SAN FRANCISCO — A few years ago, drums of used french fry grease were only of interest to a small network of underground biofuel brewers, who would use the slimy oil to power their souped-up antique Mercedes.

Now restaurants from Berkeley, Calif., to Sedgwick, Kan., are reporting thefts of old cooking oil worth thousands of dollars by rustlers who are refining it into barrels of biofuel in backyard stills.

"It's like a war zone going on right now over grease," said David Levenson, who owns a grease hauling business in San Francisco's Mission District. "We're seeing more and more people stealing grease because it lets them stay away from the pump, but it's hurting our bottom line."

Levenson, who converted the engine in his '83 Mercedes to run on straight canola oil, has contracts to collect the liquid leftovers from 400 restaurants.

Last week when his pump truck arrived at Thee Parkside, a dive bar known for its chili-cheese fries, his driver found that someone had already helped himself to their barrel of yellow oil.

Grease is turned into fuel through a chemical process called transesterification, which removes glycerine and adds methanol to the oil, leaving a thinner product that can power a diesel engine. Biodiesel can also be blended with petroleum diesel, and the alternative fuels are now sold at 1,400 gas stations across the country.

But as the price of diesel shoots up, so, too, does the value of grease.

In the past three years, the price of soybean oil — the main feedstock for biodiesel made in the U.S. — has tripled. Last week, crude soybean oil fetched 66 cents a gallon on the open market, according to the National Biodiesel Board.

Those kinds of numbers have encouraged biofuel enthusiasts to plunder restaurants' greasy waste, and have even spurred the city of San Francisco to get into the grease-trap cleaning business

Drivers for Blue Sky Bio-Fuels, a grease hauler that also manufactures biodiesel for San Francisco's municipal program, often find the 300-gallon dumpster they put outside the Oakland coliseum nearly dry, despite the dozens of concessions stands that regularly dump their oil there. Losses at that one site alone cost the company $3,700 in revenues in the past year, said company official Wesley Caddell.

In Kansas, Healy Biodiesel reports thousands of dollars in losses from used cooking oil heists from restaurants near Sedgwick.

Standard Biodiesel in Seattle has started working with police to try to catch the fly-by-night home-brewers who are pilfering up to 30,000 gallons a month of the oil they collect from restaurants.

Oil rustlers typically siphon the supplies into drums of their own, which they take to backyard gins to be brewed for personal use.

With rising demand and government incentives to seek alternatives to petroleum-based fuels, biodiesel production has become a multimillion-dollar industry.

To manufacture the fuel legally, biodiesel producers must register with the U.S. Environmental Protection Agency. Biodiesel consumers must also pay the taxes on it to help with road upkeep.

San Francisco started its program, SFGreaseCycle, to cut down on the millions it spends each year to dislodge fats, oils and grease clogging the sewers. The city eventually hopes to power most of its buses, fire trucks and emergency vehicles with biodiesel made from local restaurants' old oil. It now collects about 15,000 gallons of fat and oil a month from 350 restaurants.

When the program started six months ago, the city picked up the old oil for free, and sold it to licensed biofuel makers for 30 cents a gallon. Now that restaurants are supplying the city with cleaner waste oil, it can get up to $1.25 a gallon, said Karri Ving, who runs the municipal program.

Those numbers have convinced Levenson he needs to invest in padlocks to safeguard his grease and the barrels that hold it. Several of those have disappeared, too.

But Levenson admits, "If I wasn't doing this company, I would probably be doing the same thing as everybody else, just going to restaurants and filling up directly."