Recycling A Costly Commodity

This summer, most people were hit hard by rising gas prices that caused grimacing each time the gas gauge in their vehicles neared empty. But, those in the oil recycling business were not nearly as dismayed to see crude prices at an all-time high. In fact, they are making a profit out of it.

Collecting used motor and industrial oils in North America is a big business. According to Denise McCourt, manager of marketing issues at the American Petroleum Institute (API), Washington, there are roughly 1.4 billion gallons of motor oil sold in the U.S. each year. Oils used for industrial purposes fall just behind that with about one billion gallons sold each year. Making sure all of that oil is disposed of properly and is used to its highest potential is what oil recycling and re-refining is all about. And when the crude prices are high, it enables those who sell recycled and re-refined oil to charge more for their product—or gain market share by offering a lower cost product.

A Government Push

According to the National Oil Recyclers Association (NORA), Cleveland, oil recycling in the U.S. began in the early 20th century. But, it wasn’t until the 1980s that the government was interested in the environmental implications of used oil disposal.

The Used Oil Recycling Act of 1980 made it clear that the “recycling of used oil will result in the conservation of valuable energy resources as well as diminish the likelihood of posing a threat to public health and the environment if disposed of improperly.”

In 1985, the U.S. Environmental Protection Agency (EPA) added more regulations that governed the burning of used oil fuel, creating two categories of used oil fuel: specification and non-specification. NORA says, “once specification fuel meets all of the EPA’s limits on arsenic, lead, cadmium, chromium, flash point and total halogens, it is no longer subject to any regulatory control.” Meeting this criteria became easier when lead was phased-out of gasoline, resulting in the dramatic reduction of lead found in used oil.

In 1990, the EPA was still deciding if used oil was a hazardous substance. API's McCourt says the API advised the EPA that designating used oil as a hazardous waste would create a backlash, leading to less people who would be willing to properly collect and dispose of it. In 1992, the EPA published its used oil management standards, combining the regulations governing the burning of used oil fuel with the requirements for managing used oil by transporters, recyclers and transfer facilities.

McCourt says these regulations are not necessarily enforced by the EPA, but provide an exemption from Superfund liability for collectors if transporters don’t handle the used oil correctly. This exemption encourages people to collect used oil, she says.

A Competitive Marketplace

Collecting used oil is the first step in the recycling process. But because there is a larger market for used oil as fuel in the U.S., says Alan Gressel, technical advisor for NORA, collecting used oil for re-refining has proved unprofitable.

“As long as there’s a market for the oil as fuel, it’s pretty hard to get paid to pick it up,” he says. “Someone else might take it for nothing or even pay for it because they can burn it with very little or no processing and get the value of fuel. And although you might charge something, there’s no great demand for your product. There is a buyer for essentially all of the oil that is recovered after use, but most of it as fuel. The smaller amount ends up as lubricants.”

In most European countries, there is more oil that goes into lubricants because of the ban on burning used oil, Gressel says. The reason, in general, comes down to regulation.

“If there were no fuel market, one could charge what was needed for collection and add it to the sale price of the oil to make re-refined lube oil far more competitive,” he says. “In Europe, there is no fuel market and so there is a greater tendency to re-refine and there’s greater government support at a higher level than in the United States.”

Government mandates require commercial and industrial markets to take part in used oil collecting, even if it costs their business. Valvoline and the Valovoline Instant Oil Change centers participate in oil recycling despite the added cost. The environmental value of disposing of used motor oil properly is important, says Don Gebhardt, principal environmental engineer.

“It is critical for used oil to be recycled,” he says. “We believe this so strongly that, at a cost to Valvoline, we collect used oil from individuals within the community that change their own oil.”

Do-it-yourselfers are the one segment of the population that has been hard to reach as far as collection goes. The API estimates that half the motor oil produced in the U.S. is sold to do-it-yourselfers but that only 19% to 27% of this oil is being recycled.

In 1997, the most recent year for which data is available, the API estimates that 43 to 62 million gallons of used oil were collected and recycled by do-it-yourselfers, but in that same year, service stations and automotive service facilities recycled 194 million gallons.

Therefore, the greatest challenge in collecting used motor oil is educating do-it-yourselfers about the recycling options available to them.

The Re-refining Process

Once used oil has been collected, either from the commercial or industrial sectors, it is then either recycled or re-refined. The difference between the two is in the finished product. When oil is re-refined, all contaminants are taken out of the oil and it is taken back to its base stock, or virgin-oil state. When oil is recycled, it generally means only the heat value is recovered.

“Re-refining means that you’re processing it to capture the base oil,” says John Fahey, vice president for sales and marketing at Probex Inc., a Dallas-based lubricating oil technology company. “Recycling, unfortunately, has come to mean if you collect it, process it and make it into a fuel and burn it. That’s considered recycling and that makes our neck hairs bristle a bit. Yes, it keeps it from being disposed of improperly, but it recovers the heat value only. It does not recover the good elements in there.”

The “good elements” in oil that can be reused are water, fuel, vacuum oil and bottoms, the heavy tar-like residual, says Mike Ebert, facility manager, Safety-Kleen, East Chicago.

The API estimates 75%, or 750 million gallons, of used oil are processed per year and marketed to different industrial consumers: 43% to asphalt plants; 14% to industrial boilers; 12% to steel mills; 5% to cement/lime kilns; 5% to marine boilers; 4% to pulp and paper mills; 1% to commercial boilers; and 5% to other industry segments.

Marketing the Product

Re-refined oil is not as easy of a sell as one might think. A “recycled” or “re-refined” label can cause some potential purchasers to question the oil’s quality, and therefore makes it harder to sell than major brands. But many organizations, including the API and VIOC, are working to try to erase the stigma that comes with a “recycled” product such as oil.

Todd Coady, president of Hicks Oils in Roberts, Ill., says even though re-refined motor oil costs about the same as a major brand, there is a stigma attached to the re-refined oil that causes some consumers to believe it is not as good as major brands. “It’s not that the price is a problem, it’s the ‘what if this recycled product doesn’t work’ mentality.”

Hicks Oils makes new motor oil out of re-refined oil and sells it under the Nature’s Choice brand. Coady says there has been a growth in the re-refined market, but it has been slow.

Coady says he started the company because he knew it was possible to manufacture re-refined motor oil that meets new car manufacturers’ specifications. The Nature’s Choice brand has all its certifications from the API, allowing the company to sell to governmental agencies mandated to purchase recycled-content products.

“It’s a very rigorous process to get those certifications that the public doesn’t understand,” Coady says. “We meet the new car manufacturer’s warranty recommendations.”

Markets open to using re-refined oil are the industrial markets and governmental agencies. Industrial markets, in a closed-loop process, will have their lubricating oils collected and processed by a company such as Safety-Kleen and have the re-refined oil delivered back to them.

Re-refined oil is also in high demand from governmental agencies. The King County Metro Transit Agency, Seattle, Wash., switched to re-refined oil in February. Jim Boon, manager of transit fleet maintenance, says they haven’t had any problems with re-refined oil.

“It works fine," he says. "We had a test group of buses and did oil sampling and we also had the oil tested by one of our engine manufacturers. The oil is in the recommendation list of all the major diesel manufacturers as well as cars.”

Boon says purchasing re-refined oil has not proved to be any more or less expensive for the agency.

What Now?

It seems clear that governmental mandates will continue to ensure those in the commercial and industrial markets are collecting and recycling oil, but on the household consumer end, work needs to be done.

State and municipal recycling agencies who take part in educating consumers about the hazards of improper disposal of used motor oil and the quality of re-refined oil could help increase the number of gallons collected for processing and also help boost the re-refined oil market—helping ensure both environmental and economic success.

The author is the Internet editor for the Recycling Today Media Group. She can be reached at cgreen@recyclingtoday.com.