The Chico Biodiesel Collective is finding out just how valuable the stuff can be. Last summer, the collective received a $20,000 grant from the Butte County Air Quality Management District (BCAQMD) so it could continue educating people about and producing biodiesel, a clean-burning, renewable fuel made from used cooking oil. What the collective didn’t initially know was that, by accepting donations of used fry grease from local restaurants, it was not only breaking the law, but also cutting into the profits of another local business.

That business, it turns out, seems to have had enough political clout to make the air quality district take back the grant money, leaving the small but feisty group with an expensive one-year lease on a new facility and a bunch of high-minded plans in limbo.

Collective leader Devin O’Keane said the air quality district rescinded the grant over the demands of North State Rendering, a local company that turns used cooking oil into poultry feed. North State charges restaurants to dispose of their grease, then processes it into feed and other products to sell at a profit.

When the company found out that O’Keane’s hippie collective was trying to muscle in on its racket, it hit back, telling BCAQMD Air Quality Officer Jim Wagoner that the collective was operating illegally, lacking the necessary grease-rendering permits from the meat processing branch of the USDA. Wagoner confirmed that his office pulled the grant on the basis of information given to him by a representative of North State Rendering.

“Based on the information we were given, there are certain registrations you have to have to collect and transport this used restaurant grease, which the collective didn’t have,” he said.

Wagoner said that, after being contacted by North State, he realized that “we don’t know that [the collective] will be able to secure all the licenses and registrations in a timely manner to carry out the grant.” Upon further questioning, Wagoner admitted the district “could have dug a little deeper” before the grant was approved.

O’Keane said he was dumbfounded by the district’s decision, especially since the grant proposal specifically stated that part of the grant money was to be used for obtaining the necessary licenses and permits. He said he had received a compliance warning—not a violation—from the USDA in July, and that he has since applied for a rendering permit. A USDA spokesman confirmed the group has an application pending.

What is really at issue here, O’Keane said, is that North State Rendering is trying to keep his collective out of the used-oil business, and what’s worse, the county seems to be placing one business’ profit over the public’s need for clean air.

“They make a lot of money picking up grease,” he said. “I think they’re really threatened by what our business does.”

North State Manager Chris Ottone would not comment on whether anyone from his company had talked to the district. He said he realized the collective’s activities might siphon “a little bit” of grease from his company but claimed not to be threatened by it, adding that his only concern was that the collective follow the same rendering rules he has to.

"Whatever’s legal, that’s what they need to do. If they’re doing everything by the law, it’s a free country, what can I say?"