Published November 2007

Oil & Septic Do Mix

By Erik Gunn (page 58)

Wisconsin pumper believes waste-oil recycling for use in vehicles and heating plants will drive future growth.

Bringing one baby into the home at a time is challenging enough for most families. John Feyen spent the summer of 2007 watching two births.

Baby No. 1 was his second child, daughter Addisyn. The other, born almost at the same time, was a new business — an offshoot of his established septic pumping operation, but one that goes in a completely new direction.

Feyen, owner of Arcade Pumping in Ettrick, Wis., has teamed with business partners to start Coulee Region BioFuels LLC in nearby Blair, Wis. The company has begun to collect and refine used vegetable oil to be resold as fuel to heat buildings, provide hot water, and even power vehicles. And between skyrocketing oil prices and fears that fossil fuels are harming the world's climate, it’s a business that could be part of an energy revolution.

Along with Feyen, Coulee Region’s co-owners are Dave Dudley and Taavi McMahon. Both Dudley and McMahon are connected to PrairieFire BioFuels Cooperative in Madison, Wis., about 150 miles from Blair. PrairieFire has been working to promote the use of vegetable-oil-based fuel to power automobiles.

NEW PROFIT CENTER

For Feyen, getting into recycling waste oil as fuel is a natural outgrowth of his septic business. And while Coulee Region BioFuels is still very much in startup mode, Feyen believes it has the potential to grow astronomically, even overtaking his pumping business.

“It’s going to take two or three years, but the oil business by far will make me more profits, just as a part owner,” Feyen says.

Feyen literally grew up in the septic business. His father, Leonard, started Arcade Pumping in 1981. “My customers remember when I was 8 years old and riding with my dad,” Feyen says. When he turned 21 in 1999, Feyen started buying his father out. Now history’s starting to repeat itself with his own son, Owen: “My son’s 3 1/2 and he’s been riding with me since he was old enough to go in a booster seat.”

Arcade serves customers in Trempeleau County and surrounding areas across a 35-mile radius centered on Ettrick. Roughly 70 percent of the business is residential septic and holding tanks, and the remaining 30 percent consists of commercial and agricultural customers.

Over the years Feyen kept expanding operations. He bought a self-service car wash in 2004 as a way to invest his septic profits, and he’s also entered the portable restroom business. Feyen started Arcade’s portable restroom business in 2006, and after doubling its sales in the first year, he sold half the interest to employee Ted Graff, who manages the operation. Its inventory includes 59 PolyJohn Enterprises Corp. PJN3 units and 17 Aspen units from Five Peaks Technology, serviced by a 1997 GMC 3500 one-ton truck.

When fuel prices began spiking in 2003, “I started raising my prices,” Feyen says. He worked to run operations more economically to help pare his fuel bill. But he also got to thinking. Restaurant owners among his customers were paying specialized companies to take their waste cooking oil; the buyers would then resell it on the commodities market. But a few restaurant owners asked whether, since Feyen already took their septic waste, he could help them get rid of their waste oil.

This isn’t grease trap waste, but specifically vegetable oil, mainly from deep fryers, which most operations store in dedicated waste receptacles once it has been used and replaced with fresh oil.

WASTE STREAMS 101

As Feyen explained to them, disposing of that waste wasn’t that simple. He either land-applies his waste or sends it to a sewage treatment plant, so he couldn’t add the vegetable oil to the waste stream. But starting in late 2005 he began mulling the problem over. He spent late nights online, hunting for information on reusing waste vegetable oil, and learned about emerging biodiesel technology.

“I wanted to have a biodiesel facility,” he says. “But no one’s willing to talk to you unless you’ve got a million bucks.” Then he happened on the PrairieFire BioFuels Cooperative and met up with Dudley and McMahon.

PrairieFire has 260 members. The co-op, based in an old service station on Madison’s east side, sells biodiesel for use in diesel vehicles and also installs conversion kits to turn conventional diesel engines into ones that can run on vegetable oil. Once converted, “they become multi-fuel vehicles that can run on vegetable oil or biodiesel or petroleum diesel fuel,” says Dudley. He is the co-op’s coordinator, an employee. McMahon, a lawyer, serves on the co-op’s board.

The co-op sells biodiesel, but doesn’t yet sell vegetable oil. But over a four-month period Feyen, Dudley and McMahon hatched plans for a separate business to recycle vegetable oil and resell it as fuel. “Our business plan and our partnership agreement were written on the back of a napkin at a coffee shop in Madison,” Feyen says. Coulee Region BioFuels was born.

Increasing the pool of fuel available would, in turn, make it easier for the co-op to win more customers for its conversion kits. And vehicles aren’t the only potential market. “The bulk of energy use in our nation is not in transportation,” says Dudley. “It is in heating and cooling spaces.”

Feyen, Dudley and McMahon got to know people at Inov8 International Inc., a company in La Crosse, Wis., that manufactures multi-fuel burners for boiler and furnace systems. Inov8’s burners accept either petroleum- or vegetable-based oils, including waste oils of both kinds.

Inov8 has formed an ongoing relationship with Coulee Region BioFuels. It’s a case of one hand washing the other. Feyen “can’t sell his oil unless he has someone with a product to use it in,” says Matt Fisher, Inov8’s head of sales and marketing. “And we can’t sell our product unless people can get oil to use in it.”

FUEL STORAGE TANKS

Coulee Region BioFuels set up shop at Feyen’s car wash in Blair. Feyen has installed an Inov8 boiler to heat the floor of the facility; eventually he hopes to buy a vegetable-oil-powered generator to provide electricity for his business buildings.

The new company has bought a pair of 25,000-gallon used fuel storage tanks for the oil it collects. The oil is heated to draw off water that bonds to the oil molecules, and it’s filtered through 5-micron fibers to remove debris, such as food waste.

“All of the oil we collect is non-hydrogenated, zero-trans fat oil,” Feyen says. “We don’t want hydrogenated oils. They’re like Jell-O at 50-degree temperatures.”

For now, Feyen’s operation stores most of the low volume of byproducts of the filtering process. The byproducts consist of water; hydrogenated oils and animal fats that some restaurants dump into their used vegetable oil; and bacteria that accumulates. Feyen says the business is looking at ways to recycle those byproducts in the future.

To collect the oil from restaurants, Feyen uses his septic business’s old truck — a 1995 Ford L8000 to which his father added a 3,200-gallon Imperial Industries Inc. steel tank and a Masport 75 water-cooled pump. The vehicle was sanitized and pressure-washed and now is used strictly to haul waste vegetable oil. He expects to supplement that vehicle with a couple of smaller oil-collection trucks in the near future.

At Arcade Pumping, he replaced the old Ford with a 2006 Sterling that Imperial equipped with a 3,600-gallon steel tank, a Masport XL400 pump, and an O’Brien Mfg. toolbox jetter fed by a 55-gallon poly water tank.

Coulee Region BioFuels formally unveiled operations last summer. After Feyen took a little time off to attend to his wife as she gave birth to their daughter, he got back on the case.

MARKETING CHALLENGE

By early fall Coulee Region already had won local customers — firms buying its used oil to convert to biodiesel fuel. The tasks ahead include expanding the market for the fuel by persuading more people in Western and Central Wisconsin to consider oil-powered heating or biodiesel-fueled vehicles. Feyen has started by converting his own two trucks to burn vegetable oil. And for now there’s plenty of fuel.

“We’re getting three to four thousand gallons a week right now, and we’re not even trying,” Feyen says. And the company is closing on financing to make sure the startup doesn’t lack for marketing or business-development muscle. In the meantime, Feyen is hiring more employees for Arcade Pumping and stepping back himself to just managing the company so that he can stay focused on the biofuels business.

The company so far has not had to pay for any of its waste oil. For some suppliers who are planning to set up oil-fueled heating or acquire vehicles that run on oil, it has worked out agreements to sell back the refined oil at a discount. For other suppliers who are also septic customers, Feyen discounts septic services in return for the waste vegetable oil.

Feyen hopes that collecting waste oil is an interim step. If demand for vegetable-oil-powered machinery takes off, the demand for fuel will outpace the supply of used oil, and Coulee Region BioFuels will have to shift its emphasis.

“We believe in three to five years the virgin oil is where the market’s going to be,” Feyen says. And if that happens, so much the better. With biofuels, “Everything can be grown at home,” Feyen says. “It takes one crop season to grow the fuel that we can heat our homes with, that we can drive our vehicles on.”

Energy independence, freeing homeowners and drivers from dependence on petroleum from other countries — that, he says, is the real bottom line.

Converting trucks and furnaces to burn biofuel

Vegetable oil differs from conventional, petroleum-based fuels in that it has a higher ignition point. Drop a match in a puddle of gasoline, and you’ll get an explosion. In a puddle of vegetable oil, just a little bit of smoke.

To get vegetable oil to burn, it has to be heated first. Vegetable oil-powered vehicles use the same sort of technology that powers conventional diesel engines. While gasoline engines use an electronic spark to cause an explosion in the fuel, expanding the air and driving the pistons, diesel engines use the heat of the engine to make the explosion. That’s why diesel-powered vehicles have glow plugs that need to heat up before they can start.

“When the diesel engine was originally designed by Rudolph Diesel it ran on vegetable oil,” notes Dave Dudley. He’s a co-owner with John Feyen of Coulee Region BioFuels. Dudley is also the coordinator for PrairieFire BioFuels in Madison, Wis., which sells biodiesel fuel and installs conversion kits that enable conventional diesel engines to burn vegetable oil.

The difference between petroleum diesel fuel and biodiesel fuel is that the petroleum product can burn at a lower temperature than the biodiesel. Biodiesel, in turn, burns at a lower temperature than regular vegetable oil. “Vegetable oil burns very well, but you need to heat it up,” Dudley explains.

So the conversion kits that PrairieFire BioFuels installs include specialized glow plugs to add more heat at engine startup. They also include electronic controls, temperature sensors and relays to help monitor the process and make sure the temperature and pressure of the fuel is high enough for it to burn properly in the engine.

Conversion kits are designed specific to certain engines. Because vegetable oil is thicker than petroleum diesel fuel, the conversion occasionally includes modifications to the fuel injection system and a larger diameter fuel line, although that isn’t usually needed.

Biodiesel fuel is different from regular vegetable oil because it has been refined by adding an alcohol (usually methanol) and a catalyst, such as sodium hydroxide (lye) (NaOH) or sodium methylate (NaOCH3). The resulting reaction breaks up the large oil molecules to form two smaller products: glycerol and fatty acid methyl esters. The glycerol settles out and is removed, and the methyl esters that remain are biodiesel fuel.

Burners made by Inov8 International in La Crosse, Wis., use a similar approach to enable vegetable oil to be used to fuel boilers or furnaces, says Matt Fisher, Inov8’s head of sales and marketing. The Inov8 burners preheat the oil and atomize it, turning it into a mist that ignites more easily once it is preheated.

Regulation is a dynamic issue for biofuels

The idea of vegetable oil as a fuel is so new, no one is quite sure how to regulate it yet. That’s proved to be a challenge for Coulee Region BioFuels, but the company’s owners are taking a belt-and-suspenders approach: They’re trying to keep everyone in the loop.

First, there’s the fuel itself. Fuel emissions are regulated by the U.S. Environmental Protection Agency. Technically, says Dave Dudley, a Coulee Region co-owner and coordinator of the PrairieFire BioFuels Cooperative in Madison, Wis., burning vegetable oil as a fuel “may be a violation of the Clean Air Act” — but only if it has a negative impact on emissions. Data from states that have monitored biofuel emissions seem to indicate that its emissions are no worse than gasoline, and in some respects are better. Vegetable oil puts out about the same amount of carbon dioxide when it’s burned, but much less sulfur dioxide. Nitrous oxide emissions vary depending on the type of oil, but are still being studied.

To date, however, EPA officials have not tried to block the use of biofuels, Dudley says.

Then there’s the tax man. Where vegetable oil is used as fuel, it’s subject to the same excise taxes as other fuels.

Hauling oil has been probably the most complicated part of the regulatory picture, says John Feyen, who helped found Coulee Region BioFuels as an offshoot of his septic company.

At first, says Feyen, state regulators told him that since the purpose of the waste oil Coulee Region has begun collecting was to be reused as fuel, the company would have to abide by regulations for hauling and storing fuel. But as it became clear this was vegetable oil, they decided that wasn’t necessary. “They don’t know how to look at our plant,” Feyen says of state regulators. The standard regulations are all “set up for gasoline.”

Wisconsin’s departments of Commerce, Transportation, Revenue and Agriculture have all weighed in on the questions. At Wisconsin’s Department of Natural Resources, he says, reviewers concluded he would not have to get an agricultural product permit. Instead the waste-hauling permit that governs Feyen’s Arcade Pumping Inc. should be adequate, he was told.

The owners also went to the offices of Wisconsin Gov. Jim Doyle, whose Energy Independence Office has been helpful in navigating the complicated regulatory landscape.

Coulee Region BioFuels is getting the oil it collects tested so that it can give government regulators and customers specific information about the materials the company would be reselling as fuel. Says Feyen: “We’re just trying to cover all the bases, so we’re not going to get into trouble.”