The theft of used kitchen grease might seem like an innocuous crime, but don’t tell that to Art Gonzales.

That’s because his company, Baker Commodities Inc. of Vernon, collects the grease from area restaurants, processes it and then sells it as biodiesel fuel. As the price of grease skyrockets, Baker is losing hundreds of thousands of dollars a year to thieves who make midnight raids to break open containers left outside restaurants and siphon out the used grease.

Baker, some other major grease recycling companies and restaurants are pushing for a crackdown on grease theft with a state law to toughen penalties for thieves, impose stricter licensing procedures for grease haulers and, most importantly, give local police the authority to impound trucks suspected of illegally hauling the stuff for up to 15 days.

The bill, AB 1566 by Chris Holden, D-Pasadena, passed the Assembly last month on a unanimous vote and awaits hearings in the state Senate.

After Baker Commodities took measures to secure its containers, losses were reduced; at one point, the company said that it was losing $1million a year in revenue to grease thefts.

“This was a huge problem for us, cutting into every aspect of our business,” said Gonzales, the company’s chief of security.

Because Baker did what it could to reduce the thefts on its own but is still losing substantial sums, he said the law has to be tougher.

Slippery problem

Holden and the bill’s supporters say the crackdown is necessary because existing law basically treats kitchen grease theft as a petty crime, with little more than a citation for the few thieves who are caught. That was fine when kitchen grease theft was an occasional crime of opportunity.

But about eight years ago, a spike in oil and gas prices sparked a surge in demand for used grease that could be turned into biodiesel fuel. The price for used grease doubled to $3 a gallon, which meant recyclers could get $600 for a single truckload. Recyclers started paying fast-food restaurants for their used grease. Until then, the restaurants had to pay recyclers to haul it away.

The thievery has grown into organized crime rings, complete with their own truck fleets. They flood into a neighborhood for a couple of weeks, targeting containers left by fast-food restaurants, then move on to another neighborhood, according to law enforcement officials.

Today, used kitchen grease theft is a pervasive problem. Trade publication Biodiesel Magazine recently ran comments from one industry representative estimating between 40 percent and 50 percent of all grease set aside by California restaurants for recycling is picked up by thieves, or, as the magazine termed them, “bootleggers,” who sell it to small recyclers who don’t ask many questions.

Reports like these prompted Holden to introduce his legislation.

“Kitchen grease is an important source of biodiesel to fuel cars and trucks and its value has skyrocketed in recent years,” Holden said in statement when he introduced his bill in January. “It used to be restaurants had to pay someone to take it away. Now it’s like the Wild West out there, everybody’s fighting over it, and we need to get a better handle on regulations.”

There is no organized opposition, only some concern from a few lawmakers about ensuring due process for alleged grease thieves.

Wasted money

The biggest victims have been the legitimate grease recycling companies, such as Baker and Darling Ingredients Inc. of Irving, Texas, which provides services nationwide. They get hit with a double whammy each time thieves siphon off grease from a collection container: Not only do they lose out on the potential revenue from selling the recycled grease as biodiesel fuel or an ingredient for animal feed, they also suffer wasted man hours and must fork out money to replace damaged containers.

“Each time we go out to a pickup site, it costs us roughly $130,” said a security coordinator for Darling, who did not want to be identified by name for fear of being personally targeted by the organized crime rings. “When they get to the pickup site and find the grease already gone, that’s money wasted.”

He said that in just five months last year, Darling drivers reported more than 600 such failed trips. That translates into an annual toll of roughly $250,000 just for the wasted man hours, fuel and equipment costs, not to mention lost revenue.

The Darling security coordinator said grease theft that last year resulted in a loss of about $3.5 million for its Southern California service territory, which stretches from Ventura County to the Mexican border. Los Angeles County represented at least one-third of that loss.

He said the company has instituted certain security steps, such as requiring padlocked fences around the containers, but “our efforts are frequently thwarted by the determination of the thieves. It’s a cat and mouse game: You keep building the wall and somebody keeps building a ladder tall enough to get over the wall.”

Fast-food targets

Restaurants are also victims, though to a lesser degree. While all eateries generate some used cooking grease, typically it’s the fast-food and casual dining restaurants that produce enough to regularly fill collection containers. But that also makes them tempting targets for thieves. For example, a report from the Pasadena Police Department cited grease theft incidents last year at a Denny’s, a Popeye’s and an Islands restaurant in that city.

The California Restaurant Association said its members have sustained both loss of revenue and damage caused by thieves, either from property destruction or grease spills that need to be cleaned up.

“Our members are increasingly concerned about the issue of grease theft, especially as more of them are becoming victims,” spokeswoman Angelica Pappas said in an email statement to the Business Journal. “Restaurants are now losing millions of dollars – both to theft and the costs resulting from the destruction of property and grease spills.”

In the statement, Pappas explained that there are used grease pirates who make brazen illegal pickups.

“Thieves have been documented impersonating legitimate grease collectors, using fake paperwork and uniforms and placing fabricated logos of legitimately licensed grease collectors on their trucks,” she said. “Once the grease is stolen, it’s nearly impossible to track, and it leaves restaurants unable to recycle the grease themselves through reputable services.”

Because routine grease theft is not considered a felony, law enforcement agencies are limited in their ability to halt the thefts. The citations they issue only amount to a few hundred dollars apiece.

Pasadena police Lt. Diego Torres said that the misdemeanor status now accorded to used grease theft “makes it hard for our department to hold suspects. … We can’t really get them off the street.”

He said the only arrest the department has made in a grease theft case in the last couple of years was because the person had a prior felony conviction. That person was part of a grease theft ring that was traced to Compton.

Tougher penalties

Holden’s bill hikes the penalties to as much as $10,000 for those not able to produce proper paperwork. It also boosts the profile for illegal grease collection by listing it as a violation in the California Vehicle Code. And it gives law enforcement agencies the ability to impound suspect vehicles for up to 15 days.

Dwight “Spike” Helmick Jr., a former commissioner of the California Highway Patrol who helped draft the Holden bill, said the impound provision is the most important part of the bill.

“Local police were stopping the trucks, but didn’t know what to do after that,” he said. “Now, you can impound their vehicles. The vehicle is then out of commission for 15 days and then they have to pay huge fees to get their vehicles back. That should prove a major deterrent.”