PB-237 620
A TECHNICAL AND ECONOMIC STUDY OF WASTE OIL RECOVERY,
PART III: ECONOMIC, TECHNICAL AND INSTITUTIONAL
BARRIERS TO WASTE OIL RECOVERY
TEKNEKRON, INCORPORATED
PREPARED FOR
ENVIRONMENTAL PROTECTION AGENCY
INSTITUTE OF PUBLIC ADMINISTRATION
OCTOBER 1973
DISTRIBUTED BY:
National Technical Information Service
U. S. DEPARTMENT OF COMMERCE
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BIBLIOGRAPHIC DATA
HKET
1. Report No.
EPA/530/SW-90C.3
PB 237 620
Title and Subtitle
A TECHNICAL AND ECONOMIC STUDY OF WASTE OIL RECOVERY
Part III: Economic, Technical and Institutional Barriers
to Waste Oil Recovery
5. Report Date
October, 1973
6.
Author(s)
Peter M. Cukor> Michael John Keaton, Gregory Wilcox
8. Performing Organization Kept.
No.
Performing Organization Name and Address
Teknekron, Inc. and The Institute of Public Administration
2118 Milvia Street
Berkeley, California 94704
10. Project/Task/Work Unit No.
11. Contract/Grant No.
EPA Contract No:
68-01-1806
2. Sponsoring Organization Name and Address
Office ot Solid Waste Management Programs
UoS. Environmental Protection Agency
Washington, D. C. 20460
13. Type of Report & Period
Covered
Final 1 year
14.
15. Supplementary Notes
16. Abstracts
A study of the waste oil re-refining industry, emphasizing economic,
technical and institutional barriers to waste oil recovery. .
17. Key Words and Document Analysis. 17o. Descriptors
Secondary Oil Recovery, Economic Analysis
17b. Identifiers/Open-Ended Terms
Reproduced by
NATIONAL TECHNICAL
INFORMATION SERVICE
U S Department of Commerce
Springfield VA 22151
Waste oil re-refining, recycling, re-refining industry analysis
17c. COSATI Field/Group
18. Availability Statement
19..Security Class (This
Report)
_uucj,
121. No. of Pages
.AfsinEP.
Class (This
20. Security Class (This
Page
UNCLASSIFIED
FORM NTIS-SB (Rev. 10-731 ENDORSED BY ANSI AND UNESCO. |
THIS FORM MAY BE REPRODUCED
USCOMM-DC 82«B-P74
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A TECHNICAL AND ECONOMIC STUDY
OF WASTE OIL RECOVERY
Part III: Economic, Technical and Institutional Barriers to Waste 011 Recovery
This report (SW-90c.3) was written by
PETER CUKOR, MICHAEL JOHN KEATON, and GREGORY WILCOX
Teknekron, In(c., and The Institute of Public Administration
under contract no. 68-01-1806
U.S. ENVIRONMENTAL PROTECTION AGENCY
1974
\(J
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This report has been reviewed by the U.S. Environmental Protection Agency.
Its publication does not signify that the contents necessarily reflect the
views and policies of the U.S. Environmental Protection Agency, nor does
mention of commercial products constitute endorsement or reconmendatlon
for use by the U.S. Government.
An environmental protection publication (SW-90c.3) 1n the solid waste
management series.
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Stotici
The report A Technical and Economic Study of Waste Oil
Recovery, prepared by Teknekroo, Inc. and the Institute
of Public Administration under EPA Contract $8-01-1806,
has been published in three separate volumes under the
following titles:
A Technical and Economic Study of Waste 011 Recovery -
Part I; Federal TteSMrM^nJMQSJilDfro'P Automobiles
A Technical and Economic Study of Waste 011 Recovery -
dy of waste Qil Recovery
f Dispersed Sources of Us
Part II; An Investigation ofPlspersed Sources of Used
Crankcase 011s
A Technical and Economic Study of Haste Oil Recovery -
Part III:Economic, Technical and Institutional
Barriers to waste OTTRecovery
Freeing page blank
111
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TABLE OF CONTENTS
SUMMARY 1
CHAPTER 1: THE RE-REFINING INDUSTRY: AN ECONOMIC ANALYSIS... 9
1.0 INTRODUCTION 9
1.1 DESCRIPTION OF THE RE-REFINING INDUSTRY 11
1.1.1 Composition 11
1.1.2 Phases of the Industry 11
1.1.3 Description of Re-Ref1n1ng , 11
1.1.4 History of the Re-Refining Industry 15
1.1.5 The Decline of the Re-Refining Industry 16
1.2 COLLECTION OF WASTE LUBRICATING OILS 21
1.2.1 Independent Collectors 21
1.2.2 Charges and Payments for Waste 011 Pickups 21
1.2.3 Supply of Feedstock 24
1.2.4 Waste Oil Collection by Re-Refiners 25
1.2.5 Closed-Cycle or Custom Re-Ref1n1ng 26
1.3 RE-REFINING OF WASTE CRANKCASE OILS 27
1.3.1 Process Description 27
1.3.2 Process Economics 27
1.3.3 Breakdown of Production Costs 30
1.3.4 Blending and Compounding 33
1.4 MARKETING 37
1.4.1 Wholesale Markets 37
1.4.2 Retail Markets 37
1.4.3 Commercial and Industrial Markets 38
1.4.4 Comparison of Markets for Re-Refined Oil 40
1.5 VIRGIN AUTOMOTIVE CRANKCASE OILS 43
1.5.1 Production of Virgin Lube Oils 43
1.5.2 Supply of Virgin Lube Oils 43
1.5.3 Effect on the Re-Refining Industry 49
Preceding page blank
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1.6 CRITERIA FOR SUCCESS IN RE-REFININS. 51
1.6.1 The "On-Highway" Market................... 51
1.6.2 The "Off-Highway" Market. 51
1.6,3 Diversified Operations... 53
CHAPTER 2: EVALUATION OF LUBE OIL QUALITY. ".. .57
2.0 INTRODUCTION 57
2.1 SPECIFICATIONS 59
2.1.1 API/SAE Specifications..'. 59
2.1.2 Engine Service Classification........1'.... 60
2.1.3 Definitions and Explanations of API Engine
Service ClassifIcatlofts 62
2.1.4 Application of API/SAE Specifications...... 67
2.1.5 Automobile Manufacturer's Specifleations 67
2.1.6 Military Specifications............ 69
2.2 TESTING... 71
2.2.1 Laboratory Bench Seal© Tests. 71
2.2.2 Engi ne Tests 74
2.3 CONCLUSIONS 81
CHAPTER 3: FEDERAL PARTICIPATION IN HASTE OIL RECOVERY 85
3.0 INTRODUCTION 85
3.1 PROCUREMENT OF LUBE OIL BY THE FEDERAL GOVERNMENT 87
3.1.1 Establishment of Lyfee Oil Specifications .87
3.1.2 The Coating and Chemical Laboratory.. 87
3.1.3 Procurement Procedures 92
3.1.4 Organizational Structure. 92
3.2 WASTE LUBE OIL DISPOSAL BY MILITARY FACILITIES 95
3.2.1 Organization 95
3.2.2 Procedures 95
3.3 REMOVAL OF FEDERAL BARRIERS TO WASTE OIL RECOVERY 99
3.3.1 A Restatement of the Problem... 99
3.3.2 Establishment of a NSM Specification.... ..99
3.3.3 Re-Refining From a Constant Source of Waste Oil 100
3.3.4 Rationale for Federal Participation...... 101
VI
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3.3.5 Implementation Plan—Exceptions to Procurement
Procedures 102
3.3.6 Further Examples of Lube 011 Procurement 103
3.4 A PROPOSAL 107
ACKNOWLEDGMENT Ill
APPENDIX A: MILITARY SPECIFICATIONS MIL-L-46152 AND MIL-L-2104C FOR
ENGINE CRANKCASE OILS 113
APPENDIX B: LETTER TO FTC BY R.G. STREETS, ARMY MATERIEL COMMAND 137
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SUMMARY
Since 1960, the re-refining of used automotive engine oils, once a
flourishing industry, has continuously contracted, both in number of firms
in operation and annual volume of lube oil re-refined, A plentiful supply
of virgin lube oils, adverse government rulings regarding lube oil taxation
and labelling of recycled oils, and the failure of the re-refining Industry
to provide consumers with products of consistently high quality have been
major factors 1n the decline of this business. For example, in 1960, about
150 firms produced 300 million gallons of re-refined oil. As of 1972, the
45 firms still operating produced only 100 million gallons of recycled
lubricants. More recently, sharply reduced availability of waste oil sup-
plies and environmental restrictions on the disposal of toxic wastes pro-
duced as by-products of re-refining have contributed to the contraction
of the industry.
In order to understand the reasons for the decline of the re-ref1n1ng
industry, a study was made of the economics, structure and competitive as-
pects of the business. As a part of this analysts, interviews were con-
ducted with thirteen re-refining companies throughout the United States.
Economic and operating data for these firms were collected and analyzed in
order to determine the key costs and criteria for success at each stage of
the industry, the types of markets served, the profitability of these mar-
kets, and the ability of re-refiners to compete with producers of virgin
lubricants. The analysis revealed the reasons why a few re-refiners have
been able to prosper while the majority of firms still in existence are
only marginally profitable.
Waste Oil Collection
The first stage of the re-refining industry is the collection of waste
oil. Traditionally, used oils have been collected both by small, indepen-
dent operators, who would sell the oil to re-refiners or anyone willing to
pay the going price, and by re-refiners themselves. For many years most re-
refiners were able to obtain adequate waste oil supplies at relatively low
cost. However, since 1972 tight supplies of and rapidly rising prices for
energy sources have served to divert substantial volumes of waste oil to the
fuel market. Until recently, lube oil prices had not advanced sufficiently
to permit re-refiners to compete successfully for waste oil supplies with
persons buying waste oil for use as fuel. However, since late 1973, a grow-
ing shortage of virgin lubricants has resulted in substantial price in-
creases for both new and re-refined oils. As a result, re-refiners are
now able to pass along the increased costs of acquiring waste oil supplies.
In the future, the degree to which these firms will be able to secure ade-
quate volumes of feedstock will continue to depend on the relative market
prices of virgin lube oil and fuels. Higher fuel prices in relation to
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those for lube oil will direct waste oils to the fuel market. Conversely,
higher lube oil prices in relation to fuel will enable re-refiners to com-
pete successfully for scarce supplies of used lube oils.
Re-Refining of Uaste Oil
Nearly all re-refining plants in the United States use the acid-clay
process for treating waste oils. In this process water is removed by dis-
tillation. The water-free feed is extracted with sulfuric add to remove
spent additives and sludge. The raffinate (lube oil free of additives and
sludge) 1s distilled to remove low boiling components and mixed with clay
to remove colored bodies and colloidal carbon. Tht clay 1s separated firttn
the distilled product by filtration. The viscosity of the re-refined pro-
duct may be increased by blending with appropriate virgin lube oils or syn-
thetic polymers. Chemical additives are then blended as required to meet
specifications for various applications. The acid sludge 1s dumped where-
ever local regulations permit.
Based on interviews conducted with 13 re-refiners during the summer
of 1973, average cost figures for each step In the re-refining of waste
lube oils were obtained. The most Important variable in the cost of re-
refining is the annual production rate. Excluding the cost of feedstock,
the combined expense of labor, overhead and depreciation accounts for sixty
percent of total per gallon production costs for re-refined oil. Hence
those firms with the largest throughput have the lowest production costs,
Excluding feedstock, these costs ranged from 11< per gallon for a firm pro-
ducing 7,200,000 gallons per year to 16$ per gallon for a firm producing
540,000 gallons per year.
Excluding taxes and administrative costs, the average total production
cost for the firms interviewed was 17.5i per gallon. This figure may be
divided into the following component parts. *
The cost of feedstock (7< per gallon of product) represents the great-
est cost in re-refining. As product yields are only about Sixty percent
of the waste oil feed, a one cent increase 1n the cost of feedstock In-
creases production costs by 1.66 cents. Labor and materials (sulfuric acid
and clay) costs are about equal 1n importance (3t per gallon for each),
followed by the costs of overhead (2$ per gallon), depreciation (U per
gallon) and utilities (1<£ per gallon). The cost of disposal of the add
sludge produced as a by-product of re-refining is only a small fraction
(less than 0.54 per gallon) of total processing costs. However, Inability
to locate approved disposal sites has forced some firms to discontinue
operations.
Depending on the product specifications, a variety of additives will be
blended with the re-refined base stock. Blending costs for high performance,
* All costs are as of August, 1973.
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top quality lube oils (17.5$ per gallon of product) are as large as the
total cost of re-refining.
Marketing
Marketing is the phase of re-refining in which the greatest differences
between firms exist. Analysis of the types of markets served by re-refiners
reveals the reasons why some firms have prospered while others have failed.
There are two main marketing paths accessible to re-refined lube oils.
High quality oils which have been blended with additives are sold direct-
ly by re-refiners to final users such as Industrial and commercial estab-
lishments (trucking firms, taxi fleets, railroads, etc.). Conversely,
unblended, nondetergent re-refined oils are sold in bulk to independent
jobbers who do their own packaging and distribution. Although direct sales
of the high quality oils to final users are highly profitable, only a small
fraction of the total production of re-refined 011 is marketed in this
fashion.
Most re-refined lube oil 1s sold in tank truck loads of several thou-
sand gallons to independent jobbers. Margins on such sales are quite Tow,
in some cases as little as a penny a gallon. The jobbers package the oil in
55 gallon drums or quart cans under one or several brand names and sell the
packaged product to garages, independent service stations and discount
stores. Re-refined oil sold in these markets competes with low quality
virgin lubes and other unblended oils. The failure of the re-refining indus-
try to monitor the quality of its products and a Federal Trade Commission
ruling which requires that re-refined oils sold 1n interstate commerce be
labelled to indicate that they were produced from previously used oils
have definitely contributed to the public's lack of confidence in the qual-
ity of recycled lube oils. As a result, consumers who knowingly purchase
such oils do so on the basis of the low price at which they are sold. With
such a low margin per gallon of sales, the key to success in this market
is volume. Yet the tight supply of waste oil has forced many firms to re-
duce production levels thereby increasing marginal costs. Re-refiners who
serve primarily the bulk oil market have become only marginally profit-
able in recent years. However, all re-refiners interviewed experienced no
difficulty in selling all the oil they could produce.
Due to lack of quality assurance and consumer confidence, it is quite
difficult for a re-refiner to market his product in competition with high
quality virgin lubricants produced by major oil companies. This is espe-
cially true in the retail market where consumer purchase habits have been
shown to be strongly influenced by identification with nationally adver-
tised brands. As a result, very little, if any, high quality re-refined
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oils are available in the retail market. If an attempt to market such oils
were to be made, the oil would have to be sold at a much higher price than
the nondetergent inexpensive (and frequently low quality) recycled lubes
now available. Since the public does not have confidence In the quality
of re-refined oil, few if any of these high quality products would be sold.
Hence only unblended, low cost re-refined oil 1s available. This tends to
reinforce the poor public image of recycled oils.
However, a few firms have been successful 1n selling high performance
(blended with additives) re-refined oil to commercial and Industrial accounts
in competition with top quality oils produced by the large pttroltum com-
panies. Depending on the volumes Involved, profit margins on such sales
may run as high as forty cents per gallon. In some cases a large customer's
waste oil is delivered to the re-refiner, re-refined separately from other
oils, and returned to the customer. Such "closed-loop" or "custom" re-
refining is not only financially attractive, but also provides the re-refiner
with a secure supply of feedstock. Re-refiners who have penetrated the
high quality market have been able to do so on the basis of long-term "toe
to toe", "belly to belly" relationships with their customers. Such relation-
ships involve a significant degree of trust on the part of the consumer.
Hence a firm's success in this kind of market rests upon a very high degree
of product quality control as well as a competitive price and prompt atten-
tion to the customer's needs. Typically such customers might Include truck-
ing companies, railroads and taxi fleets, and other companies which have
very large investments in rolling stock and consume large volumes of lube
oil. Without exception, re-refiners who have been able to establish such
relationships with commercial and industrial clients have earned an attrac-
tive return on their Invested capital.
A major conclusion of the analysis of the re-refining Industry 1s that
uncertainty as to the quality of re-refined lube oils is the principal bar-
rier to increased recycling of used lubricants. In order to understand the
nature of the quality issue, existing specifications for automotive lube
oils and the testing procedures required by these specifications were examined.
Lube Oil Specifications
A variety of specifications for lube oils have been established. The
most significant specifications are those set by the automobile manufacturers,
the American Petroleum Institute/Society of Automotive Engineers (API/SAE),
and the United States military. In the case of lube oils used in modern
automobile engines, each set of specifications requires a number of labo-
ratory tests of the physical and chemical properties of the candidate prod-
uct. Such tests are neither prohibitively expensive nor excessively time
consuming. In fact, a number of re-refiners operate their own quality con-
trol laboratories, a few of which are equipped to perform all specified
tests.
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In addition to bench scale laboratory tests, eoch sot .of specifications
also requires that a series of engine sequence tests bo popfoficod. I/alike
the bench scale tests described above, dried ono)1n(2 tii3 physical ewi| chcia-
1ca1 characteristics of the lube oil Itself, Q major purpose o? enatfta se-
quence tests 1s to evaluate the "additive response" of tha luco oil; ttnt
1s, the performance properties of the lube oil-additive blend. Those tests
are performed 1n highly specialised laboratories cnti are dcsigned to re-
produce the actual conditions of temperature, vehicle Toad &ne potter con-
ditions under which modern motor vehicles operate. Tho results of engine
tests are evaluated subjectively by assessing tfte fc&tr of toy engine parts
and amounts of varnish and other wastes deposited on thase parts. Engine
tests are quite costly. Expenditures per test typically csount to $10,000.
Since a number of engine tests are required to qualify on oil for & given
class of service, total costs can e&slly Cmount to $£0,000 to cyalify o
single lube oil product. '
Automobile manufacturer's specifications are particularly Important
1n classifying luba oils, as nsw car warranties require that only lubo oils
meeting certain quality levels may bo used. As a, result, thy 1ubr1c&ftt
manufacturers, notably tfoe major oil companies, have established their own
specifications based upon performance criteria set by the auto Industry.
These API/SAE specifications are, therefore, always consistent with It&e
oil specifications established by the Individual auto>b1le flrsis. It Is
the responsibility of the lube oil producer to Osfcatmcfc that hfs product
meets the specifications for the class of service for which tha oil 1s rec-
ommended. An oil recommended for a given class of service must be capable
of satisfying all the physical, ehsnlcal, and performance requirements
(engine tests) for the specified class of service. MtK/ever, tha use of an
API/SAE service label designating an oil as sellable for a given use 1s wholly
the responsibility of the marketer of that particular brand of oil. If an oil
1s labelled as meeting the requirements of a given service classification, the
oil may or may not have been subjected to oil tha tests required for that clas-
sification. The use of the label only means that tha marketer 1s certain that
the oil would pass all the tests specified if these teats were actually per-
formed. There 1s no Independent organization which conltors lube oil quality.
While neither API/SAE nor manufacturer's specifications exclude re-
refined oils from consideration, the more stringent requirements for lube
oil quality established by the Department of Defense do prohibit the use
of re-refined materials 1n automobile engine oils. This 1s particularly
Important as all lube oil purchased by agencies of the federal goverrcrent
must meet military specifications. Further, tha procurement practices of the
U.S. government have established a standard which 1s followed by many other
organizations, Including state and local governments, which look to Washing-
ton for leadership 1n establishing quality control over automobile engine
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lubricants. According to the Defense Supply Agency, the goverrtont body
which procures lube oil for all federal facilities, re-refined oil Is ex-
cluded from consideration on the grounds that reliable Information on the
quality of such oils does not exist. In order to qualify an oil for gov-
ernment purchase, both laboratory bench scale tests and engine tests must
be performed. Further, military specifications require that once an oil
is qualified for procurement, no changes may be made in the feedstock from
which the lube oil Is manufactured without subsequent requaHflcation of
the product. Since the waste oil feed to a re-refining plant 1s derived
from a variety of unknown sources, each batch of re-refined oil would have
to be tested. Yet the cost of tha tests required to qualify an oil 1s so
high, that it has been economically Impossible for any re-reflnsr to pro-
vide qualified oil for purchase by the federal government. This situation
tends to reinforce the fear that re-refined oils may be inherently Inferior
to virgin lubricants and should, therefore, be labelled as made from previous-
ly used oil in order to protect the consumer.
Thus re-refined oils cannot be procured by the Defense Supply Agency
because there is no evidence that such oils can meet quality standards.
Yet the cost of providing such evidence 1s prohibitive, especially In view
of the competitive bidding arrangements under which government facilities
purchase lube oil.
Recommendation: A Closed-Cycle Experiment
If increased recovery of waste oils 1s to occur, then a different ap-
proach must be taken in order to establish the quality of these products.
At the same time it is evident that regardless of the quality of re-refined
oils, consumers will be reluctant to purchase thase products as long as the
government refuses to accept them for use in Its own vehicles. Conversely,
if government lube specifications were revised to portal t tte purchase of
re-refined lube oils, then a more favorable climate for new private Invest-
ment in waste oil recovery would result.
In order to resolve the question of the quality of re-refined oil, a
simple experiment is proposed. An activity with a large demand for lube
oil, such as a military base, would agree to supply used crankcase oils
to a re-refiner. The oils would be segregated from otner fluids and dirt
to assure constancy of feedstock quality. The re-refiner would agree to
process this oil separately from other feed streams so that the quality
of the lube oil product would not be affected by feedstocks of unknown
origin. The re-refined oil would then be returned to the activity which
provided the waste lube stock. Under such a "closed-cycle" system 1t would
be possible to prove or disprove the performance of re-refined oil on the
basis of day to day usage under a variety of service conditions. A success-
ful pilot program would lead to the second phase of the experiment in which
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the restriction against the use of outside sources of waste oil would be
removed. Successful completion of this phase would lead to the establish-
ment of new government specifications which would allow the procurement
of recycled oil without the need for costly requalification. The estab-
lishment of lube oil quality through a closed-cycle/open-cycle experiment
is the first step in acquiring the data necessary for a change in the
federal labelling law. This law requires that all oils containing re-
refined products bear a label stating that the oil was manufactured from
previously used materials. Because the term "used" implies that a product
may be of inferior quality, this law has frequently been cited as a deter-
rent to public acceptance of recycled oils. The labelling law has been
justified on the basis of consumer protection. Yet if a re-refined oil
can be shown to be of the same quality as equivalent virgin lubes, there is
no reason to discourage its purchase by identifying the source of the materials
from which it was manufactured.
With the government taking the lead in the use of re-refined oil,
other large lube oil consumers would have an incentive to follow, as re-
refiners can provide top quality lubes at prices competitive with those
of virgin products.
The recommendations whose implementation can lead to increased waste
oil recovery may be summarized as follows:
1. Establish the quality of re-refined lube oil in a controlled
closed-cycle experiment.
2. Resolve the variable feedstock issue in an open-cycle experiment.
3. Revise federal procurement and labelling policies to reflect
the quality of re-refined oil. Acceptable re-refined oils
should be certified as being of the same quality as equiva-
lent virgin lubes.
Successful completion of this program will aid in establishing public con-
fidence in the quality of properly re-refined oils and will therefore re-
move the barriers which have prevented re-refined oils from penetrating
the high quality, high profit retail and commerical markets.
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CHAPTER 1
THE RE-REFINING INDUSTRY: AN ECONOMIC ANALYSIS
1.0 INTRODUCTION
Since the passage of the National Environmental Policy Act, a number
of government agencies have sponsored or conducted their own research on the
technical aspects and environmental impacts of various methods for the disposal
of used lubricating oils. More recently, increasing concern for the recovery
of scarce resources has prompted additional studies on ways of increasing the
volume of waste oil which is recycled. These studies have shown that although
re-refining of used lube oils is both a desirable method of reducing environ-
mental damages due to waste oil disposal and a feasible way of conserving this
valuable resource, the existing re-refining industry has been unable to expand
its operations in order to recycle the steadily increasing volumes of waste oil
generated each year. In fact, rather than expanding its operations, the re-
refining industry has experienced an extended period of continuous contraction.
Thus it is clear that any federal strategy aimed at reducing the environmental
impact of waste oil disposal and stimulating efforts to recover the resource
value of these materials must take account of the operations of the companies
/which re-refine used lube oils.
Although reclaiming of waste lube oils has been commercially practiced for
nearly sixty years, re-refining companies now function in a business environ-
ment which has, since about 1960, been most unfavorable for new investment. Over
the past 13 years, more than two-thirds of the 150 firms formerly engaged in re-
refining have gone out of business. As a result very large volumes of waste oils
which at one time were re-refined to produce lube stocks are now being disposed
of in other ways, some of which are environmentally harmful. In addition, waste
oil generation has increased roughly in proportion to the 33 percent increase
in lube oil demand during this period. Thus while the volume of waste oil avail-
able for disposal has been rising, the capability to reprocess these wastes to
useful products has been falling. Reasons for the decline of the re-refining
industry have thus become a matter of considerable importance in forming govern-
ment waste oil policy.
This chapter seeks to assist in policy formation by discussing the struc-
ture and economics of the re-refining industry as it presently exists and examin-
ing in detail the criteria for success and the reasons for failure in re-refining.
For while in recent years a large number of firms have ceased operations, a few
companies have managed to prosper. Business strategies for profitable operation
are discussed with respect to the three phases of the industry: waste oil collec-
tion, re-refining, and marketing. Much of the data presented in this chapter
Preceding page blank
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were collected during interviews conducted with thirteen re-refiners located
in or near major urban areas throughout th© United States. Detailed cost
breakdowns are provided for all important operations relevant to the recycling
of automobile crankcase oils. Similar calculations are presented for new
crankcase oils produced directly from crude oil. The results of this analy-
sis provide insight into the business strategies of a profitable re-refinery
and the changes in the business environment which are necessary to Improve
the climate for investment in this business. The effects of certain govern-
ment policies on the re-refining environment are also discussed. The goal of
this chapter is, therefore, to provide policy makers with an awareness of the
effects of present and future strategies for recovery of waste oils on the
industry whose viability is of central Importance to this effort.
10
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1.1 DESCRIPTION OF THE RE-REKINING INDUSTRY
1.1.1 Composition
The oil re-refining industry is composed of approximately forty-five
companies located throughout the United States, principally in or near major
population centers. The main activity of these companies is the recovery
of marketable petroleum products from various types of previously used and/or
contaminated lubricants and fuels. The largest re-refiner produced about
7,200,000 gallons of industrial and automotive lube oils and had total revenues
of $3,000,000 in 1972. A typical small re-refiner produced about 500,000 gal-
lons of lube oils and had total revenues of between $100,000 and $150,000 1n
1972. Table 1 summarizes economic and operating data for thirteen re-refining
companies interviewed in this study.
Due to the high cost of shipping lubricating oils and the relatively low
market value of re-refined crankcase oils, re-refined oils are normally sold
within a radius of not more than 300 miles from the point of manufacture. In
most areas of the country the demand for re-refined oils is sufficiently large
compared to the supply that re-refiners experience no difficulty in finding
markets for all the oil they can produce. Hence there is little competition
between re-refined lube oils. On the other hand, supplies of drain oil from
which re-refined oils are produced are becoming increasingly scarce and re-
refiners must now compete with each other and with other businesses to secure
adequate volumes of feedstock.
1.1.2 Phases of the Industry
While there are vast differences in type, scale and diversity of opera-
tions between the oil re-refining industry and the petroleum industry, the
former business may be divided into three phases similar to the production,
refining, and marketing activities of large oil companies. These phases are:
collection of waste oil, re-refining of waste oil, and marketing of re-refined
products. The analysis, which begins on page 21 , is divided in this manner
in order to understand the essentials of the oil re-refining business and to
make comparisons between the firms which form this industry.
1.1.3 Description of Re-Refining
Previously used or contaminated oils may be treated by a number of methods,
In some instances, especially in the case of fuel oils, the reclamation pro-
cess may involve simply the removal of insoluble materials and limited treat-
ment to reduce chemical contaminants such as water. If waste lubricating oils
11
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I Oporattoa OaU for
for tka rival HOT ITO - 1W3
CD
ore*
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11 1. 370.000 — Uatol M-nftotai ot u tf 1. 101.008 IOB: Catoi ro-roflnol for lotwtrlal aoaoltt
a limit tariff
• lacluon oallnrj of i'a rifloao' oil
""• *
mjm (46.o»8»
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i
-------
are to be re-refined to produce a quality lube oil, considerably more complex
and thorough processing of the oil under controlled conditions is required.
Frequently confusion arises as to the type of operation referred to in discuss-
ing the re-refining industry. This chapter focuses principally on the latter
type of operation in which the objective is to remove all soluble and Insoluble
contaminants as well as any additive components from the waste oil feedstock.
The product of such an operation is a clean mineral oil or "base stock" which
is approximately equivalent in composiiton and performance characteristics to
a quality, non-detergent virgin lubricating oil. From this mineral oil it is
possible by blending with other oils and additives to produce a wide variety
of automotive and industrial lubricants.
1.1.4 History of the Re-Refining Industry
Methods for the reclamation of waste lubricating oils were 1n use as early
as 1915. At that time only simple processing was used in which the oil was
first heated to remove volatile contaminants. The addition of a coagulant
followed by settling or centrifuglng completed the treatment. Following World
War I such simple reclaiming procedures were established by the Army Air Corps
at Air Depots in the United States. Although the reclaiming process would be
considered rather primitive by today's standards, the recovered oil met essen-
tially all the specifications for aircraft engine lubricating oil against which
virgin lubricating oils were then procured. Prior to American entry into World
War II, this program was operated on a small scale as the apparently inexhaustible
petroleum reserves in the United States precluded the need for an expanded re-
cycling program.
Commercial aviation provided a new market for re-refined lube oils. In
1932, American Airlines initiated a "closed-cycle" re-refining system in which
used lubricating oils from company planes were treated to remove contaminants
and then returned for use in company aircraft. This program resulted in a 20
percent net savings in lubrication costs and served to stimulate the use of
re-refined oil in other industries. By 1939, the re-refining business had grown
considerably and was processing more than 11 million gallons of waste oil per
year. ]_/
During World War II use of re-refined lubricating oils increased dramati-
cally. In order to conserve limited supplies of petroleum, reduce costs, and
simplify supply and distribution operations, 1n 1942 the Army Air Corps in-
itiated a large scale "closed-cycle" system similar to the American Airlines
program mentioned above. Previous Army Air Corps experience with reclaimed
oil and the success of the product in commerical air fleets provided strong
incentives for initiation of the program. During World War II, re-refined
oil was used without restriction within the continental United States. Approxi-
mately 29 million hours of flight time was logged using re-refined oil without
harmful effects on engine wear, life, or cleanliness. During this period
average engine life increased by about 50 percent. 2/
Preceding page blank 15
-------
Following World War II, the Air Force approved the use of re-ref1ned
lubricating oils without restriction. Table 2 shows how A1r Force use of re-
refined oil increased steadily in the late 1940's. Considerable savings were
realized as re-refined lubricating oil could be purchased for about 40$ per
gallon less than a comparable virgin product. By 1949 about one-fourth of
all Air Force aircraft oil was re-refined. However, the advent of jet air-
craft requiring synthetic-based lubricating oils drastically reduced the
volume of oil which was available for re-refining. As a result waste oil col-
lection costs increased thereby reducing the economic Incentive to use recycled
oil. Eventually the program was discontinued.
1.1.5 The Decline of the Re-Ref1n1ng Industry
As shown in Table 3, following World War II the re-refining Industry grew
steadily. By 1960 about 300 million gallons per year of re-rreflned oils were
produced. This represented about 18% of total domestic use of lube oils. Since
then production of re-refined lubricants has fallen sharply. In 1971 it 1s
estimated that only 120 million gallons of re-refined lubricating oils or 5.5
percent of domestic use were produced. This drastic decline 1n production has
been accompanied by a parallel decrease in the number of companies engaged in
re-refining. In 1960 there were between 125 and 150 re-refiners in operation.
At present the number of firms producing re-refined lube oils is less than 50.
The most recent compilation of commercial re-refiners listed 45 companies in
operation as of mid-1972. A recent check indicated that at least three of these
firms have discontinued operations. Further, as will be discussed below, most
plants still in operation are working at less than full capacity.
As shown in Figure 1, a number of factors have contributed to the contrac-
tion of the re-refining industry. At the collection end of the business, the vol-
ume of waste oil available within a given geographical area has fallen sharply
thereby necessitating an increase In the area covered to collect the required vol-
ume of feedstock. Longer periods between oil changes, a large increase in the
number of backyard "do-it-yourself" oil changes, 3/ and the recent increase in the
use of waste lube oil as fuel have been major contributors to the drop in waste
oil supplies. This has resulted in higher costs of drain oil delivered to the re-
refinery. Competition from cheap, low-quality virgin lube oils has, until very
recently, not allowed re-refiners to recover these higher costs through price in-
creases. This cost/price squeeze has been the major reason for the contraction
of the re-refining industry.
16
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TABLE 2
USAF Post-War Procurement of Re-refined Oil
Fiscal Year
1947
1948
1949
Gallons of Re-refined Oil
823,727
936,203
1,174,810
Estimated Savings
$338,000
$384,000
$482,000
Calendar Year
1939
1948
1950
1954
1960
1966
1971
1972
TABLE 3
Estimated Industrial Production of
Re-refined Oil in the United States
Volume of Gallons*
11,250,000
45,000,000
50,000,000
75,000,000
300,000,000
225,000,000
120,000,000
100,000,000
*Source: Estimates for 1939 and 1948 were included in a research paper
prepared by Major Charles B. Cruikshank for the Air Command
and Staff College of the Air University. Estimates for 1950
and 1954 were included in the April 26, 1954 issue of the
Oil and Gas Journal. Figures for 1960-1971 were provided by
the Association of Petroleum Re-Refiners, and the 1972 esti-
mate was provided by EPA.
17
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Figure 1
REASONS FOR CONTRACTION OF THE RE-REFINING INDUSTRY
•FEDERAL LABELLING LAW
LOW QUALITY OF SOME
RE-REFINED OILS
RETAIL SALES OF RE-REFINED
OIL AT LOW PRICES IN COMPETITION
WITH LOW QUALITY VIRGIN LUBE OILS
INABILITY TO INVEST IN
MODERN., POLLUTION-FREE
PROCESS EQUIPMENT
POLLUTION DUE TO DISPOSAL
OF ACID SLUDGE
LACK OF CONSUMER
ACCEPTANCE
USER PERFORMED OIL
CHANGES; USE OF WASTE
OIL AS FUEL; SMALLER CARS
AND LONGER PERIOD BETWEEN
LOW PROFIT MARGINS TO
RE-REFINERS
OIL CHANGES
t
•*-INADEQUATE SUPPLIES OF
WASTE OIL FEEDSTOCK
REDUCED PRODUCTION LEVELS
PLANT CLOSURE
-------
At the re-refining end of the business, most plants now in operation
are more than 30 years old, have very high maintenance costs, and cannot be
modernized without large new investments. Laws concerning air and water pollu-
tion control have required considerable new investment 1n emissions control
equipment which has, in some cases, been beyond the resources of some firms.
These companies are no longer operating. Further, the re-refining process
most commonly used produces large volumes of acid sludge which has tradi-
tionally been disposed of by dumping. In some states regulations controlling
or prohibiting the disposal of such untreated hazardous materials have forced
re-refiners out of business. In addition, the re-refining process has proved
incapable of successfully removing chemical additives from modern automobile
waste oils without the use of increased volumes of add, thereby compounding
the sludge disposal problem.
In marketing, the re-refining Industry has never enjoyed a reputation
for producing high quality products. The business has a history of oppor-
tunists and men of questionable Integrity whose operations have served to
discredit those firms which do produce high quality products. Partially as
a result of this situation, in 1964 the Federal Trade Commission ruled that
oils sold in interstate commerce which are composed in whole or part of pre-
viously used oils must be labelled as "manufactured from previously used oils-"
Hence, regardless of the quality of re-refined lubricants, the FTC ruling has
cast a stigma on these oils since to the consumer the word "used" frequently
implies a product of inferior quality.3/ In 1965, the Excise Tax Reduction Act
removed a 6$ per gallon tax advantage which re-refiners had enjoyed on sales
of lube oil for off-highway use. A subsequent ruling of the Internal Revenue
Service concerning the payment of excise tax on virgin oil which is blended
with re-refined products sold for off-highway use further weakened the compe-
titive position of recycled oils by requiring re-refiners to pay a non-refund-
able tax of 6<£ per gallon on virgin oils which are blended with re-refined oils
and subsequently sold for off-highway use. 4_/
Considerations affecting the viability of the re-refining industry are
further discussed below.
19
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1.2 COLLECTION OF WASTE LUBRICATING OILS
Waste lube oils are collected from a variety of sources either by In-
dependent operators or directly by a re-refiner. The most Important sources
of used lube oils include service stations, garages, and industrial plants.
Municipal vehicle fleets, private truck and taxi fleets and railroads also
provide large volumes of drain oil. .While only a small fraction of the waste
oil is collected under contract, for some re-refiners contractual relation-
ships account for the bulk of waste oil supplies. This 1s especially true
of those firms engaged in "custom" or "closed-cycle" re-refining wherein the
source of waste oil is also the customer for the re-refined product. In these
arrangements a customer's waste oil is segregated from other oils throughout
the entire re-refining process. A single tariff 1s normally charged for waste
oil pickup, re-refining, and product delivery. An Important advantage of cus-
tom re-refining is a firm's ability to control both the quantity and quality
of its supplies of feedstock. This is especially Important as competition
for sources of drain oil is becoming Increasingly strong principally due to
the shortage and high cost of fuel oil (see below).
1.2.1 Independent Collectors
The bulk of all waste oil collected in the United States is handled by
small, independent companies. The size of these firms ranges from a "father
and son" operation involving a single 2000 gallon tank truck to a large
scavenger company engaged in the collection of a variety of waste liquids
including used lube oil and industrial solvents. In some instances large
producers of waste oil such as cities and military facilities will solicit
bids from local collectors for waste oil disposal. However, there are nor-
mally no contractual agreements between collectors and the companies whose
oil they handle. Both personal relationships between collectors and those
whose oil is being collected and the price charged or paid for oil removal
determine who will get the waste oil. As recently as the mid 1960's col-
lectors would pay as much as 3 to 5
-------
could operate satisfactorily using lube oils containing only a small per-
centage of additives which were easily removed 1n re-refining. The few
existing laws controlling air and water pollution and the disposal of solid
waste were relatively lax. Drain oil could be used for road maintenance
and for dust control. Further, service stations, car dealers and garages
accounted for more than eighty percent of automobile lube oil sales. Hence
sources of drain oil were relatively concentrated and collection eosts could
be held to a minimum while demand for waste oil was quite strong. Under
these conditions collectors could afford to pay for waste oil plcfcups and
could be assured of a good price for their oil.
In the western part of the United States, two additional factors do-
minated the supply-demand picture for waste oils. In this region It was
formerly common practice for Independent producers of crude oil to blend
several percent of crankcase dralnlngs with their crude 1n order to raise
the gravity of their production. Crude oil prices vary according to gravity
with a price rise of about 8$ per barrel per degree of gravity Increase.,
The gravity of some western crudes may run between 13* and 18° API whereas
the gravity of crankcase dralnlngs averages 25° to 27° API. These blended
oils were then sold to major oil companies for refining.
The second factor in the drain oil supply on the West Coast was the
export market for used lube oils. For about nine years after World War II
nearly 50 percent of the drain oil on the West Coast was treated to remove
water and/or sludge and then shipped to Japan where it was re-refined to
make a variety of lube oils and fuels. At this time Japan had little or
no crude oil refinery capacity and had to Import Its petroleum requirements
in the form of refined products. Further, there were strict controls on the
volume of fuel oils which Japan was allowed to import. Importation of crank-
case drainings provided a hidden supplement to the country's fuel supply.
During the mid-1960's the adoption of the federal labelling law and the
repeal of the 6<£ per gallon tax on virgin lube oils sold for off-highway use
drove some re-refiners out of business and forced others to seek ways to cut
costs in order to survive. Of even greater significance was the buildup of
large inventories of virgin lube oils by the petroleum Industry. With in-
creased lube supplies oil companies found it necessary to seek new markets for
lubricants, thereby providing more intensive competition for re-refiners. At
the same time, the flow of lube oils sales away from service stations and
garages to mass merchandisers served to diminish the volume of drain oil avail-
able at any one source, thereby increasing collection costs. In addition,
state and local governments were beginning to monitor waste disposal. In some
instances collectors were required to obtain permits authorizing them as accept-
able sources for the disposal of waste oils. By this time a number of crude oil
22
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refineries had installed catalytic cracking units whose catalysts would be
rendered inactive by the lead contained in crankcase drainings. Hence the
practice of blending used lube oils with crude oil came to an abrupt halt.
Further, the Japanese, with the aid of some major oil companies, had built
their own refineries and began to import crude oil from the Middle East.
The export market for drain oil on the West Coast rapidly disappeared causing
a drastic decline in the price paid by collectors for waste oils. Hence
fewer markets existed for drain oil and those that did exist were under econo-
mic pressure to cut the cost of waste oil supply. As a result, service sta-
tion and garage owners were forced to pay as much as Si per gallon for waste
oil collection. This served to decrease the delivered cost of feedstock for
re-refiners. Further, since the value per gallon of drain oil free of water
and other wastes is considerably higher than that of contaminated drainings,
there was an economic incentive for service station and garage owners to re-
duce contamination of their waste oil, thereby minimizing disposal costs. At
the same time, the number of independent collectors increased as one could be
paid both to collect waste oil and to sell it for use as road oil, re-refinery
feedstock or raw material for use in manufacture of products such as asphalt.
Road oiling operations were especially attractive as collectors could charge
between 10 and 15$ per gallon for spraying oil on highways in addition to
the 3-5$ per gallon charge for waste oil collection.
This change in the waste oil market made it economically possible for
certain irresponsible individuals to earn a profit by collecting waste oil
for which they had no customer. With little or no monitoring of the disposi-
tion of drain oil, it was possible to dispose of 1t by dumping at some isolated
location. Further, some service station managers, faced with having to pay
to have their drain oil removed, decided to cut costs by disposing of their
drainings in environmentally harmful ways such as dumping them into storm
sewers. 5_/
Recently there has been a marked shift in the waste oil market largely
due to tight supplies and high costs of fuel oil. Untreated crankcase drain-
ings can be blended with fuel oil and burned, although in some applications
there is a risk of burner fouling and in all instances large amounts of oxides
of lead and other heavy metals will be emitted. At current market conditions
untreated drainings can sell for as much as 15
-------
In fact a trend towards lower prices for waste oil removal Is now evi-
dent. Some re-refiners are now picking up crankcase dralnlngs for free.
Others are finding it increasingly difficult to secure supplies of drain
oil sufficient to operate their plants at capacity. As shown tn Table 1
only one of thirteen re-refiners visited 1s now operating at full capacity.
All re-refiners interviewed (save this one) complained that the fuel oil
market was making it impossible to obtain enough feedstock. Of course, this
is equivalent to saying that the fuel shortage has served to raise the de-
livered cost of drain oil above what some re-refiners are willing to pay.
If lube oil prices were to rise sufficiently, then an Increase 1n the prtce
of feedstock could be off-set by an increase 1n the price of re-refined pro-
ducts. In the absence of such a price Increase, it is likely that a number
of marginal re-refiners may be forced out of business 1n the near future.
1.2.3 Supply of Feedstock
Perhaps the most crucial difficulty facing re-refiners today is obtain-
ing volumes of waste oil sufficient to maintain re-refining operations at
or near capacity. As with petroleum refining, due to relatively high fixed
costs, in re-refining incremental costs rise as throughput falls. Formerly,
drain oil availability fell in summer as large volumes were consumed for road
oiling operations. Re-refiners having adequate storage capacity would ac-
quire large volumes of feedstock 1n winter to tide them over during the sum-
mer. This practice has been especially common in the Northeast and Midwest.
However, since these are the areas of the country most seriously affected by
the fuel oil shortage, it is highly likely that some re-refiners 1n these
regions will find themselves unable to secure adequate supplies of drain oil
either in summer 0£ in winter. In the western and southern parts of the
United States, where natural gas has been the principal industrial fuel, the
current drain oil supply is not nearly so tight as 1n the Northwest and Mid-
west. However, as natural gas curtailments continue to spread, many industries
in the South and West will be forced to convert heating and processing units
to burn fuel oil. As fuel oil supplies are likely to remain tight for at least
the next three years, large volumes of used crankcase oil will be diverted
for use as fuel.
An interesting comparison regarding feedstock supply can be made between
the re-refining industry and the petroleum industry. Throughout the his-
tory of the petroleum industry, a principal concern of refinery managers has
been obtaining supplies of crude oil sufficient to operate at or near capa-
city and to meet the requirements of customers for refined products (gasoline,
fuel oil, etc.). This concern caused many oil companies to integrate back-
wards - to become involved in crude oil exploration and production - in order
to be assured that adequate refinery feedstock would always be available. The
recent rash of closings of gasoline stations supplied by independent, non-
integrated refiners is testimony to the need for refiners to nave control over
sources of crude oil.
24
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The re-refining industry is faced with a similar problem. Shortages of
feedstock are forcing re-refiners to reduce their production of lube oil and
other products. However, a re-refiner cannot guarantee an adequate feedstock
supply by backward integration into production of waste oil, for in a given
geographical area the total supply of crankcase drainings 1s fixed. Ability
to pay a higher price for used lube oil is the only way to guarantee an ade-
quate supply of this material for re-refining.
1.2.4 Haste Oil Collection by Re-Refiners
Some re-refiners have, however, attempted to achieve security of feed-
stock supply by operating their own waste oil collection service. Table 1
summarizes the degree to which the re-refiners Interviewed depend on outside
sources for feedstock. A correlation between self-sufficiency 1n feedstock
supply and percent utilization of re-refining capacity 1s, however, difficult
to make as other considerations, namely frequent forced shutdowns for un-
scheduled maintenance, contribute significantly to reduced production levels.
On the other hand, there can be little doubt that re-refiners who collect
their own waste oil enjoy a more stable position regarding feedstock supply
than those who depend entirely on Independent collectors for Waste oil de-
liveries.
Consider the position of the manager of a service station or garage. For
him waste oil is a headache. Generally speaking, the cost of disposal is less
of a problem than getting rid of the drainings in a reliable and legal manner.
This is especially true for larger service stations and garages which" have
greater volumes of used crankcase oils to dispose of. Further, major oil
companies, under increasing environmental pressures, have become quite respon-
sive to the need to dispose of waste oils in environmentally sound ways and
are encouraging service station managers to dispose of waste oil in a manner
not harmful to the environment. The establishment of personal relationships
between the waste oil collector and the people from whom he collects can con-
tribute significantly to maintaining a secure supply of feedstock. While in-
dependent collectors come and go according to the market for drainings, a re-
refiner provides a readily available, legitimate sink for waste oils.
However, there are disadvantages for re-refiners who collect their own
oil. Most important is the higher delivered cost of feedstock. Many re-
refiners must pay union wages to truck drivers. Maintenance of the vehicles,
depreciation, and supervision of the drivers result in additional costs. On
the other hand, an independent collector generally drives his own truck, fixes
it himself and depends on scavenging for a livelihood. Hence an independent
can deliver waste oil to a re-refiner at a lower cost than if the re-refiner
collected his own oil. Further, independent collectors tend to be rugged
25
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individualists. More than one re-refiner Interviewed expressed the opinion
that infringement upon territories of independent collectors could result
in a hostile reaction, especially In those areas where collectors have formed
an association in order to stabilize prices and prevent territorial disputes
amongst themselves.
1-2.5 Closed-Cycle or Custom Re-Ref1n1ng
A more attractive route to follow to assure feedstock supply is to enter
into "custom" or "closed-cycle" re-refining arrangements with industrial and/or
commercial accounts which serve both as the source of waste oil and the cus-
tomer for the re-refined product. "Closed-cycle" re-refining both guarantees
a supply of feedstock and provides an Incentive for the client to prevent the
waste oil from becoming contaminated with other oils, greases, water, etc.
Further, under closed-cycle arrangements sales of re-refined o11 are made di-
rectly to the final user. "Middlemen," such as jobbers and distributors are
eliminated thereby increasing profit margins to the re-refiner. Most Important-
ly, a customer who has his lube oil custom re-refined Is Interested in securing
a high quality product at a savings over the cost of equivalent virgin oils.
This means that a re-refiner engaged 1n custom or closed-cycle work 1s compet-
ing against high quality, major brand virgin oils rather than against cheap
virgin products and can, therefore, secure a much higher price land margin of
profit) for his production than he would otherwise be able to obtain (see
Figure 3 and discussion in Section 4.4 Marketing). From the customer's point
of view, closed-cycle re-refining both eliminates a waste disposal problem and
decreases the cost of lubricating oil supply.
26
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1.3 RE-REFINING OF WASTE CRANKCASE OILS
Re-refining of used automotive crankcase oils 1s a separation process in
which water, sludge, spent additives and decomposition products are removed.
The desired product is a mineral oil or neutral base stock roughly equivalent
in lubricating properties to a virgin non-detergent oil. The physical proper-
ties and performance characteristics of properly re-refined base stocks can be
altered to meet essentially any existing specification by the addition of speci-
ally formulated blends of chemical additives. General or "fat" additive "pack-
ages" are frequently designed for use with a range of base stocks 1n order to
compensate for variations in the properties of re-refined oil. In recent years,
due to the wide variety and severity of the conditions under which modern auto-
mobile engines operate, the volume of additives blended with lubricating oils
has Increased sharply. This has served to Increase both the cost of additive
packages used in blending and the cost and difficulty of removing spent additives
during the re-refining process.
1.3.1 Process Description
Nearly all of the approximately 45 U.S. re-refiners now in operation
use the so-called "acid-clay" process for removing spent additives and other
contaminants from used crankcase oils. Figure 2 shows a typical acid-clay
processing plant.
Waste oil is stored in large tanks and allowed to settle thereby ef-
fecting gravity separation of some dirt, sludge, and water. After settling,
waste oil is fed into an atmospheric dehydration unit. The temperature is
raised to about 250°F using closed-cycle steam. Light hydrocarbons distilled
from the waste oil are used as fuel to heat the steam which is used in de-
hydration. The dehydrated oil is cooled to 120°F and pumped to an acid treat-
ing tank. About 4% of concentrated sulfurlc acid 1s added. Following add
treatment the oil is pumped to an atmospheric distillation unit; clay 1s
added and the mixture is heated to about 600°F and agitated using open cycle
steam. The distillate is condensed and used for fuel. The oil is then
cooled and separated from the clay in a plate and frame press, blended with
additives, packaged, and stored for shipment. All fuels consumed in re-refining
are provided by separation of the waste oil into lube and fuel fractions.
1.3.2 Process Economics
Table 1 indicates an average re-refining cost of about 17.5 cents per
gallon of finished product. This figure may be further divided into six com-
ponents as shown in Figure 3. These components include cost of feedstock,
labor, chemicals and other materials, utilities, waste disposal, depreciation,
27
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Figure 2
Flow Chart for Acid-Clay Re-refininq Process
CONDENSER
Volatile distiHates
to boiler fuel
ro
CO
OIL r
SEPARATOR ~
DEHYDRATOR | I
Steam »*N Dehydrate
Oi, X t\ ^^
stocks ^ r- -^
Vp/ I
»Surap
Treating
chemicals
^-•3. V -—"biist,
ft n
11 U ^L ,-Dtator
-1 ^ ^ I 1 aarfli
Dehydrated oil, 30OF 1 JX Sludge "
1 Air 1 / SLUW
DRY STORAGE / XX MIXEF
TANK __/ TREATING TANK (°) » *
(Steam jacketed) ^
r^~
BATCH xS.
REACTOR f ^
Hot oil,
, 600F
«T» f
"^ s JI11^
A
4
kL
» Water to sump
DIRECT FIRED
HEATER
FILTER
h
IY Re -refined/ I
' oil slurry/ CoJIoidol carbon
and diatomaeeous
earth
Ctear
re- refined
oil .^^^
Additlvss
ADDITIVE /
BLENDER ^
ADDITIVE PRODUCT
L 1125^ STORAGE
TANKS TANKS
-------
and overhead, but dc not include administrative costs such as officers' sal-
aries and taxes. Because most re-refiners produce a variety of products in
addition to unblended lube oil, it is not possible in general to determine sep-
arately the total cost of lube oil re-refining. Further, most re-refiners keep
rather minimal records of financial and operating data and so It 1s difficult
to perform an exact cost analysis for most firms. However, several companies
interviewed produce only automotive lube oil which 1s sold unblended 1n bulk
lots to independent jobbers. From financial and. operating data supplied by
these firms it is possible to estimate that administrative costs and taxes
generally add about 3 to 4
-------
1.3.3 Breakdown of Production Costs
Feedstock
Figure 3 is an examination of the important cost factors in the production
of re-refined lube oil. By far the most Important cost component In re-ref1n1ng
is the delivered cost of the waste oil feedstock. According to Table 1, the
average recovery of lube oil product is only about 57 percent by volume of
the drain oil feed. With an average delivered cost of feedstock of four cents
a gallon, this is equivalent to a cost of about seven cents per gallon of re-
refined oil. It is certainly not surprising that re-refiners pay close atten-
tion to the volume of contaminants (especially water) 1n the waste oil which
they collect and/or purchase from Independent operators. In some cases the
price charged for pickups or paid for deliveries of drain o11 varies sharply
with the level of contaminants in the oil. An unwary collector would at
times be paying for a resource diluted with water which would have to be
removed (at an additional cost penalty) 1n the re-reftn1ng process.
As mentioned earlier, access to feedstock 1s now a serious problem
for re-refiners. Given a yield of 57 percent, a one cent per gallon rise 1n
the delivered cost of drainings results 1n a cost Increase of 1.75 cents per
gallon of finished product. If these costs cannot be passed along to con-
sumers, then partial processing of waste lube oils to fuel oil In which yields
of more than 80 percent are common becomes particularly attractive (see below).
Labor
Labor costs have risen sharply in the past few years making it impera-
tive for re-refiners to keep production at maximum levels 1n order to minimize
unit costs. For companies with spare capacity, this has resulted 1n diversi-
fication of re-refining activities to produce a variety of products in addi-
tion to automotive lube oil, especially fuel oil and Industrial oils, frequently
under "closed-cycle" arrangements. Custom re-ref1n1ng of Industrial oils
affords both greater profit margins per gallon of sales (see Marketing) and
greater security of supply of feedstock. In some Instances re-refiners have
said that without increasing their industrial business they would not have been
able to survive. In the case of smaller firms increased labor costs have
invariably resulted in longer working hours for the companys' owners in order
to cut expenses. Among the smaller firms Interviewed, working days for manage-
ment approximately 15 hours in length were not uncommon.
Materials
Materials costs have risen sharply in recent years as have the amounts
of sulfuric acid and clay required per gallon of product produced. This in-
crease in material use has been necessitated by the increased volume of addi-
tives blended with automotive lubricating oils. Typical quantities of sulfuric
acid (66° Baume) and clay used per gallon of oil produced are 0.04 gallons of
acid and 0.25 pounds of clay. At current prices for add and clay this amounts
to a total materials cost of about 3$ per gallon of product.
30
-------
FIGURE 3
SUMMARY OF RE- REFINING ECONOMICS*
(ALL COSTS EXPRESSED IN CENTS PER GALLON OF OIL)
COLLECTION TRANSPORT
RE-REFINING
57% YIELD
BLENDING
PACKAGING
-2-3«
4-°«
LIGHT
LUBE
STOCK
20*
LABOR
MATERIALS
OVERHEAD
.UTILITIES
DEPRECIATION
<3«)
(3«)
(2«)
(l<)
(If)
WASTE DISPOSAL (O.S«)
BASE LUBE STOCK
1*5*
0.431 GALLONS
OF LIGHT LUBE
STOCK
UNBLENDED RE-REFINED OIL
0.902 GALLONS
OF BASE LUBE
STOCK
0.03 CALLOUS OF
VISCOSITY IMPROVER
GALLONS OF
(3.9*}
PERFORMANCE ADDITIVE
PACKAGE
1 GALLON OF BLENDED
SINGLE SHADE OIL 944*
0.431 GALLONS
10F BASE LUBE
STOCK
0.07 GALLONS OF
VISCOSITY WOEX IMPROVER (Sv2*)
OUOC8 GALLONS OF
PERFORWANCE ADDITIVE .
PACKAGE tl*a»)
1 GALLON OF BLENDED
MULTI- GRADE OIL 40.2*
NUMBERS IN BRACKETS DENOTE COSTS OF EACH OPERATION.
NUMBERS NOT IN BRACKETS DENOTE RUNNING TOTAL COSTS.
*ALL COSTS AND PRICES ARE AS OF MID 1973
| SALES PRICE
NON-DETERGENT OIL
TO JOBBERS
IN BULK 23«
TO JOBBERS 36*
TO COMMERCIAL
ACCOUNTS 42«
RETAIL SALES IOO*
SE CRAPE SAE 30 OIL
TO JOBBERS 6O<
TO COMMERCIAL
ACCOUNTS «O»
RETAIL SALES I2O*
SE 8RADE SAE IOW-3O OIL
TO JOBBERS 66* ^_
TO COMMERCIAL
| ACCOUNTS KX><
73-2* I RETAIL SALES I4O«
A TECHNICAL AND ECONOMIC STUDY OF WASTE OIL RECOVERY
Principal Investig ofor : Dr. P. ML Cukor
Project Director : Dr. M. J. Kaaton
EPA Contract No. 68-01 -IBO6 Performed for:
Dr. John H. Skinner, Acting Deputy Director
Reeource Recovery Dmtioe
Office of Solid Watte Management Program*
U.S. Environmental Prvteciie* Agency
-------
Waste Disposal
Although disposal of acid sludge is one of the most serious problems
facing re-refiners today, the cost of sludge disposal is at present only a
minor contribution to the total cost of re-refining. About 0.1 gallons of
sludge are produced per gallon of re-refined oil. Most re-refiners pay less
than 0.5
-------
TABLE 4
Analysis of Add Sludge Produced 1n
Re-Refining Automobile Crankcase Otis *
pH 0.1
Specific Gravity 1.2
Ash as S04* 11.26%
Add 40.8$
Sulfur 14.1%
Copper, Cu 40 ppm
Aluminum, Al 140 ppm
Iron, fe 1,100 ppm
Silicon, SI 1,400 ppm
Lead, Pb 20,000 ppm
Zinc, Zn 2,100 ppm
Barium, Ba 1,300 ppm
Chromium, Cr 50 ppm
Calcium, Ca 6,400 ppm
Sodium, Na 4,000 ppm
Phosphorus, P 4,300 ppm
Boron, B 50 ppm
Nickel, N1 30 ppm
Tin, Sn 30 ppm
Magnesium, Mg 1,000 ppm
* Analysis dated January 12, 1971 based on sludge produced by one
re-refining company.
34
-------
for engine oils for use in new cars. 6/
One important supplier of engine oil additives manufactures a general
purpose motor oil performance additive which when blended with a 30 weight
non-detergent base oil produces an oil which meets all the specifications re-
quired for an API SE rating and meets automobile manufacturers warranty re-
quirements for 1973 model vehicles. This performance additive sells for
$2.18 per gallon f.o.b. Los Angeles, California. 6.8 percent by volume of
this performance additive is required to produce an SE grade oil. The cost
of this blending is about 14.8< per gallon of product. Hence the total cost
to produce an SE grade oil from crankcase dralnlngs is about 34.5$ per
gallon. Table 5 gives details of this calculation.
Multi-Grade Oils
Multi-grade oils are produced by combining a viscosity index improver
with a blend of the lube oil base stock and the performance additive. As shown
in Figure 3, 10W-30 oil (a popular multi-viscosity oil) can be made by mixing
a viscosity index improver and a performance additive package with a blend of
equal volumes of re-refined base lube stock (viscosity 56 SUS at 210°F) and re-
refined light lube stock (viscosity 40 SUS at 210°F). (A re-refined light lube
stock costs more to produce than a re-refined base stock because additional
distillation and acid/clay treating steps are required.) The resulting mix-
ture should have a viscosity at 0°F equal to that of a 10 weight oil (6,000-12,000
SUS) and a viscosity at 210°F equal to that of a 30 weight oil (58-70 SUS).
Thus, multi-grade lube oils have the advantages of a light weight (SAE 10W) oil
at low temperatures and a heavier weight (SAE 30) oil at high temperatures. Such
oils are commonly recommended by automobile manufacturers for use in modern
vehicle engines. While the cost of producing multi-grade oils is higher than
that for single-grade and non-detergent oils, profit margins on such sales are
very attractive (see Table 6).
35
-------
TABLE 5
Blending Costs for Re-Refined 011s
(Single Viscosity)
Operation
Viscosity Improvement
from 55 SUS to 61 SUS at 210°F
Performance package to meet
SE specifications
Percent Additive
Blended
3.0
6.8
Cost, 4/Gal.
of Blended 011
3.9
14.3
Summary
Product
Re-refined base stock
Viscosity improver
Performance package
SE grade oil
Gallons
.902
.030
.068
1.00
Cost, t/Gal.
of Blended 011
15.8
3.9
14.8
34.5
36
-------
1.4 MARKETING
1.4.1 Wholesale Markets
In most instances re-refined automobile crankcase oils are sold un-
blended in bulk lots (more than 2000 gallons) to Independent jobbers who
package the oil in 55 gallon drums or quart cans and sell It to contnerctel
accounts, garages, independent (as opposed to major brand) gasoline stations,
automotive supply stores and discount houses. As shown 1n Figure 3, bulk sales
of unblended re-refined oil are made at rather low prices, generally about
23tf per gallon. This leaves a re-refiner with about 6$ per gallon gross mar-
gin. Administrative expenses and taxes will account for most of the 6$, leav-
ing the re-refiner with a net return of about U per gallon or 4$ per dollar
of sales.
In some instances a re-refiner will package his own production. He may
then distribute products himself (usually through a wholly owned subsidiary com-
pany), through independent distributors who handle a variety of items but carry
the re-refiner's oil exclusively, or sell the packaged products to a jobber who
will sell the oil to the same outlets listed above. Jobbers are essentially in-
dependent brokers who handle a wide variety of petroleum and related products
manufactured by a number of companies Including re-refiners, independent and major
oil companies. By packaging his own products, a re-refiner earns a return on.the
packaging operation and hence realizes a greater margin per gallon of sales.
Typical packaging costs are about $2.10 for a case containing 24 one quart cans.
This is equivalent to about 35$ per gallon. The cost of filling a 55 gallon drum
runs about 10
-------
These barriers to penetration of the high quality retail market by
re-refined oils can best be illustrated by reference to Figure 4. This
diagram shows how the considerations discyssed above build upon one another
and result in reinforcement of the public's negative attitude towards re-
refined oil. The failure of the industry to regulate the quality of its pro-
ducts led to enactment of the federal labelling law. Both of these actions
have served to foster a poor public image for recycled lybe oil. Thus re-
refined oil has become acceptable only to customers whs are highly price con-
scious. High quality re-refined oils are not price competitive with low
quality virgin lubes and thus are not available 1n most retail markets. As
a result,, only relatively low quality, low cost, non-detergent re-refined
oil is marketed. Under these conditions public confidence in the quality
of recycled oils can never be increased because high quality recycled oils
are not readily available to the public. Because of these considerations,
some re-refiners will not permit their unblended oil to be sold in the retail
market as they fear that such a practice would taralsh their hard-won images
as manufacturers of quality oils.
Paradoxically, some of the low quality virgin lubes with which re-
refined oils compete are actually blends consisting of very low quality,
very inexpensive virgin lubes and re-refined oHH The recycled oil 1s used
to raise the viscosity and the viscosity Index of the virgin products to
minimal (but still unacceptably low) levels. Such oils are generally sold
in retail markets as virgin oils (1n violation of federal and state labelling
laws), even though they may contain an appreciable fraction of re-refined oil.
Tha performance characteristics of these low quality blends fall far short
of specifications for lube oils Intended for u«e 1n modern automobile engines.
Thus, in the retail trade 1t 1s the bulk packager who earns an attrac-
tive return on his investment by canning very large velumes of cheap oils
(both re-refined and virgin). Large profits in the retail sale of re-refined
oil can be made on a volume basis only. Hence it is not surprising that
those re-refining firms whose principal customers ara jobbers (who buy un-
blended oil in bulk) are among the least profitable (see Table 1).
1.4.3 Commercial and Industrial Markets
The most lucrative markets for re-refiners involve sales to commercial
accounts such as truck and taxi fleets, railroads and other industrial cus-
tomers. The emphasis in these markets is on qyality and hence the competi-
tion for re-refined oils is major brands of virgin lutes. The critical fac-
tors for success are thus a reputation for producing top quality oil and,
of course, a price below that of the compstiton.
A re-refiner expands his commercial and industrial business on the
basis of "toe-to-toe" and "belly-to-belly" type relationships which have devel-
oped over extended periods of time. Satisfied customers generally provide
the only demonstration as to the quality and performance record of oils pro-
duced by a re-refiner. While years of satisfactory engine performance and
38
-------
Figure 4
Barriers to Public Acceptance of Re-Refined Oil
FEDERAL LABELLING LAW
u>
to
LOW QUALITY OF RE-REFINED
OILS WHICH ARE AVAILABLE
TO THE PUBLIC
LACK OF CONSUMER ACCEPTANCE
OF RE-REFINED OIL
RETAIL SALES OF RE-REFINED
OIL AT LOW PRICES IN COM-
PETITION WITH LOW QUALITY
VIRGIN LUBRICANTS
-------
low maintenance costs are not adequate to qualify re-refined oils for procure-
ment by federal agencies, such records should not be lightly dismissed as
railroad, trucking and taxi companies have millions of dollars Invested In
rolling stock and certainly would not risk high maintenance costs and out of
service time by using oils of questionable quality. At the same time, a
re-refiner whose oil is used In such applications will monitor his product
quality carefully. For if even one customer experienced maintenance problems
due to poor oil performance, the re-refiner's ability to maintain or expand
his sales to commercial and Industrial accounts would be severely limited.
A brief examination of Table 1 shows that, without exception, the most profit-
able re-refineries are those whose principal sales are to the commercial and
industrial market.
Due to the high cost of shipping lubricating oils, a re-refiner's
marketing area rarely extends beyond a 300 mile radius .from the production
location. A noticeable exception 1s the case of sales to railroads where
tank car loads of re-refined oil are picked up by the customer at the re-
refinery and distributed to points of locomotive service across the nation.
1.4.4 Comparison of Markets for Re-Refined 011
Table 6 shows representative prices and production costs for several
grades of re-refined oil sold in various markets. Considerable variation
from these price levels occurs for large volume purchases as well as for
negotiated "closed-cycle" custom re-refining arrangements. For example,
consider the jobber price of 36< per gallon for non-detergent 30 weight oil
delivered in lots of one to five 55 gallon drums. If bulk deliveries are
made in tank car loads of approximately 2000 gallons, the price would be
much lower, approximately 23$ per gallon. Similarly, commercial accounts
which buy oil in large volumes can expect to be granted discounts of between
5
-------
Table 6
Representative Prices and Production Costs for
Re-Refined 011s as of M1d-l973*
Grade of Oil
Jobber
Sales by a Re-Refiner to:
Commercial Account
Price
Cost1
Price
Cost1
Retail Customer
Price
Cost1
Non-detergent SAE 30 36a
Heavy Duty SAE 30 60
(SE grade)
Heavy Duty Multi- 66
Viscosity SAE 10W-30
(SE grade)
27.5
44.5
42
80
27.5
44.5
100
120
52.5
69.5
50.2
100
50.2
140
75.2
a For single purchases of tank car loads (approximately 2000 gallons) the price and cost
are 23$ and 17.5<£ per gallon.
* Prices and costs for sales to jobbers and commercial accounts are for purchases of
between one and five drums each containing 55 gallons. For deliveries of more than
five drums jobber and commercial prices are discounted further. Retail prices are
for single purchases of cases containing 24 one quart cans. All prices listed are
f.o.b.
b Cost figures exclude administrative costs and taxes.
41
-------
Thus, under present conditions, the commercial market Is the most
profitable outlet for re-refined oils, because large volumes of high quality
SE grade lubes can be sold here. As mentioned earlier, penetration of this
market depends on the establishment of long-term working relationships with
commercial and Industrial clients. Word-of-mouth recommendations as to the
quality of a company's lube oil have enabled several of the re-refiners In-
terviewed to sell most of their production to commerlcal and Industrial ac-
counts. Gaining entry to this market would not be an easy task for a new-
comer to the re-refining Industry. However, since the major demand is for
the high quality oils, a successful effort to gain access to this market
would have a high payoff.
42
-------
1.5 VIRGIN AUTOMOTIVE CRANKCASE OILS
Figure 5 presents economic data concerning the manufacture of virgin
automobile engine oils and the subsequent blending and packaging operations.
While the refinery gate price per gallon of unblended virgin lubes is higher
than that for re-refined oils, the blending and packaging costs are somewhat
lower. This is due to the much larger volumes of oil produced by a major
oil company.
1.5.1 Production of Virgin Lube Oils
Virgin automobile lube oils are produced by blending light vacuum gas
oils (approximately an SAE 10 oil) and heavy vacuum gas oils (approximately
an SAE 50 oil). As shown in Table 7, crude oils produced in the United States
yield, on average, about 1.7 percent lube oil per barrel. Pennsylvania crudes
have the largest "lube cut," around 8 percent, while crudes produced in the
interior of Texas yield only 0.1 percent lube oil per barrel. Further, lube
oil made from paraffinlc base crudes, such as thoie produced in Pennsylvania,
has a much higher viscosity index than lube oil nude from naphthenic base crudes,
some of which are produced 1n California. However, with solvent refining-to
remove napthenic compounds and suitable blending with additives, naphthenic lubes
can be "built up" to meet any specification, but at a higher cost.
1.5.2 Supply of Virgin Lube Oils
At present throughout the United States new lube oils are in short supply.
One of the largest oil companies In the U.S. has halted expansion of lube oil
sales, temporarily recalled its lube oil salesmen from the field, and placed
all customers on allocation according to 1972 purchases. According to an official
of one large oil company, the reason for the tight supply is a shortage of re-
finery capacity. The lube oil producing capacity of U.S. refineries depends on
a number of factors including the composition of the crude oil processed and the
economics of producing other products, such as fuel oil or gasoline, from those
crude fractions from which lube oil can be made. As of August, 1973, refinery
prices for new, unblended lube oil were about 25-26$ per gallon. However, by
the middle of October, 1973, prices had risen to about 30$ per gallon. One oil
company official has estimated that refinery prices for lube oils will rise to
nearly 45$ per gallon within a year.
Table 8 shows representative prices for sales of major brand lube oils
to various marketing outlets. The differences In price between virgin and
43
-------
FIGURE 9
ECONOMICS OF VIRGIN LUBE OIL PRODUCTION
(ALL COSTS EXPRESSED IN CENTS PER GALLON OF OIL)
REFINING
BLENDING
PACKAGING
CRUDE OIL
LIGHT
LUBE
STOCK
2B.H
REFINERY AND
LUBE OIL PLANT
BASE LUBE STOCK
30«
i SALES PRICE
I (excluding tax
I of G* per gallon)
i
UNBLENDED LUBE OIL
0.932 SALLOW
OF UNBLENDED
LUBE OIL
O.043 GALLONS OF
PERFORMANCE AOMTTVC (ll.7«)
1 GALLON OF SINGLE
GRADE BLENDED OIL 3B.7*
_4L2.J
> NON DETERGENT
| SAE 30 OIL
TO JOBBER 32*
TO COMMERCIAL
i ACCOUNT 57*
9BJ* I TO SERVICE STATION
(7*
0.877 GALLONS OF LIGHT LUBE STOCK
0.08O OALLON3 OF
VISCOSITY MOEX IMPROVER
(•»>
OlOBB GALLONS OF
PERFORMANCE ADOmVE (IL7O
I BALLON OF MULTr-ORADE
BLENDED OIL 44.7*
NUMBERS IN BRACKETS DENOTE COSTS OF EACH OPERATION.
NUMBERS NOT IN BRACKETS DENOTE RUNNING TOTAL COSTS.
*ALL COSTS AND PRICES ARE AS OF MID 1973
jas*^
SE GRADE SAE 3O OIL
TO JOBBER 89*
TO
ACCOUNT 100*
TO
STATION
jsW
I SE GRADE SAE U3W-3O OIL
TO JOBBER 114* __
COMMERCIAL
ACCOUNT izo*
I
TOJt* I TO SERVICE STATION _
I
A TECHNICAL AND ECONOMIC STUDY OF WASTE OIL RECOVERY
Principal Investigator: Dr. P. M. Cuker
Project Director: Dr. M. J. Matoa
EPA Coetnct No. 68-01-ISO* Performed for:
Dr. John H, Skinner, Acting Deputy Director
Resource Recovery Division
Office of Solid Wecte Me«oeeiw«f Program*
US. Emriramentol Protection. Agency
-------
TABLE 7
Percentage Yield of Lubricating 011s per Barrel of
Crude 011 by Refinery Districts fdr 1968
East Coast 1.4
Appalachian No. 1 8.1
Appalachian No. 2 1.1
Indiana, Illinois, Kentucky 0.9
Oklahoma, Kansas, Missouri 1.7
Texas Inland 0.1
Texas Gulf Coast 3.3
Louisiana Gulf Coast 1.7
Arkansas, Louisiana Inland 3.9
Rocky Mountain 0.3
West Coast 0.9
Unlttd States Average 1.7
47 Preceding page
-------
TABLE 8
Representative Costs and Prices for Major Brand
Virgin 011s as of M1d-l973*
(not Including federal tix of 6t per gallon)
Grade of Oil
Non-detergent SAE 30
Heavy Duty SAE 30
(SE grade)
Heavy Duty SAE 10W-30
(SE grade)
Jobber
114
55.9
Sales by an 011 Company to:
Commercial Account
120
55.9
Service Station
-------
re-refined oils in all market sectors appear to give the re-refiner a signi-
ficant competitive advantage, especially when the federal tax of 6tf per gal-
lon is added to prices of virgin oil sold for on-h1ghway use. Re-ref1nad
oils are tax-exempt save for any virgin stocks blended with the recycled oil.
However, in practice a large commercial customer, for example, will have
need for petroleum products (principally fuel) other than lub€ oil. The
dollar value of a fuel supply contract Is certain to be many times larger
than a lube oil supply agreement. Hence a large conmerical customer will
frequently be willing to pay a higher price per gallon for lube oil 1n order
to obtain a discount on his fuel supply. The net savings to the customar
can more than compensate for the higher price paid for lubricating oil.
1.5.3 Effect on the Re-Ref1n1ng Industry
Shortages of and subsequent price rises for virgin oils will help re-refin-
ers by enabling them to pass along increased costs of production. If the price
of lubricating oils rises relative to the price of fuel oils, re-refiners will
be able to compete successfully for needed supplies of waste oil feedstock. Fur-
ther, if major oil companies are not able to fulfill the lube oil requirements
of their existing customers, some of these clients will turn to re-refiners for
their lube supply. This will both provide an opportunity for the re-refining
industry to improve the image of Its products and result in higher prices and
higher profits for sales of re-refined oil.
49
-------
1.6 CRITERIA FOR SUCCESS IN RE-REFINING
In view of the generally unfavorable marketing conditions for re-refined
oils, the low margin which can be realized on bulk scales of unblended re-
refined oil, and the tight supply of feedstock, 1t 1s apparent that the days
of the single purpose (crankcase oil) re-refiner are numbered. From Table 1
we can see that re-refiners serve two basic markets - the "on-h1ghway" market
and the "off-highway" market. In both markets federal policy has contributed
to making profitable operation very difficult. The federal labelling law
discussed earlier has contributed to the difficulty of selling high quality
blended re-refined oils 1n the retail "on-hlghway" market. The removal of
the federal excise tax on virgin oils Sold for "off-highway" use eliminated
a built-in price advantage for re-reflhed Oils of 6$ per gallon. While other
considerations, notably quality assurance In the case of the labelling statute,
may have required the enactment of these laws, 1t must be made clear that these
regulations have been major factors 1n the decline of the re-refining Industry.
Yet even with these handicaps, some re-refiners have been able to operate
quite successfully.
1.6.1 The "Qn-Highway" Market
In the "on-highway" market re-refiners can make an attractive return
through sales of blended oils to commerlcal accounts such as trucking com-
panies, agricultural concerns, lumber firms, taxi fleets, etc. Such cus-
tomers are very much concerned with the quality of the oils used in their
expensive vehicles. Re-refiner number 2 In Table 1 serves this market and
has built a widespread reputation as a producer of very high quality oils.
This firm had the highest average revenue per gallon sold of the companies
interviewed. Penetration of the high quality on-highway lube oil market
is, however, not an easy task for a re-refiner. Many years of close work-
ing relationships with customers and close attention to their individual
needs play an Important part 1n building the very attractive business which
this firm now enjoys.
1.6.2 The "Off-Highway" Market
Industrial Oils
Success in the "off-highway" market is based on the establishment of
a number of agreements with industrial firms for purchases of a variety of
lubricating, hydraulic, and other non-synthetic fluids used 1n manufacturing.
Industrial oils include some which are quite expensive and some which present
extremely difficult disposal problems. The ability to recycle these oils,
frequently under "closed-cycle" arrangements, not only saves the company
sizeable amounts of money when compared with the cost of virgin oils but also
avoids those economic and environmental costs associated with disposal.
51 Preceding page blank
-------
For example, the Saglnaw Steering Gear Division of General Rotors Corpora-
tion 1n Michigan has Implemented a "closed-cycle" system with a re-refiner for
the recycle of more than 1,000,000 gallons of Industrial oils annually. Rather
than dispose of the used oils by burning, burial or otter environmentally harm-
ful methods, the oil 1s now recovered, cleaned, re-refined and fed back Into
the division's manufacturing plants for reuse. General Motors has found the
re-refined oil to be equal to new oil for cutting, broaching and grinding opera-
tions. It must be emphasized, however, that re-refining of Industrial cutting
oils is a much simpler process than re-refining of cranhcase oils. Generally,
used cutting oils are processed to remove water and solids but are not treated
with acid followed by clay addition and distillation. This is primarily be-
cause cutting oils do not contain additives. • -
Railroad Oils
The re-refining of railroad dlesel engine oils 1s a completely differ-
ent situation. Here, used oils are completely processed using acid treat-
ment followed by clay addition and distillation. For many years a number
of the nations largest railroads, Including the Union Pacific and Southern
Pacific, have engaged in "closed-cycle" re-refining agreements for the re-
cycle of diesel engine oils. In fact, at one time the Union Pacific, 1n
an attempt to cut costs, operated Us own re-refinery 1n Ogden, Utah. How-
ever, this venture was not an economic success and eventually the railroad
returned to its former policy of dealing with re-refiners. The Burlington
Northern Railroad was somewhat more successful In re-ref1n1ng Us own oil
and still operates a small plant 1n Livingston, Montana. However, most of
Burlington Northern's engine oil volume 1s custom re-refined by an outside
concern. One re-refiner Interviewed processes a total of about 6,000,000
gallons annually of used dlesel engine oil under closed-cycle arrangements
with 15 different railroads. Waste oil is delivered to the plant site 1n
tank car loads of approximately 20,000 gallons; re-refined oil is picked up
by the railroads at the same tiros. This company 1s one of the largest re-
refineries in the U.S. both 1n terras of volwtn of oil processed and 1n terms
of total revenues.
Other re-refiners serving Industrial accounts mentioned that without
this business they would have ceased operations several years ago. In Table
1 re-refiners 1 and 11 emphasized the Importance of Industrial customers in
their operations. Re-refiner 13, who serves only industrial clients under
closed-cycle arrangements, has found this business strategy particularly
successful.
52
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1.6.3 Diversified Operations
Re-refiner 11 has managed to diversify his operations in order to
serve a variety of markets. This strategy not only allows the company to
change its product mix 1n order to serve the most profitable markets, but
also permits the conversion to fuel of large volumes of lube oil. Further,
diversification enables a re-refiner to serve a range of recycling require-
ments of industrial customers, a strong selling point in view of restric-
tions on disposal of industrial oily wastes. Re-refiner 11 stated that
under current market conditions industrial oils are his most profitable
product, followed by fuel oil and automobile lube oil.
53
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FOOTNOTES CHAPTER 1
1. "Waste Oil Recycling Study". Department of Defense, Defense Supply
Agency, September, 1972, p.20.
2. Ibid., p.21.
3. "A Technical and Economic Study of Waste 011 Recovery, Part II: An
Investigation of Dispersed Sources of Used Crankcase Oils"; Teknekron,
Inc.; EPA Contract No. 68-01-1806; October, 1973.
4. "A Technical and Economic Study of Waste Oil Recovery, Part I: Federal
Research on Waste Oil from Automobiles"; Teknekron, Inc.; EPA Contract
No. 68-01-1806; October, 1973.
5. Loetterle, Fred. "Use of Sewers for Oil Dumping Probed", New York Daily
News. December 26, 1970.
6. Detailed explanations of the requirements of various lube oil specifications
may be found in Chapter 2.
7- Op. cit., "A Technical and Economic Study of Waste Oil Recovery, Part II."
55 Preceding page blank
-------
CHAPTER 2
EVALUATION OF LUBE OIL QUALITY
2.0 INTRODUCTION
The quality of re-refined lube oil is a raajer ynresolved Issue that has
always stood in the way of federal efforts to encourage waste oil recovery.
In 1970, for example, the Council on Environmental Quality abandoned its
plans to support greater lube oil recycling largely beeayse the quality of
re-refined oil could not be adequately demcjflstrated» ]/ Product quality is
also a major issue in the Federal Trade Goraafssfern's resent review of re-
cycled lube oil labeling policies.
A number of issues bear upon the problem of quality. Particularly
important is the distinction to be made between the quality of re-refined
oils currently on the commercial market and the quality of re-refined oils
which can be produced with the application of available technology. The
quality of many re-refined oils produced for today's market does not repre-
sent the best that technology can produce-^even economically produce.
Rather, under current marketing conditions high quality re-refined oils are
simply not being produced for the retail customer. Therefore, to judge re-
refined oil in general by the quality of many re-refined oils now available
to the public is an error. For, as has been shown in Chapter 1, market con-
ditions have effectively discouraged the production of high quality re-
refined oils for the retail consumer. Combined with the failure of the
re-refinery industry to establish and enforce guidelines for maintaining
acceptable levels of product quality, the market situation has resulted in
public mistrust of re-refined products. This mistrust is reflected in the
federal labelling law, in specifications for lybs oil purchased by govern-
ment agencies, and in the lube oil procurement practices of public and pri-
vate organizations which have followed the government's lead in banning the
use of re-refined oil. However^ mistrust of the quality of re-refined lube
so1ls is not, by any means, universal amongst consumers. As discussed in
'Section 1.4.3, a number of re-refiners currently produce high quality lube
oils for industrial and commercial customers, frequently under closed cycle
conditions. These re-refined oils have been used successfully for a number
of years in such high cost, heavy duty equipment as railroad diesel engines
and truck cabs for tandem trailers.
For example, in a recent publication, the Committee on Fuel and Lube
Oil of the Locomotive Maintenance Officers Association reported that:
57
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Re-refined crankcase dralnlngs, fortified with an additive systemE
have been used successfully In all equipment for many years. Labo-
ratory tests and road tests Indicate that reclaimed oil Is entirely
equal to the best new oils, provided that the reclaimed oil has
been properly handled by the re-refiner. 2/
Unfortunately, the only hard evidence as to the quality of these oils
is the satisfaction of the clients who use them. Complete sets of test re-
sults required under existing lube oil specifications are not available for
re-refined oils. As a result, under existing government procurement regula-
tions, re-refined oils are excluded from consideration, largely because of
the lack of evidence as to the absolute quality of and quality variations
in recycled lubricants.
In order to provide an understanding of the details of the quality
issue, this chapter focuses on the two aspects of lube oil quality evalua-
tion: specifications and testing. Specifications establish the physical
and chemical properties required of lube oil for various uses and also Indi-
cate performance criteria for those uses.
Testing involves both laboratory analyses of the physical and
chemical properties listed in the specifications and engine sequence tests.
Engine sequence tests are designed to evaluate the performance properties
of the lube oil-additive blend under the operating conditions likely to be
encountered in those applications for which the particular set of spsdfica-
tions has been established. A complete evaluation of lube oil quality re-
quires that both types of tests be performed. The following discussion will
deal with how specifications and testing apply both to virgin and to re-
refined lube oils.
58
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2.1 SPECIFICATIONS
Three major sets of specifications apply to motor vehicle lubricating
oil. These are API/SAE specifications, auto manufacturers' specifications,
and military specifications. The API/SAE and manufacturers' specifications
are closely related, Indeed Interdependent. Military lube oil specifica-
tions are similar but establish some additional quality requirements for more
demanding military uses.
2.1.1 API/SAE Specifications
The first attempts to classify or identify motor oils started with the
first automobiles. Even then viscosity was known to be one of the most
important qualities of an oil so far as lubrication is concerned. 011s were
then classified as light, medium, heavy and extra heavy, 1n an attempt to
identify their viscosity. After instruments were developed to measure vis-
cosity accurately, the Society of Automotive Engineers developed a new classi-
fication based on viscosity, and the SAE numbering system of motor oils was
born. This classification system is used today. Seven distinct viscosity
classifications are defined by the Society of Automotive Engineers. SAE 5W,
SAE 10W, SAE 20W, SAE 20, SAE 30, SAE 40 and SAE 50.
The "W" (for winter) after the SAE number Indicates an oil suitable for
use in colder temperatures and the viscosity of these "W" oils must have the
proper value when measured at 0°F.
Those SAE classifications which do not include the "W" are suitable at
higher temperatures such as are experienced in the summer months. The vis-
cosity of these oils (SAE 20, 30, 40 and 50) must have the proper value
when measured at 210°F.
It should be noted that SAE 20W and SAE 20 are identified as two sepa-
rate classifications. However, with today's well-refined, high viscosity
index oils, the SAE 20W oil will usually also meet the viscosity require-
ments of the SAE 20 oil and vice versa. Such oils are identified as
SAE 20W-20 and actually are dual viscosity oils.
With the development of viscosity index improvers, the manufacture of
multi-viscosity oils became possible. Multi-viscosity oils, SAE 5W-20,
5W-30, 10W-30, 10W-40, and 20W-40, are or have been marketed during post
World War II years by oil companies in the USA. Actually, 5W-50 oils are
possible through the use of VI (viscosity index) improvers. However,
American car manufacturers design engines to operate normally on SAE 20
and SAE 30 oils at highest atmospheric temperatures. SAE 40 oil is used
in heavy equipment and seldom used by passenger cars and as a result there
59
-------
is no technical demand or advantage 1n SAE SW-50 oils.
Multl-viscosity oils are now generally marketed as SAE 5W«£Q or §1*1-30
for extreme cold, SAE 10W-30 or 10W-40 for normal operating temperatures
and SAE 20W-40 for extremely hot conditions. In general and In all but ex-
tremely hot or cold climatic conditions, the SAE 10W-30 and SAE 10H-40 oils
are the most popular and have the greatest versatility for the average
motorist.
GUIDE TO SAE VISCOSITIES OF MOTOR OIL
Lowest Atmospheric
Temperature Expected SIngle VIscos Uy 011 Multi-Viscosity Oils
32° F 20.20W 10W-30, 10W-40
0° F 10W 10W-30, 10W-40
Below 0° F 5W * 5W-20, SW-30
* SAE 5W single viscosity oils should not be used for sustained high spaed
driving (above 50 mph).
The SAE classification system only Identifies viscosity and does not
indicate anything about the type of the oil, Its quality or the servlea for
which the oil is Intended.
2-1.2 Engine Service Classification
Many years ago, the automotive and petroleum Industries recognized the
need for a system by which crankcase oils could be classified and described.
A first step in this direction was the adoption In 1911 of the SAE Crankcase
Oil Viscosity Classification system. However, this system classified crank-
case oils in terms of viscosity only.
In response to inter-Industry needs for a system which would Include
factors other than viscosity, the American Petroleum Institute 1n 1947 adop-
ted a system which established three types of engine oils. In this system,
crankcase oils were designated as: Regular Type, Premium Type, and Heavy
Duty Type. Generally, the Regular Type oils were straight mineral oils;
Premium Type oils contained oxidation Inhibitors; and Heavy Duty Type oils
contained oxidation Inhibitors plus detergent-dlspersant additives.
This oil-type classification system did not recognize that gasoline and
diesel engines might have different crankcase oil requirements or that the
60
-------
engine requirements would be affected by engine operating conditions, com-
position of the fuel and other factors. In tltts, both tho oil and engine
manufacturers recognized that oil-type definitions were Inadequate. As a
result, the Lubrication Subcommittee of the ftnarlcan Petroleum Institute,
cooperating with the American Society for Testing and Materials* developed
a new system of Engine Service Classification In TS5JJ tftich was revised to
1955 and again In 1960. ' ' ' " '
This API Engine Service Classification Systssn described and classified',
in general terms, the service conditions tfRdsr t&1ch engines were operated',,
It provided a basis for selecting end recosasndinKj engine crankcaso oils.
The system included three service classifications for oasoline engines
(ML, KM and MS) and three for dfosel eaglR& (OS; £J, E.id D3). '•
While this system was a great ImpfDvcE&nt QVC? the earlier system, it
eventually becams apparent that a more effective crmns of coraunicating the
relationship of engine oil performance and onglno uorv.fee classification
information between the engine manufacturers, t?$ f&fcroleum industry and
the customer was required. There was need for a systcn that would provide
more flexibility 1n order to sGtisfy the changing t:arrc;>ty t;01ne oils to be Btt>re
precisely defined and selected according to tftelr performance character-
istics than heretofore, and to be more easily related to the type of
service for which each 1s intended.
Late in 1970, a ninth class of service had been added to reflect the
anticipated service requirements of nsw model autc~ob11cs. This G
-------
The SAE Crankcase 011 Viscosity Classification System is In noway
affected by the new API Engine Service Classification System and therefore
1s used as before to Indicate the SAE v1$cos1t1«S of oils.
The new API Engine Strvlce Classification System continues to define
and explain classes of service for both dltstl and gasoline engine applica
tions. It provides a means of Identifying service requirements with oil
performance from a lubrication standpoint. Thtse requirements range from
the mildest, requiring minimum protection a$a1n»t d*pot1tsi, ww o*
to the severe requirements 1mpoia*o*
- Short- trip, start-and-sto*,o0e*»tlO*i
- H1 gh- temperature trailer
- Sustained high-speed, high- temperature driving -and on suptr-
charged dlesel engines operating on high sulfttr fuel.
The new system continues the 4ise of letter designations for each service
classification. This provides a convenient means for the engine manufactur-
er to Indicate the service characteristics of his various designs and hence
their lubrication requirements. Similarly* petroleum companies its* the letter
designation to Indicate for which class or classes of service we* Of thtYr
brands of lubricating oil 1s suitable. .
2.1.3 Definitions and Explanations of API Engine Service Classifications
! ' ' '
The new API Engine Service Classification Systam presently includes
nine classes of service; five for service stations and fajtr for? e
-------
TABLE 1
OIL SPECIFICATION REFERENCF CHART
API SERVICE
CLASSIFICATIONS
New
Old
ENGINE SERVICE
DESCRIPTION
RELATED
DESIGNATIONS
AUTOMOBILE
MANUFACTURERS
SPECIFICATIONS
SA
ML
Utility Gasoline and
Diesel Engine Service
Service typical of engines
operated under such mild
conditions that the pro-
tection afforded by com-
pounded oils is not re-
quired. This classifi-
cation has no performance
requirements.
Straight Mineral Oil
SB
Minimum Duty Gasoline
Engine Service
Service typical of engines
operating under such mild
conditions that only «ini-
BKR protection afforded by
compounding fs desired.
01U designed for this
service have been used
since the 1930's and pro-
vide only antiscuff capa-
bility, and resistance to
oil oxidation and bearing
corrosion.
Inhibited Oil
sc
MS
1954 Gasoline Engine
Warranty Service
Service typical of gaso-
line engines in W64-
1967 models of passenger
cars and trucks operat-
ing under engine manu-
facturers' warranties in
effect during those model
years. Oils designed for
this service provide con-
trol of high and low tem-
perature deposits, wear,
rust, and corrosion in
gasoline engines.
1964 MS Warranty Approved Ford ESE-H2C101-A (1964)
"MIL-L-2104C"2
-------
TABLE 1 Continued
SO MS 1968 Gasoline Engine
Warranty Maintenance Ser-
vice (revised)
Service typical of gasoline
engines in 1968 through
1970 models of passenger
cars and some trucks opera-
ting under engine manu-
facturers' warranties in
effect during those model
years. Also may apply to
certain 1971 and/or later
nodels, as specified (or
reconoended) in the owner?'
ninuals. Oils designer! for
this service provide more
protection against high and
low temperature engine de-
posits, wear, rust and cor-
rosion in gasoline engines
than oils «trich are satis-
factory for API Engine Ser-
vice Ctnsff ieatte* S£ and
my be used Mfce» »1s
classification is recon-
^^ftM44^«4
Mnoeo.
1968 MS Warranty Approved
Ford ESE-H2C101-B (1968)
GH 6041-M (Prior to
July. 1970)
SE
None
1972 Gasoline Engine War-
ranty Maintenance Strvtce
Service typical of gaso-
line enfiMS IB
1972 Gasoline Engine War- Font N2C101-C (1972)
ranty Maintenance Service -
OB041-M Revised.
ks, he-
**"
taerican ftottn AM 4042
certain T971 •pfeTs "t*erat-
fny wieer enjine nanyfac-
t»rers* warrant fes. (Mis
'oejtgned for this service
provide more protection
aoainst oil oxidation,
htjb tMierature engine
ieposits, rust a«4 corro-
sion in gasoline enfinw
than o'ls wblck .r* satis-
factory for API Gasoline
f*«1iw Warranty Nainte-
«ft«ee» Classifications
t*en either of these
classifications are re-
coMnended.
SO or
SE
Sane as above.
Same as above.
Chrysler HS4071H
Nack Tntct £0-6
Mack Tn»ck €0-H
C»t*r»>Uir
-------
TABLE 1 Continued
API SERVICE ENGINE SERVICE RELATED
CLASSIFICATIONS DESCRIPTION DESIGNATIONS
New Old
CA DG Light Duty Diesel MIL-L-2J04A
EQUIVALENT
.MILITARY
SPECIFICATION
MIL-L-2104A
an
Engine Service
Service typical of diesel
engines operated in mild
to moderate duty with
high quality fuels.
Occasionally has included
gasoline engines in mild
service. Oils designed
for this service were
widely used in the late
1940's and 1950's. These
oils provide protection
from bearing corrosion
and from high temperature
deposits in normally aspi-
rated diesel engines when
using fuels of such quality
that they impose no un-
us*at requirements for wear
and deposit protection.
CB OR federate Duty Diesel Engine
Service
Service typical of diesel
engines operated in irlld
scrvfce. Oils designed for
tfcts service Mere Intro-
duced in 1949. Such oils
provide necessary pretcc-
%5M frcw bearing corro-
sttm and from high teopera-
*** deposits in normally
asptratetf dieseT engines
with higher sulfur fuels.
Supplcnent 1
U.S. An* 2-104B, Suppl
CC OH Moderate Duty Diesel and
Gasoline Engine Service
Service typical of lightly
supercharged diesel en-
glws opera tea in Moderate
to severe duty and has in-
cluded certain heavy duty,
gasoline engines. Oils de-
signed for this service
were introduced in 1961
and used in many trucks
and in industrial and con-
struction equipment and
farm tractors. These
oils provide protection
frem high temperature de-
posits in lightly super-
charged diesels and also
from rust, corrosion, and
low fceroerature deposits
in gasoline engines.
NIL-L-2104B
Wl-l-21048, WL-L-461523
-------
TABLE 1 Continued
CD
OS
C7»
0»
Severe Duty Diesel Engine
Service
Service typical of super-
charged diesel engines in
high speed, high output
duty requiring highly
effective control of wear
and deposits. Oils de-
signed for this service
were introduced in 1955,
and provide protection from
bearing corrosion and from
high temperature deposits
in supercharged diesel en-
gines when using fuels o*
a wide quality range.
MIL-L-45199B, Series 3
MIL-L-45199B, MIL-L-2104C
2
Service typical of both
spark-ignition and com-
press ive-ignition (diesel}
engines used in tactical
service, i.e., all types
of military ground equip-
ment operating under the
entire range of service
conditions. Meets API
engine service require-
ments CD and SC.
Tactical Service
Vehicles
HIL-1-21C4C
Service typical of com-
mercial engines used in
administrative (post,
camp, and station) service.
Oils are to be appropriate
for gasoline engines in
passenger cars and light to
medium duty trucks operat-
ing under manufacturers
warranties and also for
lightly supercharged
diesel engines operated
in moderate duty. Meets
API engine service require-
ments SE and CC.
Passenger Cars
Light Trucks
NIL-L-46152
-------
2.1.4 Application of API/SAE Specifications
API/SAE ratings are used both by auto manufacturers and lube oil pro-
ducers. Auto manufacturers take Into account engine design and expected
operating conditions. It is then their responsibility to Indicate the API
service class or classes, SA through SE, applicable to that design and
use. Further discussion of manufacturers' use of specifications will be
found in the section on manufacturers (see below).
It is the responsibility of the lube oil producer to establish that
his lube oil has the characteristics essential for the class of service for
which the oil is recommended. An oil recommended for a given class of ser-
vice should be able to satisfy all physical/chemical and performance re*
quirements for the specified class of service.
The use of an API/SAE service label 1s totally up to the oil producer
and is self-policed. There 1s no Independent organization which monitors
the quality of lube oils sold In the retail market. The API M&tor Oil
Guide states:
The designation of an oil as suitable for a given API Service,
such as "API Service SE", 1s wholly the responsibility of the
marketer of that particular brand of oil. It 1s expected that
his knowledge of the performance characteristics of his product
provides the basis for proper service designation.
Although many consumers do, and should, rely on the API/SAE rating in
purchasing lube oil, there is some evidence that the rating system has been
abused. A 1962 study by a major additive manufacturer showed that second
and third line oils frequently did not meet the API/SAE service quality
level with which they were labeled.3/However, lubrication engineers In
major auto companies believe that API/SAE labels used by major oil pro-
ducers are completely trustworthy. They feel that fraud would soon be dis-
covered during engine tests made by additive producers, auto manufacturers,
or professional trade organizations.
It is particularly important to note for the purpose of this study
that neither the API/SAE service classifications nor the associated ASTM
test methods and performance limits exclude re-refined lube oil. Re-
refined oil may correctly use an API/SAE grade label 1f 1t is able to meet
the performance tests applicable to oil of that grade.
2.1.5 Automobile Manufacturer's Specifications
Manufacturer's specifications for lube oil are used in three different
ways. They are used by the manufacturer to buy factory fill lube oil and
67
-------
by automobile dealerships in purchasing lube oil with which to service
cars. They are also used by the car purchaser 1n choosing lube oil appro-
priate for his car. This last use 1s particularly Important because quality
choice may affect customer's ability to get his new car warranty tnforced.
Auto manufacturers are the prime movers behind the API/SAE specified
tions because It 1s their cars that have to use the oil. Automakers' In-
terests are represented by the SAE in the Joint SAE-A5TM-API decisions on
lube specifications.
Ford and General Motors dominate the lube oil specification-setting
process and new API/SAE specifications are written largely at their re-
quest. Chrysler and American Motors follow the lead of Ford and 6M.
API/SAE specifications are therefore always consistent with th« lube oil
specificatiDisestablished by the individual auto firms, ford's new car
lube oil specification, ESE-M2C 101-C, and Gil's new car lube oil specifica-
tion, GM 6136-M, are virtually identical in tests and required performance
to the API/SAE rating. *
Both new car owners' manuals and warranties indicate that vehicle fail-
ure due to use of non-specification lubricants are not covered by the warran-
ty. Owners' manuals for new Ford and GM cars Instruct the consumer to pur-
chase only oils that meet SE service specifications. The Ford enwission con-
trol system warranty sets up particularly rigorottS requirements for mainten-
ance if its provisions are to be honored.
Most oil companies identify oils which have been tested and approved
for warranty servicing with an Identifying phrase on the oil container.
These statements are frequently printed vertically on the side of the can:
"Meets Car Manufacturers' Test Requirements"
"Passes ASTM Sequence Tests"
"Sequence Tested"
"Exceeds (or Surpasses) Car Manufacturers' Service Requirements"
"Meets (or Exceeds) Car Manufacturers' Warranty Requirements", etc.
These specifications are for "service fill", I.e., field servicing by
dealers and consumers. Each automaker also has a "fac-tory fill" speci-
fication for lube oil put 1n the crankcase at the plant. The factory
fill specification is slightly more demanding than the companies' service-
fill, i.e., API/SAE specification, because it has special additives for
breaking in the engine.
68
-------
Like API/SAE specifications, Ford and GM specifications nowhere ex-
clude re-refined oils a priori. Ford's specifications, for example, only
require that all supplters provide a product which is "essentially identi-
cal in all characteristics and compensation to the material upon which
qualification was originally based, and shall be suitable for the Inten-
ded application." 4/
Although the specifications themselves do not bar manufacturer or con-
sumer warranty purchases of re-refined oil, opinions among lubrication
engineers employed by the major automakers differ on the quality of re-
refined oil. Ford engineers state that they would not purchase re-refined
oil for company use without complete engine testing of each batch. Their
opinion is that without such testing feedstock variations make 1t impossi-
ble to be assured of lube oil quality or additive response. They do agree,
however, that re-refined lube oil need not be inherently Inferior.
GM lube engineers have a somewhat more charitable view of the quality
consistency of re-refined oil. It 1s their belief that 1t is technically
possible to get a consistent quality output from a widely varying Input
—If enough funds are available to apply the best re-refining technology
and to withstand the Increased costs which may result from lower product
yields.
2.1.6 Mi 1itary Specif1cations
Military specifications for lube oil are crucial 1n determining whether
the military or other government agencies can purchase re-refined oil.
However, unlike API/SAE or automaker specifications, military specifica-
tions specifically exclude re-refined lube oils from consideration.
This is particularly important because the military's oil specifica-
tions have a strong influence on all other federal agencies and on much
of the private market. The General Services Administration (GSA), the
federal unit that buys most government property, has delegated authority
to the Defense Supply Agency (DSA) to procure fuels and lubricants for the
entire federal government. Further, military lube oil specifications are
followed by many state, local, and commercial fleet maintenance facilities.
The military lube oil specifications at Issue are MIL-L-46152 and
MIL-L-2104C. 5/ Both specifications require in their sections on materials
that "no re-refined constituent material shall be used." 6/ MIL-L-46152
is the specification for "lubricating oil, Internal combustion engine, ad-
ministrative service." Lube oils covered by the specifications are
"intended for the crankcase lubrication of commercial type vehicles used
69
-------
for administrative (post, station and camp) service typical of: (1) gasoline
engines in passenger cars and light to medium duty trucks operating under
manufacturers' warranties; and (2) lightly super-charged diesel engines
operated in moderate duty." TJ
MIL-L-2104C is the specification for "lubricating oil, Internal com-
bustion engine, tactical service." Lube oils covered by the specification
are "intended for the crankcase lubrication of reciprocating spark-ignition
and compress ion-Ignition engines used in all types of military tactical
ground equipment and for the crankcase lubrication of high speed, high-output,
supercharged compression-ignition engines used 1n alt ground equipment." 8/
MIL-L-46152 oil 1s, in sum, chiefly for military automobiles and light
trucks. It is an oil that will meet the performance requirements of API/SAE
grade SE and as a moderate duty dlesel oil 1t will meet the performance re-
quirements of API/SAE grade CC.
MIL-L-2104C is chiefly a lube oil for heavy equipment such as trucks.
As such it meets API/SAE grade CD for heavy duty dlesel uses. However* it
is only a single viscosity oil and therefore qualifies for only an SC gty-Q-
line engine rating. MIL-L-46152 oils can be Single or multl-viscosity 1u£ri-
cants.
These two specifications exclude procurement of re-refined constituents
on the grounds that there is no reliable Information on the quality of
such oils. According to the Defense Supply Agency, the government agency
which procures lube oils for all federal facilities, the small, Independent
firms which typically engage 1n oil re-f1n1ng do not have .the financial
capability to support the level of laboratory and other testing needed to
provide essential data on quality and consistency.
Aside from the explicit prohibition of re-refined constituents, the
military specifications contain another provision which has been Interpreted
to exclude re-refined oil. This provision states:
Whenever there is a change on the base stock, in the refining
treatment or in the additives used 1n the formulation, requaiif1ca-
tion will be required. When proposed changes are minor and may not
be expected to significantly affect performance, the qualifying acti-
vity may, at its discretion, waive complete requai1f1cation In order
to determine the significance and acceptability of the proposed
changes. _9/
t
The varying feedstocks that go Into re-refining of waste lube oil are
seen as a significant "change 1n the base stock." Each batch therefore 1s
required to undergo prohibitively expensive requaiIfications.
70
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2.2 TESTING
Lube oil must be tested in order to determine whether or not it meets
the performance standards established by specifications. Indeed, the speci-
fications themselves indicate which of a standardized set of tests must be
performed in order to qualify lube oils for various classes of service.
Two kinds of tests are carried out — laboratory bench scale tests and
engine tests. The laboratory tests measure the physical and chemical prop-
erties of lube oil and the results of these tests must meet or exceed pre-
cise criteria established by the specifications. However, lubrication en-
gineers have found that currently available laboratory tests cannot sub-
stitute for engine tests that approximate the operating conditions under
which lube oil is required to perform. A sequence of expensive tests Is
therefore always required before a lube oil 1s found acceptable by major
purchasers.
2.2.1 Laboratory Bench Scale Tests
a. Virgin Oils
An example of physical and chemical standards from the military speci-
fication, MIL-L-46152, appears 1n Table 2.
Several other characteristics 1n addition to these are also required,
including high foaming, high stability, and compatibility with other oils
made for similar uses.
As can be seen from these criteria, there are specific numerical stan-
dards for most, but not all, physical and chemical properties. This holds
true also for API/SAE and manufacturer specifications. Those characteristics
for which no precise standards exist must be measured and reported and the
producer must establish tolerances for them. Evaluation by the analyst
tends to be subjective in these areas. However, properties for which no
minimum standard has been established are not generally considered to be
critical determinants as to whether or not a candidate oil passes or fails
the entire qualification test.
b. Re-Refined Oils
Re-refined oils now available can easily pass established laboratory
tests such as those required under specification MIL-L-46152. Table 3
71
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Table 2
Military Specification MIL-L-46152
Partial List of Physical and Chemical Requirements
Property
Viscosity at 210yF (99°C)
kinematic, SUS
m1n.
max. ,,
Viscosity at 0°F (-I8°C)-^
apparent, SUS
m1n.
max.
Viscosity index, min
Pour point, °F (max.)
°C (max.) 2/
Stable pour point, °F (max.)^
°C (max.)
Flash point, °F (min.)
°C (min.)
Gravity, API^ 3/
Carbon residue^
Phosphorus -J,
Chlorine 3,
Sulfur *-.
Sul fated residue^- 3/
Organo-metallic components-'
Grade
10
44.9
< 50.8
6000
< 12000
«M
•25
•32
-25
-32
400
204
X
X
X
X
X
X
X
tirade
30
58.0
< 70.0
*M
»«*
75
0
•18
—
• «•
425
218
X
X
X
X
X
X
X
Grade Grade
10W- JO 2QW-40
58.0
< 70.0 <
6000
< 12000 <
—
-25
-*2
-25
-32
400
204
X
X
X
X
X
X
X
70.0
85.0
12000
48000
--
-10
-23
-10
-23
415
213
X
X
X
X
X
X
X
'!_/ Report measured, apparent viscosity at 0°F (-18°C) in centipoises for grades
10, 10W-30, and 20W-40 oils.
2] After being cooled below its pour point, the oil shall regain its homogeneity
on standing at a temperature not more than 10°F (6°C) above the pour point.
3/ Values shall be reported ("X" indicates report).
72
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TABLE 3
Physical and Chemical Properties of Re-Refined Oil*
Grade Grade Grade Grade
Property 10 30 10H-30 20W-40
Viscosity at
kinematic, SUS 46.5 65.5 63.4 77.5
Viscosity at 100°F
kinematic, SUS 190 , 540 310 480
Viscosity Index 110 96 144 134
Pour point, °F *35 -10 -45 -35
Flash Point, °F 385 450 420 435
F1re Point, °F 440 480 455 465
These data were supplied by one of the 13 re-refiners Interviewed. Data
supplied by two other re-refiners were essentially Identical to the above
figures.
73
-------
presents data concerning the physical and chemical properties of some commer-
cially available re-refined oils. The data indicate that these oils exceed
the minimum requirements listed in Table 2 for lubricants qualified under
specification MIL-L-46152. This does not, however, imply that these re-
refined oils will necessarily pass the engine sequence tests required by
specificaiton MIL-L-46152 (see below).
c. APR Emblem Licensing Agreement
In 1964, in response to the FTC's proposed rule requiring re-refined
oils to be labelled as made from previously used oils, the Association of
Petroleum Re-Refiners (APR) established an Emblem Licensing Agreement 1n
order to set minimum quality standards for re-refined oils. Re-refiners
subscribing to this agreement would certify that the physical and chemical
properties of their oil would meet or exceed the list of specifications
shown in Table 4. In return for this pledge, the APR would allow the re-
refiner to print an emblem on all oil containers certifying that the re-
refined oil had met the established quality criteria. The standards list-
ed in Table 4 applied only to re-refined base stocks (non-detergent oils)
before the addition of additives. Hence engine sequence tests were not
a part of the Emblem Licensing Agreement.
Unfortunately, most re-refiners did not subscribe to this agreement,
preferring to go their own ways in establishing and maintaining markets
for their oil. To a degree, 1t is not surprising that few companies sign-
ed the emblem agreement. As discussed in Chapter 1, re-refined products
have, in the main, been sold as non-detergent oils in competition with low
quality virgin lubes. Since most re-refiners were not trying to compete
with manufacturers of oils of established quality, there was little reason
for them to take steps to have their products meet minimum quality stan-
dards. However, as was shown 1n the previous chapter, this was a bad strat-
egy as it is precisely those firms (which have chosen to market unblended
re-refined oils in bulk quantities) whose survival 1s now threatened. Of
the 13 re-refiners interviewed, only one had signed the Emblem licensing
Agreement. His company, which sells blended re-refined oils to commercial
and industrial accounts, is a profitable business and has a widespread re-
putation for producing quality products.
2.2.2 Engine Tests
Engine tests of lube oils have two major uses. Most obviously they
are used to judge whether or not a specific compounded (blended with addi*
tives) lube oil will be adequate for expected field use. The engine
74
-------
MXN.
Flaslh
365
365
370
37S
380
385
390
395
400
405
405
410
415
420
42S
42S
425
430
430
430
SoA.E.
MAX.
Color
3.0
3.0
3.0
3,5
3.5
3.5
3.S
3.5
4.0
4.0
4.0
4.0
4,0
4.5
4.5
4.5
4.5
4.5
5.0
5.0
EMBLEM OIL
10 to S.A.E, 4@ Iftcl.
Vis. ® 210
60
61
62
63
64
6S
66
67
63
69
70
71
72
73
74
75
76
77
78
79-84
MIN.
Flash
435
435
435
440
440
440
445
445
445
450
450
450
455
455
455
460
460
460
465
465
MAX.
Color
5.0
5.0
5.0
5.5
5.5
5.5
5.5
5.5
6.0
6.0
6.0
6.0
6.0
6.5
6.5
6.5
6.5
6.5
6.5
6.5
Vis. 9 210
41
42
43
44
45
46
47
48
49
50
51
52
53
54
55
56
S7
In addition to the above, the oil must meet the specifications of the S.A.E.
N0. undir which 1t is sold.
following specifications apply to all A.P.R. EMjlM oils:
Mln. V1se§s1ty Index of 90
Difference; between Flash Point and F1r<§ Point myst be 40°F. M1n.
fi!eytra11zat1on Number 0.075 Max.
Ash - 0.01% Max.
Moisture - Trace Max.
Precipitation No. to be 0.0 Max.
Above specifications apply to oil before addition of any additive.
These values shall be computed by the American Society of Testing Materials
Standard Method of last as -follows:
ASTM Test ASTM Test
Designation Designation
Flash Point D-92 Viscosity Index D-567
ASTM Color 0-1500 Neutralization No. D-974 or D-664
Saybolt Viscosity* 0-88 Ash D-482
Precipitation No. D-91
It 1s preferable to determine Kinematic Viscosity by ASTM Method 0-445 and con-
vert Kinematic Viscosity to Saybolt Viscosity using ASTH Method n-44fi
Latest revisions of the above ASTM 'Test ProeedyriS shall apply.
75
-------
tests are set up to duplicate such field use and performance criteria must
be passed if the oil is to qualify for purchase at Its designated grade.
Engine tests are also performed to determine an appropriate additive
package. Additive manufacturers will test formulations of the base stock
blended with various combinations of additives until the least-cost package
for the desired grade is determined. Both the kind and amount of additives
are important. Oil producers, of course, want to buy from the additive
company that can blend its oil up to specified performance criteria at least
cost.
It is expected that if neither the crude source nor refining process
change, then the additive package need never change since the "additive re-
sponse" will be the same from batch to batch. If the crude, i.e. feedstock
source, does change, as it must for re-refined oil, there is always .a sus-
picion that a slightly different additive package may be needed. But with-
out extensive and costly engine tests 1t 1s Impossible to tell the precise
additive amounts or changes required to just meet performance standards.
In order to alleviate such suspicions, 1t 1s common practice for ad-
ditive manufacturers to perform engine tests on a number of basestock-
additive blends in order to develop a general purpose additive package for
use with a wide variety of lube oils. Such general additive formulations
enable small firms, which cannot afford costly engine tests, to specify
that their lube oils meet specifications required by their customers. Thus
if a lube oil container bears the designation "For API Service SE," it does
not necessarily mean that the engine sequence tests required for an SE
rating were actually performed on the lube oil-additive blend which is In
the container. Rather, such a designation may mean that an additive manu-
facturer, having performed engine tests on a number of base stocks blended
with a certain concentration of a general purpose additive, has recommended
to the lube oil producer that a certain blend of the producer's base stock
and the additive would pass all engine tests specified for an SE rating if
auoh teats were to be carried out.
In the case of re-refined oils, the general additive package 1s ef-
fective because there are only a few individual crude sources that are
used to make lube oils for a specific geographic region, such as the West
Coast. These same sources are used by both large and small lube oil pro-
ducers. These oils eventually find their way Into the re-refiner's waste
oil feedstock so he, too, can be considered to be using the same crude
from regional sources. As a result, the general additive package recom-
mended to him is the same as that used by small virgin lube oil producers.
The practice of large virgin oil producers and re-refiners differs in
the area of additives, but the difference is due not to their product but
to their scale of operations. Virgin oil producers are frequently corporate
76
-------
giants while re-refiners, because of the high collection costs associated
with distant waste oil pick-up, are generally small companies. To the ex-
tent that virgin oil producers are small firms, their behavior 1s like that
of the re-refiners.
A large virgin lube oil producer will typically send its refined lube
base stock from a new crude source to an additive firm and request that the
additive producers run engine tests on compounded versions of the oil. The
oil producer will be willing to pay the $10,000 to $80,000 cost of these
tests because the tests will tell him how lean an additive package he can
use and still meet the desired specification. Since the oil company re-
quires large volumes of additives, a small savings In the volume of additives
required per gallon of oil represents a major total savings in cost. The
engine tests are, therefore, usually worth the expense.
Small virgin lube oil producers and re-refiners do not purchase such
a large volume of additives. Consequently, engine tests to reduce the
volume of additives per gallon are not economically practical. Instead, as
discussed above, small lube oil producers avoid engine test expenses by
purchasing a general additive package. By blending 1n more additives than
may be required, the small producer can assure his potential customer that
his oil would pass engine tests, if these tests were performed. This ap-
proach results in a greater additive cost to small lube oil producers, but
the extra expense is frequently outweighed by the small firm's lower over-
head costs.
This procedure of circumventing expensive engine tests was stimulated
in 1967 by an agreement between the Ford Motor Company and the Independent
Oil Compounders Association (IOCA). At this time Ford was attempting to
establish its own oil quality certification business. Small, independent
oil companies belonging to IOCA brought an antitrust suit against Ford,
claiming that engine test requirements for oil certification by Ford were
so expensive that the small oil companies would be squeezed out of the
passenger car lube oil market. This was a particularly difficult problem
for those IOCA companies who followed a practice of buying lube oil base
stocks from a number of different sources depending on who offered the
lowest price. Hence the lube oil blends produced by the independent oil
compounders would not satisfy Ford's requirements regarding variation in
base stock composition.
In order to resolve this problem, Ford engineers proposed a simple
solution. Ford would approve (without having tests performed) oils blended
from varying base stocks for use in new automobiles provided that the vol-
ume of additives blended with these base stocks was increased by ten percent
above the level recommended for non-varying base stocks. A minimum value
of 85 was established for the viscosity index of all base stocks which
qualified under this arrangement.
77
-------
a. Virgin Oils
There is a prescribed series of engine tests for each lube oil speci-
fication, whether it be API/SAE, manufacturer, or military (see Table 1).
The API/SAE SE oil grade, for example, requires the following four engine
tests:
Oldsmobile Sequence II B Test. This test procedure Is used to evaluate
the rusting characteristics of motor oils. Sequence II B 1s run under low
speed, low load, and cold temperature conditions. It 1s designed to relate
to short trip service under typical winter conditions encountered 1n the
northern United States.
Oldsmobile Sequence III C Test. This test procedure is designed to
evaluate the performance of engine oils operating under high temperatures.
The main objective is to produce oil thickening resulting from oxidation.
Sequence III C also evaluates sludge, varnish, and wear characteristics of
motor oils. The test is meant to represent such high temperature usage
conditions as trailer towing, power consuming accessories, emission control
devices, and extended high speed driving on freeways.
Sequence V C Test. This test is used to evaluate sludge and varnish
forming tendencies" oTlnotor oils under a variety of operating conditions.
The engine is cycled through three different stages — high-speed cold,
high-speed hot, and idle operating conditions — to accelerate deposit
formation. The test was designed to represent a combination of low-speed,
low temperature "stop and go" city driving and moderate turnpike operation.
CRC L-38 Test. The test is run on a special single cylinder engine
and is used to evaluate the oxidation stability and copper-lead bearing
corrosion characteristics of engine crankcase oils.
The following table gives the primary API/SAE performance criteria
for these tests:
78
-------
TABLE 5
SJ[ Primary Performance Criteria
Sequence IIB AVG. Rust rating, min. 8.9
Sequence II1C Vise. Incr. 9 100°F and 40 hrs.,
% max. 400
Piston skirt varnish, m1n. 9.5
Oil ring land varnish, min. 6.0
Sludge rating, m1n. 9.0
Ring sticking None
Lifter sticking None
Cam or lifter scuffing None
Cam •(• lifter wear, In. -Avg. 0.0010
-Max. 0.0020
Sequence V-C Avg. engine sludge, min. 8.5
Avg. piston skirt varnish, m1n. 8«2
Avg. engine varnish, min. 8.0
011 screen clogging, %, max. 5
011 ring clogging, %, max. 5
Compression ring sticking None
L-38 Bearing Wt. Loss, mg., max. 40
Some of the evaluation criteria listed in the right hand column in
the table have no units. For these criteria a subjective evaluation 1s
made of the results of the engine test by Inspecting the particular engine
part involved. A rating of 10 is perfect, a rating of zero is the worst
failure. For example, under sequence V-C the average engine sludge must
be rated at 8.5 or higher. In evaluating the results of an engine test,
an experienced engineer will inspect the engine and pronounce his judgment.
If any test is failed, the candidate oil must be resubmltted for an entire
new series of tests.
In addition to these tests, the military requires one extra test se-
quence under its specification for automobile oil MIL-L-46152. This 1s
because it requires this oil to be usable 1n moderate duty dlesel engines:
Caterpillar I-M Test. The test is designed to measure diesel engine
wear and accumulation of deposits under high temperature supercharged con-
ditions. The I-M designation refers to small bore, highly supercharged
diesel engines.
The MIL-L-2104C lube oil specification drops the IIIC test (high tem-
perature) and replaces the I-M with I-D and 1-6 which are similar tests to
I-M but are designed for larger and more highly supercharged engines.
79
-------
b. Re-Refined Oils
Engine tests of re-refined oils have been totally inadequate. The
military ran a series of tests on recycled lube oils 1n the mid-1950's and
found that the oils were inferior to virgin oils. The test results have
since been lost and some of those involved in the tests recollect that the
samples used did not fairly represent the quality of recycled lube oil then
available. Moreover, many changes have taken place 1n the additive packages
used to upgrade the performance of both virgin and recycled oils since the
mid-1950's.
Nevertheless, these unfavorable test results have often been cited
by the military as proof of the inferior quality of re-refined oils. U)/
In the absence of contradictory data, they have also provided a rationale
for excluding re-refined oil in military specifications. In addition, the
tests were influential in the formation of the current Federal Trade Com-
mission labeling policy which discriminates against re-refined oil 1J/
However, even if engine tests of re-refined oils indicated that these
lubricants could meet the military performance requirements, under existing
regulations re-refined oils could still not be purchased by any federal
agency because of the requirement that once an oil Is qualified, the source
of the feedstock from which the oil is manufactured may not be changed.
80
-------
2.3 CONCLUSIONS
Neither API/SAE specifications nor manufacturer specifications pose
any obstacles to the use of re-refined oil. Neither set of specifications
explicitly excludes re-refined oil from acceptability or establishes labora-
tory and performance criteria which are beyond the capability of such oil
to meet. New car warranties from major automakers will remain legally bind-
ing with re-refined oil, providing the oil meets normal specification criteria,
The case is completely different with military specifications. The
specifications for lube oils explicitly exclude re-refined oils from con-
sideration even though the chemical/physical and engine test performance
criteria are well within the capability of recycled lube oils. The exclu-
sion is a formal obstacle to government procurement of re-refined lube oil.
Perhaps the most frequently cited problem for re-refined oils is the
question of repeatability. Since the feedstock used in most re-refining
operations is a mixture of a large number of crankcase oils produced from
a variety of crude oil sources, it is argued that there can be no assurance
that the re-refined product will be of consistent quality. While re-refiners
have for years been using "fat" additive packages to account for any possible
variations in product quality, no documentation in the form of engine se-
quence tests of re-refined oils is available to confirm the success of this
strategy. Re-refiners claim that since their feedstock is composed of such
a large number of lube oil products, the overall mixture will, in fact, be
constant and will be composed of lube oils in proportion to the market shares
of the major lube marketers in the geographical area concerned. Hence the
effect on product quality of introducing some poor quality drain oil into
a re-refiner's feedstock storage tanks will be negligible. The problem of
proving the validity of either of these contentions is, of course, eliminated
if the used oil is custom re-refined under closed-cycle conditions.
81
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FOOTNOTES CHAPTER 2
1. A Technical and Economic Study of Waste Oil Recoyery--Part I; Federal
Research on Waste Oil From"Automobiles, Teknekon, Inc., EPA Contract
No. 68-01-1806, October 1973.
2. "Pre-Convention Presentations," In 1972 Annual Proceedings--1973 Pre-
Cpnvention Report. Locomotive Officers Maintenance Association,
Chicago, 111., September 10-12, 1973, p. 184.
3. Lubrication is a Responsible Job—But Do W6 Know It?, Frank Menton,
April 21, 1965, ASLE Meeing, Buffalo, New York
i
4. Ford Specification ESE-M2C 101-C, revised August 1973.
5. See Table 1 and Appendix 3A.
6. MIL-L-2104C and MIL-L-46152, p.4 1n each.
7. Language taken directly from specification, p. 11.
8. Language taken directly from specification, p. 10.
9. Page 3 in MIL-L-2104C and MIL-L-46152.
10. See copy of letter to RTC by R.G. Streets, Army Material Command,
1965, Appendix 38.
11. A Technical and Economic Study of Waste Oil Recovery—Part I; Federal
Research on Waste Oil from"Automobiles, Teknekron, Inc., EPA Contract
No. 68-01-1806, October 1973.
83 Preceding page blank
-------
CHAPTER 3
FEDERAL PARTICIPATION IN WASTE OIL RECOVERY
3.0 INTRODUCTION
Present and future shortages of virgin lubricants and the need to
prevent environmental damage due to uncontrolled disposal of crankcase
drainings require that steps be taken that will stimulate the recovery of
waste lube oils. Chapters 1 and 2 have shown that the removal of two
barriers, one economic and one institutional, will greatly stimulate lube
oil recycling.
The first barrier stems directly from the lack of public acceptance
of re-refined oil. As discussed 1n Chapter 1, the poor public image of
recycled oil has been a major factor 1n discouraging re-refiners from pro-
ducing high quality re-refined lubricants for the retail market. This 1s
a particularly important problem as the retail market is by far the most
profitable outlet for automotive lube oils. If high quality re-refined
oils could compete in this market with equivalent virgin lubes, re-refining
would become a highly profitable business thereby providing an attractive
environment for new investment 1n modern, pollution-free facilities for
waste oil recovery.
However, it is difficult to imagine that public confidence could be
instilled in the quality of re-refined oil as long as the government re-
fuses to use recycled oil in any of its own vehicles and requires that all
re-refined lubes bear a label stating that they are made from "previously
used" oils. This position is supported by a study of consumer attitudes
toward the purchase of re-refined oil. This study showed that the public
appears to be willing to buy recycled oils but only if such oils bear a
government certification that they are equal in quality to virgin lubri-
cants. ]/ Thus the second barrier to increased waste oil recovery is an
institutional problem. Removal of this barrier will involve a reassessment
by the appropriate federal agencies of both the specifications for lube oil
procurement and the labelling law which now casts a stigma on a'II re-refined
oils.
Hence the economic and institutional barriers to increased waste oil
recovery are not independent of one another. On the contrary, the former
barrier is due, in large part, to the existence of the latter. Therefore,
it is clear that one possible strategy for removal of the economic barrier
to increased waste oil recovery will require the participation of the
government in a program to demonstrate whether or not. properly re-refined
oils can be used with confidence by the public.
Preceding page blank
-------
In order to understand ways in which government action might effect
removal of the institutional barrier to waste oil recovery, it 1s necessary
to be aware of the mechanism by which federal agencies purchase lubricants
and dispose of their waste oils. Once these procedures are understood it
will be possible to suggest plans which can lead to revision of those federal
policies which now form an Institutional barrier to Increased use of re-
refined oil.
86
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3.1 PROCUREMENT OF LUBE OIL BY THE FEDERAL GOVERNMENT
Lubricating oils purchased for use in all government owned vehicles
are procured by the Defense Fuel Supply Center (DFSC), Cameron Station,
Alexandriaa Virginia. DFSC is an arm of the Defense Supply Agency. A
voluntary liaison between the General Services Administration (GSA), which
has responsibility for supplying all materials to all civilian government
agencies, and the Defense Supply Agency (DSA), which has responsibility
for supplying all materials for military use, has been established wherein
GSA has delegated authority to DSA for procurement of all petroleum pro-
ducts for use in civilian vehicles owned by the government. This relation-
ship developed because DSA procures the largest volume of petroleum pro-
ducts of all government agencies. Hence an investigation of ways in which
the government might take part in an effort to stimulate waste oil recovery
must necessarily involve an analysis of the organization and procedures by
which the military procures lubricating oils. This section provides such
an analysis and includes data regarding both the volumes and qualities of
lube oil purchased by various government agencies and the volumes and dis-
tribution of used lube oils which are now discarded.
3.1.1 Establishment of Lube Oil Specifications
All lube oil procured for government agencies by DFSC must be certified
as having met one of a number of rather comprehensive specifications estab-
lished by the Army Materiel Command's Coating and Chemical Laboratory (CCL)
located at Aberdeen Proving Ground, Aberdeen, Maryland. Because the Army
is the branch of the military which uses the largest volume of automotive
lubricants, the other military branches have delegated authority for lube
oil specifications setting to the Army Materiel Command. The Army Materiel
Commands in turn, has delegated all authority for the management and direc-
tion of research and development programs dealing with fuels and lubricants
to the CCL. Ths CCL also serves as consultant to Army Materiel Command
Headquarters by providing the technical input as to the specifications and
standards required of fuels and lubricants procured by DFSC. The CCL is
responsible to the Research and Development Directorate at Army Materiel
Command Headquarters.
3.1.2 The Coating, and; Chemical Laboratory
Figure 1 shows the organizational structure of the CCL. Mr. Harry L.
Ammlung 1s the CCL Director and supervises the activities of the five dif-
ferent divisions. The Fuels and Lubricants Divisions headed by Mr. Charles
F. Schwartz, in consultation with engine manufacturers and the petroleum
industry, sets specifications for lube oil. Further Mr. Schwartz sits on
87
-------
Figure 1
Army Materiel Command
Coating and Chemical Laboratory - Organizational Structure
SECRETARY
Marie R. Breitbart
GS-318-7
TWO *. HUIUU
COL. CE
Dl
Harry L.
DEPUTY Oil
Perry C. RejrnoUs
SMEFB-CLO
ADMINISTRATIVE OFFICE
Chi of
Hard t Bakien
CS 141-11
Budget Officer
F Auvan Saith
US-560 II
Clerk
Oelores « LePera
US 301-0
General Supply Specialist
Nelson Noble
CS-20Q1.7
lerk Stenographer
Jeanne ^ Rohr
GS-301 A
Editorial Oerk
Vinetta Upchurch
Supply Clerk
1.1 wood f Matkins
GS- 2005•4
Laboratory Morker
Annie Addtson
Mb-3S6b-2
bMLFB-ILP
PAINT. VARNISH 8 LACQUER U1VIS1
LACQ
»»"
ISION
Chief
Melvin II. Sandier
C-S-13ZD-14
Chcmi"t
Or -lames -I McLeskev
C.S-1320 13
Ml Ilia* H. Deaver
CS 1320-1^
Cheni st
Stanley I Kou'ek
CS-1320 12
Chemist
loseph H. Thompson
GS 132U 12
Chemi st
Andrew A. O'Brochta
OS-1320-II
Physical Scianie Technician
MerrilI > ohen
GS-1311-11
Physical Science Technician
Kenneth h Smith
GS-13M-9
Physical Science Technician
John H. Poau
GS-13II-7
Chemical Test Unit Operator
Joihua •'. Buchanan
HC-5429-b
Military (Officer)
JaMs F. Southern
'319
MEF«.CU:
:HEM. CLE
IS
l»75
CHEMIST
CharltJ V. freston
ctiur
Char In i. Jordan
- Cf-lMO-U
Ch«al«t
Jult« I. Counts
G*-1IM-12
En Mil 11
J«M* H. ConUy
Q5-1120-H
ScitK* Ttchnlcian
HOTKC R. ShMti
Physical Science Technician
Robert G. Juiion
CS-111 1-10
Cheaical Teat Unit Operator
I. Caudill
IB. M 29-10
Military (Enliited)
Je*f« J. Davii
QIFjO
LKANINC I CORROSION Dl
Acting Chief
Kelvin H. Swann
OS-1320-14
Oieeiltt
George C. Esposito
GS-IJ20-14
Cheattf
Martha L. Adaai
CS-1320-13
cnenist
ireorge Svernas
US-1320-12
Chemist
Robert E Wagner
CS-1320-12
Cheniat
Miry .) Carrol I
GS-1320-II
Chenitt
Troy R. Nichols
CS-1120-11
Physical Science Technician
C. Cole Jackson
GS-I31I-7
Military (Offlcerl
kenton i Travit
LT
7319
3NEFI-CU1
X3H.7
yqsts i tuMiCAirrs PIVISION
cniei
Charlei F. Schwari
CS-M30-14
Raaeaircn Chee4«
Mturice E. LeP«ra
SS-1320-13
Dr. Mar Jan HoloeieUki
C»-1120-13
rnyaicai sciennst
Vorrest N.' Schaekel
CS-110113
Chemist
Thoaas C. Bowen, .Ir.
GS-1120 11
Clean st
JaBei V. Shiaek
CS-1120-9
Physical Science Technician
John G. Sonnenburg
CS-11I1 9
Oiemlst
John P. Donor
CS-1320-9
Mecnnicai Engineer
Gerald J. OeBono
GS-0830- 7
Military (Unlisted)
Michael S Gutierret
OIG2D
E4
Military (EnlistedI
George Otvald
01G20
-------
the Military Automotive Review Committee which evaluates laboratory and
engine tests performed on lube oils submitted for qualification for govern-
ment procurement. There are seven other members on the committee In ad-
dition to Mr. Schwartz, one representative from each of the following
vehicle manufacturers and testing laboratories: Caterpillar Tractor Com-
pany, Ford Motor Company, General Motors Company, International Harvester
Company, AutoResearch Laboratories (Chicago), Southwest Research Institute,
and AutoResearch Associates (San Antonio). This committee meets five times
a year and is the decision-making body concerning the qualification of lube
oils for government purchase. DFSC will not procure any lube oils which
have not been approved by this committee. The two specifications under
which most automotive lube oils are procured, MIL-L-46152 and MIL-L-2104C.
have already been discussed. Copies of these specifications are contained
in Appendix A.
As has been previously discussed, re-refined oils are excluded under
specifications MIL-L-46152 and MIL-L-2104C. The principal reason cited by
CCL for this policy is that lack of assurance that re-refined oils produced
from waste oil feedstocks of varying composition will be of uniform quality.
Even if one batch of re-refined oil was tested and found to meet a given
specification, CCL feels that there is no assurance that succeeding batches
will also qualify. Since military specifications require that once a lube
oil'has been approved, the manufacturer must agree not to change the crude
oil feedstock, the refining process, or the additive package blended with
the lube oil, re-refined oils produced from a varying feedstock source are
automatically excluded from consideration.
CCL is willing to reconsider approval of re-refined oils if laboratory
reports can be provided which show that the oil meets military specifications.
As discussed in Chapter 2, no such data are known to exist.
The Coating and Chemical Laboratory has already been involved in at
least one study of the possible use of re-refined oils by federal agencies.
In September, 1972, DSA published a report entitled "Waste Oil Recycling
Study" which examined the possible development of military specifications
under which re-refined lube oils might be procured. In consultation with
CCL the authors of the report proposed that:
1. Samples of re-refined oil be collected from a number of
re-refiners over an 18 month period. This would allow
variations due to weather conditions and feedstock varia-
tions to be accounted for.
2. Laboratory tests be performed on these samples. CCL re-
commended that the tests shown in Table 1 be performed
as the minimum analysis necessary to insure adequate
product quality control.
89
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3. Multi-cylinder engine tests be performed on a variety of
brands of re-refined oil and different blends of re-
refined and virgin stocks each blended with a selection
of additive components.
4. Based on the results of the engine tests CCL develop
specifications for automotive oil using re-refined compon-
ents. These specifications will contain limits on the
physical and chemical properties of re-refined oils es-
tablished under (2) above.
5. A demonstration project be performed at a military In-
stallation over a period of one year to evaluate thoroughly
the performance characteristics of re-refined 011,5.
A proposal was made to the Department of Defense to carry out these
recommendations. At present a decision to fund this proposal has not
been made.
90
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Table 1
Minimum Analysis Required to Insure Lube 011 Quality Control
Test Method ASTM Method Number
Kinematic Viscosity (? 210°F
and 100°F D 445
Ramsbottom Carbon Residue D 524
Total Ash D 482
Flash Point D 92
API Gravity D 287
Aniline Point D 611
Neutralization No., TAN & TBN D 664
Emission Spectograph for
Sulfur, Phosphorus, Lead,
Calcium, Barium, Zinc
91
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3.1.3 Procurement Procedures
As discussed above, all lube oils required by agencies of the federal
government are procured by DFSC. Nearly all lube oil 1s procured In five
gallon pails, 55 gallon drums or in bulk tank car loads. An exception Is
lube oil ordered by the Defense General Supply Center 1n Richmond, Virginia,
some of which is procured in containers smaller than five gallons.
Each year DFSC prepares a list of the previous year's lube oil pur-
chases for each government agency. Such a 11st Is sent to all ordering
activities who then respond with an estimate of the coming year's require-
ments. The various military and executive branch agencies then submit to
DFSC their total lube oil requirements. DFSC then distributes Invitations
to submit bids for lube oil supply to all firms listed on a bidder's mailing
list. Any company may submit a bid provided the firm can prove that:
1. It is a qualified supplier (I.e. Its lube oil meets the
military specification under which the oil is being pro-
cured); or
2. It is supplying the product of a qualified supplier.
Bids received are evaluated solely on the basis of price, provided, of
course, that the lowest bidder is a qualified supplier. Contracts are then
prepared and a bulletin of successful bidders 1s printed and mailed to the
ordering activities for all government facilities. The ordering activities
place their order directly with the contractors listed In the bulletin.
DFSC does not maintain an inventory of lube oil products. All the contracts
are for indefinite quantities of oil and are unfunded with no prepayment
clauses. Payment is made after delivery by the facility making the order.
However, DFSC administers any problems which may arise between the ordering
activity and the lube oil supplier.
Lube oil ordered by the Defense General Supply Center in packages
smaller than five gallons is procured by DFSC on firm quantity, firm funded
contracts. The Defense General Supply Center maintains Inventories of
these packaged lube oils at locations throughout the United States.
3.1.4 Organizational Structure
Figure 2 shows the organizational structure of the Defense Fuel Supply
Center. The Commander, Rear Admiral William M. Oiler, was himself In the
1950's in charge of a naval facility which successfully used re-refined
cutting oils and is, therefore, well aware of the beneficial aspects of
re-refining.
92
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The Office of Technical Operations, headed by Dr. John A, Krynltsky.
has two divisions. The Technical Services Division monitors all purchase
requests to insure that the buyers of petroleum products are buying the
right product for the Intended use. This division also specifies packag-
ing, packing and marking of containers and has the power 1n the case of
negotiated procurements to waive certain specification requirements In
return for lower prices. However, this 1s not done for Items procured on
open bids.
The Quality Assurance Division acts to Insure that once a procure-
ment contract is signed, the Items procured meet all the pertinent
specifications. In the case of lube oil, Inspectors are sent to refiner-
ies and blending plants to monitor the production operations.
93
-------
Figure 2
Defense Fuel Supply Center - Organizational Structure
1
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T(C» C*
. I A
r*,(C V
O'SC-' J
O»C O' COuNMl
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COMKACT MVMW O»C
£ J.
IVOOuCTlON 1 On
Su»»p*t O»i« 3 e •
OIHNV *UCl Of'lCIt
-------
3.2 WASTE LUBE OIL DISPOSAL BY MILITARY FACILITIES
3.2.1 Organization
The Executive Directorate, Technical and Logistical Services, 1s the
branch of the Defense Supply Agency responsible for property disposal. As
shown in Figure 3, property disposal is the responsibility of a number of
local Dsfense Property Disposal Offices (DPDOs) which report to regional
offices or second level field activities. Mr. Richard 6. Bruner 1s the
Executive Director of Technical and Logistical Services. The Property
Disposal Division, headed by Mr. Frank Ales1s 1s directly responsible to
Mr. Bruner's office. These organizations are located at the Defense Supply
Agency, Camsron Station, Alexandria, Virginia. Lieutenant General Wallace
H. Robinson is the Director of DSA. He reperts directly to the Secretary
of Defense.
3.2.2 Procedures
In theory all military activities are supposed to dispose of surplus
and waste materials through one of the 190 DPDO's located throughout the
country. The DPDO's in turn dispose of the surplus materials and wastes
in the most economical way available. However, current practice at nearly
all military facilities is for the base commander to assume responsibility
for the disposal of waste lube oils. In most cases bids are solicited
from local scavengers for removing the waste oils. Once they are removed
from the installation, no record of the ultimate fate of these materials
is kept. Since many military facilities dump all waste oils into a single
storage tank, under current disposal practices much of the used lube oil
is probably too contaminated to be economically re-refined. For example,
Table 2 lists the volume of all waste oils accumulated annually at the
Army facilities in the U.S. having the largest volume of waste oil genera-
tion. Data concerning the volume of used lube oils generated at Army
installations are, unfortunately, not available. It Is estimated that in
1972 approximately 3,600,000 gallons of waste oils were generated and dis-
posed of at Ant\y facilities in the continental United States.
95
-------
Figure 3
, :iPS3.«£lf J! L'tHISt ^"\X
A "'"^M
\rr '\T3r1
X^ QtSPOS^ P90CS4M
FUNCTIONAL
DIRECTORATES
PRIMARY LEVEL
HELD ACTIVITIES
SECOND LEVEL
FIELD ACTIVITIES j
THIRD LEVEL
FIELD ACTIVITIES
DISPOSAL PROGRAM ORGANIZATION
n"
«
PROCUREMENT
r
SUPPLY
CENTERS
-
1
DPDR
COLUMBUS
1
DPDOS
DIREQOR
»
DPDS
\
TECHIM1ICAL&
- LOGSVCS
-*- SWF PROGRA
1
i
.« OTHER !
J SERVICE t
- CENTERS F
1
<
DPDR 1 OPDR
OGDEN j . fVEMPHIS
1
DPDOs ; DPDOs
»
i
1
DPDR
EUROPE
I
DPDOs
J
50PPLY
OPERATIONS
M DIRECTION
J
DEPOTS
1
DPDR
HAWAII
I
I DPDOs
-------
TABLE 2
Waste 011 Generation at Anr\y Facilities
Having the Largest Volumes of Used 011s
Waste 011 Generated
Fac111ty (Gallons per year)
Red River Army Depot, Texas 271,200
Fort Carson, Colorado 216,000
Fort Hood, Texas 204,000
Fort Meade, Maryland 198,000
Rock Island Arsenal, Illinois 168,000
Annlston Army Depot» Alabama 117,000
Fort Bragg, North Carolina 108,000
Letterkermy Army Depot, Pennsylvania 104,400
Sharpe Army Depot, California 84,000
Toelle Army Depot, Utah 57,600
97
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3.3 REMOVAL OF FEDERAL BARRIERS TO WASTE OIL RECOVERY
3.3.1 A Restatement of the Problem
The primary barrier to federal procurement of re-refined oils Is the
lack of documentation that such lubricants can consistently meet all per-
formance requirements established 1n military specifications. The
principal reason for the failure of re-refiners to provide such evidence is
the military's requirement that once an oil has been qualified for pur-
chase, no changes may be made in the feedstock from which the oil 1s pro-
duced. Thus under existing regulations each batch of re-refined oil would
have to be qualified separately in order for government agencies to use
recycled engine oils in their vehicles. Since the cost of qualifying a
lube oil is high, typically $50,000 to $80,000, 1t has been economically
impossible for refiners to provide lube oil to the government, especially
in view of the fact that federal agencies purchase lubricants under com-
petitive bid arrangements. Thus 1t is clear that If the federal ban on
use of re-refined lube oil is to be removed, at least one of the following
steps must be taken:
1. A new specification must be established which permits
changes in the feedstock from which lube oils are
manufactured, or
2. Re-refined oil that has been produced from a constant
source of waste oil must be provided.
3.3.2 Establishment of a New Specification
As discussed in detail in Chapter 2, under military specifications
MIL-L-2104C and MIL-L-46152 re-refined oils are specifically excluded
from consideration. Hence a new specification must be written if federal
agencies are to use re-refined oil. Both these specifications require a
series of engine sequence tests. The requirements set forth in
MIL-L-46152 are quite similar to those established for an API/SAE SE
rating. Oils procured under this specification are generally used in
passenger cars and light gasoline powered trucks. The requirements set
forth in MIL-L-2104C are more stringent, as oils procured under this
specification are for use in tactical military vehicles.
The new specification must not exclude oils which are made from a
varying feedstock. The discussion in Chapter 2 presents ample evidence
that use of general or "fat" additive packages can compensate for any
changes in additive response due to variations in base stock properties.
99
Preceding page blank
-------
The fact that additive manufacturers have spent considerable sums of money
in the development of such compounds specifically for use with a variety
of base stocks lends further support to this premise. The success of the
Independent Oil Compounders Association in their dispute with the Ford
Motor Company over the question of lube oil qualify assurance provides
additional evidence that variation in the base stock need not result 1n
concern over the performance characteristics of a lube o1l-add1t1ve blend.
However, if such a specification Is to be established, evidence of the
quality of re-refined base stocks and blends of re-refined base stocks
with general additive packages will have to be provided.
3.3.3 Re-Refining From a Constant Source of Haste Oil
The current military specifications for lube oil were established in
order to protect government vehicles, especially tactical vehicles, from
excessive engine wear which might result from the use of lube 011$ not
suitable for the variety of services required of these engines. Since
evidence that properly re-refined oils are appropriate for such service
conditions has not been forthcoming, the military, specifically the Army
Materiel Command's Coating and Chemical Laboratory, has prohibited the pro-
curement of recycled lubricants by government agencies. Thus 1f this
federal barrier to the use of re-refined oil is to be removed, evidence
that such oils are suitable for use in government vehicles must be pro-
vided. Implementation of a closed-cycle re-ref1n1ng system is One way of
providing such evidence.
As discussed in Chapter 1, a closed-cycle re-ref1n1ng system is an
arrangement in which lube oil consumers agree to purchase re-refined oil
which has been produced from waste oils drained from their own vehicles.
The following materials flow diagram Illustrates the operation of such a
system:
•CLOSED-CYCLE" RE-REFININ6 SYSTEM
Processing
Materials
Additives
Re-Refined Lube Oil
Re~Refiner
Virgin Lube Oil
Federal Fleet
Uaste Products
Burning Loss
Used Lube Oil
100
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The most Important advantage of the clos@d«cyc1in!se.M
does so by shifting attention from the wast© oil feedstock to fetog
of the re-refined product. If ttots qyality of the ng-riflsws0 feedstock
can be held constants batch°to=foateh product variations wflll dHsappar as
an issue. Ordinarily this is not possible becays© re-fefilofi e©11sct
waste oil from diverse and varyitug sources: stsrvloa stations,, ay to dealer-
ships , and so forth. However,, th@ elosed-cycle system would fyaf®nt@e the
re-refiners a continuing supply ©f waste ©II of kwtm qyalli^. If
recycling process is closely controlled,, the user ©f recycled oil ym
this system is himself responsi&>1d for any lbate[n)°fe§>°i>atelh vaHat1©ms
he is also the waste oil supplier.
3.3.4 Rationale for Federal Participation
Although a closed-cycle project coyld be iropl©ranted with TO govern
ment involvements, federal participat1@n is a desirable way to .Initiate such
a system. While a number of re-refiners already dngag© in "cystej" re-
refining of lube oil under closed-cycl© condit1©if®0 all sycfB. operations are
presently restricted to industrial lu£>@ oils or dlssel engiw® 011 used by
railroads.
Federal participation would first take the form of a demonstration
involving a federal installation or set of installations and a re-refining
facility. Once the system's feasibility is demonstrated» the system can
be expanded to a larger number of federal Installations. What is required
in each case is that the federal installations operate a relatively large
number of vehicles and are geographically n@ar r©°r©fliming facilities. A
number of military. Postal Service„ aund 6©mi@fa1 Survicss Administration
motor pools would meet these criteria.
The federal government has three major reasons to involve itself
directly in this way. Firsts, the approach is effective. Procurement has
been demonstrated to be one of the fe^sral gweirraant's most us©fy] tools
for support of innovation in the private sector. It makes Urassdlate and
significant use of the market system while avoiding the problem of enforc-
ing new regulations on private industry. It has the capability of d©ron°
strating new technology on an operational scale without burdening the
federal government with actual production management. Congress recently
recognized these advantages in giving GSA authority to make extra payments
for equipment it purchases that meet EPA noise abatement standards. In
the case of the closed-cycle waste oil recovery plan^ successful yse of
the recovered lube oils and subsequent revision of government policies
which discriminate against re-refined oil would give assurance to con-
sumers that properly re-refined lube oils perform as well as high quality
101
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virgin lubricants. This would enable re°ref1nars to Increase sales of high
quality oils. Profit margins on such sales are much greater than on sales
of the non-detergent oils which presently account for most of the volume
of re-refined oil sold in the United States. Closed-cycle operations can
thus lend needed support to a troubled industry but only 1f those re-
refiners participating in the program maintain the highest standards of
quality control in their production processes. In this sense a federal
effort to recycle lube oil must be regarded as an opportunity (as opposed
to a subsidy) for re-refiners to remove the stigma of questionable quality
which has prevented wide public acceptance of theft* products.
Secondly, government use of recycled oils will reduce the environ-
mental costs associated with waste oil disposal by federal facilities.
More than 24 million gallons of automotive lube oil are purchased annually
by agencies of the federal government. Perhaps two-thirds of this oil is
not consumed. Given present practices, it is highly likely that a signi-
ficant fraction of the waste oil is disposed of In ways harmful to the
environment. While the disposal of acid sludge from conventional re-refin-
ing plants is itself a serious environmental problem, the initiation of
lube oil recycling projects which result in the establishment of consumer
confidence in the quality of re-refined oil would create attractive oppor-
tunities for capital investment 1n new, more efficient re-refining techno-
logies which do not produce environmentally hazardous waste products.
Thirdly, participation in an effort to demonstrate the quality of
re-refined oil is consistent with national policies for resource recovery
and environmental improvement. If dislocations resulting from shortages
of basic materials are to be minimized, it is only logical that the govern-
ment, which consumes about two percent of all automotive and industrial
lubricants, assume a position of leadership 1n the use of recycled mater-
ials. Moreover, since federal agencies generate very large volumes of
waste oil, it is imperative that the government set an example by disposing
of its own waste oil in a way which is ecologically sound.
3.3,5 Implementation Plan—Exceptions to Procurement Procedures
As discussed in Section 3.1, lube oil purchases by federal facili-
ties are made by consulting a bulletin prepared by the Defense Fuel
Supply Center, which contains a 11st of all successful bidders whose pro-
ducts have been found to meet pertinent specifications. Thus 1f a federal
activity is to participate in a closed-cycle waste oil recovery project,
the participating group will not be able to order its lube oil from the
firms listed in the bulletin. Under existing regulations this bulletin
must be used for lube oil purchases by all activities of the military de-
partments and by all other activities in the executive branch of the
government unless:
102
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1. The maximum single order Is less than the minimum
quantity obtainable under the contracts listed In
the bulletin; or
2. Container sizes required are smaller than those available
from contracts listed 1n the bulletin; or
3. Purchase without regard to existing Defense Fuel Supply
Center contracts is otherwise authorized.
Thus, under present circumstances, in order for a "closed-cycle"
pilot project involving re-refined oil to be established at a federal
facility, one of these three conditions must be met. Given EPA's
authority to issue guidelines for disposal of solid wastes at federal in-
stallations, condition 3 might well provide the most direct method for
circumventing military procurement policies which now exclude re-refined
oil. Authorization for a military facility to purchase re-refined oil
might have to come directly from the Office of the Secretary of Defense.
However, chemists at CCL have stated that 1f regulations or legislation,
such as that proposed by Representative Vanik 2/ were adopted which re-
quired the use of re-refined oil, they would urge the military not to use
re-refined oil in those vehicles (largely tactical vehicles) which
normally use virgin lube oil meeting specification MIL-L-2104C. On the
other hand, the chemists stated that use of re-refined oil in vehicles
which normally use virgin lube oils procured under specification
MIL-L-46152 (mainly passenger cars and light trucks) would not be so
strongly discouraged.
Table 3 shows the very significant volumes of lube oil procured
for fiscal year 1974 by ten important military bases throughout the
United States. Any of these facilities could provide the waste oil and
purchase the re-refined oil in a closed-cycle pilot program.
3.3.6 Further Examples of Lube 011 Procurement
Some examples of lube oil procurement by federal facilities located
in California can serve to illustrate how conditions 2 and 3 might be used
to circumvent the normal procurement procedures. Table 4 lists estimated
lube oil requirements for 16 California postal facilities for the fiscal
year 1974. The oil required is a multi-grade lubricant meeting specifica-
tion MIL-L-46152. All deliveries are to be made by tank wagon. The
largest minimum delivery is 800 gallons for the postal service in San
Diego. Note that the delivered price per gallon is much lower than those
listed in Table 8 of Chapter 1. The government's competitive bidding pro-
gram does, indeed, result in considerable savings for oil purchases when
compared with prices paid by large commercial accounts to major oil
companies. For this reason most of the oil bought by government agencies
is not supplied by major oil companies but by independent oil firms and
103
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TABLE 3
Internal Combustion Engine Lube 011 Procurement for
Some Military Bases for Fiscal Year 1974
Base and Location Lube Oil. Procured (Gallons)
1. Fort Hood, Texas 267,060
2. Fort Riley, Kansas 260,000
3. Camp Lejeune, North Carolina 173,450
4. Fort Bragg, Worth Carolina 118,500
5. Fort Lewis, Washington 104,280
6. Camp Pencileton, California 95,890
7. U.S. Marine Corps, Tampa, Florida 71,500
8. Fort Sill, Oklahoma 64,670
9. Fort Benning, Georgia 48,700
10. Camp Shelby, Mississippi 40,000
104
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TABLE 4
Lube 011 Requirements of Some Postal Facilities 1n California
for Fiscal Year 1974
Total Estimated
Location
Walnut Creek
Hayward
Van Nuys
San Diego
Oxnard
Los Angeles 1
Los Angeles 2
Los Angeles 3
Los Angeles 4
Torrance
Santa Ana
Huntington Beach
La Puente
San Jose
San Rafael
San Bernardino
Minimum Delivery
(Gallons)
400
400
600
800
400
600
300
300
300
400
500
500
500
500
400
500
Requirements
(Gallons)
1,700
1,000
1 ,500
4,400
1,500
4,800
1,200
600
900
4,000
1,500
2,000
1,000
3,000
1,800
2,000
Price
^/Gallon
NA
NA
66
73
75
66
66
66
66
66
68
68
68
NA
NA
71
105
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smaller blending and compounding companies, These firms frequently buy
base stocks from the major oil companies 1n large quantities and perform
the blending operations themselves. Lower overhead costs allow smaller
firms to outbid the Majors for lube oil supply to the government. In fact,
due to the present shortage of lube oils, some large companies are avoiding
sales of lube oil to the government as more profitable markets are now
available.
If it were decided that one or more of these postal service facili-
ties should be chosen to Implement a closed-loop oil recycling project,
conditions 2 or 3 might suffice without the need for "special authoriza-
tion" options. For example, the postal facilities ralght wish to have the
re-refined oil provided in 55 gallon drums or 5 gallon palls or even quart
cans rather than in tank wagon loads. In the cast of the San Diego
facility a delivery of less than 800 gallons would qualify as an exception
to DFSC purchase regulations. In all cases, however, approval from local
Post Office authorities would have to be obtained. In the absence of
"special authorization" from higher level authorities In Washington, D.C.,
this approval would probably be very difficult to obtain. Note also that
purchases of re-refined oil in smaller volumes or In smaller containers
would probably be more costly than existing contracts for virgin lube oils.
106
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3.4 A
A closed-cycle pilot project at federal facilities for tfs© USG of
re-refined automotive lube oils should be Initiated. A federal
should be selected which is both willing to participate and can
adequate volumes of used lube oil to b@ "custw" r@°ref1ned. I
cases the minimum batch of feedstock which can b
-------
return the recycled product to the facility which supplied the used oil.
In these instances at least a part of the resource value of the oil might
be recovered through use of the oil as fuel. While, In the final analysis,
market forces should dictate the most beneficial means of waste oil dis-
position, the establishment of a closed-cycle re-ref1n1ng project should
be viewed primarily as an opportunity to remove the Institutional oarirlers.
which have prevented the free market from operating.
Arguments can be raised which challenge the proposition that federal
policy should encourage the recycling of used lube oils. "Let the market
decide the ultimate disposition of crankcase dratntngs" Is a preposition
frequently put forth. This would be an admirable policy provided a free
market atmosphere in which re-refined lube oils can compete with virgin
products in fact existed. However, past federal policies have distorted
the "free market" by discriminating against re-refined products, regardless
of their quality. The results of a recent consumer survey verify the low
regard held for re-refined lube oils by those Individuals who know of the
existence of these products. 3/ If the federal government were to reverse
its policies and provide a more supportive atmosphere for recycled lube
oils, then the re-refining industry would have an opportunity to establish
its products as viable competitors in the marketplace. In fact, as dis-
cussed in Chapter 1, some re-refiners have been able to compete success-
fully with producers of virgin oils despite the effects of government policy
and the poor reputation of the Industry 1n general.
108
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FOOTNOTES
1 • A Technical and Economic Study of Haste 011 Recovery—Part II; An
Investigation of Dispersed Sources of Used CranVca.se 011s, Yeknekron,
Inc., EPA Contract No. 68-01-1806, October 1973.Hereafter referred
to as Waste Oil Recovery--!I.
2. A Technical and Economic Study of Waste 011 Recovery—Part I; Federal
Research on Waste 011 From Automobiles, Teknekron, inc., EPA Contract
No. 68-01-1806, October 1973.
3. Waste Oil Recovery—II.
109
-------
Inc. md The Institute of Public Admlnls-
to acknowledge the Resource Recovery
Office of Solid Waste KaaagiEient Programs,
U.S. Environmental Protection Ag§ney8 for support of
this study. In particular we are grateful to Dr. John
H. Skinner, Acting Deputy Director, Resource Recovery
Division and to the Project Officers, Messrs. Thomas D.
Clark and Laurence B. S%E^@rj for their guidance and
assistance In the ptrformanee of this research.
We Kould also like to express of sincere appreciation
to the following Individuals and organizations whose
assistance was vital 1n completing this project:
The thirteen re-refiners Interviewed
Mr. Bel ton R. H111 lamsB Presidents Association of
'Petrol©urn R@°ref1rcers
Mr. Cyrtls Gordon, The lubHiol Corporation
Mr. R1ck Richardson, The LubHzol Corporation
Mr. Joseph Byrna0 V^ce President, Union 011 Company
of California
Colonel Ralph J. Walsh, Office of the Assistant Secretary
of Defense for Health and Environment
-------
APPENDIX A
MILITARY SPECIFICATIONS MIL-L-46152 AND MIL-L-2104C FOR
ENGINE CRANKCASE OILS
113 Preceding page blank
-------
MIL-L-46152
20 November 1970
MILITARY SPECIFICATION
LUBRICATING OIL, INTERNAL COMBUSTION ENGINE,
ADMINISTRATIVE SERVICE
This specification is mandatory for use by all Departments
and Agencies of thd Department of Defense.
1. SCOPE
1*1 Scope. This rpecification covers engine oils suitable for lubrication
of commercial-type vehicle reciprocating internal combustion engines of both
spark-ignition and compression-ignition types used In administrative service
(see 6.1).
1.2 Classification. The engine lubricants shall be of the following
viscosity grades (see 6.2):
Viscosity grade
Grade 10W
Grade 30
Grade 10W-30
Grade 20W-40
2. APPLICABLE DOCUMENTS
2.1 The following documents of the issue in effect on date of invitation
for bids or request for proposal, form a part of the specification to the
extent specified herein.
SPECIFICATIONS
MILITARY
MIL-L-2104 - Lubricating Oil, Internal Combustion Engine, Tactical
Service
MIL-L-21260 - Lubricating Oil, Internal Combustion Engine, Preservative
and Break-In
/ FSC 9150 /
114
-------
MIL-L-46152
STANDARDS
FEDERAL
Fed. Test Method Std. No. 791 - Lubricants, Liquid Fuels and Related
Products; Method* of Testing
MILITARY
MIL-STD-105 - Sampling Procedures and Tables for Inspection by Attributes
MIL-STD-290 - Packaging, Packing and Marking of Petroleum and Related
Products
(Copies of specifications, standards, drawings and publications required
by contractors in connection with specific procurement functions should be
obtained from the procuring activity or as directed by the contracting
officer.)
2.2 Other publications. The following documents form a part of this speci-
fication to the extent specified herein. Unless otherwise indicated the issue
in effect on date of invitation for bids or request for proposal shall apply:
AMERICAN SOCIETY FOR TESTING AND MATERIALS (ASTM) TEST METHODS
D 92 - Flash and Fire Points by Cleveland Open Cup
D 97 - Pour Point
D 129 - Sulfur in Petroleum Products by the Bomb Method
D 270 - Sampling Petroleum and Petroleum Products
D 287 - API Gravity of Crude Petroleum and Petroleum Products
(Hydrometer Method)
D 445 - Viscosity of Transparent and Opaque Liquids (Kinematic and
Dynamic Viscosities)
D 524 - Rarasbottom Carbon Residue of Petroleum Products
D 808 - Chlorine in New and Used Petroleum Products (Bomb Method)
D 811 - Chemical Analysis for Metals in New and Used Lubricating Oils
D 874 - Sulfatcd Ash from Lubricating Oils and Additives
D 892 - Foaming Characteristics of Lubricating Oils
D 1091 - Phosphorus in Lubricating Oils and Additives
D 1317 - Chlorine in New and Used Lubricants (Sodium Alcoholate Method)
D 1552 - Sulfur in Petroleum Products (High Temperature Method)
D 2270 - Calculating Viscosity Index from Kinematic Viscosity
D 2602 - Apparent Viscosity of Motor Oils at Low Temperature Using the
Cold Cranking Simulator
Engine Test Sequence IIB
Engine Test Sequence IIIC
Engine Test Sequence VC
115
-------
MIL-L-46152
(The ASTM test methods listed above are included in Part 17 or Part 18 of
the Annual Book of ASTM Standards and are also available separately, except
for Engine Test Sequences IIB, I1IC, and VC. Engine Test Sequence IIB is a
part of ASTM Special Technical Publication STP 315-D. Engine Test Sequences
IIIC and VC will be included in ASTM Special Technical Publication STP 315-E,
scheduled for publication after May 1971, and are currently avail4ble only as
preprints.)
(Application for copies of all ASTM test methods except Engine Test Sequences
I11C and VC should be addressed to the American Society for Testing and Mate-
rials, 1916 Race Street, Philadelphia, Pennsylvania 19103.)
(Until publication of Special Technical Publication STP 315-E by ASTM, infor-
mation concerning Engine Test Sequences IIIC and VC may be obtained from U. S.
Army Aberdeen Research and Development Center, Coating and Chemical Laboratory,
AMXRD-CF, Aberdeen Proving Ground, Maryland 21005.)
Specifications and standards of technical societies are generally available
for reference from libraries. They are alto distributed among technical groups
and using Federal agencies.
3. REQUIREMENTS
3.1 Qualification. Engine lubricating oils furnished under this specifica-
tion shall be products which are qualified for listing on the applicable quali-
fied products list at the time set for opening of bids (see 4.5.1 and 6.4).
3.1.1 Each viscosity grade of oil which satisfies all the requirements of
this specification shall be qualified for a period not to exceed four years
from the date of its original qualification. When the qualification period
has expired, each product must be requallfied if the supplier wishes to main-
tain the formulation as a qualified product and be eligible to bid on prospec-
tive procurements.
3.1.2 Whenever there is a change in the base stock, In the refining treat-
ment or In the additives used in the formulation, requalificatlon will be
required. When proposed changes are minor and may not be expected to signifi-
cantly affect performance, the qualifying activity may, at its discretion,
waive complete requalification or may require only partial requalification in
order to determine the significance and acceptability of the proposed changes.
3.1.3 The engine lubricating oil supplied under contract shall be identical,
within permissible tolerances assigned by the qualifying activity for the prop-
erties listed in 3.4, to the product receiving qualification. The values re-
sultlnp after the application of tolerances shall not exceed the maximum nor
fall below the minimum limits specified herein (see table I and 3.3.1 through
3.3.7).
116
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MIL-L-46152
3.1.4 Pour-point depressant: All grade oils. No changes shall be made In
cither Che type or concentration of the pour-point depressant after qualifi-
cation tenting and approval unless:
a. The oil is retested for conformity to the stable pour point
requirement (see table I).
b. The qualifying activity (see 6.4) is informed of the proposed
change(s) and of the retestlng of the stable pour point.
c. The qualifying activity approves the proposed change(s) in
writing.
3.2 Materials. The engine lubricating oils shall be petroleum products,
synthetically prepared products, or a combination of the two types of product
compounded with such functional additives (detergents, dlspersants, oxidation
inhibitors, corrosion Inhibitors, etc.) as are necessary to meet the specified
requirements. No re-refined constituent materials shall be used.
3.3 Physical and chemical requirements. The oils shall conform to the re-
spective requirements specified in table I and in 3.3.1 through 3.3.7.
117
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Table I. Requirements
MIL-L-46152
Property
Grade
10
Grade
30
Grade
10W-30
Grade
20W-40
Viscosity at 210°F (99°C)
kinematic, ccntiotokes
rain.
Viscosity at 0°F (-18°C)-
apparent, centipoises
I/
5.7
< 7.5
9.6
< 12.9
9.6
< 12.9
12.9
< 16.8
rain.
ESK.
Viscosity index, min
Pour point, °F (max.)
°C (max.) ./
Stable pour point „ °F (max.) —
°C (max.)
Flash point, °F (min«)
*C (min.)
Gravity, API 1'
Carbon residue —
Phosphorus !'
Chlorine!'
Sulfur!'
Sul fated residue-'
Organo-metallic components—'
1200
< 2400
..
»25
-32
-25
-32
400
204
X
X
X
X
X
X
X
» «•
..
75
0
•18
--
--
425
218
X
X
X
X
X
X
X
1200
< 2400
..
-25
-32
-25
-32
400
204
X
X
X
X
X
X
X
2400
<9600
--
-10
-23
-10
-23
415
213
X
X
X
X
X
X
X
2/
—Report measured, apparent viscosity at 0°F (»18eC) in centipoises for
grades 10, 10W-30, and 20W-40 oils.
After being cooled below its pour point, the oil shall regain its homoge-
ni£y on standing at a temperature not more than 10°F (6°C) above the pour
shall be reported ("X" indicates report).
3.3.1 Foaming. All grades of oil shall demonstrate the following foaming
characteristics when they are tested in accordance with 4.6, table I.I
CASTM D 892).
a. Initial test at 75° ± 1*F (24° ± 0.5°C). Not more than 25 ml
of foam shall remain immediately following the end of the 5-minute blowing
period. No foam shall remain at the end of the 10-mlnute settling period.
b. Intermediate test at 200° ± leF (93.5° ± 0.5°C). Not more than
150 ml of foam shall rt-main immediately following the end of the 5-minute
blowing period. No foam shall remain at the end of the 10-minute settling
period.
118
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MIL-L-46152
c. Ftnal test at 75° ± 1°F (24° ± 0.5°C). Not more than 25 ml of
foam shall remain immediately following the end of the 5-minute blowing
period. No foam shall remain at the end of the 10-rainute settling period.
3.3.2 Stability and compatibility.
3.3.2.1 Stability. The oils shall show no evidence of separation or color
change when they are tested in accordance with 446, table II (Method 3470 of
Fed. Test Method Std. No. 791).
3.3.2.2 Compatibility. The oils shall be compatible with oils previously
qualified under MIL-L-2104, MIL-L-46152 and MIL-l-21260. The oils shall show
no evidence of separation when they are tested against selected reference
oils in accordance with 4.6, table II (Method 3470 of Fed. Test Method Std.
No. 791).
3.3.3 Moisture-corrosion characteristics. The oils shall prevent or mini-
mize corrosion of ferrous-metal engine components in the presence of moisture
induced by low-temperature operating conditions. Satisfactory performance in
this respect shall be demonstrated when the oils are tested in accordance with
4.6, table II (Engine Test Sequence IIB).
3.3.4 Low-temperature deposits. The oils shall minimize the formation of
undesirable deposits associated with intermittent, light-duty,low-temperature
operating conditions. Satisfactory performance in this respect shall be
demonstrated when the oils are tested in accordance with 4.6, table II (Engine
Test Sequence VC).
3.3.5 Oxidation characteristics. The oils shall resist thermal and chemi-
cal oxidation and prevent or minimize thickening and deposits associated with
high-temperature operating conditions. Satisfactory performance in this re-
spect shall be demonstrated when the oils are tested in accordance with 4.6,
table II (Engine Test Sequence IIIC).
3.3.6 Ring-sticking, wear, and accumulation of deposits. The oils shall
prevent the sticking of piston rings and the clogging of oil channels, and
shall minimize the wear of cylinders, rings and loaded engine components ouch
as cam shaft lobes, cam followers, valve rocker arms, rocker arm shafts, and
the oil pump and fuel injection pump drive gears. Satisfactory performance
shall be demonstrated when the oils are tested in accordance with 4.6, table
II (Method 346 of Fed. Test Method Std. No. 791).
3.3.7 Bearing corrosion and shear stability.
3.3.7.1 Bearing corrosion. The oils shall be non-corrosive to alloy bear-
ings. Satisfactory performance in this respect shall be demonstrated when
the oils are tested in accordance with 4.6, table II (Method 3405 of Fed.
Test Method Std. No. 791).
119
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KIL-L-46152
3,3.7.2 Shear stability. Gi?Q<3s 10H-30 atai 1GW-40 oils shall demonstrate
shear stability by freaaining within the respective viscosity tangis at 210*F
(99°C)9 nhen tested in aceoffdence with 40§o3o
3,4 Other reguireaaenfco and tolerances £otm quality conformance testing.
The following physical and chemical properties shall be tested in accordance
with the appropriate methods listed in 4«6 to insure that purchased products
ore of the come eorapooitions as the respective qualification samples and to
identify the produefcs. fto opeeific values o* limits are assigned In quail*
fication testing,, except as otherwise specified in table 1 and in 3.3.1
through 3.3.70 but teot ffcsulte shall be raperted for all properties listed.
The qualifying activity (see 604}> shall establish specific values and toler-
cnces for subsequent quality eosfoi'fsaase testing for these properties (see
6.3 and 6.4):
Viocooiey
¥iocool£y im^ess
Pour point
Fiaeh point
Gravity, API
Carbon reaidw® • .
Foaming
Phosphorus
Chlorine
Sulfur
Sulfated ash
Organo-tnetallic components
4. QUALITY ASSURANCE PROVISIONS
4.1 Responsibility fog inspection. Unless otherwise specified in the con-
trace or purchase order, the supplier is responsible for the performance of
all inspection requirements as specified herein. Except as otherwise speci-
fied in the contract or ordere the supplier may use his own or any other
facilities suitable for the perferaenee of the inspection requirements speci-
fied herein„ unless disapproved by the Govctnoent. The Government reserves
the right to perffsra any of She ilnspecei©n8 SG£ forth in the specification
tjhare ouch lnopGcti@no ai?e deoasd neeessasvy to sseure supplies and services
confona £o prescrifead reqwireraenes.
4.2 Lot.
4.2.1 Bulk lot. An indefinite quantity of a homogeneous mixture of one
gtade of oil offered for acceptance in a single, isolated container; or manu-
factured in a single plaint run (not exceeding 24 hours), through the same
processing equipment„ with no change in the ingredient materials..
120
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MIL-L-46152
4.2.2 Packaged lot. An indefinite number of 55 gallon druas or Mailer
unit containers of identical size and type, offered for acceptance, and
filled with a homogeneous mixture of one grade of oil from a single, isolated
container; or filled with a homogeneous mixture of one grade of oil, manu-
factured in a single plant run (not exceeding 24 hours), through the same
processing equipment, with no change in the ingredient materials.
4.3 Sampling.
4.3.1 Sampling for the examination of filled containers. Take a random
sample of filled containers from each lot in accordance with MIL-STD-105,
at inspection level II and acceptable quality level (AQL) * 2.5 percent
defective.
4.3.2 Sampling for tests. Take samples from bulk or packaged lots for
tests in accordance with ASTM Method D 270.
4.4 Inspection. Perform inspection in accordance with Method 9601 of Fed.
Test Method Std. No. 791.
4.4.1 Examinationof filled containers. Examine samples taken in accord-
ance with 4.3.1 for compliance with MIL-STD-290 with regard to fill, closure,
sealing, leakage, packaging, packing, and marking requirements. Reject any
container having one or more defects or under the required fill, tf the
number of defective or underfilled containers exceeds the acceptance number
for the appropriate sampling plan of MIL-STD-105, reject the lot represented
by the sample.
4«5 Classification of tests.
a. Qualification tests
b. Quality conformance tests
4.5.1 Qualification tests. Qualification tests consist of tests for all
of the requirements specified in section 3 and may be conducted in any plant
or laboratory approved by the qualifying activity (see 6.4) unless otherwise
specified in 4.6.1 through 4.6.3. Qualification tests shall be performed on
each viscosity grade except as specified in 4.5.1.1 and 4.5.1.2.
4.5.1.1 The stable pour-point test (Method 203 of Fed. Test Method Std.
No. 791) shall be required only on grade 10W, 10U-30 and 20W-40 oils.
4.5.1.2 Shear stability shall be required for only grade 10W-30 and 20W-40
oils.
121
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MIL-L-46152
4.5.2 Quality _cpnfpmance toota. Tosts for quality ecr»fortnane« of individ-
ual loto shell cenaist of tests for all of the requirements in section 3,
except for the £©1loving (see table II):
Stability and compatibility
RinQ-ot letting 5 wear, and eeeysaslatiOT of deposits
Low- temper at wire deposits
Oitidaeicm chas-acteristics
Moio tuH-e- corrosion ehareeteristies
Besting eonrooion and B&eBff stability
^•^ Te s t _ge tj^odo . Perfona Easts in accordance with table II and with 4.6.1
through 4.3.3 ao applicable.
4. S.I StabiHt^ and compatibility. Dstenaine the stability and compati-
bility of the olio by ths procedures for "Hoccogeneiey" and "Miscibility"
§iven in Method 3470 of Fed. Test Method Std. No. 791, as explained in
4.6.1.1 end 4.6.1.2. The procedures in 4.6.1.1 and 4.6.1.2 should be per-
formed at the CGSBQ time. This test shall be conducted only in a laboratory
designated by the qualifying activity (see 6.4).
4. 60 1.1 S tabUj. ty . Determine the stability by subjecting an unmixed sample
of oil to the prescribed cycle of temperature changes, then examine the sample
for eonforaenee eo the requi-retaents of 3.3.2.1. Record the test results on a
copy of the "Homogeneity and Miscibillty Test" fora in the column markad "None"
4.6.1.2 Go^Btibilit^. Dsterain© the compatibility of the oil with other
oils previously qualiUied under MIL- L° 2104, MIL-t- 21260, and MIL- L- 46152 by
subjecting oepeiroCG mixtures of the oil with selected reference oils desig-
nated by the qualifying activity (see 6.4) to the prescribed cycle of tempera-
Sure changes „ then exoHine the captures for conformanee to the requirements
of 3.3.2.2. Eecord the test, results on the same copy of the "Homogeneity and
Miocibility Tost" form (oee 6.601.1) in the appropriate colums marked "1-30",
"2- W\ etc.
4.6.2 ^to^i^SOJiL-ESlSi0 ^e stable pour=point test shall be conducted
only in o laboffQeoiry desigaated by Shs qualifying activity (see 6.4).
4.6.3 Sheag otablltty. Determine the shear stability of grade 10W-30 and
20W-40 oile by the following method:
a. Weigh 25 grasas of usad oil, obtained at 10 hours of testing in
accordance with Method 3405 of Fed. Test Method Std. No. 791, into a 50-ml
three-necked round bottom flask equipped with a thenaomster, gas inlet tube,
otirrer, and distillation aide arm.
b0 Meat the sample at 248° * 9° F (130° ± S*C) in a vacuum of 100 mm
of mercury with o nitrogen oparge for one -
122
-------
MIL-'L-46152
c. Filter the stripped sample through a 0.1 micron Seitz filter pad.
d. Determine the kinematic viscosity at 210°F (99°C) of the filtered
sample using ASTM Method D 445 for cotiformance to the requirements of 3.3.7.2.
Table II. Test methods
Test
Test Method No.
Fed. Std. 791
Test Method Ho.
ASTM
Viscosity, kinematic
Viscosity, apparent
Viscosity index
Pour point
Stable pour point
Flash point
Gravity, API
Carbon residue
Phosphorus
Chlorine
Sulfur
Sulfated residue
Organo-mctaiiic components
Foaming
Stability and compatibility
Moisture-corrosion characteristics
Low temperature deposits
Ox•dation characteristics
Ring-sticking, wear, and accumulation
of deposits
Bearing corrosion and shear stability
2032'
3470*'
346
3405*'
D 445
D 2602 i'
D 2270
D 97
D 92
D 287
D 524
D 1091
D 808 or D 1317 f
D 1552 or D 129-'
D 874 f
D 811-'
D 892
Sequence HB.7
Sequence VC&/
Sequence 111C*'
-'obtain the viscosity at OeF (-18*0) by D 2602 for grade 10W, 10W-30 and 20W-40
— j 1 _
/
•j'See 4.6.2
~.D 806 is the preferred method but D 1317 may be used as an alternate.
- D 1552 is the preferred method but D 129 may be used as an alternate.
-X-ray fluorescence or atomic absorption spectrochemical analysis methods that
have been previously approved by the qualifying activity (see 6.4) may be
used as alternates to D 811.
-/Homogeneity and miscibility test (see 4.6.1 for clarifying instructions.
I'Included in ASTM STP 315-D.
2.'Not yet published by ASTM. To be included in ASTM STP 315-E, when published
(see 2.2).
-'See 4.6.3
123
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MIL-L-46152
5. PREPARATION FOR DELIVERY
5.1 Packaging, packing, and marking. Unless otherwise specified in the
contract or purchase order (see 6.2), packaging, packing, and parking shall
be in accordance with MIL-STD-290.
6. NOTES
6.1 Intended use. The lubricating oils covered by this specification are
intended for the crankcase lubrication of commercial-type vehicles used for
administrative (post, station, and camp) service typical of: (1) gasoline
engines in passenger cars and light to medium duty trucks operating under
manufacturer1 warranties; and (2) lightly supercharged dlcsel engines operated
in moderate duty. The lubricating oils covered by this specification are
intended for use, as defined by vehicle manufacturer, when ambient tempera-
tures are above -20°F (-29*C).
6.2 Ordering data. Procurement documents should specify the following
information:
a. Title, number, and date of this specification.
b. Grade of oil required (see 1.2).
c. Quantity of oil required.
d. Type and sice of containers required (see 5.1).
e. Level of packaging and level of packing required (see 5.1).
6.3 Other requirements and tolerances for quality conformance testfng.
Definite numerical values are not specified for certain of the physical and
chemical properties listed in 3.4, and for which corresponding test methods
are given in Section 4. Values of some properties vary from one commercial
brand of oil to another for the same grade. These values are influenced by
the source of the base stock, the identities and quantities of additives, etc.
Definite numerical values are not always functionally important except, for
some properties, within specified maximum and/or minimum limits. It is not
possible (or necessary) to assign restrictive values in the specification
before the testing of qualification samples. During qualification, test values
will be determined which are characteristic of a particular product and which
can serve thereafter to identify the product. Using the results of qualifi-
cation testing, the qualifying activity (see 6.4) can set values, including
permissible tolerances, for future quality conformance testing.
124
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6.k Qualification. With respect to products requiring qualification,
awards will be made only for products which are at the time set for opening
of bids, qualified for inclusion in the applicable Qualified Products List
whether or not such products have actually been so listed by that date. The
attention of the suppliers is called to this requirement, and manufacturers
are urged to arrange to have the products that they propose to offer to the
Federal Government tested for qualification in order that they may be
eligible to be awarded contracts or orders for the products covered by this
specification. The activity responsible for the Qualified Products List Is
the U.S. Army Aberdeen Research and Development Center( Coating and Chemical
Laboratory, Aberdeen Proving Ground, Maryland 21005 and information pertain-
ing to qualification of products may be obtained from that activity.
Custodians: Preparing activity:
Army - MR Army - MR
Navy - SH
Air Force - 68 (Project No. 9150-0316)
Review activities:
Army - Ml, WC, AT
Navy - SH, SA, AS, YD, MC
At r Force - 11, 68
DSA - PS
User activities:
Army - ME
Navy - OS
U. S. GOVERNMENT PRINTING OFFICE) 1*70 .431-693/3080
125
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WL-L-2104C
2Q November 1970
SUPERSEDING
MIL-L-2104B
1 December 1964
MIL-L-45199B
28 June 1968
MILITARY SPECIFICATION
LUBRICATING OIL, INTERNAL COMBUSTION ENGINE, TACTICAL SERVICE
This specification is mandatory for use by all Departments and Agencies of the
Department of Defense
1. SCOPE
1.1 Scj3£e_. This specification covers engine oils suitable foi lubrication
of reciprocating internal combustion engines of both spark-ignition and com-
pression-ignition types used in tactical service (see 6.1).
1.2 Classification. The lubricating oils shall be of the following
viscosity grades (see 6.2):
Viscosity Grade Military Symbol
Grade 10 OE/HDO-10
Grade 30 OE/HDO-30
Grade 40 OE/HDO-40
Grade 50 OE/HDO-50
2. APPLICABLE DOCUMENTS
2.1 The following documents of the issue in effect on date of invitation
for bids or request for proposal, form a part of the specification to the
extent specified herein.
SPECIFICATIONS
MILITARY
MIL-L-21260 - Lubricating Oil, Internal Combustion Engine, Preservative
and Break-In.
MIL-L-46152 - Lubricating Oil, Internal Combustion Engine, Administrative
Service.
STANDARDS
FEDERAL
/FSC 9150/
126
-------
MIL-L-2104C
Fed. Tost Method Std. 791 - Lubricants, Liquid Fuels and Related
Products; Methods of Testing.
MILITARY
MIL-STD-105 - Sampling Procedures and Tables for Inspection by
Attributes.
MIL-STD-290 - Packaging, Packing and Marking of Petroleum and Related
Products.
(Copies of specifications, standards, drawings and publications required
by contractors in connection with specific procurement functions should be
obtained from the procuring activity or as directed by the contracting
officer.)
2.2 Other publications. The following documents form a part of this
specification to the extent specified herein. Unless otherwise indicated,
the issue in effect on date of invitation for bids or request for proposal
shall apply.
AMERICAN SOCIETY FOR TESTING AND MATERIALS (ASTM) TEST METHODS
D 92 Flash and Fire Points by Cleveland Open Cup
D 97 Pour Point
D 129 Sulfur in Petroleum Products by the Bomb Method
D 270 Sampling petroleum and Petroleum Products
D 287 API Gravity of Crude Petroleum and Petroleum Products (Hydrometer
Method)
D 445 Viscosity of Transparent and Opaque Liquids (Kinematic and Dynamic
Viscosities)
D 524 Ramsbotlom Carbon Residue of Petroleum Products
D 808 Chlorine in New and Used Petroleum Products (Bomb Method)
D 811 Chemical Analysis for Metals in New and Used Lubricating Oils
D 874 Sulfated Ash from Lubricating Oils and Additives
D 892 Foaming Characteristics of Lubricating Oils
D 1091 Phosphorus in Lubricating Oils and Additives
D 1317 Chlorine in New and Used Lubricants (Sodium Alcoholate Method)
D 1552 Sulfur In Petroleum Products (High Temperature Method)
D 2270 Calculating Viscosity Index from Kinematic Viscosity
D 2602 Apparent Viscosity of Motor Oils at Low Temperature Using the
Cold Cranking Simulator
Engine Test Sequence IIB
Engine Test Sequence VC
127
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MIL-L-2104C
(The ASTM test methods listed above are included in Part 17 or Part 18 of
the Annual Dock of ASTM Standards and are also available separately, except
for Engine Test Sequences IIB and VC. Engine Test Sequence IIB is a part of
ASTM Special Technical Publication STP 315-D. Engine Test Sequence VC will
be included in ASTM Special Technical Publication STP 315-E, scheduled for
publication after May 1971, and is currently available only as a preprint.
(Application for copies of all ASTM test methods except Engine Teat Sequence
VC should be addressed to the American Society for Testing and Materials,
1916 Race Street, Philadelphia, Pennsylvania 19103.)
(Until publication of Special Technical Publication STP 315-E by ASTM,
information concerning Engine Test Sequence VC may be obtained frcro U.S.
Army Research and Development Center, Coating and Chemical Laboratory,
AMXRD-CF, Aberdeen Proving Ground, Maryland 21005.)
Specifications and standards of technical societies are generally available
for reference from libraries. They are also distributed among technical
groups and using Federal agencies.
3.1 Qualification. Engine lubricating oils furnished under this specifi-
cation shall be products which are qualified for listing on the applicable
Qualified Products List at the time set for opening of bids (see 4.5.1 and
6.4).
3.1.1 The qualifying activity (see 6.4) may waive complete qualification
testing or may require only partial qualification testing of grade 40 oil if
the supplier states in a written affidavit that the product has been formulated
with base stocks, refining treatment, and additives the same as those used in
the formulation of grade 30 and grade 50 oils qualified under this specification-
3.1.2 Each viscosity grade of oil which satisfies all the requirements of
this specification shall be qualified for a period not exceeding four years
from the date of its original qualification. The qualification period for
each grade 40 oil qualified in accordance with 3.1.1 shall not exceed that of
the grade 30 and grade 50 oils used in the qualification procedure. When the
qualification period has expired, each product must be requal ified if the
supplier wishes to maintain the formulation as a qualified product and be
eligible to bid on prospective products.
3.1.3 Whenever there is & change in the base stock, in the refining treat-
ment or in the additives used in the formulation, requalification will be
required. When proposed changes are minor and may not be expected to signi-
ficantly affect performance, the qualifying activity may, at its discretion,
waive complete requalification or may require only partial requalification
in order to determine the significance and acceptability of the proposed changes.
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MIL-L-2104C
3.1.4 The engine lubricating oil supplied under contract shall be Identical,
within permissible tolerances assigned by the qualifying activity for the
properties listed in 3.4, to the product receiving qualification. The values
resulting after the application of tolerances shall not exceed the maximum nor
fall below the minimum limits specified herein (see table I and 3.3.1 through
3.3.6).
3.1.5 Pour-point depressant. No changes shall be made in either the type
or concentration of the pour-point depressant after qualification testing and
approval unless:
(a) The oil is retested for conformity to the stable pour point
requirement (sec. table I).
(b) The qualifying activity (see 6.4) is informed of the proposed
change(s) and of the retestitig of the stable pour point.
(c) The qualifying activity approves the proposed change(3) in writing.
3.2 Materials. Tl-c engine lubricating oils shall be petroleum products,
synthetically prepared products or a combination of the two types of product
compounded with such functional additives (detergents, dispersants, oxidation
inhibitors, corrosion Inhibitors, etc.) as are necessary to meet specified re-
quirements. No re-refined constituent materials shall be used.
3.3 Physical and chemical requirements. The oils shall conform to the
respective requirements specified in table I and 3.3.1 through 3.3.6.
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MXL-L-2104C
Table I. Requir.emen.1;^
Viscosity at 210°F. (99°C.),
kinematic, centisfcokes
min.
max.
Viscosity at 0°F. (-18eC.)3/,
apparent, cesntipoises
min.
max.
Viscosity index (min.)
Pour points °F. (maK.)
°C. (max.)
Stable pour-point, °F. (max.)±/
°C. (max.)
Flaoh point, °F. (min.)
"C. (min.)
Gravity, APll/
Carbon residue!/
Phosphorus si
Chlorine I/
Sulfurl/
Sulfated residue!/
Organo-raetallic components^./
Grade Grade Grade Grade
10 30 40 50
5.7
1200
<2400
-25
9.6
<12.9
12.9
<16.8
75
0
-18
80
5
-15
16.8
<22.7
85
15
- 9
-25
-32
400
204
X
X
X
X
X
X
X
..
c» o*
425
218
X
X
X
X
X
X
X
--
—
435
224
X
X
X
X
X
X
X
--
.-
450
232
X
X
X
X
X
X
X
JL./ Report measured, apparent viscosity at 0°P (-18°C) in centipoises for
grade 10 oil.
2.7 After being cooled below its pour point, the oil shall regain its homogeneity
on standing at a temperature not more than 10* F (6° C) above the pour point.
JS/ Values shall be reported ("x" indictes report).
3.3.1 Foaming. All grades of oil shall demonstrate the following foaming
characteristics when they are tested in accordance with 4.6, table II.(ASTM D 892),
(a) Initial test at 75° ± 1° F (24° * 0.5° C). Not more than 25 ml
of foam shall remain immediately following the end of the 5-minute blowing
period. No foam shell remain at the end of the 10-minute settling period.
(b) Intermediate test at 200° ± 1° F (93.5 ± 0.5° C). Not more than
150 ml of foam shall remain immediately following the end of the 5-minute
blowing period. No foam shall remain at the end of the 10-minute settling
period.
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MIL-L-2104C
(c) Finn! test at 75° ± 1° F (24° -f 0.5° C). Not more than 25 ml
of foam shall remain immediately following the end of the 5-minute blowing
period. No foam shall remain at the end of the 10-minute settling period.
3.3.2 Stability jand compatibility.
3.3.2.1 Stability. The oils shall show no evidence of separation or color
change when they arc tested in accordance with 4.6, table II (method 3470,
Fed. Test Method Std. No. 791).
3.3.2.2 Cojiipat i hi ' Uy. The oils shall be compatible with oils provioi.sN
qualified undi-f MI'-1.-^ lO'-t, MIL-I.-461 52 , and MIL-I.--M 260. The oils shall
show no evidence of .- ep?rjfion when they are tr&t.o.•
oils in accordant. •. Lth i.6, table II (method
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MIL-L-2104C
but test results shall be reported for all properties listed. The qualifying
activity (see 6.4) shall establish specific values and tolerances for subse-
quent quality conformance testing for these properties (see 6.3 and 6.4):
Viscosity
Viscosity index
Pour point
Flash point
Gravity, API
Carbon residue
Foaming
Phosphorus
Chlorine
Sulfur
Sul fated ash
Organo-metallic components
4. QUALITY ASSURANCE PROVISIONS
4.1 Responsibility for inspection. Unless otherwise specified In the con-
tract or purchase order, the supplier IB responsible for the performance of
all inspection requirements as specified herein. Except as otherwise specified
in the contract or order, the supplier may use his own or any other facilities
suitable for the performance of the inspection requirements specified herein,
unless disapproved by the Government. The Government reserves the right to
perform any of the inspections set forth in the specification where such in-
spections are deemed necessary to assure supplies and services conform to
prescribed requirements.
4.2 Lot.
4.2.1 ^ulk loj:. An indefinite quantity of a homogeneous mixture of one
grade of oil offered for acceptance in a single, isolated container; or manu-
factured in a single plant run (not exceeding 24 hours) , through the same
processing equipment, with no change In the Ingredient materials.
4.2.2 Packaged lot. An indefinite number of 55 gallon drums or smaller
unit containers of identical size and type, offered for acceptance, and filled
with a homogeneous mixture of one grade of oil from a single, isolated con-
tainer; or filled with a homogeneous mixture of one grade of oil manufactured
in a single plant run (not exceeding 24 hours), through the same processing
equipment, with no change In the Ingredient materials.
4. 3
4.3.1 Sampling, of filled containers. Take a random sample of filled con-
tainers from each lot in accordance with MIL-STD-105 at inspection level II and
acceptable quality level (AQL) = 2.5 percent defective.
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MIL-L-2104C
4.3.2 Snmpli.nK for tests. Take samples from bulk or packaged lots for
tests in accordance with ASTM Method D 270.
4.4 Inspection. Perform inspection in accordance with method 9601 of
Fed. Test Method Std. No. 791.
4.4.1 Kxair5p.ition of filled containers. Examine samples taken in accordance
with 4.3.1 for compl i..ui<-e with MIL-STD-290 with regard to fil] , closure,
staling, leakage, I>.K kn;-.ing, packing, and marking requirements. Reject any
container having o»r or more defects or under the required fill. If the nunber
of defective or underfilled containers exceeds the acceptance number for the
appropriate sampling plan of MIL-STD-105, reject the lot represented by the
sample.
4.5 Classified.ion of tests.
(a) Qualification tests.
(b) Quality conformance tests.
4.5.1 Qua! if ic.-.Uon ^c.^.ts. Qualification tests consist of test for all of
the requirements spi-iified in section 3 and may be conducted in any plant or
laboratory approved by the qualifying activity (see 6.4), unless otherwise
specified in 4.6.1 through 4.6.2. Qualification teats shall be performed on
each viscosity grade except as specified in 4.5.1.1 and 4.5.1.2.
4.5.1.1 The .stable pour-point test (method 203, Fed. Test Method Std. 791)
shall be required only on grade 10 oil.
4.5.1.2 Grade 40 oils may be qualified in accordance with 3.1.1.
4.5.2 Quality confoi irance tcstr. Tests for quality conformance of individual
lots shall consist of tests for all of the requirements in section 3, except
for the following (see table II):
Stable pour point
Stability and compatibility
Ring-sticking, wear, and accumulation of deposits
Low temperature deposits
Bearing corrosion
Moisture-cot rosion characterisitcs
4.6 Test mut!'od_!s. Perform tests in accordance with table II and with
4.6.1 through 4.6.2 as applicable.
4.6.1 Stability JUKI compatibility. Determine the stability and compatibility
of the oils by the procedures for "Homogeneity" and "Miscibility" given in
method 3470, Fed. Test Method Std. No. 791, as explained in 4.6.1.1 and 4.6.1.2.
The procedure? in 4.6.1.1 and 4.6.1.2 should be performed at the same time. Thi.-
test shall be conducted only in a laboratory designated by the qualifying
activity (see 6.4).
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MIL-L-2104C
4.6.1.1 Stability. Determine the stability by subjecting an unmixed sample
of oil to the prescribed cycle of temperature changes and examining the sample
for conformanee to the requirements of 3.3.2.1. Record the test results on a
copy of the "Homogeneity and Miscibility Test" form in the column marked "None1.1
4.6.1.2 Compatibility. Determine the compatibility of the oil with other
oils previ.nisly qualified under MIL-L-2104, MLL-L-21260 and MIL-L-46152, by
subjecting separate mixtures of the oil with selected reference oils designated
by the qualifying activity (see 6.4) to the prescribed cycle of temperature
changes, then examining the mixtures for conformance to the requirements of
3.3.2.2. Record the test results on the same copy of the "Homogeneity and Mis-
cibility Test" form (see 4.6.1.1) in the appropriate columns marked "1-30",
"2-30", etc.
4.6.2 Stable pour point. The stable pour point test (method 203, Fed. Test
Method Std. No. 791) shall be performed only in a laboratory designated by the
qualifying activity (see 6.4).
Table II. Test Methods
Test
Test Method No.
Fed. Std. 791
Test Method No.
ASTM
Viscosity, kinematic
Viscosity, apparent
Viscosity index
Pour point
Stable pour point 203.2/
Flash point
Gravity, API
Carbon residue
Phosphorus
Chlorine
Sulfur
Sulfated residue
Organo-metallie components
Foaming
Stability and compatibility 3470^
Moisture-corrosion characteristics
Low temperature deposits
Bearing corrosion 3405
Ring-sticking, wear, and accumulation
of deposits:
Medium-speed, supercharged, high-sulfur
fuel 340
High-speed, supercharged 341
D 445
D 2602J/
D 2270
D 97
D 92
D 287
D 524
D 1091
D 808 or D -1317 3/
D 1552 or D 1295/
D 874
D Sill/
D 892
Sequence IIBl/
Sequence VC§/
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MIL-L-2104C
!_/ Obtain the viscosity at 0°F. (-18°C.) by D 2602 for grade 10 oil.
21 See 4.6.2.
5/ D 808 Is the preferred method but D 1317 may be used as an alternate.
^/ D 1552 Is the preferred method but D 129 may be used as an alternate.
5/ X-ray fluorescence or atomic absorption spectrochemical analysis methods
that have been previously approved by the qualifying activity (see 6.4) may
be used as alternates to D 811.
6/ Homogeneity and Misclbllity Test. See 4.6.1 for clarifying instructions.
?/ Included in ASTM.
8/ Not yet published by ASTM. To be Included in ASTM STP 315-E, when published \
(see 2.2).
5. PREPARATION FOR DELIVERY
5.1 Packaging, packing, and marking^ Unless otherwise specified in the con-
tract or purchase order (see 6.2), packaging, packing, and marking shall be In
accordance with MIL-STD-290.
«
6. NOTES
6.1 Intended use. The lubricating oils covered by this specification are
intended for the crankcase lubrication of reciprocating spark-Ignition and
compression-ignition engines used in all types of military tactical ground
equipment and for the crankcase lubrication of high-speed, high-output,
supercharged compression-Ignition engines used in all ground equipment. The
lubricants covp.red by this specification are intended for all conditions of
service, as defined by appropriate Lubrication Orders, when ambient temperatures
are above -20°F. (-29°C.).
6.2 Ordering data. Procurement documents should specify the following
information:
(a) Title, number, and date of this specification.
(b) Grade of oil required (see 1.2).
(c) Quantity of oil required.
(d) Type and size of containers required (see 5.1).
(e) Level of packaging and level of packing required (see 5.1).
6.3 Other requirements and tolerances for quality confornvmce testing. De-
finite numerical values are not specified for certain of the physical and
chemical properties listed in 3.4, and for which corresponding test methods are
given in section 4. Values of some properties vary from one commercial brand
of oil to another for the same gnde These values «irr influenced by the source
of tbe base stock, the identities and quantities of additives, etc. Definite
numerical values are not always functionally important except, for some pro-
perties, within specified mnxirru.-n and/oi minimum limits. It is not possible
(or nccesiiary)'' to assigr restrictive values in the specif it ition before the
testing of qualification samples. During qualification, test values will be
determined which are characteristic of a particular product and which can serve
135
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MGLL-L-2104C
thereafter to identify the product. Using the results of qualification testing,
the qualifying activity (see 6.4) can set values, including permissible tolerances,
for future quality lonformance testing.
6.4 Qj.iajjUixatj.oii. With respect to products requiring qualification, awards
will be made only for products which are at the time set for opening of bids,
qualified for inclusion in the applicable qualified products list whether or
not such products have actually been so listed by that date. The attention of
the suppliers is called to this requirement, and manufacturers are urged to
arrange to have the products that they propose to offer to the Federal Govern-
ment tested for qualification in order that they may be eligible to be awarded
contracts or orders for the products covered by this specification. The
activity responsible for the qualified products list is the U.S. Army Aberdeen
Research and Developcment Center, Coating and Chemical Laboratory, Aberdeen
Proving Ground, Maryland 21005, and Information pertaining to qualification
of products may be obtained from that activity.
6.5 Certain provisions of this specification are the subject of International
standardization agreement (NATO STANAG 1135). When amendment, revision or can-
cellation L£ this specification is proposed which would affect or violate the
international agreement concerned, the preparing activity will take appropriate
reconciliation action through international standardization channels, including
departmental standardization offices, if required.
Custodians:
Army - MR
Navy - SH
Air Force - 68
Review activities:
Army -ME, WC, AT
Navy - SA, SH, AS, YD
Air Force - 11, 68
DSA - PS
User activities:
Navy - MC
Preparing activity:
Army - MR
(Project No. 9150-0167)
•ft U. 8. 6OVERNMSNT PfllNTItta OFFIC6: »»7>-43J-«97 6501
136
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APPENDIX B
LETTER TO FTC BY R.G. STREETS,
ARMY MATERIEL COMMAND
137
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June 5, 1964
Mr. H. Paul Butz, Chief
Division of Trade Regulation Rules
Bureau of Industry Guidance
Federal Trade Commission
Washington 25, D. C. Reference: File 959
Dear Mr. Butz:
Reference is made to your proposed rule relating to the advertising
and labelling of previously used lubricating oil and to the revised text
of proposed trade regulation rule as submitted by the Association of
Petroleum Re-refiners.
In my opinion, the proposed rule 1s very desirable from the stand point
of consumer protection. With the Increasingly severe performance require-
ments being placed on engine crankcase lubricants, automatic transmission
fluids and conventional transmission and axle lubricants by today's auto-
mobiles and trucks, the use of an Inadequate or Improperly labelled product
can lead to costly damage varying from slow degradation to catastrophic
failure.
I feel that the requirement for a clearly visible and conspicuous
marking to indicate the presence of previously used lubricating oil 1s
of primary importance since it at least serves to make the customer aware
of what he is buying.
The provision in Part 3 of the proposed rule for the use of the term
138
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"re-refined" is more difficult to define since 1t Involves the question of
degree.
In general, the term "re-refined" 1s understood to mean that the pre-
viously used oil has been subjected to a complete refining process equal
to or exceeding that used to prepare high quality virgin base oils. In the
case of used oil this might Include settling, filtration, vacuum distillation,
sulfuric add treatment, and clay treatment. In some cases selected solvent
refining may be necessary to remove asphaltlc and resinous materials.
The selection of the processing details normally depends on the know-
ledge of the characteristics of the charge stock. In the case of used oil
collected at random from a variety of sources, these characteristics are
essentially unknown since the original base oil types can cover a wide range
and contaminants may include grease drippings, antifreeze, and extreme
pressure gear lubricants as well as all the physical and chemical contaminants
produced by previous use of the products.
Simple "reclaiming" or "reprocessing" which Involves only the removal
of insoluble physical contaminants or at best a mild treatment to reduce
chemical contaminants such as fuel fractions, water, combustion products,
and perhaps resinous oxidation products 1s completely inadequate to assure
that the base oil, even when re-treated with functional additives, will be
satisfactory for use with modern engines and transmissions.
After extensive tests some years ago with re-refined oils which had
been given very thorough re-refining as discussed above followed by re-
treating with balanced blends of recognized engine oil additives, the U.S.
Army found that the performance of these oils in actual engine tests was
139
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very Inferior to the minimum standards required for qualification under
the then current specification for engine oil.
Subsequent to this, and realizing that base stock characteristics would
be constantly changing with used oil dralnlngs, the Army prohibited any
consideration of the use of re-refined components 1n engine oils and gear
lubricants qualified under specifications MIL-L-2104A (Lubricating 011,
Internal Combustion Engine, Heavy-Duty), MIL-L-45199A (Lubricating 011,
Internal Combustion Engine, High Output Diesel)0 and MIL-L-2105B (Lubricating
011, Gear, Multipurpose).
The reasons for this basically relate to the fact that these are all
performance specifications requiring qualification prior to any procurement.
The qualification requirements Involve a number of expensive and, 1n some
cases, lengthy performance tests 1n actual test engines or gear sets.
Although the composition of the oil submitted for qualification 1s not other-
wise restricted, once the performance tests have been passed no significant
change 1s allowed 1n either the base stock or additive components without
requa!1f1cat1on.
From our years of experience with products of this type, 1t became
apparent that changes in base stock source or treatment even with virgin
base oils could greatly alter the performance of a product. Since re-
refined oils were of unknown origin, could contain organic contaminants
which would degrade performance and might have lost all natural Inhibition
due to excessive acid treatment (the result of original refining plus add
treatment during re-refining) 1t was obvious that the use of re-refined oils
in products having severe performance requirements was out of the question.
140
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In reviewing the proposed control specifications submitted by the
Association of Petroleum Re-refiners, 1t Is my opinion that these standards
represent essentially no quality control from the stand point of assuring
satisfactory performance 1n use.
For example, the 11st of color and flash standards against viscosities
would do nothing except to assure the removal of volatile fuel fractions.
This 1s desirable, of course, but does not assure satisfactory lubricant
performance. Color, per se, 1s no assurance of quality since good virgin
base stocks may range from very light to very dark, depending on crude
source and refining treatment. In the case of re-refined oils, the color
standards listed may allow masking of some contaminants, but on the other
hand, severe treatment to produce very light colored oils may Increase
the degree of over-refinement and thus Impair performance even further.
An example of this 1s water-white medicinal mineral oil which has lost
all the natural oxidation Inhibitors and 1s a very unsatisfactory lubricant
base stock.
The standard for viscosity Index 1s an acceptable number although low
viscosity Index virgin base stocks have and are being used to formulate some
very high-grade heavy-duty oils.
The neutralization number has some merit when applied to the base stock
alone since it may control the amount of undesirable adds present (both
organic and Inorganic). The number suggested by APR 1s too high however,
and I would suggest a maximum of 0.02.
The ash value (sulfated residue) will control the presence of Inorganic
141
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or metal-organic compounds resulting from previous use or the existence of
metal-containing additives originally placed 1n the oil. In order to establish
that the re~ref1n1ng process has been effective 1n removing such
contaminants, the ash determination must be made on the base oil before any
subsequent additions of oxidation Inhibitors, detergents, dlspersants, or
other metal-containing chemicals. This value should be no hlghtr than
0.005 percent by weight.
In addition, some control should be placed on the maximum content of
any single metallic element since the presence of even a few parts per
million of some metals such as copper may produce undesirable catalytic
effects 1n the finished oil. A maximum of 5 parts per million (by spectro-
graphic analysis) of any metallic element, phosphorus, chlorine, or
silicon 1s recommended.
All of the above controls would apply to the re-refined base stock
simply as a means of assuring that a thorough job of re-ref1n1ng had been
done with the Intent of removing essentially all of the contaminants
associated with previous use.
This, however, provides no assurance that tills re-refined base stock
will provide satisfactory performance when subsequently used to blend
engine oils, gear lubricants, or automatic transmission fluids.
In the case of both military and Industry standards for such materials,
it 1s recognized that the only accepted method for determining whether
performance will be satisfactory 1s through the use of full-scale performance
tests Involving equipment of the type 1n which the fluid will be used.
142
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To my knowledge, no re-refined products are being subjected to such
performance tests on a routine basis 1n order to verify the maintenance of
a performance standard. In the absence of such control, the purchaser of
such a product has no real guarantee of satisfactory performance regardless
of claims or API service classifications which may be printed on the
container.
For these reasons, the requirement for a clearly visible and conspicuous
marking on the front panel of the container to Indicate the presence of
previously used lubricating oil seems to be a minimum requirement to
protect the consumer.
Sincerely yours,
/s/ R.E. Streets
R. E. STREETS
Chief, Power Sources Section
Chemistry and Materials Branch
Research Division
R&D Directorate
U. S. Army Materiel Command
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