The deep fat fryers and waste oil containers of America house a large, untapped source of transportation fuel, says Rubin, business development general manager for BiOil, a biodiesel company based in Sausalito, Calif. Namely, billions of gallons of animal fat and waste vegetable oil that can be converted into domestically produced, cleaner-burning biodiesel, says Rubin, among others.

BiOil's plan--which will require sizable funding--is to build a national network of disposal centers, with help from biodiesel producer Pacific Biodiesel, based in Kahului, Hawaii, to collect a substantial portion of the 3.9 billion gallons of waste vegetable oil produced at fast-food eateries, refine it and then sell it to trucking companies and drivers.

"We rely on people to eat Chinese food, fast food, whatever," Rubin said.

More significant, big agribusiness has its eye on the grease bucket too. Last November, chicken giant Tyson Foods announced it has formed a renewable-fuel division. Rival Perdue has said it is exploring the idea as well.

Tyson harvests approximately 2.3 billion pounds of chicken, hog and animal fat from its operations each year. The fat could be converted into about 300 million gallons of fuel, according to the company. (Industrial oil gets measured in pounds, while fuel oil is measured in gallons.)

"That's the equivalent of 20,000 barrels a day of feedstock that can be turned into renewables," Jeff Webster, senior vice president of strategy and business development for Tyson, said at an investor conference last year. "It's the equivalent of bringing renewable content to one-third of the (diesel used) on highway diesel within the U.S."

Companies such as Imperium Renewables in Washington state already operate refineries that convert soy or palm oil from farms into biodiesel. A few individuals, meanwhile, fill up their biodiesel vehicles at fast-food restaurants. Cars need to be retrofitted, however, before they can accept oil straight from the Dumpster.

Methodically collecting and refining waste biodiesel for sale to vehicles that have not been retrofitted could help transform biodiesel from an asterisk as a fuel source into a something of a sustainable industry. In the U.S. last year, only 150 million gallons of biodiesel were produced while Americans consumed 62 billion gallons of regular diesel.

Additionally, a focus on animal fat could help insulate the industry from the increasingly erratic pricing in the commodities market. Some expect that prices for vegetable cooking oil will begin to rise in a few years because of biodiesel demand. Animal fat already costs 70 to 80 cents less than new vegetable oil per pound, according to Tyson, while restaurants have to pay people to get rid of waste vegetable oil.

No guarantees on the menu
Success, though, is not guaranteed. Smithfield Foods a few weeks ago shut down its biodiesel subsidiary after two years because it determined that the project, based in Utah, was not economical. Smithfield BioEnergy, however, differed from these other projects in that it was trying to make diesel by mixing vegetable oil and methane culled from the manure of the animals on its farm.

"The nutrient content of the animal manure produced on our farms proved to be more than 50 percent below published estimates," the company said in a statement. Smithfield, however, will explore ways to exploit the methane.

Converting waste oil or animal fat into biodiesel is a somewhat straightforward chemical process. Through the transesterification process, glycerols, which make the oil more viscous, are removed from the oil. Hobbyists who run their cars on deep fat fryer oil today have to insert an additional tank inside their cars or trucks where the oil can be heated up before going into the engine. The heating counteracts the effects of the glycerols. (Biodiesel hobbyists also filter the oil.)

As a fuel source, biodiesel has distinct advantages over conventional diesel based on fossil fuels, say advocates. When burned in cars, it produces far less carbon dioxide in most cases and can produce fewer sulfur compounds, although an extensive debate surrounds the sulfur issue. Drivers can get fewer miles per gallon, but the difference is not big, and the cost--with subsidies--is somewhat similar to regular diesel. Many big diesel consumers buy their fuel directly from refiners so biodiesel makers don't have to worry as much about being snubbed by Big Oil gas stations.

Interestingly, biodiesel was the first form of diesel. Rudolf Diesel ran his first engines on peanut oil. Petroleum-based diesel, however, became popular because it cost less.

However, variations in the feedstock lead to different kinds of biodiesel. Soy-based biodiesel, for instance, can produce more sulfur. Also, animal fat biodiesel doesn't work as well in colder climates. Mixing different types of feedstocks can ameliorate the problem. Animal biodiesel can also be used for heating.

If anything, the economic circumstances of waste oil appear to make it an attractive feedstock. Most restaurants and fast food outlets, which are largely independently owned by franchisees, currently pay waste-disposal companies such as Waste Management 10 to 15 cents a gallon to haul away their used oil.

By contrast, BiOil will pay fast-food outlets for their oil. The company hopes to pay only a few cents a gallon, but that's more attractive than paying to have it hauled away, Rubin says.

"When we tell them we are going to pay them, they are like, 'Excuse me? I don't get it,'" he said. "But once they hear the explanation, they love it. They can even advertise themselves as a green restaurant."

Industrial disposal companies resell the oil they collect. Some of it goes to cattle feed, while the rest gets processed into glycerols for the soap and cosmetic industry. Here too, though, biodiesel is a better bet economically. Biodiesel can sell for around $2.75 a gallon, more than waste oil. BiOil and others can also sell the glycerols they extract during the process.

Perhaps one of the most difficult challenges in entering the market will be getting started. A plant that can churn out 5 million gallons of biodiesel a year can cost a few million dollars, and erecting the plant requires going through regulatory processes.

BiOil hopes to raise $97 million--an exceedingly large amount for a start-up--to build 30 processing plants. Rubin admits that the company hasn't produced a gallon of biodiesel yet either.

But unless burger sales plunge, the potential will be there.