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Grease bandits take off with 'liquid gold' Add to ...

Vern McArthur was driving his unmarked van through Toronto's back alleys last month, vacuuming out 55-gallon drums of used fryer grease.

But when Mr. McArthur, the owner of VMC Disposal Services of Halton, stopped for a regular pickup at a downtown diner, the containers were mysteriously missing, with only a trail of grease covering the nearby pavement.

The grease bandits had struck again. Days later, the containers were found in a back alley two blocks away, where thieves had evidently stashed them before siphoning out more than 400 litres.

“I see it all the time now,” said Mr. McArthur, the latest entrepreneur to smell eco-profit in the dirty business of grease collection. “Thieves are beating us to a lot of our grease. We're showing up and they're empty.”

On the surface, it might seem absurd: Grease is waste, not liquid gold. But, increasingly, grease is the word: Processed fryer oil, commonly known as yellow grease or waste vegetable oil, has grown valuable in a world desperately searching for fuel alternatives. Its value has doubled in the past year, driven by the ever-escalating price of oil, making it a popular form of biodiesel to fuel vehicles.

In Toronto, the grease industry is thriving like nowhere else in Canada, Mr. McArthur said, because of the competition from biodiesel startups and the high number of restaurants in the city.

There are at least 10 companies fighting with each other to get contracts with restaurants for their waste oil, and more grease-collecting biodiesel startups coming on board each month, he said. In Western Canada, by contrast, one company owns virtually the entire market.

The demand for grease is also driving collection companies to new ends to win over businesses and smother competition.

“It's cutthroat out there,” Mr. McArthur said. “I'm afraid I'm going to show up at one of my restaurants and there's going to be cement in my barrels.”

Restaurant grease is another trash-turned-treasure in Canada's thriving underworld economy.

Recently, manhole covers have been pried off the holes with picks or crowbars, then allegedly resold for scrap metal. Toronto's enterprising metal thieves have been reselling copper wire to scrap-metal yards for decades.

The grease industry, an offshoot of the rendering and biodiesel industries, has become so competitive that all the major local grease-collection companies complain of a spate of used-cooking-oil heists from their waste-oil containers. Mr. McArthur suspects that the thefts may be coming from black-marketeers or a minority of drivers who use filtered grease to fuel their converted biodiesel vehicles.

There are a growing number of such do-it-yourself environmentalists getting into the grease game: Anyone with a diesel vehicle can buy kits on the Internet, starting at around $1,000, to convert their engines to run on filtered fryer oil.

Jim Long is vice-president of rendering for Rothsay Biodiesel, a subsidiary of Maple Leaf Foods, one of Toronto's main grease collectors, with contracts for major fast-food chains and restaurants. He said the company has “several” investigations under way and has retained the services of a private surveillance team to find the thieves in some of the grease dumpsters hit most often.

“There has been a noticeable impact [on]volume,” Mr. Long said. “Theft of any kind will not be tolerated, and we continue to investigate incidents and work with the authorities. … Thieves are not only stealing from the approved service provider but also from the restaurant owner.”

Yellow grease comes from soy oil, canola oil and other oils used for cooking. In the past, its value has been as an additive to help manufacture soap, makeup, clothing, rubber and detergents. But its main use, historically, has been as a livestock-feed additive because it makes the food less dusty and more appetizing for farm animals.

In 2000, yellow grease was trading for around seven cents a pound. Last week, its price was more than 39 cents a pound, or around $3.60 (U.S.) a gallon. In Canada, that amounts to around $1 a litre. That would make the 5,000-gallon haul from a fast-food court, for instance, worth around $18,000 if the grease were pure. Even one of Mr. McArthur's 55-gallon drums would likely net $200 or more.

In this lucrative market, grease-collection companies are doing their best to stifle competition.

Last year, just after Mr. McArthur made his move into the grease market, his phone rang. The call was from another grease-collection company and the message was clear: Watch your back.

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