Get Your Mind out of the Dumpster

I had one of those moments last night after I had woken suddenly at 3:30 a.m. suffering from indigestion. I grabbed a Tums and on the way back from the bathroom it hit me. Background: I've been bothered by website after website which talk up biodiesel or veggie-oil fuel and say that its free fuel -- just go dumpster diving behind your local Chinese restaurant and with a wink and a nod to the restaurant owner you have your fuel source. I don't know whether it was the in-elegance of this model or my basic sense that nothing is free that bothered me. But I kept thinking about it.

First, collecting a restaurant by-product is not easy and not everyone is equipped to get it, nor process it and store it after they have done so. An East Indian colleague of mine says it best, and you really need his accent to get it, "you know, nuisance has a value." Second, used cooking oil is actually a commodity. Its called yellow grease and it is considered a commodity by the USDA. The current price is 16.25 cents per pound which equates to $1.24 per gallon. Its primary use is in animal feed. So, with an economist's grin, I say that this represents an opportunity cost. Instead of filling your tank, you could fill your wallet. It would be like having a pile of chips at the blackjack table in Vegas. If you fill your tank, its as if you lost your chips to the dealer. If you take your chips to the cashier, you fatten your wallet. The value of the grease is the same no matter how it is obtained.

Why is this important? As I said, there has been too much fanfare about running your car on cheap or free used cooking oil. This notion detracts from the fact that biodiesel or veggie-oil won't take off until the distribution of it is similar to that of petro diesel. Biofuel isn't attractive because of its price. It's attractive because of its environmental, economic, geopolitical, and sustainability profiles are far better than petroleum products. I'm not sure what the commodity price of $1.24 goes to in order to get it to your gas tank, but with gas and diesel north of $2.00, there's room for this to be competitive purely on price. Add the "intangibles" and it becomes an easy sell. Biodiesel enthusiasts, get your mind out of the dumpster!