Grease Lightning grinds to a halt as oil’s troubles rock cooking fat profits
naky
www.diecastingpartsupplier.com
2016-02-25 17:16:30
Ructions in the global oil market have spread to restaurant kitchens across the US as chefs who once had buyers vying for used cooking oil find they must now pay to have it taken away.
The rise of US biodiesel, refined from fats and vegetable oils, turned a waste product into a sought-after commodity when crude prices were high, even attracting the attention of thieves armed with vacuum hoses.
But the collapse in crude oil prices has blunted biodiesel’s edge against conventional diesel. Production capacity at the refineries which turn fat into fuel is also far larger than demand, causing the US biodiesel industry to lose about $130m last year, a University of Illinois economist has estimated.
In 2013, benchmark yellow grease sold for 36 cents per pound, according to price reporting service The Jacobsen. As biorefineries’ financial woes have crept upstream, wholesale grease now sells for less than 20 cents.
“It used to be we paid customers for their oil. Now, people are charging to pick up the oil,” said Natalie Chakov, office manager of the Green Oil Recycling group in New York, which has stopped collecting cooking oil to focus on cleaning grease traps.
Last week, a court-ordered liquidation began for Grease Lightning, a collector founded in 2010 whose smudged tank trucks were once a common sight outside pubs and restaurants around New York City.
Some large fast-food chains are faring better. Yum Brands, which operates KFC, Pizza Hut and Taco Bell, told the Financial Times: “We partner with contractors who pick up our used cooking oil and reuse it for biodiesel and animal feed. We do not pay them to do this, they pay us.”
And there may yet be hope for smaller restaurateurs. The federal government recently decided to require at least 1.9bn gallons of biodiesel use this year, almost double the amount outlined in a 2007 law. Congress also recently reauthorised a biodiesel tax credit for this year and next.