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New Energy Harvest

BioDiesel company seeks Chicago area plant to convert cooking oil

By Mary Wisniewski
January 29 2007

There are no oil wells in Chicago.

But there is plenty of greasy food, which means leftover cooking oil.

Now a Florida-based energy company wants to find a Chicago entrepreneur who will turn that waste grease into homemade diesel fuel.

"Chicago has lots of restaurants, which makes it conducive to what we're doing," said David Jarrett, spokesman for Xenerga, which is selling biodiesel plant partnerships. Xenerga wants a plant in the Chicago area and in 39 other U.S. markets by the end of 2007.

Biodiesel is a fuel derived from vegetable oil or animal fats. It can be used in its pure form, but that can cause operating problems, so it is typically blended with petroleum diesel. Biodiesel's advantage is that besides being domestically made, it emits less pollution.

Illinois is the country's biggest user of biodiesel -- ComEd, for example, runs its bucket trucks on biodiesel blends. But waste-oil biodiesel is uncommon here. Almost all of Illinois biodiesel is made from virgin soybean oil.

Xenerga CEO Jason Sayers started FiltaFry in 1996, a business with 500 franchises that cleans commercial and restaurant deep-fryers and recycles cooking oil. Sayers expanded into biodiesel with Xenerga, which now boasts 136 plants in Europe and Asia. Xenerga expects to finish its first U.S. plant in Orlando, Fla., by April.

An investor in a Xenerga partnership would supply the land plus $2 million for a plant that could produce 5 million gallons of pure biodiesel a year. Xenerga will supply the German-made equipment, set up the plant, train the employees, provide used oil and animal byproducts, monitor quality and find wholesale buyers.

The plant's net profit could be $2 million to $2.5 million a year, Jarrett said. He said it's cheaper to produce than pure soybean oil-based diesel.

Howard A. Learner, executive director of the Environmental Law & Policy Center, said turning cooking oil into biodiesel helps the environment in two ways -- by getting rid of waste oil, which can clog sewer systems, and by producing a "relatively clean" domestic fuel.

"It's a winner," Learner said. "There's been this false myth for many years that if you wanted to do environmental improvement it would have to come at an economic cost. People are finding ways to make money by improving the environment."

The idea of using waste products to create fuel is gaining momentum in U.S. business, according to Clark Wiedetz, general manager of alternative energy for Siemens Building Technologies. Siemens recently found a way for a Georgia carpet factory to "cook" carpet scraps to create synthetic gas to help power the plant.

Because of an Illinois sales tax incentive for biodiesel, it usually prices a few pennies cheaper than conventional petroleum diesel, said Brian Boyle, account executive with Northfield-based Stepan Co., Illinois' largest biodiesel producer.

Boyle said he would need more information to have an opinion on Xenerga's process. He noted that restaurant cooks use many different things for frying.

"There can be issues with other [non-soybean] feedstocks you need to be careful of," Boyle said. "It's something people would want to take a hard look at," he added.