road use. I also research with Texas State Comptroller to determine that they do not have a Motor Fuels Tax License and is not legally allowed to haul bulk motor fuel when they started doing it. They come into compliance after I complain, which has the side effect of tipping them off that I am onto them for their illegal operation. Oh well, small price to pay.
  • The new grease hauling subsidiary takes over a longtime restaurant that my former partner helped me get, and our container disappears within days of their container appearing. Police report filed. Former partner tells police they didn’t take it. In 4 years, we’ve never had theft of a container, and we don’t own a pickup truck, so we didn’t take it. Where’s the tank? Did it grow legs and walk away?
  • This new company takes over another longtime restaurant that my former partner dropped off our container at in 2008. Our container disappears within days of their container being placed. Police report filed, and investigating. Our sticker was covered up with grease, and our contact had left the company, so customer didn’t know who to call. Customer didn’t know whose tank it was, didn’t know who to call, and stumbled on former partner using google. Instead of telling customer “oh, that’s DieselGreen’s tank, here’s their number”, he takes all the oil (350 gallons), as witnessed by customer. We go to collect our container, and it’s gone. Second container missing in 4 years. Second police report. This one is in Lakeway, 28 miles from our shop, up a very steep hill. Nobody goes there to pick up a dirty greasy tank without really wanting to. We’ll see how that investigation goes.
  • Same week, City of Austin watershed protection calls and says someone is going to our collection containers in middle of night, stealing oil, spilling it, then calling in  to their number anonymously saying there is a spill. These containers are ones placed by my former partner, large containers that are out of visibility from the public’s eye, and the spills were not enough to matter, just drips. City tells me they never get calls like that, and that we seem to be being set up.
  • The next week, someone steals 265 gallons of biodiesel from our fuel truck. Gate was locked with combination lock. Same combo on gate lock that we have had for years, never thought to change the combo. It was not broken, but our truck was broken into with the gate combo lock still locked. Only people that have that combo are me, my driver, and my former partner. Research finds that former partner just acquired 1 ton pickup – same size truck that holds 275 gallon plastic totes so commonly used to hold fuel in our industry. $1000 in fuel lost, $300 in truck repairs needed. Former partner also selling biodiesel now, too – and to my own customer, by offering them a lower price. I wonder where he is getting it?

It’s clear to me that these two individuals, with whom I have chosen to not do business with, have decided to team up and work against me, and they are trying to wage some kind of personal war against me. I have no problem with fair competition. If they have a superior product with a value proposition that people find compelling above DieselGreen’s, that is the American Way. DieselGreen has over four years of a proven track record, a partnership with the industry’s longest running biodiesel producer, and an owner who is a leader in the alternative fuel industry – even if I am residing in Seattle.

But let’s talk about what these “other guys” do with their oil. According to the National Renderer’s Association, most of it goes into animal feed. I don’t know about you, but I would rather cows destined for dinner eat grass and grains, not grease. And, an increasing amount of that grease is being shipped overseas, to China and India – even to make pet food! These rendering companies do sometimes sell to biodiesel companies – when they are the highest bidder. The difference between them and us is the contract we have with our customers – that 100% of our material goes to Pacific Biodiesel Texas for recycling into biodiesel. The only time in the past 4 years that this has not happened is when PB Texas was not operational. Even when there is more money selling dog food to China, we are making biodiesel in Texas.

And, if this other party of two does decide to make some biodiesel in the back field of the acreage behind the rendering plant using their unlicensed equipment, there is no telling what quality fuel will result. Excess methanol, unreacted oil, unwashed fuel, water in fuel, the list goes on. Small scale fuel CAN be made to high standards – it’s unfortunately often not. The reason for this is pretty simple – the high cost, on a per gallon basis, of testing. A full suite of ASTM testing costs in the neighborhood of $1,000. If you’re making 5,000 gallon batches, like Pacific, and coalescing 4 batches, your test cost is about a nickel a gallon – and you can test EVERY batch that leaves the plant. But if you’re making batches in the 2,000 gallon size, which is common at the small scale, the temptation to test only occasionally is very high. Early on, in 2007, we made the mistake of letting a load go through without adequate testing that was severely under-reacted, that was made by a small producer.  We learned the hard way that quality is, as Nissan used to say, Job #1. Once PB Texas came online and we established a relationship, we have bought from them 100% of the time fuel has been available. Unlike the trillion dollar petroleum industry, every drop of biodiesel is not created equal. Know your producer and know your fuel. Regardless of where it comes from, as long as every load has a laboratory test result attached to it, you can be sure that you are getting what you paid for. The latest load of fuel we are selling was tested and the results can be found here.

In other news, I am planning a trip to Austin this spring, and would like to have a biodiesel get together of some kind. We had a GreaseUp a couple of years ago for the WVO’ers, and in years past, Austin Biofuels had the Biodiesel Bash. So I want to do something like that this year. Just want to mention it early, and that it would hopefully be in the March or April time frame. Be thinking about it – if you would like to volunteer, have a place in mind, or any ideas about it, please contact me to help out!

I also invite you to ask me any questions you may have. As you can see from my 4000 words here, I am more than willing to discuss biodiesel and these related issues. This has been a labor of love for over five years now. I won’t sit by and let others destroy it. That doesn’t mean that I own it – it just means that I have a stake in it, and feel strongly that I have invested the time to know what’s right. Consider these words a starting point, and call me directly at 512-992-8677 or email me at jason@dieselgreenfuels.com.

As always, thank you for your support. I always appreciate the emails I get – we would be nothing without you. Please look us up on Facebook and join in the conversation there.

PS It’s getting cold in Austin right now! The lab report from Pacific says the cloud point of our latest batch is about 40F. Please top off with diesel – maybe 20-30% this tank – to ensure you don’t have problems starting the next few mornings. If you are driving, and feel a loss of power, consider pulling over and letting the car idle for 5-10 min. When sitting still, with no wind, the heat from the engine sits in the engine bay and melts the waxy crystals that form. That lets the warmed fuel recirculate through the system and can get you going again. Also consider having an extra fuel filter on hand, and a bottle of Diesel 911 or other diesel fuel additive. If you have to replace your filter, fill it up with the diesel additive when you replace it. That will help dissolve whatever may be in the lines, and is good to do occasionally anyway.

Thanks, and Happy New Year!

Jason Burroughs
Owner, DieselGreen Fuels
512-992-8677
DieselGreenFuels.com

Check out DieselGreen’s new Facebook Page

Please check us out at our Facebook Page and click the “Like” button at the top to show your support. If you find that our occasional posts welcoming a new restaurant are cluttering your own wall, simply remove them from your wall by clicking the X. A lot of people don’t realize you can do this, without having to un-Like a page.

I’ve also cleaned up our website, removing references to fuel stations that no longer exist, products we don’t sell anymore (such as veggie oil), etc.

I will still send out a blog post with relevant news and updates occasionally, but will seek to use the Facebook Page to add pictures of current events and stay connected with our member restaurants and biodiesel customers.

Remember – DieselGreen really is Austin’s only source of biodiesel. We collect oil from 200 restaurants, take it to Pacific Biodiesel for processing, then it goes to Ecowise, our exclusive retail partner. Recently, we have seen other people claim to be recycling oil into biodiesel, but this is not entirely true. They are either greenwashing their existing oil collection business, which sends oil into the cattlefeed industry, or are hoping to “cash in” on the growing biofuels movement. If you are a restaurant owner, and are approached by someone that says they want to turn your oil into biofuel of some kind, ask them these questions: Where is your biodiesel plant? How long has it been in production? What is the name and owner of the plant? Is it a member of the National Biodiesel Board? Get all this information in writing and follow up with the EPA, the NBB, and the Texas State Department of Health. Don’t let people sell your oil to dog food companies in China when they offer a penny a pound more than the biodiesel companies offer. DieselGreen’s oil goes straight to Pacific Biodiesel 100% of the time, regardless of where the market for other commodities is headed.

DieselGreen, Pacific Biodiesel Texas, and Ecowise are making a difference in Central Texas – because of YOU. Thanks for sticking with us. We are hopeful that Congress will pass the Biodiesel Tax Credit, which will immediately reduce the price at the pump by 40-60 cents.

Our biodiesel now at Ecowise

I am happy to announce that Ecowise is once again carrying our biodiesel, which is produced by Pacific Biodiesel, from used cooking oil collected by DieselGreen in Austin and San Antonio! Call for current pricing (326-4474), but it is down in the $4 range (and a cash discount) from a high of almost $5. We hope to get the price even lower when the federal tax credit issue is resolved.

Also, I would like to sincerely thank you all for your letters and phone calls of support. It helped tremendously to know that you value our model of locally sourced feedstocks and locally produced biodiesel enough to make your voices heard.

If you ever have questions about our fuel, or biodiesel in general, please don’t hesitate to give me a call or send me an email directly.

Jason Burroughs
DieselGreen Fuels
512-873-4882

Important info about pricing, availability, and the future

This has been a tough year for DieselGreen and our customers. We’ve seen the price of vegetable oil used to make biodiesel go up by $1.00 and watched as Congress tried to re-enact the $1.00 per gallon tax credit that is currently tied to the “jobs bill”.  Also, as some of you know, I outsourced our oil collection to a third party from south of San Antonio late last year. I did this for a number of mostly personal reasons, but the side effect is that our pricing has, since then, been “at the market” rather than being based on our costs plus markup. Because of the unfortunate issues with oil pricing and the tax credit, this led to fuel at the pump as high as $4.95 per gallon.

As of July 1, I took back over the oil collection and severed the relationship with the company I was outsourcing to. This means we are collecting oil in house again, and after jumping through some legal hoops, will be able to offer product that is made from our own collected oil. This will take 2-3 months to be fully realized, as we collect oil weekly but only have fuel produced periodically. In the meantime, we have found a cheaper source of biodiesel that has lowered the price by about 75 cents per gallon, getting us down toward the $4 mark. With the $1 tax credit coming back eventually, our fuel price will be down in the $3 range again.

However, at this time, it is NOT our fuel being sold at Ecowise. There is an unfortunate situation that I need to make you all aware of. I severed the relationship with the oil collection company because they left me short almost $20,000 on the bank loans they had agreed to assume. I have run DieselGreen for almost five years for no pay, but have invested considerably in the business – so this really hurt. Also, this entity has now taken advantage of the retail fuel pricing situation to go around me to Ecowise and sell them fuel. This company is not licensed to sell fuel, has no track record of fuel quality or customer service, and is putting YOU at risk. I have all the legal information to back these statements up, and will be aggressively defending my business and customer relationships.

I am working to restore our standing with Ecowise, bring the price down, and get us back on track. It is hard to see someone try to steal my business after all the hard work and dedication I have put into it. It is hard to see a trusted partner go to a slightly cheaper product without regard to all the things I feel so strongly about. I am supportive of competition, when done fairly and above board; but I cannot sit back and watch someone destroy what I’ve worked so hard to help build. But just like my former business partner turned in a couple of guys collecting and selling oil without a license when they came in illegally and undercut our pricing, I will defend our brand and, more importantly, the quality of fuel that gets sold and used in Austin.

Let me be clear – DieselGreen does not have a retail fuel pump anywhere in Austin or elsewhere. EVERY call that comes in for retail sales go to Ecowise. We offer bulk fuel to a handful of fleet customers with their own equipment, and deliver 500-1000 gallons at a time. So losing this relationship would be a mortal blow to our business.

I will also mention that due to the very high prices from Pacific Biodiesel, our longtime supplier of fuel, our most recent load of fuel came from animal fat biodiesel. While this is not my preferred feedstock, it is a waste material that exists whether we use it or not, and it has a higher cetane rating than diesel, and a higher oxidative stability than fuel from WVO. So in the heat of the summer, it makes great fuel. That being said, if WVO-made biodiesel were available at a better price, I would use it. Once we get our own oil produced into biodiesel again, you can be sure the fuel we sell (and hopefully through Ecowise) will come from used oil collected in the Austin area.

Thank you all for your support, and I look forward to many years of offering fuel in Austin. Please contact me with ANY questions or concerns.

Jason Burroughs
DieselGreen Fuels
512-873-4882
Jason@DieselGreenFuels.com

Biodiesel pricing going up by $1 per gallon due to tax credit loss

February 22, 2010

Dear customers,

As you may know, the biodiesel industry receives a $1 per gallon federal excise tax credit. Without it, there would never have been a viable biodiesel industry to begin with, because the price of feedstock (vegetable oil) has generally been high enough to make the production of biodiesel higher than that of petroleum diesel.

Unfortunately, this tax credit expired at the end of 2009 and has not yet been renewed. We were fortunate to buy a large volume before the end of the year, and have not yet had to deal with the implications of the credit loss. We had high hopes the credit would be renewed by now, but the most recent legislation to renew it had the biodiesel portion removed by Senate Majority Leader Harry Reid. There is currently no bill before the Congress that would renew it.

Although we expect it to be renewed, we are now faced with a gap – our 2009 supply is running out and we’ll need to buy new fuel without the credit. This will cause a penny for penny increase at the pump, starting as soon as next week.

Some of you may know that DieselGreen collects used cooking oil from restaurants all over Austin. Many people assume that we are making biodiesel ourselves, but this is not true. All of the oil we collect goes to Pacific Biodiesel, in Hillsboro, TX, where they turn it into fuel for us. Although providing our own feedstock cuts down on our final price, the credit goes to the producer, which lowers our cost by that very same $1 per gallon. Please be assured that nobody is price gouging and that our entire industry is truly in peril. Community-scale businesses like ours only survive with the core customer base such as yourselves, willing to pay more for an environmentally friendly fuel that is made in the US, lowers our dependence on foreign oil, reduces emissions significantly, and turns a waste stream into energy.

I invite you to contact me personally to answer any questions you have. I hope that you will ride out this difficult time with us, and that the credit will be reinstated as soon as possible.

Thank you so much for your support and your business,

Jason Burroughs

DieselGreen Fuels

(512) 873-4882

Jason@DieselGreenFuels.com

Sustainable Biodiesel Summit coming to Texas in February!

Hello everyone,

The seventh annual Sustainable Biodiesel Summit (SBS) will be held in Grapevine, Texas on February 6th and 7th, 2010.  Join community activists, backyard brewers, farmers, and other passionate individuals to discuss the future of sustainable, community-based Biodiesel.  As always, the National Biodiesel Board’s Annual Conference and Exhibition will follow the Summit.

This year’s keynote speaker will be Bill Holmberg, long time champion of biofuels and sustainable new wealth industry.  The schedule this year will feature a series of action-oriented roundtable discussions at a small, local winery and a trip to Willie’s Place at Carl’s Corner to visit the truck stop and biodiesel production facility.

Register before January 22 and pay only $100, saving up to $100 off the price of on-site tickets.  For more information or to register online, go to http://sustainable-biodiesel.org

The SBS is a golden opportunity to address today’s issues regarding biodiesel and sustainability.  This unique Summit is organized through the joint efforts of the Sustainable Biodiesel Alliance, Roundtable for Sustainable Biofuels, and The National Biodiesel Board.

Hope to see you there!

Jason Burroughs
DieselGreen Fuels
512-247-3835

DieselGreen Summer 2009 Update

Hello everyone,

With each week bringing another bankruptcy or bailout, it should come as no surprise that local businesses are being impacted as well. Our business has never been easy, and with the worst regulatory climate in the country for biodiesel, we’re faced with unparalleled challenges. Today we are announcing some changes to our business that we hope will enable us to survive this downturn and thrive when it’s over.

Effective immediately, we no longer offer conversion services to install Greasecar kits on customer’s cars.

Due to the regulatory requirements imposed by the health department, it’s been very difficult for us to do dewatering and filtering of veg oil onsite. We have been using a third party for some time, who has been remodeling their facility and stopped production of oil for the past few months. We are happy to announce that our contract renderer is back online and we have vegetable oil available again! We offer this dewatered oil, filtered to 5 microns, at Ecowise and at our own shop. The other good news in this area is that we have constructed our own facility to do the dewatering and filtering, which is in the final application process with the health department. Over the next few months, we expect to take back control of this process, which will help us stay afloat.

Effective today, our satellite stations at Geogrowers, El Sol Logistics, and Oaxacan Tamaleo are closing down permanently. Folks out in the rural areas served by these stations are more price sensitive than our urban customers, and while we have some loyal customers who will be disappointed, these stations just don’t work for us.

As of July 1st, we moved NEXT DOOR to our current location, into what used to be Chavez Motors. The new place lacks the large warehouse we used for vegetable oil conversions, but has the special building we need to do the oil processing.

We’ve been experimenting with biodiesel production on our own and had great results! We used a new biodiesel process called hydrodynamic cavitation, which is the underlying physics behind milk homogenization (among other things). This innovative process allows for biodiesel production at room temperature, in less time, with lower quality oil, using less methanol.

We wrote a piece of software called Biodiesel Control Center to manage our business. This software is a ‘web app’ that is intended to run a business like ours, including grease collection, task management, and ultimately biodiesel production and distribution. We were fortunate to get some great press on the software, and have had inquiries from around the country from biodiesel businesses struggling with the same issues we had when we wrote it.

I just got back from the Collective Biodiesel Conference in Washington DC. For the fourth year, I presented our evolving business plan, networked with old friends and met new ones, and participated in a lobbying effort to educate Congress on biodiesel issues. The key issue we talked about is that the biodiesel tax credit ($1 per gallon) is tied to being blended with diesel – a HUGE problem for our industry that has plagued us since 2005. This rule is set to be overturned and the credit given to biodiesel producers, independent of blending with diesel. This has the effect of eliminating “B99” forever and letting us sell B100 as a motor fuel with the credit intact. The credit is also going up to $1.10 for small producers (which we always work with), and being extended 5 years. The bill is called the Biodiesel Tax Incentive Reform and Extension Act of 2009. If you speak to your congressman or senator, please ask for their support on this issue.

This follows our own legislature session, in which the biodiesel industry scored a few key victories. First, all state fleets are required to use alternative fuels at least 50% of the time in 80% of their vehicles, and for the first time biodiesel is an official alternative fuel – even at just B20. Second, and more important, TCEQ, who has attempted to ban biodiesel blends in most cases in the most populous counties in Texas, has been forced to go to EPA for an official ruling on the issue. We are confident that when this ruling comes back from EPA, our position (that biodiesel is NOT bad for the environment!) will be supported, and the TCEQ’s ridiculous rule will be rescinded.

Finally, I’d like to explain to everyone exactly what our business does. We have evolved from a coop in 2005, into a biodiesel distributor in 2006, an oil collector/renderer in 2007, did the conversions to run on vegoil, and have now solidified on a specific plan:

  • Using a 2000 gallon vacuum truck, DieselGreen collects used cooking oil from area restaurants. This service, dubbed Fryer to Fuel, takes the oil from almost 200 restaurants from San Antonio to Taylor, and all parts in between.
  • This oil is taken to Pacific Biodiesel, the nation’s most experienced and respected biodiesel producer. They have a plant in Hillsboro, about 130 miles north of Austin.
  • Pacific takes our oil and turns it into biodiesel, and ensures it meets the ASTM specification for biodiesel.
  • Using a 2000 gallon fuel truck, we pick up this biodiesel and bring it back to our shop. From there, we provide fuel to Ecowise for retail sale. We also have a variety of fleet customers who use clean burning biodiesel instead of diesel fuel for their equipment.
  • We are working on a retail pump for our location to service those customers on the east side who have trouble making it to Ecowise. This location will sell both vegetable oil and biodiesel.
  • We’re working on Biodiesel Control Center, hoping to license it to folks around the country.
  • We’re sitting on a cutting edge biodiesel production process, considering our options to license the technology, offer a kit, or work with a third party to develop a set of plans for DIY’ers.

I’m also personally involved in a couple of other biodiesel projects:

What we need:

  • First and foremost, we need your support! Keep using biodiesel, keep telling your auto dealer you want more diesel choices, keep telling your elected representatives to support LOCAL FUEL!
  • We need lots more restaurants. We pay for referrals, so let us know if you are involved in the restaurant business or know someone who is.
  • I’m seeking a PHP developer to help with the software. There is no funding for pay, but possible ownership potential for the right person.
  • I’m seeking a part time driver to collect oil and drive it to our biodiesel producer. Hours are 15-30 per week, pay is $10 per hour, Class B CDL required. Schedule is very flexible, with oil collection being done at any hour of day or night in most cases.

The current price of biodiesel (B100) at Ecowise is $2.84 and vegetable oil is at $2.15 – both include the federal road taxes.

Thanks for your support!

Jason Burroughs
Managing Partner, DieselGreen Fuels
http://www.dieselgreenfuels.com
512-992-8677 mobile
512-287-4229 fax

A warning about 2008 and newer vehicles using biodiesel, and a call to action

Through some very painful testing, we’ve learned that the newest diesel vehicles have an emissions system that is not compatible with a high blend of biodiesel. Starting in the second half of 2007, every diesel vehicle must be equipped with a Diesel Particulate Filter to clean up the nasty diesel emissions. Ironically, when used with biodiesel, the DPF does not function properly. This is because biodiesel has a higher flash point than diesel, and the DPF system relies on a squirt of fuel into the exhaust.

I could go in more detail about this, but suffice it to say that anyone driving or planning to drive a diesel car or truck made in 2007 or later will have problems with biodiesel over about B20. Even at B20, you need to make sure and have your oil changed regularly, due to another side effect – engine oil dilution. It turns out that this poorly devised emissions system forces the injectors to squirt diesel fuel in the exhaust stroke, which naturally makes its way into the engine oil. However, diesel fuel evaporates off (sort of) and biodiesel does not.

So – because of these two issues, we recommend the use of only B20 in these vehicles. Furthermore, we ask that you sign a petition that’s been put together to literally Save Biodiesel. Without compatible vehicles, there is no biodiesel industry.

Please take just a minute to sign this petition, which is being sent to the OEMs. We’ve had conversations with them, and the final nail in the DPF coffin came with a detailed presentation by Chevron, who makes engine oil and lubricants. Everyone in the industry knows this is a problem, but until they hear it from YOU, it’s a problem they can ignore.

Thanks for supporting us, and thanks for choosing biodiesel made from locally collected and processed used cooking oil!

Petition is HERE

Jason Burroughs
DieselGreen Fuels
512-247-FUEL