Case Study

the oil flows in Austin

More in the Winter 2008 issue

Jason Burroughs is the busiest guy I know.

A call comes from a customer, says the drum behind her restaurant is full. Better call TJ and get the location on his routes. Another call comes from a retailer. A B100 (B99.99) delivery is on its way.

Burroughs gets done with his calls and we start going over numbers.

Soon enough, I'm hearing that familiar iPhone jingle. This time it's his wife letting him know his new baby boy has a doctor's appointment tomorrow. Ok, time to finish up what we're working on and head home. It's 9pm on a Friday, anyways.

For Burroughs, it's all in a day's work. He's the owner-operator of an outfit in Austin, Texas that collects used fryer oil, distributes SVO/B100, and installs SVO kits.

It's called DieselGreen Fuels.

There are three full-time employees. Charlie Duncan and TJ Barr do used fryer oil collection, B100 distribution, and the SVO conversions. I'm the new guy doing quality assurance, logistics, and making things run smoothly. Burroughs's wife helps with accounting, and his mom helps answer phones. We work at a small office and warehouse. There are two 2,000 gallon trucks: a fuel truck and a vacuum truck. Burroughs himself isn't on the payroll yet. He's been growing the company as his passion while holding down a work from home job at Dell.

DieselGreen Fuels got started in 2005 as the Austin Biodiesel Cooperative. "After a disappointing attempt to set up a small production facility at one member's family salvage yard, we went to the Collective Biodiesel Conference in 2006 to share our story and seek direction," says Burroughs.

"We were somewhat relieved to find that we were not the only ones struggling. We came to the difficult decision to scrap the Co-op (we had also just been kicked off the property we were using) and start DieselGreen Fuels as a biodiesel distributor."

Since then, DieselGreen has gotten involved in the recycled fryer oil (RFO) world. It is Texas's authorized Greasecar installer, installing 1-2 conversion kits a month for SVO users. Charlie and TJ take the Greasecar kit, replace its PEX tubing with aluminum, replace the fuel lines with Viton hoses, and add a flat plate heat exchanger, a "Vegtherm" heater, and the electronic "VO Controller." It's a high end automated system, geared more towards the general public than a DIY type of person.

Since DieselGreen also has RFO for sale, customers don't have to collect and filter their own oil, which is a barrier to entry for many would-be SVO users.

The oil comes from over 120 locations, mostly Mom & Pop but a few institutions (hospitals and a prison). Expanding collection reach is going to be a big part of how DieselGreen plans to grow the company this year. There is currently enough SVO to satisfy the conversion customers. "Hopefully," says Burroughs, "we will have enough extra to create enough biodiesel to satisfy our B100 customers."

Interestingly, it would probably become B99.99 at some point.  "Instead of buying B99, we buy B99.99, which the state considers B100 for reporting purposes; this allows us to avoid petroleum industry rules, which kick in at B99.94 or lower.  You need to blend some diesel into the product for the IRS, but not so much Texas considers you a petroleum distributor (which we are not).  Since it's such a technicality, it took me a while to come clean on that with people in my industry," says Burroughs. "But I wanted to make sure I was doing it correctly. The way the state did it was in line with federal regulations, and we managed to make it work. I've since got producers to sell biodiesel to me as B99.99."

The biggest factor in any biodiesel purchase is price, since customers tend to blame (hate) the vendor for price increases. But it's not the only factor.

At DieselGreen, feedstock sustainability is critical.  Many outside the industry don't know that biodiesel isn't guaranteed to be sustainable (palm oil producers are known for clearcutting rainforests) or even responsible (where does the glycerin go?).

Recently, for example, Austin crafted a proposal to switch its entire city fleet to B20. Jason contacted the mayor's office and warned them that Malaysian palm oil- based biodiesel, which might offer the cheapest bid, would not really be a win for Texas sustainability. Consequently, the city added a "sustainable feedstock" criterion for the bid.

Besides being focused on sustainability, DieselGreen is also community-minded.

"Being local and a part of the community is important to us," says Burroughs. "That means things such as not getting too big and finding people that share your values and sharing your business with them as suppliers, customers, employees, and partners."

In the SVO community, not many people are able to collect and filter their own fuel. So although DieselGreen has hundreds of biodiesel customers, it's really the only company that also caters to dozens of SVO customers. DieselGreen tries to have a presence in the community, and helped put together the "Austin Grease Up," a meet-up event for vegetable-oil-fueled vehicles and their owners this summer.

"We want to support what people are doing. People come to us and say 'I want to make biodiesel.' I think it's really important to note that we don't shoot anyone down. I don't say 'You're gonna blow yourself up,' or 'You're gonna steal all of our business.' I still tell them all the dangers and gotchas and all that stuff, but I tell them at the same time: 'Good luck, and if there's anything we can do to help you, let us know.' We know 90-99% of people that think they're going to collect their own RFO and make their own biodiesel don't, so there's no reason to come out and be negative. People are going to figure it out for themselves and be better people for it."

I asked Burroughs what he finds most rewarding about DieselGreen Fuels. "From a business level, it's getting the phone calls from people that praise us and give us such positive feedback," he said. "So the community support is a big part. On the personal level, its the same thing, but from friends and family. And it's very rewarding for me to take a leadership role in where alternative energy is going in Austin, since there are really only a handful of people doing it."

Despite challenges facing the industry, Burroughs sees a long future for biodiesel. "Well, it's the only thing today you can make yourself," he says. "You can take the entire fleet of equipment that's on the road right now and it could last 100 years. It is possible they make the technology that could propel a car so cheap, that the idea of a motor wouldn't even make sense. Imagine a breakthrough in battery technology making a DC motor look a lot more attractive than combustion!

"However, as long as there are diesel engines, and my guess is 100 years from now in some part of this world there's gonna be plenty of diesel engines, biodiesel is going to be right there with it. I would expect biodiesel to overtake diesel fuel in the next 30 to 50 years, which could even be in our lifetimes.

"Imagine transporting yourself back in time 100 years. So much has changed. In our time, it feels like those same big changes will come from alternative energy." S

Chris Continanza was an intern at DieselGreen Fuels when he started researching this story; he’s now a full-time employee.

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