Used cooking oil thefts plague restaurants as industry recovers from COVID-19 shutdowns

Thefts of used cooking oil, a lucrative byproduct of the cooking process that can be converted into biodiesel fuel, is running rampant at local eateries in the Hudson Valley.

With prices soaring to around double what they were a year ago, the "yellow grease" from restaurants is becoming an increasingly valuable target for black market thieves.

As the restaurant industry recovers from the coronavirus pandemic and ensuing lockdowns, it will continue to encounter this nuisance that has dogged industry players for years.

The value of spent cooking oil has ballooned from 16 cents per pound last year to 44 cents per pound last week. Restaurants in the Westchester and Rockland regions have become attractions for petty thefts. The thefts are a nationwide problem, say experts.

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“The oil gets taken almost every other day,” said Joe Novielli, the owner of Battaglia’s Deli & Meat Market in Dobbs Ferry.

Restaurants, major producers of yellow grease, typically enter into contracts with recyclers or waste disposal companies to collect the oil on a regular basis. The companies will provide restaurants with on-site storage equipment, such as barrels or tanks, and refine the product before it is resold to biodiesel producers.

The restaurants earn a small sum from recyclers depending on how much cooking oil they are able to provide.

“They came a couple times and fixed the barrel, because there’s a grate on top and someone broke into the grate, so they replaced the grate. But they haven’t come to fix it anymore,” Novielli recalled. “People keep on siphoning the oil out of there.”

Yellow grease worth millions

Approximately $75 million worth of yellow grease is diverted onto the black market each year, according to the North American Renderers Association, a trade group for the animal byproduct industry.

Though soybean oil is the most significant ingredient in biodiesel production, yellow grease comprised around 11% of all feedstocks in the production process pre-pandemic.

Despite the headwinds of the pandemic, biodiesel production rebounded strongly in 2020, nearly reaching 2018 levels after a dip in the intervening year. U.S. producers made 159 million gallons of biodiesel in December 2020.

In July, grease recycler Baker Commodities sent a statement to its Northwest clients warning of an increase in yellow grease thefts, calling it a “serious and growing problem.” A spokesperson told The Journal News that the company has also observed this trend in the Northeast and, in general, across the country, citing record demand for biofuels.

“Beyond causing property damage and costly, potentially hazardous spills, grease theft jeopardizes our nation’s supply of biofuel, one of our most valuable environmental resources,” said Jimmy Andreoli II, Baker Commodities’ assistant vice president for public relations and legislative affairs.

Local eatery owners speak out

Restaurants in Westchester and Rockland are no exception to this phenomenon. In Suffern, Nicky's Pizza has become a repeated target for theft, according to owner Gary Wirchansky.

He recalls once arriving at the restaurant to discover an unidentified van parked outside, apparently in search of used cooking oil. The van drove away quickly.

"Every time you turn around, somebody’s constantly taking the oil out of here," he said. "It’s only nickels and dimes to us. I just feel bad for [the recyclers]."

Nicky's is serviced by Buffalo Biodiesel Inc., which has launched a campaign to increase awareness about the thefts and pressure law enforcement to more aggressively investigate theft rings.

Law enforcement awareness (and pursuit) of yellow grease burglars can vary, though arrests are occasionally made if the perpetrator is captured in the act, or on surveillance footage.

In January, police in East Lyme, Connecticut, arrested two men in connection with a suspected yellow grease theft, with local reports indicating that officers were tipped off from their vehicle leaking an oily substance.

William Urbina Jr., and Kevin Romero-Castro, the latter from Yonkers, each face two misdemeanor charges stemming from the incident and are set to make their next court appearance at the end of August.

Other incidence of theft points to a deeper connection with organized criminal activity extending beyond the United States. In 2019, a federal grand jury in Raleigh, North Carolina, charged 21 individuals with theft, money laundering, and immigration fraud in connection with a yellow grease burglary ring. Several of those charged were Mexican nationals.

Prosecutors allege that the operation smuggled yellow grease from restaurants in North Carolina, Virginia, and Tennessee up to New Jersey where it was resold to a recycler.

Sumit Majumdar, president of Buffalo Biodiesel, said that he runs through around $30 million worth of yellow grease each year, collecting from 18,000 accounts the company has established across approximately a dozen states.

Majumdar estimates that he lost up to $10 million in potential revenues from thefts of yellow grease in 2020, contributing to an overall operation loss that year.

"I would have been sold or out of business if the price didn't double this year," he said. "I'm a straight, clean business. I buy it low and sell it high and I've got the labor costs in between."

The apparent rise in thefts has led Buffalo Biodiesel to roll out new security measures. The company began putting padlocks on all of its vats, but then "they started cutting off those padlocks," Majumdar recalled.

Next, he switched to padlocks made of a boron-alloyed steel, a much tougher material. Thieves turned to tearing out protective screens instead.

Eventually, Majumdar engaged a security consultant, who advised him that he would never be able to outpace the thieves targeting his clients. Instead, the consultant advised, Majumdar should place serialized security seals on every storage site, to be able to better monitor the incidence of theft.

Majumdar acknowledged that this shift in surveillance techniques may have contributed to the rise in thefts the company has observed during the pandemic. But he emphasized that because of the surge in price, it has become more economically viable for theft rings to target restaurants farther and farther from New York City, closer to the company's base of operations in Western New York. 

While thefts are a significant and notable obstacle to regular collection of cooking oil, the lockdowns imposed at the height of the pandemic may have played an even greater role in the disruption of the biodiesel supply chain.

In the Northeast, restaurants were hit particularly acutely with widespread lockdowns and abundant transmission during several pandemic peaks. A survey released last winter by the New York State Restaurant Association estimated that over 8,000 New York restaurants had been shuttered by the pandemic.

The vast majority of New York-area restaurants said they had been forced to consider temporary closures and layoffs and had experienced a reduction in business.

Todd Mathes, the senior vice president for restaurant services at Darling Ingredients, one of the largest yellow grease recyclers in North America, noted that the Northeast in particular has weathered economic conditions unseen in other parts of the country.

"Thefts are not our biggest issue. Our biggest issue is that restaurants have been closed," he said. "That's where we've seen volume fall off, with restaurants being closed. Now they're starting to open back up, but then they're having issues getting themselves staffed back up. I'd say that's the biggest challenge."

Darling Ingredients has not noticed an acute increase in thefts that has tracked alongside the surge in yellow grease prices, Mathes said, though he did observe that theft is one of several, notable causes of product loss in the industry.

At San Martino Ristorante in Yonkers, the substantial sums it would cost to eliminate repeated thefts can't compete with the paltry rebates the restaurant receives for its used cooking oil, according to manager Al Loparo.

"To spend thousands of dollars to catch somebody stealing $2 worth of stuff, it doesn’t make sense. We can’t afford it," he said. "We leave here at night and go home, and we don’t know what happens after we close until we come back in the morning. I wish there was a better way, but we can’t be here 24 hours a day."

Asher Stockler is a staff writer for The Journal News. You can find him on Twitter at @quasiasher or send him an email at astockler@lohud.com.