POSTED ON NOVEMBER 7, 2007:
Running on Full Imagination
Old science, sweat equity, and time to gather fatWith gas prices up, demand high, and supplies questionable, local entrepreneurs step into biofuel spotlight
Who You Gonna Call? Tulsa Biofuels is, from left, Randy Kimberlin, Robert Stephens and Todd Stephens.
"It's actually a strange mix of a couple of '80s movies," said Todd Stephens as he described the fledgling business he recently co-founded, Tulsa Biofuels.
"It's like Ghostbusters because you've got the scientist guy, the nerdy guy and the money guy, and it's like Men at Work because we're out there every day, just covered in gunk--you can't work with this stuff without getting it all over you," he said.
Fight Club actually came to mind when he described the process of turning cooking waste into fuel, but more on that later.
Whichever cinematic mold Tulsa Biofuels LLC fits into, it's still relatively unique as a business, both locally and nationally, which is what drove Stephens and Co. to turn what started as a curiosity-driven hobby into a bold new business venture in a relatively untapped market.
As Stephens explained, it all started two years ago when he and Randy Kimberlin ("Egon Spengler," a.k.a. the "science guy" of the bunch) were sitting down to a meal at the Atlas Grill in downtown Tulsa.
At the time, both were working for Matrix Architect, Engineers, Planners, Inc., and some shoptalk about environmentally friendly building designs somehow turned into a discussion about the rising price of gas in the wake of Hurricane Katrina.
"One of us said, 'There's got to be a way to make our own fuel,'" Stephens recounted.
"Then we talked about using vegetable oil for fuel, (Atlas Grill providing finely fried breakfast, lunch and dinner items since the '20s) and then we went to Google and tried to see if anyone was doing that in Tulsa, and we were surprised that no one was," he continued.
So, Kimberliin, a mechanical engineer, started looking into the process of turning used vegetable or animal grease into fuel.
Once Kimberlin understood the process, he, Stephens and Stephens' brother Robert started tinkering in Kimberlin's garage in his home in Broken Arrow, eventually building what would be the prototype for Tulsa Biofuels' biodiesel plant.
The homemade plant was completed in May 2006, and then the trio spent the next few months testing it.
After picking up healthy amounts of discarded cooking grease from a local Chinese restaurant, they put the sludge into a decanting tank, in which it was dewatered and filtered.
Then, it was placed in a holding tank where it was mixed with methoxide--a mix of methanol and potassium hydroxide. After that, it was then transferred to a settling tank where it separated into biodiesel and glycerin.
"The glycerin's heavier, so it sinks to the bottom, while the biodiesel floats on top," said Stephens.
By August, Kimberlin and the Stephens brothers had sold their gasoline-using cars and bought diesel-running cars instead.
After enjoying the benefits of driving around on cheaply produced, homemade fuel for a while, "it occurred to us that this could be a viable business," said Stephens.
The idea turned into excited conversation, and a business plan eventually emerged from those discussions about a year later.
Getting the right mix of methoxide reactant and cooking grease was the tricky part, he said.
"We'd often under-react and wound up with just vegetable oil, glycerin and crap. We'd also over react, and just got soap," Stephens explained.
While making soap was the aim of Edward Norton and his imaginary friend in Fight Club, it wasn't the goal of the Stephens brothers and their real life friend in Broken Arrow.
(The glycerin byproduct, though, is useful in a wide range of marketable applications, and Stephens estimates that selling it to glycerin refineries will make up at least a tenth of their revenue.)
"There's a very thin sweet spot where you get the right amount of reactant, and you get biofuel," said Stephens.
After that "sweet spot" is achieved, the biodiesel is then pumped into a wash tank, where it's washed with simple hot water two or three times.
"We just run hot water into it, and it's heavier than the biodiesel, so it sinks to the bottom, taking all the particulate matter with it," the entrepreneur explained.
The last step before the finished product is the centrifuge, where the processed and washed biodiesel is spun around at high speeds to separate it from any remaining wash water and other impurities.
Through the course of their planning, they turned to i2E, Inc.--"Innovation to Enterprise," which is an offshoot of the Oklahoma Center for the Advancement of Science and Technology, which helped them streamline their business plan and gave them an "award," for some startup costs.
The "award," Stephens explained, was essentially a loan that they'd have to pay back double in five years, unless their business failed, in which case they'd owe nothing.
They also received support from the Tulsa Economic Development Commission.
The trio still needed a sizeable business loan to get their business off the ground, which Spirit Bank eventually provided after two other banks turned them down.
"One of them didn't even want to hear our presentation," said Stephens.
Now, they're set up in north Tulsa on West 36th St. N., across from the Osage Casino.
They currently pick up the University of Tulsa's used cooking grease and use it as their raw material. Also, just last month, they made arrangements to pick up the used vegetable grease from 10 Tulsa-area restaurants, and a week before this writing, had arranged to pick up the refuse from the entire Broken Arrow Public Schools District.
Just as they do all the production themselves, the three also perform all the nasty grease pickup duties themselves.
They don't pay for the grease, as their donors consider it a free service to have someone come and take it off their hands, but Stephens said it won't be long before businesses will be able to sell their cooking waste off to the highest bidder.
"It's already happening on the coast(s)," he said.
That's because, as the Tulsa Biofuels principals discovered, "demand for this is freakish," said Stephens.
They're not selling any yet because they're not at full production, but Stephens said the City of Tulsa has already sent them three RFQs (request for quotes), and countless others have contacted them, asking to be notified as soon as they're producing at marketable levels.
"Everybody and their cat wants biodiesel," he said.
The reason for the demand, he said, is that biodiesel is environmentally friendly because it produces 70 percent less emissions than regular diesel or gasoline, and it also restores to engines the lubricity that's been lost through environmental regulations that require standard diesel have reduced sulfur content.
Also, biodiesel is a renewable, sustainable energy source, he said.
At the time of this writing, the company had that day produced its first "mini-batch," which was 100 gallons of biodiesel.
"We're starting on a small scale, and we're going to be ramping up gradually," said Stephens.
"We're a boutique plant--we're designed to be small and flexible," he added.
A full batch, he said, will be 500 gallons, and when the plant is operating at full capacity, they'll produce two full batches a day, with maximum production yearly between one and two million gallons.
They expect to be fully operational by the end of the month.
While trucking companies and government fleets are likely to be their biggest customers, Stephens said, "We're going to make a serious attempt to sell this on the retail market."
Biodiesel is currently priced at $3.54 a gallon on the Chicago Mercantile Exchange, and sells locally for $3.22 per gallon, he said.
"We're going to try to beat the retail market, though. If diesel is $2.90, we'll probably sell for $2.80," said Stephens.
The reason, he said, is that "I'm a capitalist, and I want to make a profit, but we also want to take the edge off for the local farmer who's got to deal with lower crop prices and rising energy prices."
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