A visit from the EPA

By Jason Burroughs

Yesterday, two men from Bionetics, an EPA contractor, paid us an unannounced visit. They asked to see samples of my biodiesel, thinking I was a producer. I explained that I was only a distributor, but they still wanted samples. After calling the EPA to confirm it was for real, I gave them samples from our tank and explained what we do.

To summarize, we collect oil from restaurants (170 so far) and provide it to biodiesel producers to turn into biodiesel for us, then we sell that B100 to end users to power their vehicles. Right now, we are in an unfortunate position where our biodiesel producers don't have the license to accept our raw grease, so we're forced to sell it on the open market, rather than toll it into biodiesel. We're building our own facility that will give us the legal right to do this processing, which is really just storing the oil before it goes to the producer.

They wanted product transfer documents from our restaurants to us for the oil collection (we only have handwritten driver records, which were acceptable); PTD's from us to the rendering company we sell the oil to; and PTD's from the biodiesel company we buy B100 from.

Anyway, they took a sample of biodiesel and tested it on the spot using an xray machine of some kind, and determined it had 5.2ppm sulfur (must be below 15ppm). Then they took another sample to take back and test for methanol content, flash point, and acid number. They knew little about biodiesel, but were just following orders.

In addition to this, they asked me about our conversion of vehicles to run on vegetable oil. They requested invoices to customers for doing conversions, receipts of buying Greasecar kits and VO Control controllers, and anything else I had on those products.

I could have said no and contacted a lawyer, but I'm in this as a business, not to hide what I'm doing. I gave them everything they asked for and then some. We talked for quite awhile about the grey area of using vegetable oil as a fuel - the IRS takes road taxes for it, while the EPA officially says it's not allowed. However, they asked me NOTHING about using vegetable oil as a fuel, but focused entirely on the conversion business.

They had reviewed our website and had googled for me enough to find things I've written about these topics, so of course I had to wonder what the source of the inquiry was. They said they didn't know, so I called their boss at the EPA, Ross Ruske. He said he "couldn't recall" the source. I pressed him, and said I would just file a Freedom of Information Act inquiry to find out. I also said I suspected it was a complaint by a competitor, and he finally said "why take the time and expense to file a FOIA request when you already know the answer?". So there it is - the competitor apparently called the EPA to tell them that we were doing things they wouldn't approve us, and the EPA showed up on my doorstep.

The good news is that we had an answer for everything they threw at us. I had every document, every rule, every little shred of information to show that we are doing it all above board. Not incidentally, we stopped doing conversions at the beginning of this year, when one of the partners split off to do that himself. So I even had the legal document splitting that part of the business off.

They were really nice guys, and after I explained the trouble we had with our competitor (sending a spy to try and rent a room from us and probing for confidential business information, filing false criminal charges against me, threatening to sue their customer for $8,000 for breaking their contract, etc.) they asked me for their address and said they were going to make an unannounced visit to them!

So what's the moral of the story: be prepared for this. Don't forget that you're a complaint away from an audit, a site visit, or even just a phone call from the authorities. After we took over a couple of accounts from our competitor last year, we got a visit from the city's zoning board, the air quality, water quality, stormwater runoff, state environmental board, fire marshall, and city planner - literally within a week of each other. Each one said it was complaint driven and they came in about two weeks after we took over those accounts.

Here is a copy of the full report.