Add water, oil, ketchup, soy sauce, salt, garlic powder, onion powder, paprika, and a handful of fresh basil to a saucepan and heat until it starts to boil, then turn off the heat and allow it to cool for about 15 minutes.
Press a block (14 oz.) of tofu and crumble it into a food processor or blender, then remove the basil leaves from the broth and pour the broth into the food processor along with the tofu. (You can leave the basil in if you would like. It will give it a nice flavor, but make green flex in your bologna.)
Blend until it turns into a creamy thick liquid.
Pour into a large glass mixing bowl.
Add 1 cup of vital wheat gluten and mix well until a thick dough forms.
Add another 1/2 cup of vital wheat gluten and knead it into the dough until all of the wheat gluten has been absorbed and no longer feels wet. (You may have to add an additional tablespoon or two of wheat gluten until the dough is firm enough to hold its shape.)
Form the dough into the shape of a round loaf of bologna, and wrap the whole thing tightly in foil so that no seitan is showing. (It will try to expand and bulge out of any holes in the foil, so you may want to double wrap it to make sure there are no holes.)
Steam the wrapped bologna loaf in a large pot with a steamer basket for 1 hour and 15 minutes. (You can also use a pressure cooker or Instant Pot. Cook under pressure for 55 minutes and then allow steam to release naturally. Be sure that you put a lot of water in the bottom so it doesn't run out of water. If you notice less steam coming out, turn off your pressure cooker, and allow the pressure to come down and refill the water.)
Take the bologna out of the pot with potholders and allow it to cool for about 15 minutes before opening the packet. (I always get too excited to see my creation and get burnt with the steam when I open the foil too soon.)
At this point, the bologna is ready to eat. Slice it up and make a bologna sandwich with vegan mayo or vegan chipotle mayo.
Notes
Knead the seitan until all of the gluten flour is incorporated and you have a dough that's a little firmer than you would have for bread. Only knead it for about 30- 60 seconds so your wheat meat doesn't get too chewy.
If you don't want the foil to touch your food, you can wrap the loaf in parchment paper first, and then wrap the foil around that.