Oakland, California-based Blue Sky Bio-Fuels, Inc. has sent out its first shipment of biodiesel.

This story from the East Bay Business Times says the biodiesel is going to fuel school buses in the area:

Blue Sky, an 18-month-old Oakland company that manufactures biofuel from waste restaurant kitchen grease, formed a partnership with the city of San Francisco’s Greasecycle program to collect used kitchen oil and convert it into a fuel that burns more cleanly than traditional diesel fuel. Greasecycle was launched in November by San Francisco Mayor Gavin Newsom. Greasecycle is the first citywide program to collect fats, oil and grease, or FOG, and convert them into biofuel for municipal vehicles. The first restaurants that had their FOG picked up gratis by the city were Puccini and Pinetti in Union Square.

Recycled FOG from San Francisco restaurants in the Greasecycle program is estimated to generate 1.5 million gallons of biofuel each year. Fifty-nine restaurants had signed up for the program before its launch.

Blue Sky got its first shipment of waste oil about a month ago. You can read more about the company on its web site, BlueSkyBio-Fuels.com.