Business Tech

Recovering Tomorrow's Energy

Ben Cowart, founder and president of Vertex Energy, used his entrepreneurial vision to go from driving an oil collection truck to developing an industry-leading, environmentally safe refining technology that has changed the oil industry. 

Thermal Chemical Extraction Process (TCEP) was developed by the Vertex team in Houston, and is now pending an international patent. Conceived from biodiesel manufacturing, TCEP takes used black oil and extracts contaminants, including heavy metals, without any of the air pollutants associated with burning.

In his interview with The Suit, Cowart explained that TCEP yields more than 95 percent hydrocarbons, which is better than any other process available. "The finished product is clean and can replace No. 2 diesel," Cowart says. "It is safe for marine use and works well in marine port facilities with high volumes of ship traffic."

Cowart’s unusual path to success began during his teenage years, when he worked for his brother’s one-truck oil collecting business. "We went around to small shops and garages collecting oil. By the time I graduated high school, we had several drivers that worked for us. It was an evolving industry back in the 1980s—very much a rogue business with small, backyard operators. Today the industry is much different."

Cowart spent 15 years building a regional business with his brother before branching off on his own. "There was a saturation of market share," he says, "So I decided to start my own business. I was very much an entrepreneur and was probably more comfortable taking those steps than most people."

Cowart recalls his ambitious spirit. "I had a vision to go to the next level of our industry as I started to see that emerge. My first contract was with Texaco. They had a refinery in New Orleans that processed used motor oil from the automotive market. The rest, including what my brother was doing, was sold to industrial manufacturing facilities. Oil was burned as raw fuel, but Texaco refined it to a higher value product."

In order to supply Texaco's facility, Cowart networked with independent collectors around the country and developed aggregation and transportation logistics necessary to secure the oil. This became the niche that defines Vertex’s Black Oil Division today.

"There was a big gap between refining organizations like Texaco and the rogue, fragmented supply channel," Cowart recalls. "I mended that with what I call a middle market aggregation model."

Today, Vertex supplies multiple refining facilities with oil aggregated in 13 states by using a sophisticated operating system that moves product from market to market. "We are very close to the supply-demand balances for this material," Cowart says.

The Black Oil Division started in 2001, but Cowart didn't wait long before identifying other distressed petroleum streams that needed the same type of care and innovation. "We started aggregating these other streams and taking them to third-party refiners. We have a contract manufacturing agreement with a refiner. They process the stream for us and give us finished product on the backside of the process. This was our introduction to the refining margin that led to our Refining and Marketing Division, founded in 2004."

Four years later, Vertex began developing its own oil-refining technology that led to TCEP. "At that time, we were very entrepreneurial to step out and spend our own cash on a technology concept," Cowart said. "We built a plant on a development basis and ran it for 10 months to produce 50,000 barrels of finished product. We proved the concept and end-product specifications that were sold to major international trading firms."

That success led to Vertex's public merger in 2009. By allowing a large portion of company to go public, they secured investment cash, enabling commercialization of their technology.

"Last year was a year of refining our technology," Cowart says. "Our fourth quarter shows that the plant is online and doing very well." He adds that the black oil division continues to grow. "Our overall output increased in volume by 17 percent. We moved over one million barrels of finished goods."

The advancement of natural gas may have deterred some, but not Cowart. "Natural gas had become the fuel of choice for the industry," he says, explaining that it is cleaner, more available and cheaper to access. "This has had a profound impact on the market for used oil or recycled fuel. Companies like ours are pursuing other options to make a market for raw materials; otherwise, it would be stranded and potentially have a negative impact on the environment. We see a lot opportunity to pursue not only TCEP, but also technology we plan to develop for other markets," he adds.

Having built Vertex with only a high school diploma and firsthand knowledge of the industry at the ground level, Cowart decided to attend Harvard Business School for AMP credentials in 2009. "That really helped put some tools in my toolbox. Other than that, it's all been hands-on at the school of hard knocks," he laughs.

"I received a lot of advice along the way," Cowart adds. "My brother was obviously a major influence in my life and my career in many ways. I also got involved with a CEO peer group and have been meeting with them monthly for almost ten years. I've received lot of good feedback and candid counsel about the decisions I was making."

Cowart knows the value of expert advice and ensures that the Vertex board of directors fits the mentoring model. "These are very high level, highly talented business people who have far exceeded anything I've ever done," he says. "They've really held me up and walked with me as we've built this business."

With his bold initiative and relentless drive, it is no wonder that Cowart believes entrepreneurship is critical to America's future. "We're the guys that come up with the ideas, the innovations that will create the next industry and the next economic surge," he says.

"We've got to keep our spirit high and our creativity at the forefront. America is the greatest innovative country in the world. If you think about every major product or service that touches the common person, America is usually the leader in every category. It's in the DNA of our American economy and culture. I put a lot of faith in the entrepreneurship of the United States to push forward."

And "pushing forward" is precisely what Cowart continues to do. His vision for Vertex is to continue creating new technology and capturing the value of used oil as a resource here and around the world.

www.vertexenergy.com

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