I looked into bio-diesel and waste veggie oil a while back for my business- I burn around 375 gallons of diesel a month. To address some of the things I've read in this thread:
Bio-Diesel is not the same as Waste Vegetable oil:The stuff you get out of the fryer at McDonalds is Waste Vegetable Oil. A modified vehicle can burn this stuff directly, after you've filtered all the chunks out. No chemistry needed. You can also use Waste Vegetable Oil to make Bio-Diesel, but this is a more complex process, involving chemistry and some potentially dangerous chemicals.
Modifications to the engine: For direct burning of waste oil: you need a heating system added to heat the oil so that it's not too thick. Also a spare tank, and a switching mechanism, so you can switch back and forth from veggie to petro.
For Bio-Diesel: Cars made before 1994 need all the rubber parts in the fuel system replaced with parts made from Viton. Viton is a synthetic that won't break down when bio is run through it. The parts are readily available, because the high-sulphur diesel fuel that's being dispensed today eats those old rubber parts up anyway. in 1994, the automakers switched to Viton anyway, for just this reason. Diesel vehicles made since 1994 need no conversion.
Limited supply of Waste VegOil from restaurantsYou can use brand new, non-waste veggie oil, too. So the supply is only limited by what America can grow, or buy.
Limited availability of Diesel burning vehiclesThat's only because most people don't buy them. There are plenty of different vehicles being sold with diesel engines if you want one.
Not enough people using Diesel to justify putting it at the gas stationEVERY big truck you see runs on diesel. So does all the heavy equipment you see. A large percentage of full-sized pickups are diesel. And more cars than you think. When you see a new VW, do you ask the driver if it's a diesel or not? Because a lot of them are. A lot of other cars you see every day are/were sold with both gas and diesel engines, but how often do you check to see which one you're looking at?
Can't buy Bio-Diesel at the pump, except in a 2% blend100% Bio is available at the pump in the SF Bay area:
http://www.berkeleybiodiesel.org/resources.html#retail (retailers @ bottom of page)
The big problem is that high-percentage Bio is not currently Federally approved as a motor vehicle fuel. Those Bay Area guys had to get approval to sell it as an "experimental" fuel.
It clogs your fuel filterSort of. Petro Diesel leaves deposits all through your fuel system. Bio acts as a solvent, and pulls all that junk loose, clogging the filters pretty quickly when you first start using it. But after it gets it all clean, that problem goes away.
Waste Veg, on the other hand, will continue to cause clogs if your filtration is not good enough. French fry chunks will clog it up every time!
One other problem.... is that if you run on Waste VegOil or make your own Bio, you're not paying your highway taxes, since those are added on to your fuel costs at the pump. Not that I care if you want to stick it to the man, and it's unlikely you'll get caught. But a few people have been caught, and prosecuted. The way around it is to pay those taxes anyway, at the end of the year on your tax returns. You can still stick it to the man- claim on your return that you only burned 100 gallons of homemade fuel that year, instead of the 1000 you really burned. If you ever get popped for running non-taxed fuel, you can claim that was the day you ran a tank's worth of the 100 gallons you pay for on your return.