Nothing moves but the smell.
Chicken carcasses are stacked waist-high: white feathers splayed straight, red legs shocked into death's rigid arrangement. To the right a sloping deposit of cattle entrails add maroon and traces of green to the picture. To the left, a field of chicken fat smears the floor like yellow sea foam. Upon closer inspection, the head of what appears to be a wild boar screams out of a mound of brown protein powder, all waiting to be reprocessed at Valley Protein's production facility in Winchester.
Recently unemployed hormones swarm out of the heap and form a foul, low-pitched odor, depositing its necrotic salts at the back of the tongue.
When asked how he describes this smell, Gerald “J.J.” Smith Jr. pauses before answering. “Money,” he says.
If it's the smell of money, Smith's company is loaded. Valley Protein makes its fortune when the animal waste and byproducts on the intake floor, stuff that's usually discarded by slaughterhouses and food manufacturers, is pulverized and cooked down. In the same way civilians fry bacon on Saturday morning, Smith will use heat to separate the fat from the protein. The resulting compounds will be processed into industrial additives for chicken feed, fish food, dog food and fuel. Everything will be used — wastewater is the only byproduct. The resulting revenue will gas Smith's private plane and finance his brother's new 1998 lemon-drop yellow Ferrari 355. In fiscal year 2008, the business posted $450 million in sales.
Back in his corner office, Smith sits in front of two full walls of windows, drinking in views of green pastures and blue mountains. Valley Protein's headquarters in bucolic Winchester, two hours northeast of Richmond, is the center of operations for his 12 plants.
Decorative figurines of chickens perch on his bookshelves and a stuffed cow with crossed eyes quakes and brays when squeezed — a mad-cow memento, Smith says. He has fleshy lips, a striped short-sleeved shirt, loafers and the same enormous diamond ring that glints from his father's hand in a portrait hanging in the lobby. You can't go to a school to learn this business, known as rendering. Although it starts on the horror show of the intake floor, it reaches across the ocean into international trade, federal regulations, complex machinery and an erratic commodities market.
Valley Protein, like many other rendering operations, has been a family business since Smith's grandfather Clyde started it in 1949. Over three generations of hard work, the Smiths have turned themselves into veritable grease barons.
But during the last few years, business has really taken off. Yellow grease — the catch-all term for the lipid brew Smith squeezes out of dead farm animals, slaughterhouse waste and the occasional bit of road kill that local governments scoop up — is caught up in the skyrocketing oil market.
In response to high oil prices, policy makers have encouraged the production of ethanol, which has made corn more scarce — and expensive — for use in livestock feed. Farmers spray yellow grease over animal feed to keep the calorie count steady while using less corn.
Yellow grease itself relies on used vegetable oil as an ingredient in the final product and as an important processing material.
So Valley Protein deploys a swarm of pickup trucks to suck spent fry oil out of tanks behind restaurants, doughnut shops, fast-food joints — wherever. Then employees pour it into their own giant cookers. The fat bath conducts heat and breaks down the animal parts like a deep fryer. Of the 50,000 suppliers Valley Protein deals with for its raw materials, 48,000 are restaurants. In a back-of-the-envelope calculation, Smith estimates his trucks sucked a million gallons of grease out of the Richmond region last year, an area where Valley Protein has long held an unofficial monopoly over the yellow stuff.
Although the rendering industry typically stays off the public's radar, competition has been building. In a shifting energy market, that same used-restaurant grease has steadily become a coveted resource in the young but rapidly growing biodiesel industry. Since biodiesel became commercially available in 1999, the fledgling market has sold close to a billion gallons of the fuel. While this has directly and indirectly helped renderers, everyone else wants to get in on the act.
This summer, Will Bates brought his grease removal service, the Greener Oil Co., from Northern Virginia to Richmond. He aims to break Valley Protein's hold over the used-fry-oil output. He promises clients that if they go with him, he'll divert the oil to cleaner-burning biodiesel, not dog food — a waste management mitzvah.
“We like to talk about the grease business as the wild, wild West,” Bates says, “because everyone's fighting for oil.”
Home on the range has become a little crowded. Smith had the pick of any grease pit until Bates galloped into town promising everyone a better future in biodiesel. But they're not alone out there. A goodly apothecary and Ukrop's Super Markets have teamed up to turn the chain's grease into fuel for grocery trucks. Meanwhile, a lone bandit or two have found ways to brew their own backyard fuel out of the fought-for grease — and not payed one red cent for it.
Although most commercial biodiesel is made from chicken fat or soybean oil, the availability and the relative simplicity of converting restaurant grease into fuel has lured a new crop of competitors eager to scrap for the limited supply of golden grease in the fry pits and make their own gas.
The founders of Greener Oil revel in a frontier freedom similar to the one that accompanied the dot-com boom in the late 1990s. It animates them with an impish creativity. They dream up names for all their trucks, such as Susie the Isuzu and Uncle Julio, christened for their client and favorite Mexican restaurant in Bethesda, Md.
Jess Cadwallender, Greener Oil's regional director in Richmond, drives H.W., a small flatbed truck with a snub-nosed trucker cab and a 750-gallon silver tank on the back. His ride is a tribute to H.W. Plainview, the forlorn son of an oil speculator in the recent movie “There Will Be Blood.”
“I consider myself an oil man,” Cadwallender quips, quoting a Daniel Day-Lewis line from the film while he swings H.W. onto Main Street for one of his pickup rounds on a recent, sunny afternoon.
Crossing over to Broad Street he grooves along to George Clinton tunes. Cadwallender graduated in 2007 from the University of Richmond, where he studied urban planning. After a few months of traveling, he landed a job with Greener Oil in May, in what he hopes will be the first stop in a career on the alternative energy frontier.
“The future of the U.S. has got to involve different energy sources,” he says.
Cadwallender pulls up on the curb in front of Empire, a hipster saloon smack in the middle of the Virginia Commonwealth University campus. Cadwallender, dressed in khaki shorts and a green company shirt, pulls on gloves and heaves the suction wand out of a holster on the floor of the truck's bed. The wand is basically a length of pipe on the end of a hose that feeds into the tank on the back of the truck.
Empire keeps its grease behind a fence, so Cadwallender threads the wand through the bars and into one of two barrels full of brown syrupy goop (with the occasional potato curl floating through). He's lucky here: no trash or rats bob in the oil. So he flips a lever activating a pump that slurps the mess into the tank. Different restaurants fill their tanks at different rates, but Cadwallender doesn't expect Empire will need another pickup until next month.
The grease pickup business has provided him with a novel metric for restaurant critique: The clearer the oil, the better the food. Comfort, the upscale soul-food restaurant on East Broad Street, has the best oil in town, he says. Seeing some of the foul-smelling deep brown oil pits at low-dollar establishments has made Cadwallender a purist in his own kitchen. He's now devoted to coconut oil and shares a not-very-cowboy recipe from the weekend's fried soft-shell crab tempura.
“Today's been mild,” he says. “Sometimes when you go to a place it's coated with putrid grease.” Competitive cleanliness is key to the Greener Oil sales pitch. Workers are not only better stewards of the earth, they argue, but also give better service than the grease barons at Valley Protein.
So far, so good. Greener Oil signed up 30 restaurants during its first month in Richmond, when Cadwallender was the only employee. This week he'll get a promotion and three employees to help manage more than 100 new contracts including VCU, Old Dominion University, James Madison University and the University of Virginia.
Back at Greener Oil's storage facility in Scott's Addition, plastic tanks filled with the brown fluid line the walls. (Cadwallender has furtively parked his fishing boat in there too.) They'll be transported to Maryland where a biodiesel processor will turn the grease into gas — “from French fry to fuel tank,” says Bates, Greener Oil's founder and a VCU art school dropout.
“I specialized in glass blowing and that uses an absurd amount of propane,” says Bates, 28, from his office in Washington. Besides, he says, “the only way to make it in glass blowing is to sell pretty things to old ladies.”
He's quick with the jokes, but during the two years he's been in the business, a prospector's wariness has set in. He won't disclose the processing company he works with or how many people he employs. He's constantly on guard against Valley Protein's long reach. In Bates' frontier scenario, Valley Protein's Smith plays the mustachioed villain.
“We're taking their business,” Bates says, “and we're taking it so easily.” The new company is certainly taking on business. Since starting Greener Oil in 2006, he's cultivated some 500 customers in and around Washington and Baltimore, including big clients such as Chipotle, Whole Foods and the University of Maryland. But it hasn't come easy.
Cadwallender tells a story about a Greener Oil pickup driver in Washington. Traffic is so much more congested in the area that they run pickup routes at night. One evening the driver, a 300-pound former college football player, hopped down into an alley to suction up grease from a new client. At the other end of the alley, a competitor's truck was lurking. There wasn't an altercation, but it reminded Bates to watch his back.
Bates won't discuss the details of his contract agreements except to broadly confirm that in the past Valley Protein charged a pickup fee, like for trash removal, and Greener Oil takes grease away for free. He pitches grease removal as a service, but as demand grows it's quickly become a commodity.
The demand for grease will eventually pinch profits, which means the free grease may soon be a thing of the past. In September 2006, yellow grease traded at 12 cents a pound. It climbed to 21 cents a year ago, and this month it's going for 33 cents a pound. Over at Davis and Main, a bar and grill in the Fan, the owner says he switched from Valley Protein to Greener Oil this summer to save on the fee, but agreed to pay a $400 breakup charge if he leaves Greener Oil within the first two years.
Valley Protein has started paying some of its clients for the veggie grease. But Bates' contract may make folks think twice before they jump ship.
Rob Caudle is painfully familiar with the headaches of the grease market. He works for Reco Biodiesel, a few blocks north of the 17th Street Farmers' Market in Shockoe Bottom.
Reco Biodiesel is the sister company of Reco Biotechnology, an environmental services company that cleans soil or water after petroleum has contaminated it. Their dirt-floored facility is a giant chemistry set with cookers and vats 20 feet high. With all that equipment, jumping into the biodiesel business was a no-brainer.
As with all new frontiers, however, the expansion into biodiesel hasn't come without hiccups. The plant is housed in what used to be the American Steam Locomotive Co.'s shed in Shockoe Bottom. Entering through a side door off the parking lot, everything inside the building is tinted a disorienting green from the plastic sheeting over the windows. To the left a football-field-sized heap of dirt ruminates as microbes chew through petroleum that spilled — from a leaking tank, or an old gas station — neutralizing it.
Past the indoor mountain, another high-ceilinged room houses a cluster of two-story metal vats standing behind a trailer unit, Caudle's indoor office. In the trailer, Caudle keeps a fat binder of article clippings, which he refers to as his “freaking bible,” along with rendering trade magazines and a small dishwasher to clean the vessels he uses to experiment with different chemical levels.
Caudle, 36, is, as he phrases it, “a recovering lawyer” who gave up the courtroom three years ago and joined Reco after marrying the boss's daughter. “I never thought I'd be reading a daily bulletin about animal-fat pricing,” he says.
Now he wears work boots and white coveralls to work, and his wispy, unkempt blond hair makes him look perfectly at home with his beakers and vials. “The one good thing about being a lawyer is you know how to research,” he says. After getting curious when he saw a vacuum truck pulling out from behind a restaurant, he turned his focus to biodiesel manufacturing and finished his first batch in November 2006.
Reco made the early loads out of chicken fat and soybean oil. This summer it started collecting fat from Ukrop's commercial kitchens to mix into the diesel used for the company's delivery fleet. Along with the holiday parades, and 10k footraces, the composting program is another episode in the locally owned grocery chain's attempt to do the right thing, while burnishing its rectitude and folksy Main Street appeal.
Collecting enough grease from Ukrop's to run a full batch took most of the summer, so Reco's encouraging some of the industrial food processors that Ukrop's works with to start sending their grease to Richmond as well.
When Ukrop's approached Reco about switching over from Valley Protein, Caudle was careful to avoid any kind of contractual interference.
“Every industry has its personality and render-grease is pretty freaking gross, and you've got to be pretty freaking tough to do it,” he says. “Nobody's really been messing with” the established rendering firms until now.
Out on the floor in the old train shed, a 7,000-gallon vat of chicken fat (“It's actually poultry fat, turkeys, too,” he says. “We need to be all-inclusive.”) sits in a corner waiting to become biodiesel.
Fat molecules are shaped like capital letter Es. They have a glycerine backbone and three fatty-acid chains tailing off. The chicken fat or veggie oil gets mixed with methanol, a kind of alcohol, and a catalyst, such as sodium or potassium hydroxide. The catalyst comes along and tears the fatty acid chains off the glycerin until all the fats are separated. Glycerin is heavier than fat, so after the reaction has run its course the mixture is transferred to a cone-bottomed container. The glycerin settles at the bottom and gets used to make soap or animal feed.
The first batch of grease from Ukrop's went through the same process last week, and on Sept. 5, for the first time, the store fueled its fleet with its own fry waste.
Reco produces between 40,000 and 60,000 gallons a month. It sells the stuff to petroleum distributors that make it available at the pump. One of those clients, Woodfin Watchcard, a division of Woodfin Oil, only used to sell diesel fuel to truckers. When it started selling biodiesel in 2006, the company opened its fueling stations to the public. The self-service stations are unmanned, requiring customers to apply for membership. Four Woodfin stations in the Richmond region now pump biodiesel — which last week went for $4.04 a gallon.
“We just felt it's a step in the right direction for the environment,” says Tim Earley, operations director of Woodfin's gas-station division. Petroleum-based diesel and biodiesel are priced the same at the pump.
The federal government wants to see more of this, and offers a $1 tax credit for every gallon of petroleum diesel that gets mixed with biodiesel. For now, biodiesel made from restaurant grease is not eligible for the credit, but by the looks of things it will be when the bill is renewed next year.
So is diesel vs. biodiesel like Pepsi vs. Coke?
“It's like Pepsi and champagne,” Caudle says, back inside the trailer. “Biodiesel burns better in your car.” There are virtually no sulfur emissions, it cleans out the gunk from old diesel and provides better lubrication. Also, he says, “customers like the green thing, they like that it's domestically made.” Caudle has heard of contracts requiring builders to use biodiesel on construction projects.
The rising demand for biodiesel has also led to thefts. The June issue of Render magazine, a trade publication, reports that yellow grease theft is increasing. A rendering firm based in Kentucky, family run Griffin Industries, has reportedly hired two private investigators to investigate grease theft. Valley Protein's Smith estimates that five percent of his company's contracted grease gets stolen, but says pursuing the thieves, at this point, isn't cost effective.
“I've spent plenty of my life on P.I.s and off-duty detectives. That's $10,000 for nothing,” he says. “When something goes up in value, someone's going to steal it. There's probably $200 in [one restaurant container]. The only $200 a judge cares about is if someone stole his mower.”
It does hurt renderers, though, says Bill Smith — no relation to the Valley Protein family. He's a reporter for Urner Barry's Yellow Sheet, an industrial fats commodity tracker. As the grease has gone from free to a commodity, he says, thefts have become more commonplace.
“A good comparison might be if you went to a Mobil and took gas out of the reserve tanks,” he says. “It's stealing product for them.”
In addition to a host of new competitors, the rendering process has attracted simple moonshiners who brew batches of fuel for themselves and a few friends. Shannon Black, 36, works for Altria and cruises around town in a Mercedes that runs on converted pizza grease from Mary Angela's Pizzeria in Carytown. He says the fuel runs his engine “smoother, maybe a little peppier.”
Black, a cycling enthusiast, has an end table on his front porch depicting a bicycle in mosaic tiles and a row of backyard tomato plants. He's part of a growing network of do-it-yourselfers.
Munching on burgers with Black, recent home-brew converts Christina and Reid Harris, who live in Chesterfield County, exchange tips on self-processing. The Harrises say they switched because gas has become too expensive, but it's hardly a conventional belt-tightening response for a family of four.
Christina Harris teaches at a Waldorf school where one of the classes went on a field trip to Black's back yard shed. She was blown away. She started researching the process so much that she and her husband were literally “losing sleep over it,” she says. Being self-reliant was the big selling point.
“I stayed awake studying Web sites,” Reid Harris says, drunk on the possibilities. “It's just cool that you can use something that was wasted. If I could, I'd have solar panels and a windmill.”
The setup in Black's shed — the Harrises bring their grease to his place for conversion — follows the same chemical process on a fraction of the scale.
The grease is poured into a glass vat that stands about waist high. To test the level of acidity in the mixture, he adds tumeric, a golden-colored kitchen spice often used in Indian food that turns scarlet when the balance of oil and catalyst is right.
Black heats the mixture with an old hot water heater and has assembled all the pumps and hoses from pieces easy to find around the house or at the hardware store. The catalyst chemicals each only cost three or four dollars a pound, and a pound is enough for 200 gallons. Depending on whether he uses potassium hydroxide or sodium hydroxide, the glycerin byproduct comes out as solid or liquid. On a shelf behind his orderly tubes and bottles, he stashes a heather-brown bar of soap made from the leftovers. He can complete a batch in a few hours, but typically lets it cook overnight.
Black and the Harrises aren't sure how many other folks in the area are trying the same thing, but Black regularly notices cars on the Craigslist trading post tagged as “ready for biodiesel.
Meanwhile the grease is becoming more scarce. The Harrises, infected by that prospectors' discretion, won't reveal their sources. “It's very competitive,” Christina says.
“I would like to see all of the waste oil in Richmond go into biodiesel,” Black says, “as long as I don't have to pay for it.” It seems like a better use than dog food, he says, wrinkling his nose.
Smith is used to the villain treatment and knows the dog food jokes all too well. Valley Protein used to pick up euthanized pets from local veterinarian's offices for rendering. Then, on March 9, 2000, on his 39th birthday, a Washington television station ran a story accusing him of selling people's beloved pets to the dog-food factory. His comment for the story was that Valley Protein would stop immediately, a move he says has cost animal care facilities huge amounts of money in incinerator operating fees.
Back in his glassed-in office, he takes two books off the shelf. The first, published in 1978, is called “Rendering: The Invisible Industry.” A more recent title on the business updates the image to “The Original Recycler.” Smith is used to the ebb and flow of public opinion, just as he's used to the rise and fall of the market.
How much attention the business should call to itself has long been a topic of family debate. In the early days, his grandfather was reluctant to expand into the D.C. market. They were a small company, no sense in luring the big boys into the sleepy Shenandoah Valley. Then Smith's dad took over.
“Some of those guys took my dad lightly,” Smith says, “and we own them now.” It's a lesson he takes to heart.
“Every little guy out there has the ability to take our place in the industry,” he says. Not that he's worried just now. Smith's fat boilers can run on oil or burn the raw yellow grease the company produces. For the past few months, Smith has opted to buy oil because it will be cheaper than what his grease can fetch on the open market.
But he's seen it before. As the commodity market fluctuates, so does competition. Every now and then, encouraged by a promising market, a competitor will set up shop. The new biodiesel competitors and the roller-coaster commodities market don't scare him. The other day, he had lunch with a grease collector that Smith bought out eight years ago. With this up market, he's back in the business again.
“Before he retires,” Smith says, “I'll buy his routes back.” S