The stolen cooking oil is sold to grease processors who refine it, or sell it directly to biofuel producers. The majority of the recycled cooking oil sold is used for biofuel, fluctuating with market demand. It can also be used as a nutritional additive to animal feed and pet food, or in the production of many consumer and industrial products.
This demand is causing yellow grease prices to grow. The benchmark cost for yellow grease in July ranged between $25 and $27.50 per 100 pounds, which is roughly $2 more than July 2016, U.S. Department of Agriculture data shows. In 2011, when crude oil was more than $100 a barrel and the pump price of gasoline was almost $4 a gallon, yellow grease was worth $47.75 per 100 pounds, Bloomberg states.
These rising costs created a surging black market for grease theft, and biodiesel producers and refineries are — sometimes unwittingly — the biggest buyers.
That’s because biodiesel producers hunt for every drop of used cooking oil they can scavenge to help oil companies comply with a 2007 federal mandate for renewable fuels. The law requires oil consumption to include 2 billion gallons of biofuel in 2017, up from 1.9 billion in 2016.
Last year, 1.4 billion pounds of used cooking oil, at a rate of 3.84 million pounds a day, were turned into yellow grease and eventually biodiesel, Bloomberg reports. About eight pounds of used cooking oil are required to produce one gallon of biofuel.
Used cooking oil is gross, gooey and rancid. And properly disposing of it is a time-consuming and difficult task. Restaurants typically keep their old fryer grease in locked containers — either in the parking lot or inside the kitchen — and hire a licensed grease service provider, like DAR PRO Solutions, to properly remove the used cooking oil. Depending on market values, restaurants may receive a rebate from their service provider based on the value of their oil. The used oil is then refined by the service provider for commercial or industrial use, or sold directly to biodiesel producers.
When thieves steal this used oil, they are stealing from both the restaurant and their grease service provider, selling it to unscrupulous buyers for pure profit. While the more reputable companies only buy used cooking oil from approved vendors with a trackable chain of custody (particularly for oil that is being used in feed or technical applications), the need to meet government fuel mandates can entice some biofuel producers to buy from anybody — with no questions asked.
The ease of stealing used cooking oil, combined with a profit opportunity, has created grease bandits from all demographics — small-time thieves, shady competitors and even organized crime gangs — and the thieves are difficult to deter, says Frank Scoggins, a security manager with Darling Ingredients. Scoggins says his security team frequently encounters repeat offenders who refuse to leave the trade.
“There is a statement one serial grease thief told me a long time ago. He said, ‘grease gets in you,’ and that's a very true statement,” Scoggins says. “For a lot of them, once they start stealing grease they never stop.”
Not all cooking oil thieves start out with nefarious intentions. Scoggins says many of the people who become thieves initially tried to be legitimate business owners, but competing against companies with 50 to 100 years of experience turned out to be too much competition.
Fledgling companies often learn the hard way that paying restaurants requires an intricate balance between offering too little or too much money for used cooking oil. Some people will pay too much and go out of business, others will pay too little and get their accounts fleeced by competitors. When their profits get low enough, some people start stealing to make up the difference, Scoggins says.
Once the stealing begins it can spiral out of control quickly, both in scope and scale.
One such instance occurred in Missouri, where Scoggins and his team discovered a theft scheme that spanned more than five states. Initially, the Darling investigations team ran into a headwall with local law enforcement who didn’t want to prosecute the thieves because they only committed misdemeanors in each city. But Scoggins and his team persisted and eventually worked alongside a criminal investigator for the IRS. The investigation concluded by indicting and arresting several people and seizing a few million dollars.
Scoggins says establishing prosecution cases against thieves is a large part of his team’s purpose, but it’s not their main goal.
“Our job is not particularly to get the guy a whole lot of time in jail, which is great and we want that too, but the ultimate goal is to stop him from stealing — that's it,” he says. “If you're making a profit off trying to steal our oil, you're going to end up paying the lawyer in court and pay more with time in jail, because we're coming after you by any ethical and legal means necessary.”
The best deterrent for grease theft is to install a fully enclosed tank offered by DAR PRO Solutions. These connect to a proprietary fitting on the outside wall that only DAR PRO service vehicles can access, ensuring there is no way for thieves to siphon any used cooking oil other than conning their way inside the kitchen to manually pump it.
If an automated tank isn’t feasible, the following methods can help prevent used cooking oil theft:
Monitor grease levels in your tank; is it fluctuating between service visits?
Install a security camera that monitors your corral
Install fencing with a lockable gate to hide tanks from view
Install an alarm that sends mobile alerts if the oil level drops unexpectedly
Know the official uniform and vehicles for your service provider
Scoggins and his team are retired law enforcement, many of whom have narcotics and investigative experience. Since 2012, Darling has arrested and sought prosecution for hundreds of grease bandits. DAR PRO Solutions and Darling Ingredients believe educating their customers, the public and local law enforcement that grease theft truly is a crime is a key deterrent to stopping it.
DAR PRO Solutions is a thought leader in the industry for used cooking oil management and grease trap services. Our innovative equipment solutions, strong customer support, and service expertise will make handling grease a worry free part of your business. Reach out to a DAR PRO representative today and find out how your ghost kitchen or restaurant can benefit from our partnership. Call us 24/7/365 at 855-DAR-PRO1 (855-327-7761).