Slippery Treasure

It’s a late Thursday night in the gritty south Los Angeles County city of Carson and Baltazar Fedalizo is on a quest for fuel. But as the co-founder of the biodiesel production and sales firm Biodiesel America, he’s not pulling into any gas stations. Instead, he’s lifting the lid of a tank that holds vegetable oil waste in the back of a Denny’s restaurant — and what he’s finding is yet another sign of just how desperate the nation is becoming in the battle for cheap fuel.

He shines a flashlight into a giant tank, which normally holds 150 gallons of the gunky fluid that’s left over after a couple of days of cooking, but is now empty. His frustration is obvious, even as he laughs incredulously at the effort that other mysterious figures must have made to steal the fluid that converts into biodiesel fuel.

“There are grates and protective covers for these, and you’re supposed to use the keys like I’ve been given from the restaurants as part of the deal for taking the oil off their hands,” says Fedalizo, who’s based his success on his company’s promise to always sell its biodiesel fuel for 50 cents less than the market price for diesel. “But these guys are cutting through thick metal with saws and blowtorches, man! The shit I’ve seen lately is unbelievable — people are even bending back metal to make holes in the covers and stick the siphons in. And you know, they’re using their bare hands.”

We never learn
Welcome to the wild world of the underground economy, where hundreds, perhaps thousands of people across Los Angeles County use the cover of night to raid trash bins and dumpsters for everything from vegetable oil to cardboard waste. And as the economy spirals further downward, Fedalizo is wondering just how ruthless things can get.

Yet there are enough signs of hope to remind us that the nation can still turn things around.
Readers might remember Fedalizo from a profile of him that appeared in Pasadena Weekly’s annual environmentally oriented Green Guide. At that time, April gas prices were hovering around $4 a gallon and Fedalizo was predicting that by the end of summer America would be paying a full five bucks per gallon.

As he offered a tour of his Chino-based company’s processing facility, Fedalizo railed against decades of misguided US energy policies that have led to the crisis the nation faces today. After serving in the US Navy and working in computer engineering, and before that working as a chef, the Altadena resident leaped into the biodiesel field in 2005 as a means of lowering his own companies’ fuel costs.
As fuel prices spiral uncontrollably, many others have jumped onto the bandwagon, creating an atmosphere that Fedalizo likens to outright piracy. For instance, savvy car buffs have bought pre-1994 Mercedes cars off the general marketplace because of their ability to run on a variety of petroleum alternatives, including unprocessed vegetable oil.

It’s a problem that Fedalizo and his team of 10 drivers are facing on a nightly basis across Southern California, as the tumbling economy gives way to a ruthless underground system of trash scavengers who are making bank on either stealing refuse like this type of oil or even cardboard waste and using it for themselves or selling it to recycling ventures.

“They’ve got to get that vegetable oil somewhere, so they raid the restaurants, and the cops don’t do anything about it because it’s easy to assume this oil’s all junk and not worth anything,” says Fedalizo. “But it’s about $3.50 a gallon. That’s nearly $500 being stolen every time they siphon these, but what can you do? People have got to keep their cars going to keep their jobs and get their families fed. So you have to let it slide and hope for the best yourself.”

Returning to a favorite complaint, Fedalizo says, “We just never learn. We had the same problems in the ’70s, in ’98, in 2003 and now boom, again. We never are really prepared, because our leaders don’t prepare. It’s so bad Gov. Schwarzenegger got busted for using veggie oil on his personal trucks and not paying the road tax that comes with gas.”

A long way off
But is our situation really as dire as Fedalizo says? There’s plenty of debate over whether the energy situation today is indeed the same as in past crises. According to Paul Lichterman, an associate professor of sociology and religion at USC, there is a “big difference” between now and the 1970s, when things got so bad that Americans were allowed to buy gas only on “odd” or “even” days according to their license plates.

“Calls for cultural change in the 1960s may have begun with young people whose elders considered them simply rebellious or nutty, but the idea of changing a lifestyle became widely acceptable. During the mid-’70s ‘energy crisis,’ ordinary people bought smaller cars, and bicycles,” explains Lichterman. “From the 1980s onward, some of these life-changing, culture-changing ideas have been demonized as the ‘bad ideas of the 1960s’ and more Americans are locked into an expensive way, and in some ways environmentally damaging way, of life, in spite of their own best intentions. Oil dependence is partly a way of life but also a product of how we organize our jobs, homes and lives.”

On the other hand, Caltech economics professor Charlie Plott says the argument that America doesn’t learn from its tough times is mistaken. Pointing out that “we still enjoy the cheapest fuel in many places in the world, and it’s much more expensive in Europe,” he says that while higher fuel prices might spur moves for alternative energy, in reality those alternatives are a long way off.
“That’s great there’s a financial interest in those things like alt fuels. The potential for profitability has been there, and if it manifests, it’s wonderful,” says Plott. “But solar energy is very costly, we have limited energy from hydrogen, and very limited [energy] from any kind of volcanic activity or steam. Where else is energy supposed to come from — the tides, or wind? It all has yet to be demonstrated on a mass level.”

Plott says that biodiesel advocates like Fedalizo “could be right that converting into heavy vegetable oils could be the answer, but so far it hasn’t worked.” He notes that the use of corn in fuel has had heavy consequences on the agricultural industry and in particular on the cost of cattle feed.

Yet Plott says that forced economic solutions like price ceilings are “silly” and result in “dislocations and mammoth inefficiencies,” because as prices are held down, demand goes up and the whole cycle essentially repeats itself.

“While the caps look to be helpful to the average person, what you don’t notice is that the price is down, but then gas is unavailable, so we stand in line,” says Plott. “That’s the kind of sad situation that we face. Everything I read says this current problem is long-term, but that the system will adjust. You already see it, because SUV prices are collapsing because no one wants something with 10 miles a gallon, and fuel-efficient cars go up in price. The economy is working the way it should; there’s nothing not understandable. We can’t have everything we want all the time.”

People have to eat
One man at the forefront of solving these problems is Glenn Keller, who as manager of the Vehicle Systems Group at the Argonne National Laboratory near Chicago supervises a team of 60 scientists attempting to devise engines that will provide at least 100 miles per gallon. Their main focus these days is on optimizing engines and fuels, by developing plug-in hybrid vehicles and pushing the frontiers of alternative-fuel possibilities.

“A plug-in hybrid vehicle is a modification of a normal hybrid like a Prius except you add a much bigger battery to it and you have the opportunity to charge this battery at home by plugging your car into a wall socket and, as a result, you can drive a portion of your commute each day utilizing electric power you’ve stored in the battery,” says Keller. “Depending on the length of your commute and how you drive your vehicle, you can get greater than 100 miles per gallon of gas with a plug-in.”
Keller notes that fully electric cars made a small splash on the American auto scene in the early ’90s, before they were “killed because of a combination of things: they were fairly exotic, high cost and questionable how long batteries might last.” He believes that at that point in time the economic climate was not conducive to making consumers enthusiastic about the  vehicles, and that people feared getting stranded if their battery charge ran out.

“The hybrid plug-ins will be gasoline-powered hybrids with a bigger battery, so you continue going with the gas in your tank even after the charge is gone,” Keller explains. “You get the best of both worlds: saving gas while on charge, but completing your trip because gasoline takes over.”

Sounds good, but Keller is also fully aware of the frightening reality that we are going to be stuck with high prices for a long time to come — perhaps even permanently. And he believes that the public hasn’t yet adjusted in a realistic way to the situation.

“You’re hearing the outrage over the prices, but not the undertones of ‘gosh, we’ve gotta do something about it.’ They seem to want to make the costs magically go down, but the public awareness of the state of the quest for new sources of energy is low,” says Keller. “The point is that the general public thinks it’s going to be business as usual a year from now when prices go down. I think we’re seeing the tip of the iceberg in the fact that there will always be upward pressure on gasoline prices and it just comes down to the fact that there’s a fixed supply and greater demand coming from countries around the world.”

Until the plug-ins are ready for release, possibly in 2010, Keller says pursuing alternative fuels is the other big solution. A key element is finding a way to replace costly diesel for freight trucks, which, surprisingly, are more important than ever for transporting goods. He’s optimistic about biodiesel, but he also believes ethanol, methanol and even coal-derived fuels — and amazingly, even algae — are the answer.

“It’s the diesel side of the demand that’s continuing to increase, whereas the gas demand in the US has begun to fall off and is no longer increasing. The simple explanation for that is our gross national product, raw materials and goods are transported by freight moved by diesel-powered equipment,” says Keller. “We’re using more truck freight than ever before. The point should be taken that when dealing with freight, these are not discretionary miles like the average person going to the movies but are essential to getting food in stores, clothes on backs and products for daily lives. One you can substitute and do away with, the other you can’t, unless you don’t like eating.”