REPORT TO THE CONGRESS
WASTE OIL STUDY
Authorized by
Section 104(m), Public Law 92-500
April, 1974
Prepared by
U.S. Environmental Protection Agency
Washington. D.C. 20460
-------
REPORT TO CONGRESS
"WASTE OIL STUDY"
April, 1-974
Authorized by
Section 104(m), P.L. 92-500
Prepared by the
Environmental Protection Agency
Washington, D,C. 20460
iii
-------
PREFACE
This report is submitted to Congress in compliance with Section
104(m) of the Federal Water Pollution Control Act Amendments of 1972,
Public Law 92-500.
The report was prepared under the supervision of Mr. Kurt Jakobson,
Chief, Agriculture and Spills Branch. Major inputs were provided by
Dr. John Jaksch, Washington Environmental Research Center, Dr. Peter B.
Lederman, Director, Industrial Waste Treatment Laboratory, and
Dr. Thomas J. Padden, Agriculture and Spills Branch, Office of Research
and Development.
Appendices B, E, F, and G were prepared by the Environmental Law
Institute., Washington, D. C. under contract to the Environmental Protection
Agency. These appendices do not necessarily reflect views and policies
of the Environmental Protection Agency.
-------
SUMMARY
This report presents the results of studies undertaken to determine
the extent of the problem resulting from the disposal of waste oils and
the effect of various disposal techniques on the environment. The report
is submitted in fulfillment of Section 104 (m) (2) of the Water Pollution
Control Act Amendments of 1972.
In 1972 approximately 2.2 billion gallons of lubricating oil were
sold in the United States. Approximately 50% of this lube oil was
consumed in use, discarded with filter cartridges, lost through leakage
or in other ways resulting in the generation of an estimated 1.1 billion
gallons of waste lubricating oils for which environmentally acceptable
disposal was required. Approximately 600 million gallons of waste
automotive crankcase oil and 400 million gallons of aviation and industrial
lube oil made up the majority of the waste oils generated.
The demand for automotive lubricating oil has been leveling off
since 1965 because of increased intervals between oil changes. The
total demand for lubricating oils has increased at an average rate of
1.3% annually in the period from 1965 through 1972. This increase was
due to the increased demand for industrial lubricants.
Waste lubricating oils contain a myriad of contaminants depending
upon their usage. In general, they contain oxidation products, sediment,
water and metallic particles resulting from machinery wear. In addition
to these, waste automotive lubricants also contain organic and inorganic
chemicals used in oil additives and metals which were present in gasoline
and transferred to the crankcase during combustion (blow-by). Lead is
the principal metallic contaminant found in waste automotive oils, being
present in amounts which sometimes exceed 1% by weight. It is expected
that this lead concentration will decline as the use of non-leaded gasoline
is increased.
The collection of waste oils from industrial operations and automotive
service facilities is the weakest link in the overall waste oil recycling/
disposal scheme. It is estimated that there are between 1000 and 2000
waste oil collectors in the United States, most of whom are poorly equipped
and operate in urban areas only. In rural areas the small quantities of
waste oil generated per square mile cannot economically support waste
oil collection systems. Disposal methods currently utilized include re-
refining, use as a fuel for industrial and utility applications, use in
road oils, asphalts and as a dust palliative, disposal in sanitary land-
fills, and surreptitious dumping on land or in water.
The re-refining industry in the United States is a small industry
generally using old process technology and, in most cases, is very .
susceptible to economic fluctuations. Depending on local conditions,
some re-refiners are experiencing difficulties in obtaining feedstocks
vii
-------
for their operation due to the competition for this material from other
users. The most commonly used re-refining process, acid/clay treatment,
does not appear to be an attractive approach for expanding the re-refining
industry because of its high operating costs and because of the difficulty
in disposal of the residual waste products. Several other re-refining
processes are technologically and economically more attractive.
Of these, the distillation/hydrogen treating process is considered the
most promising waste oil re-refining process assuming that the distil-
lation bottoms can be economically utilized to recover the lead which
will be present. The process will also be the most environmentally
acceptable.
At the present time, it is estimated that 40% of the waste oil
collected is utilized as a fuel. It should be noted that if all the
waste oil generated annually were available for use as a fuel, this
would represent less than 1 percent of the total annual coal and
petroleum energy consumed in the United States.
The combustion of waste crankcase oil without removal of contaminants,
can cause adverse environmental effects. From the public health point of
view, lead is the most significant contaminant. The amount of lead that
can be introduced into the atmosphere from this source is estimated to
range from 2 to 5 percent of that discharged through automotive exhausts,
the present major source of atmospheric lead. This environmental impact
can be minimized by employing existing technology to remove the contaminants
prior to combustion or by the use of high efficiency air pollution control
equipment to remove the contaminants in the stack gas before they enter
the atmosphere. These restrictions will increase the cost of utilizing
waste oil as a fuel and its economic desirability will be governed by
fuel prices in any given location at any given time.
Results of the biological studies to date indicate a difference
in toxicity among species, among methods of Introducing the oil, and
between marine and freshwater organisms. However, many problems
require further Investigation to determine sublethal effects and
aquatic community structure changes due to waste oil.
Add sludge and spent clay generated during re-refining can be safely
disposed of in landfills if proper handling and disposal practices are
followed. Soils have been shown to provide a high degree of physical,
chemical and biological treatment for organic wastes. 01ly waste dis-
posal by land spreading has not been generally appreciated or exploited.
-------
TABLE OF CONTENTS
Page
Preface v
Summary vii
Table of Contents ix
List of Tables and Figures xiii
Sections
I Conclusions and Recommendations 1
II Introduction 4
III Generation of Waste Oil 5
IV Physical and Chemical Characteristics of Waste Oil 12
Waste Automotive Lubricants 12
Waste Industrial Lubricating Oils 18
V Methods of Collection and Disposal 22
Collection 22
Re-refining 24
Disposal by Land Application 33
Use as a Fuel 33
Other Disposal Methods 34
VI Re-refining Technology 35
Acid/Clay Treatment 35
Distillation Clay Treatment 37
Solvent Extraction and Clay Treatment 40
Distillation/Hydrogen Treatment 42
Other Re-refining Approaches 44
Re-refining Waste Products 44
Acid Sludge 44
Caustic Sludge 45
Spent Clay 45
Distillation Bottoms 46
Wastewater 46
Air Emissions 47
European Practices 47
Overall Assessment 48
ix
-------
VII Waste Oil Reuse as a Fuel 49
Magnesium 51
Calcium 51
Lead 51
Copper 52
Barium 52
Zinc 53
Phosphorous 53
Other Trace Elements 53
Lead Emissions from Uncontrolled Sources 53
Ground Level Lead Concentrations 58
Reduction of Waste Oil Fuel Combustion Impacts 68
VIII The Effects of Waste Crankcase Oil on Selected Marine
and Freshwater Organisms 74
Test Results 74
Conclusions 76
IX Economic and Legal Aspects of Waste Oil Policy 78
The Problem: An Overview 78
Environmental Damages Resulting from Waste Oil
Disposal 79
Waste Oil Collection 80
Waste Oil Re-refining and Recycling 86
Burning Waste Oil as a Fuel 100
Potential Marketability of Waste Oil as a Fuel 100
Impact Reduction Alternatives—Pretreatment 103
Impact Reduction Alternatives—Emission Control
Systems 103
Capital Investment and Operating Costs for Impact
Reduction Alternatives 103
Basis for Cost Estimates 105
Effect of Capacity on Economics of Impact Reduction
Alternatives 112
Treatment Versus Emission Control Devices 125
Selling Price of Treated Waste 011 128
Comparative Fuel Prices 131
Demand Factors Affecting Marketability 131
Supply Factors Affecting Marketability 135
X Federal Procurement of Products Made from Waste 011 138
Automotive Lubricating Oils 138
Other Lubricating Oils 138
Quality Assurance 139
Bureau of Mines Research 139
XI References 141
-------
XII Appendices
A. Land Spreading - A Conserving and Non Polluting
Method of Disposing of Oily Wastes 146
B. The European Community Experience on Waste Oils
Report on the 1968 Used 011 Statute of the 162
Federal Republic of Germany 170
*
C. The Effects of Waste Oil on Freshwater Aquatic
Life 213
D. Effects of Emulsified Waste Crankcase Oil on
Selected Marine Biota 268
E. Federal Tax Treatment of the Re-refining
Industry 287
F. Government Action Governing 011 Container
Labeling 301
G. Federal and State Jurisdiction Over Waste Oils 341
xi
-------
List of Tables & Figures
Tables Page
1. Lubricating Oil Sales 6
2. Trends in Domestic Lube Demand 7
3. Automotive Lube Demand Related to Registration
and Gasoline Consumption 8
4. Estimate of Factors for Converting Automotive
Sales to Waste Oil Quantities 10
5. Waste Oil Generation 11
6. Typical Gasoline Engine Lubricating
Oil Ingredients 13
7. Typical Waste Automotive Oil Composition 14
8. Waste Oil Physical and Chemical Analysis 15
9. Used Automotive Lubricating Oils - Selected
Properties 17
10. Oil-Based Metal Working Lubricants 19
11. Generation, Destination, and Disposal of
Waste Oils (1972) 25
12. Composition, Application and Function of
Lubricating Oil Additives 26
13. Survey of Selected Oil Re-refiners, Processes
and Capacity 28
14. Influence of Dilution of Waste Oil with Virgin
Fuels 50
15. Summary of Available Data on Quantities of
Lead Emitted iwth Flue Gas as a Percnetage
of Lead Entering with Waste Oil Fuel 55
16. Weight Percent of Trace Contaminants in
Particulate Emissions from the Combustion
of Waste Oil ' 56
17. Particle Size Distribution of Lead and Other
Major Contaminants in Emissions from Waste
Oil Combustion 56
18. Summary of Available Estimates and Measurements
of Ambient Lead Concentrations Resulting from
Waste 57
19. Assumed Physical and Operating Characteristics
of 560 Magawatt Power Plant Firing Waste Oil 60
20. Incinerator Input Data 64
21. Use of Particulate Collectors by Industry 72
22. Air Pollution Control Equipment Sales in the
United States 73
23. Waste Oil Collectors: Estimated Profit and
Losses per Activity 82
24. Crankcase Waste Oil Processes 89
25. Crankcase Waste Oil Processing Capital Investment 91
26. Crankcase Waste Oil Process Operating Costs 92
xiii
-------
List of Tables & Figures (contd)
Tables
27. Potential Profitability of Crankcase Waste
Oil Processes Unblended Bulk Sales 94
28. Potential Cost of Producing SE Grade, SAE '30
Oil for Different Markets 96
29. Potential Profitability of Selling Re-refined
SE Grade SAE 30 Uncontainerized Oil in Bulk
Markets 97
30. Potential Profitability of Selling Containerized
Re-refined SE Grade SAE 30 Oil to Jobbers,
Commercial, Industrial, and Retail Accounts 99
31. Cost of Impact Reduction Alternatives in the
Burning of Waste Oil 104
32. Assumptions Made on the Development of Capital
Investment Costs 106
33. Capital Cost Estimation of Treatment Facility:
Settling 108
34. Estimated Operating Cost of Treatment Facility:
Settling 109
35. Capital Cost Estimation of Treatment Facility:
Centrifugation 110
36. Estimated Operating Cost of Treatment Facility:
Centrifugation 111
37. Capital Cost Estimate of Treatment Facility:
Vacuum Distillation . 113
38. Estimated Operating Cost of Treatment Facility:
Vacuum Distillation 114
39. Capital Cost Estimate of Treatment Facility:
Solvent Extraction 115
40. Estimated Operating Cost of Treatment Facility:
Solvent Extraction 116
41. Estimated Capital Cost of Precipitators 117
42. Estimated Operating Cost of Precipitator 118
43. Capital Cost Estimate of Fabric Filtration 119
44. Estimated Operating Cost for Fabric Filtration 120
45. Capital Cost Estimate of High Energy Venturi
Scrubbers 121
46. Estimated Operating Costs of High Energy Venturi
Scrubbers ' 122
47. Summary Table of the Economics of Reduction
Alternatives 123
48. Affect of Capacity on Processing Cost 126
49. Effect of Profit on Market Price of Treated
Oil 129
50. Selling Price of Treated Waste Oil 130
xiv
-------
List of Tables & Figures (contd)
Tables • Page
51. Selling Price Comparisons of Virgin Fossil
Fuels and Waste Oil Fuels 132
52. Selling Price of Blended Waste Oil Products 133
Figures
1. Motor Oil Ratio Trend 9
2. Re-refining by an Acid Clay Process 36
3. Vacuum Distillation of Crankcase Waste Oil 38
4. Re-refining by a Propane Extraction Process 41
5. Hydrotreating 43
6. Isopleths of Average Ground-level Concentration
of Lead for September 1970 61
7. Isopleths of Average Ground-level Concentration
of Lead for December 1970 62
8. Isopleths of Average Ground-level Concentration
of Lead for Winter Season 65
9. Investment and Operating Cost of Pretreatment
as a Function of Treatment Facility Capacity 124
10. Investment and Operating Cost of Particulate
Collection Equipment as a Function of Control
Capacity 127
11. Comparison of Fuel Savings and Control Equipment
Annual Operating Cost 136
xv
-------
SECTION I
CONCLUSIONS AND RECOMMENDATIONS
Conclusions
1. Total waste oil generation is estimated to be about 1.1 billion
gallons annually in the United States. The major sources of waste
oil are automotive operations which produce about 600 million gallons,
and industrial and aviation operations which produce about 400 million
gallons; other sources, such as U.S. government purchases and industrial
process oils, account for the remaining 100 million gallons.
2. Presently, the best estimate of the ultimate fate of this 1.1 billion
gallons of waste oil is: 480 million gallons treated or untreated, used
as fuel; 90 million gallons re-refined to lube oil; 200 million gallons
used in road oil and asphalt; and the fate of 340 million gallons,
including 30 million gallons of re-refinery wastes, is unknown. Better
.estimates of the ultimate fate of waste oil are not possible because of
the lack of accountability across the splintered collection, re-refining
and disposal systems.
3. There are no technical impediments to physically recycling waste '
lubricating oil. The processes applicable in petroleum refining are
generally adequate, with modification, for processing waste oil; how-
ever, as a matter of practice virgin crude refineries do not recycle
waste oil because metallic contaminants present in the waste oil can
adversely effect some key catalytic refining processes.
4. At the present time, the re-refining industry appears viable and
a Federal subsidy is not required; however, vagaries of the existing
energy situation could hinder or aid its continued profitability.
Re-refining of waste oil is complicated by: the difficulty of
securing sufficient feedstock to operate existing plants at rated
capacity; labeling requirements which connotate that products made
from waste oil are inferior; increasingly more stringent environmental
controls that require expenditures for capital improvements; increasing
difficulty in disppsing of acid/clay sludge waste resulting from the
process that predominates in the industry; the lack of quality assurance
that would generate confidence in the products of re-refineries.
5. Waste crankcase oil may be used as fuel if highly efficient particulate
control systems are employed to reduce preventable lead exposure. The
combustion of waste crankcase oil is also permissible if a high-level
pretreatment is utilized to reduce the lead concentration in the oil to
a level which does not exceed the background lead concentration or where
resulting emissions are unlikely to result in increased human exposure.
-------
6. Indiscriminate disposal of waste oil is potentially detrimental to
the environment. A concentration of 1 mg/1 of oil in surface or ground
waters causes taste and odor problems in drinking water, Concentrations
of 50 to 100 mg/1 can impede waste treatment processes. Results of bio-
logical studies to date indicate a difference in toxicity among species,
among methods of introducing the oil, and between marine and fresh-
water organisms. Significant chronic effects were found at concen-
trations of 310 ul oil/liter of water and higher on the freshwater species
tested, Acute toxicity levels varied from 370 to 11,000 ul oil/liter
of water depending on the oil phase to which the freshwater fish were
exposed. A concentration of 1.0 ul oil/liter of water was found to be
toxic to certain marine forms. Many problems require further investigation
to determine differences 1n response among species, sublethal effects and
aquatic community structure changes due to waste oil.
7, Preliminary analysis appears to indicate that IRS Ruling 68-108 unduly
discriminates against the re-refining industry 1n non-highway lubricating
oil markets, since it permits rebate of excise taxes on virgin oil products
without permitting a rebate of taxes on reprocessed products,
8. At this time, the need for further regulatory action at the Federal
level is not clear despite the fractionated state of the collection, re-ref1n1ng
and disposal system, Presently, some States with more critical needs are
attempting to initiate programs to address specific problems. The progress
of such states should be monitored in order to utilize the experience
gained from such programs, Most importantly, the benefits and costs of
further regulatory programs needs to be examined. States are encouraged
to continue to develop such control programs where warranted and to include
where necessary the following elements:
a. approved waste oil disposal methods
b, licensing of collectors
c. approved waste oil disposal facilities
d. collection stations for receiving small quantities of waste oil
e. supervised record keeping by collectors and users of waste oil
f. re-ref1n1ng of waste oil 1n virgin crude refineries.
Finally, it appears appropriate to examine the need for further
regulatory action at a future date as experience 1s gained with State
programs and as more other information becomes available on environmental
and energy concerns.
- 2 -
-------
Recommendations
1. Present Federal Trade Commission regulations require all products
made from waste oil to be so labeled. For cases wherein a waste oil
product can meet required specifications, the labeling regulation
should be reexamined to eliminate the connotation that a product made
from waste oil is inferior. In such cases, in order to protect the
consumer, the label should give information as to what quality and
performance specifications the oil will meet regardless of origin.
Designations such as "made from used oil" should not be required.
2. IRS Ruling 68-108 should be reexamined to determine the feasibility
of allowing non-highway users of re-refined oil to obtain refunds of
taxes paid on virgin oil blended with re-refined lube. In the course
of such a reexamlnation consideration should be given to the administrative
feasibility and the effects on the lube oil market of such a reversal.
3 -
-------
SECTION II
INTRODUCTION
Approximately 2.2 billion gallons of new lubricating oils were sold
in the United States during 1972 (1). While figures vary widely on the
subject, it is estimated that 50% of these oils are consumed in their
various uses (2). The remaining 1.0 to 1.3 billion gallons of waste oil
are potentially available for recycling and reuse, this volume is expected
to grow at a rate of two percent per annum (3). The uncontrolled disposal
of waste oil in sufficient concentrations over space and time can cause
environmental damages. Waste oil probably poses the greatest threat to the
environment through potential ground water and stream contamination, and
by its heavy metals content (lead is the prime concern in waste crankcase
oils).
Congress recognized that the disposal of waste oil could be a problem.
Hence, in passing the 1972 Federal Water Pollution Control Act, (here-
after called the Act) Congress, in Section 104(m), mandated the Administrator
of the Environmental Protection Agency (EPA) to "...conduct a study of (A)
the generation of used engine, machine, cooling, and similar waste oil,
including quantities generated, the nature and quality of such oil, present
collecting methods and disposal practices, and alternate uses of such oil;
(B) the long-term, chronic biological effects of the disposal of such waste
oil; and (C) the potential market for such oils, including the economic
and legal factors relating to the sale of products made from such oils, the
level of subsidy, if any, needed to encourage the purchase by public and
private non-profit agencies of products from such oil, and the practicability
of Federal procurement, on a priority basis, of products made from such oil."
The results of EPA's study are to be embodied in a report to Congress.
It should be emphasized that not all oily wastes fall within the scope
of the definition provided within Section 104(m) of the Act. While the
section calls for a study of "used engine, machine, cooling, and similar
waste oil, it excludes (by specifically not including) animal and vegetable
oils and unused mineral oil wastes (the wastes from drilling, refining,
or transporting petroleum). The definition does include mineral oils and
mineral oil products which have been used in machines, axles, transmissions,
transformers, turbines, cable or circuit breaker insulation, and spindles.
It was decided to exclude from the analysis tanker, bilge and other oil
wastes from port facilities, since discharges from these sources are
specifically covered in another section of the Act.
An attempt is made in the report to balance the need for additional
energy sources required in the form of fuel with the need for preserving
our supply of lubricating oil stock. The ultimate optimum reuse of waste
oils must be determined on a case-by-case basis so that valuable resources
are preserved.
A preliminary report on this study was submitted to the Congress
on April 1973. This report fulfills the requirements of this section
of the Act for a final report.
- 4 -
-------
SECTION III
GENERATION OF WASTE OIL
Waste oils can be grouped into three broad categories: (1) automotive,
(2) industrial and aviation, and (3) other waste oils. The automotive
waste oils consist primarily of crankcase drainage (greater than 90%),
waste transmission fluids, gear lubricants, hydraulic oils from automotive
and construction equipment and minor amounts of kerosene and other sol-
vents used in servicing equipment. Industrial and aviation waste oils
consist of many types of oils and oil emulsions such as those used in
metal working, lubrication of industrial equipment, hydraulic and cir-
culating systems, railroad diesel engines, turbine lubrication, and those
generated in aircraft engine overhaul facilities. Included in the general
category of other waste oils are oils which have been used in transformers,
heat transfer and refrigeration equipment, and in the myriad of equipment
not included in the first two categories.
The amount of waste oil which is generated is a function of demand
or sales. In 1972 the demand for lubricants was estimated by the Bureau
of Mines at 2.2 billion gallons. Table 1 provides a categorized estimate
of sales. Table 2 indicates the trends in domestic lube oil demand.
Approximately one half of the total demand is automotive. It is interest-
ing to note that automotive demand has been leveling off since 1965 and has
not experienced an increase commensurate with gasoline sales because of
the automotive industry recommendation of increased interval between oil
changes. In the late 1950's oil was drained about every 2000 miles; oil
in the late 1960's was drained between 4000 and 6000 miles. This is
illustrated in Table 3, and Figure 1. Aviation requirements have fallen
off drastically since 1958. This reflects the phasing out of piston
engines and the phasing in of jet engines which use synthetic lubricants.
Little quantitative information is available as to the ultimate disposal
of the 2.2 billion gallons of lubricating oil that are sold each year.
However, reasonable estimates can be arrived at considering major points
of generation and establishing waste oil generating factors that can be
applied to sales figures. Table 4 indicates a rationale for converting
automotive sales information to waste oil generation estimates. Using
these factors for the automotive category and educated guess factors for
the other categories, the total waste oil generated is estimated at 1.115
billion gallons. Table 5 provides the estimated generation data.
- 5 -
-------
TABLE 1
LUBRICATING .OIL SALES (4)
(millions of gallons)
Automotive Lubricating Oils
Commercial engine oils fleet sales 200
Commercial engine oils retail sales 90
Factory fills (automotive & farm equipment 60
Private automobiles 600
Auto fleets, other 136
Total automotive lubricating oils 1086
Industrial and Aviation Lubricating Oils
Aviation lubricating oils 8
Hydraulic and circulating system oils 325
Metal working oils 150
Railroad engine oils 60
Gas engine oils 62
Other 129
Total industrial and aviation lubricating oils 734
Other Lubricating Oils
Process oils 310
Electrical oils 57
Refrigeration oils 10.
Total other lubricating oils 377
Lubricating Oils Purchased by U.S. Government 37_
GRAND TOTAL LUBRICATING OIL SALES 2234
- 6 -
-------
Year
Total
TABLE 2
TRENDS IN DOMESTIC LUBE DEMAND (5)
Oils (Add 000 gal.)
Automotive
Avi ati on
Industrials
Lubri cati ng
Other
1972
1971
1969
1967
1965
1962
1960
1958
1956
2,234,000
2,193,755
2,184,031
2,058,953
2,028,963
1,766,094
1,655,954
1,555,234
1,704,112
-
1 ,071 ,065
1 ,050,935
1 ,031 ,784
1,015,809
945,493
924,645
899,562
984,009
-
8,434
9,894
13,064
15,363
22,157
25,575
27,327
22,189
726,000
781 ,206
699,120
659,966
510,823
478,233
415,206
496,385
-
388,256
341,996
314,985
337,825
287,621
227,501
213,139
201,528
Source: Bureau of Census, Current Industrial Reports, Sales of Lubricating Oils and Greases
-------
TABLE 3
AUTOMOTIVE LUBE DEMAND RELATED TO REGISTRATIONS
AND GASOLINE CONSUMPTION (5)
Registrations
Demand Trend
Year
1971
1969
1967
1965
1962
1960
Total
(000)
112,909
105,097
96,945
90,370
79,023
73,901
%Change
7.43
8.40
7.77
14.35
6.93
Gasoline
106 gals.
92,946
85,764
77,406
72,240
66,570
63,504
%
Change
8.37
10.79
7.15
8.51
4.82
' Lubes
106 qals.
1 ,071
1,051
1,032
1,016
945
925
%
Change
1.99
1.84
1.57
7.51
2.16
- 8 -
-------
1.00
o 0.20
LU
O
oo
-------
TABLE 4
ESTIMATE OF FACTORS FOR CONVERTING AUTOMOTIVE SALES
TO WASTE OIL QUANTITIES (6)
Service Stations
70% of oil sold is used for changes.
Oil drained is 90% of filled capacity.
70% x 90% = 63% of Oil sold - waste oil generated.
Garages and Auto Supply Stores
Assume average is same as service stations (63%).
New Car Dealers
100% of oil sold is used for changes.
Oil drained is 90% of filled capacity.
100% x 90% = 90% of oil sold = waste oil generated.
Retail Sales for Commercial Engines
Assume same as service stations (63%).
Automotive Fleet and Other Lube Oil Uses
Assume 50%, allowing for two-cycle engines and internal use,
e.g. fuel, by commercial and governmental fleets.
Factory Fills, Automotive and Farm
Assume 90% recovery as in automotive service centers.
Oil Bought at Discount Stores
Assume same as service stations (63%).
Assume 35% of waste oil generated finds its way to service
stations.
63% x 35% = 22% of oil sold = waste oil generated at service
stations.
- 10 -
-------
TABLE 5
WASTE OIL GENERATION (6)
(millions of gallons)
Sales W.O. Factor W.O.
Automotive Lube Oils
Service Stations 270 .63
Garages, auto supply stores 60 .63
New car dealers 102 .90
Retail sales for commercial
engines 90 .63
Auto fleet & other lube oil uses 136 .50
Factory fills (auto & farm equip.) 60 .90
Discount stores 168 .22
Commercial engine fleets 200 .50
T08T
Industrial and Aviation Lube Oils
Hydraulic & circulating system
oils 325 .42
Metal working oils 150 .42
Railroad engine oils 60 .53
Gas engine oils 62 .90
Aviation & other 137 .50
~73T
Other Industrial Oils
Process oils 310 .10
Electrical oils 57 .90
Refrigeration oils TO .50
Lube Oils Purchased by U.S. 37 .50 18
GRAND TOTALS 2234 1115
* Other national estimates or extrapolations of estimates from regional
data range from 400 to 730.
- 11 -
-------
SECTION IV
PHYSICAL AND CHEMICAL CHARACTERISTICS OF WASTE OILS
WASTE AUTOMOTIVE LUBRICANTS
Included under waste automotive lubricants are drainage of crankcase
oils, transmission fluid, differential gear lubricants, hydraulic oils
from automotive and construction equipment and small quantities of solvents
frequently used in servicing automotive equipment. Automotive oils con-
tain additives to improve their properties. These are synthetic organic
chemicals and contain sulfur, nitrogen, oxygen and metals. Typical high
grade automotive lubricating oil formulations may contain as much as
20 percent proprietary, or additive compounds. A typical blend is shown
in Table 6. The organic portion of these additives may be susceptible to
losses, combustion and reactions such as those that occur with the lube
oil; however, the inorganics concentrate in the crankcase as oil losses
occur and make up oil is added.
The contaminants in the waste automotive oil can be classified as
volatile products, materials soluble in oil, and materials insoluble
in oil. The volatile components generally are water and fuel. The soluble
materials include many of the additives originally placed in the oil
such as viscosity index improvers and detergents. The insoluble materials
include submicron size carbon particles and inorganic materials such as
atmospheric dust, metal particles, metal oxides and lead oxides originating
during fuel combustion (7). A typical analysis of waste oil is shown in
Table 7. In addition to the metals noted here, there are a large number
of other trace metals present in used lubricating oils including aluminum,
copper, silicon, tin, sodium, and magnesium.
The Petroleum Analytical Research Corporation (9) in 1973 obtained
and analyzed automotive waste oil samples from 13 cities selected from
five geographical zones, namely: Pacific Coast, Rocky Mountains, Plains
States, East Coast and Midwest Rural. From each city the samples included
three from high volume service stations, one each from a truck (diesel)
fleet, a taxi fleet and an off-the-road fleet. For each city a composite
sample was made and analyzed. In addition one sample was obtained from
waste oil collection services in each of seven cities located in the five
zones. Table 8 summarizes the waste oil characteristics of the composited
samples and the samples from the collection services. It is evident that
appreciable amounts of lead, barium, calcium, and zinc are found in most
used motor oils. The exact amount reported on a given sample depends to
some extent on the analytical method used. There will be differences
between values determined by emission spectroscopy and atomic absorption.
Individual samples vary widely in metal content. Lead concentrations
may vary by an order of magnitude. This has important implications for
waste oil processing.
- 12 -
-------
TABLE 6. TYPICAL GASOLINE ENGINE
LUBRICATING OIL INGREDIENTS (6)
INGREDIENT PERCENT
1. Base 011 86
(Solvent 150 Neutral)
2. Detergent Inhibitor 1
(ZDDP-zinc dialkvl
dithlophosphates)
3. Detergent 4
(barium and calcium
sulfonates)
4. Multi-functional 4
Additive (dlspersant,
pour-depressant, VI
improver-polymethyl-
methacrylates)
5. Viscosity Index Improver 5
(polylsobutylene)
100
13
-------
TABLE 7
TYPICAL WASTE AUTOMOTIVE OIL COMPOSITION (8)
Variable
Gravity, °API
Viscosity Q 100 °F
Viscotity @ 210 °F
Flash Point
Water, (By Distillation)
BS & W
Sulfur
Ash, Sulfated
Lead
Calcium
Zinc
Phosphorous
Barium
Iron
Vanadium
Value
24.6
53.3 Centistokes
9.18 Centistokes
215 °F (C.O.C. Flash)
4.4 Volume %.
0.6 Volume 85.
0.34 Weight %
1.81 Weight %
1.11 Weight %
0.17 Weight %
0.08 Weight %
0.09 Weight %
568 ppm*
356 ppm*
5 ppm*
ppm = parts per million
- 14 -
-------
TABLE 8
WASTE OIL PHYSICAL AND CHEMICAL ANALYSIS (9)
Composites*
Collection Service**
Test :
Water Content i.Freej
Water Content -Distillation)
Flash Point
Sul fa ted Residue
Lead Content
Barium Content
Calcium Content
Zinc Content
Phosphorous Content
ASTM Distillation to 450° F.
Total Chlorine Content
Total Bromine Content
Sulfer Content
Copper Content
Iron Content
Magnesium Content
Sodium Content
Aluminum Content
Units Range
Vol. %
Vol. % 1.2
6 F. 195
ppm
ppm
ppm
ppm
ppm
wt
wt
wt
wt
wt,
§pm (wt
15300
5066
12
784
688
490
ol. % 6
ppm
ppm
ppm
ppm
,wt
wt
.wt
wt
2900
.1
2898
15
ppm (wt 24
ppm
ppm
ppm
wt
wt
wt
86
27
43
0
- 16
- 390
- 34100
- 11969
-285
- 2243
- 1173
- 1166
- 22
- 4700
- 27
- 4788
- 38
- 434
- '165
- 368
- 27
Avg
0
5.0
304
21340
8204
87
1228
894
917
11
3671
6
3833
26
220
252
148
11
Range
0-2
2-24
205-360
5200-17400
1429-8745
7-301
182-1116
242-983
388-1075
1790-6573
Avg
.2
8.9
287
12000
4461
70
755
683
743
3246
* Include 13 composites, one from each of 13 cities: Fort Lauderdale, Fla.; Decatur, Ga.;
Pelham, N.Y.; Ballwin, Mo.; Columbia, Mo.; Los Angeles, Calif.; Sacramento, Calif.;
Seattle, Wash.; Houston, Tx.; Minneapolis, Minn.; Salt Lake City, Utah;
Phoenix, Ariz.; Cheyenne, Wy.
Each composite was made from 6 samples including 3 from service stations, one from a taxi
fleet, one from an off the road fleet, and one from a truck (diesel) fleet.
** Include 7 samples, one each from collection services in Decatur, Pelham, Ballwin,
Los Angeles, Sacramento, Houston and Minneapolis.
-------
Additional properties typical of waste oil are shown in Table 9
illustrating the wide variations that may occur in the composition of
waste automotive lubricating oils. These values directly affect the
fraction of re-refined oil that can be obtained. They are important
in assessing the degree of contamination of the used lubricant and in
determining methods of processing to convert used oils into useful
products. Used automotive lubrication oils may contain appreciable
amounts of gasoline introduced by means of blow-by. They also may
contain relatively large amounts of sediment and water, and large amounts
of ash. Much of the ash is due to additives originally blended with the
oil. However, a large fraction of the ash originates from the lead in
the fuel and enters the oil by means of blow-by. These materials
generally impair the use of spent lubricant either for further use as
a lubricant or for other applications until they are removed. Although
most motor oils compounded for modern internal combustion engines contain
additives of organo-metallic nature, a large proportion of metals are
introduced during use. Typically, the metals introduced by means of wear
or combustion and corrosion are aluminum, copper, iron, lead, silicon and
tin. Sodium, barium, calcium, zinc and magnesium frequently are added
as compounds by the oil manufacturer to impart specific properties to
the oil. As will be discussed in greater detail in other sections of
this report, these metallic residues affect the ultimate treatment, use
and disposition of waste crankcase oils.
It is interesting to note that the impurities found in used automotive
lubricants are similar the world over. For example, Schilling reports
French waste oils (11) to have a viscosity of 37 to 45 centistokes, bottom
water and sediment of 2 to 8 percent, a water content ranging from 1 to 9
percent, and a gasoline dilution of up to 10 percent. Additional charac-
teristics of used automotive lubricant oils have also been reported (12, 13).
It is apparent that wide variations in composition may occur thus affecting
the value of the waste oil for subsequent applications and affecting the
ability to reprocess these materials.
Two major factors can be expected to change the future composition
of waste automotive engine lubricants. First, the Clean Air Act Amendments
of 1970 mandated that the emissions of specified pollutants from automobiles
be sharply reduced by the 1975-76 period. In order to meet the prescribed
standards, automobile manufacturers will generally use catalytic converters.
Since the presence of emission products of lead and phosphorous additives
in the exhaust gases will significantly impair the effectiveness of such
systems, EPA determined that it was necessary to promulgate a regulation
(14) providing for the general availability of lead- and phosphorous-free
gasoline. This regulation becomes effective on July 1, 1974, in order
that lead- and phosphorous-free gasoline will be available when the 1975
model automobiles are introduced. Lead-free and phosphorous-free are
defined as a maximum of 0.05 grams of lead per gallon and 0.005 grams of
phosphorous per gallon. This compares with typical current values of 2.0
to 2.2 grams of lead per gallon and 0.01 to 0.02 grams of phosphorous per
gallon.
- 16 -
-------
TABLE 9
USED AUTOMOTIVE LUBRICATING OILS
SELECTED PROPERTIES (10)
Property Average Range
Specific Gravity 0.917 0.896 - 0.965
Viscosity @ 100° F SUS 436.000 262 - 753
Carbon Res. Conradson 6.5 3.8-12.6
Ash, % 2.49 1.57 - 3.78
Bomb Sulfur, WT. % 0.44 0.26 - 0.52
Neutralization No. 6.67 4.00 -14.26
Benzene Insolubles, % 2.0 1.17 - 3.33
BS&W, % 6.3 3.2 - 9.3
- 17 -
-------
WASTE INDUSTRIAL LUBRICATING OILS
Waste metalworking lubricants originate from the manufacture of
various machinery articles. These include oil-based fluids used without
water, and emulsified aqueous fluids consisting of physical mixtures
of oil and water plus certain additives. Metalworking lubricants may
be classified (18) into two broad classifications. These are shown in
Table 10. Under use, these coolants and lubricants are subject to
deterioration and degradation caused by bacteria, heat, metal particles,
oxidation, introduction of contaminants from water used to make the
lubricant emulsions, and the introduction of tramp oil and grease.
In many cases, the metalworking fluids are recirculated, settled, fil-
tered and subjected to other forms of purification enabling their reuse
in the plant; nevertheless, large quantities of these fluids must be
disposed of. Both primary metal industries performing rolling and
shaping of ferrous and nonferrous metals, and hardgood manufacturers
such as automotive and appliance manufacturers, generate significant
quantities of waste oils. These oils are heavily contaminated with
oxidized lubricant materials, sediment, and finely divided hard-to-
filter particles. In general, used metalworking lubricants must be
handled separately from other waste oils primarily because of their
composition.
The physical and chemical characteristics of a variety of other
industrial waste oils depend on the specific application and composition
of the original lubricant or oil. Typically, these wastes consist of
spent turbine oil, spent transformer oil, mixtures of aviation jet fuel
and lubricants, gear box oils from industrial rotary machinery, heat
transfer fluids, and railroad lubricants.
Turbine oils have a long life and usually are Inhibited to prevent
oxidation, rusting and foaming. Although most turbine systems have
on-Hne purification equipment of some type, Impurities tend to build
up necessitating flushing and changing of these lubricants. The oil
volume 1n the turbine system can range from 4,000 gallons for a 300
megawatt generator up to 18,000 gallons for a 1,000 megawatt generator
(19). Thus, accidental contamination of a turbine oil system can result
1n a large amount of waste oil suddenly being made available. Usually the
viscosity of turbine oils range from 150 to 400 SSU at 100°F, although
manufacturers do produce special products with viscosities around 900
SSU at 100°F. A typical turbine oil has a viscosity of 220 at 100°F,
a viscosity Index of 110, a flash point of 440°F, a pour point of 15°F
and a neutralization number of 0.1, plus additives to control oxidation
and foaming (20).
Transformer insulating oils must be maintained at a degree of purity
necessary to maintain their Insulating properties. Three measures of the
performance of transformer oils currently are in wide use. These Include
dielectric tests, neutralization number, and interfadal tension.
- 18 -
-------
TABLE 10
OIL-BASED METAL WORKING LUBRICANTS (18)
CLASS I. OILS AND OIL BASE FLUIDS
A. Mineral Oils - Uncompounded
B. Fatty Oils
1. Uncompounded
2. Fatty Oils containing Chlorinated Compounds
3. Fatty Oils containing Sulfurized Compounds
4. Fatty Oils made by combining B-2 and B-3
C. Mineral Oils - Compounded
1. Mineral Oil/Fatty Oil Blends
2. Sulfurized and/or Chlorinated Mineral Oil
3. Mineral Oils containing Sulfurized Fatty Compounds
and/or Sulfurized Non-Fatty Compounds
4. Mineral Oils containing Chlorinated Fatty Compounds
and/or Chlorinated Non-Fatty Comoounds
5. Mineral Oils containing Sulfo-Chlorinated Fats or
Sulfo-Chlorinated Non-Fatty Compounds
6. Mineral Oils made by combining C-3 and C-4
7. Mineral Oils and/or Fatty Oils containing Nitrogen or
Phosphorus Compounds or Solid Lubricants, etc. in
addition to Compounds from the groups employed in
C-l through C-6
CLASS II. AQUEOUS EMULSIONS AND DISPERSIONS
A. Oil in Water Emulsions (Soluble Oils)
1. Mineral Oil - Emulsions of Class I-A
2. Mineral Oil/Fatty Oil - Emulsions of Class I-B(l) or
I-C(l)
3. Heavy Duty or Extreme Pressure - Emulsions of
Class I-C(2) through I-C(7)
B. Water in Oil Emulsions
1. Mineral Oil - Emulsions of Class I-A
2. Mineral Oil/Fatty Oil - Emulsions of Class I-B(l)
I-C(l)
3. Heavy Duty or Extreme Pressure - Emulsions of
Class I-C(2) through I-C(7)
C. Colloidal Emulsions •
1. Regular - Emulsions of Clss I-A
2, Fatty - Emulsions of Class I-B(l) and I-C(l)
3. Heavy Duty or Extreme Pressure - Emulsions of
Class I-C(2) through I-C(7)
D. Dispersions
1. Physical Dispersions of Liquid (Class I)
Materials
- 19 -
-------
Dielectric tests (expressed in kilovolts) reveal the moisture content
of the oil. The neutralization number (normally expressed as milligrams
of potassium hydroxide per gram of oil sample) reveals the acid content
and thus the degree of deterioration of the transformer oil. The inter-
facial tension (normally expressed as dynes per square centimeter)
reveals the amount of sludge in the oil. New oil normally has an inter-
facial tension of 45 dynes per square centimeter and neutralization
number of less than 0.1 milligrams of KOH per gram. The dielectric
strength normally is greater than 25 Kilovolts (21). The interfacial
tension normally is measured between the oil sample and a layer of
distilled water. As the oils are subjected to the stresses, both
thermal and electrical within the transformer, they deteriorate form-
ing various acidic materials and accumulating moisture. Although these
oils can be reclaimed, frequently their condition becomes poor enough to
warrant disposal and replacement. Normally when the interfacial tension
decreases to as low as 16 dynes per square centimeter, corresponding to a
neutralization number of about 0.8, a sludging condition has developed in
the transformer and the oil must be reprocessed or disposed of. Some of
the physical property control methods used for transformer oils appear
suitable for other industrial oils as well.
A small amount of fireproof transformer oils such as commercial
mixtures of trichlorobenzene and polychlorinated biphenyls enter into
the waste category each year. However, because of the persistent nature
and non-biodegradability of these materials, they normally are disposed
of by controlled incineration in approved facilities.
Waste gear oils usually are mixed with other plant oily wastes for
ultimate disposal. These gear oils have SAE numbers ranging from 80
up to 250. Frequently they contain sulfur-bearing additives, anti-
oxidants, and other additives. After use, these lubricants become con-
taminated with dirt, wear metal, water, and products of oxidation. Since
they have properties similar to automotive crankcase lubricants, they
may be included with them for re-refining or other means of disposal.
In addition, EPA has promulgated regulations (15) requiring a
general reduction in the amount of lead additives used in gasoline.
These regulations serve to protect the health of the general public
by reducing the amount of lead introduced to the environment. These
regulations become effective on January 1, 1975. To minimize economic
dislocation, the regulations call for the phased reduction of the lead
additives in relation to total amount of gasoline produced by a company.
— —...__. ^ (
The promulgated schedule restricts the use of lead in
total gasoline pool according to the following schedule:
Allowable Lead in
Year Total Pool (gr/gal)
T975" 1.7
1976 1.4
1977 1.0
1978 0.8
1979 0.5
a refinery's
- 20 -
-------
This schedule is designed to accomplish a 60 to 65 percent decrease in
lead usage from base 1971 by supplementing the expected increasing
use beginning in late 1974 of lead-free gasoline by new automobiles with
catalytic emission control systems.
It is expected that the decrease in the average amount of lead in
waste oil will parallel the schedule given above with adjustments for
greater numbers of cars on the road each year. However, it should be
remembered that two types of waste oil will be generated; (1) oil from
cars that used lead-free gasoline, and (2) oil from cars that used
leaded gasoline in which the lead content is gradually phased-down.
Were it possible to segregate these two types of oil at the oil change
level, a potentially useful supply of unleaded waste oil could be made
readily available. EPA's latest estimates indicate the following portion
of the gasoline market will be unleaded in the years to come:
Year Percent of Pool Lead-free
1975 15
1976 30
1977 44
1978 53
1979 63
1980 72
The percent of the waste oil pool which would be relatively lead-free
should generally parallel the percentage of lead-free gasoline sold.
All recent information indicate few if any other effects on waste
oil from removal of lead from gasoline. Although some minor changes
in gasoline formulation will occur in order to compensate for the removal
of lead additives, no significant changes in the composition of the
waste oil are expected other than the reduction in lead.
The removal of lead from gasoline will have no effect on fuel economy;
however, fuel economies associated with the catalytic converter are
being shown to average 8 percent higher than 1973/1974 model cars, on a
sales weighted basis. Furthermore, the recent energy shortage will
likely lead the motorist to seek more fuel economy, e.g., smaller cars,
and will also lead car manufacturers to attempt to improve fuel economies
to the greatest extent possible. Thus, we might expect that the amount
of gasoline consumed per unit of motor oil will tend to decrease in the
future. This will further decrease the amount of lead in waste oil.
The use of unleaded and low lead fuels has been slight until now,
and the changes in waste oil composition can not be predicted exactly.
However, the removal of lead is a major problem 1n re-refining; therefore,
the decrease in lead concentration may make re-refining more technologically
and economically feasible. The decrease will also affect the use of this
waste oil as a fuel.
- 21 -
-------
SECTION V
METHODS OF COLLECTION AND DISPOSAL
COLLECTION
Collection is probably the weakest link in the entire waste oil
recycling or reuse chain. At the present time it is estimated that
there are between 1000 and 2000 collectors in the United States, most
of which are concentrated in urban areas. Some are one truck operations
and few have more than five trucks.
Some collectors are only in the collection business and derive their
revenues from charging both the parties that they are collecting from
and the parties that are recipients of the waste oil. In the past, when
collectors have not been able to sell waste oil, they have disposed of
it in landfills or in other ways that may or may not have been environ-
mentally acceptable.
Another portion of the collection industry blends the waste oil
with fuel oil (with or without any processing) and sells the resulting
mixture as a fuel. Some of these operators are significant factors
in the local industrial fuel market and will acquire waste oil collected
by independents as well as that collected by their own trucks.
The last major segment of the industry is composed of those pro-
cessors and re-refiners who operate their own collection fleets. Most
of these collectors will fall into the category of reprocessors who
dehydrate the oil and then use it in asphalt mixes or as road oil.
Only a few of the re-refiners operate their own collection trucks.
None of the major, or even the smaller, oil companies collect
waste oil. They do, however, encourage their dealerships, whether
franchised or owned, to dispose of their oil to acceptable collectors.
This is often written directly into the franchise contract.
Facilities at modern gasoline stations for collection of oil
normally include a 500 to 1,000 gallon waste oil tank. Oil, solvents,
grease drippings and related products often find their way into these
tanks. The tanks are then periodically emptied by an independent
collector. The gas station owner, or operator, does not concern him-
self with the ultimate disposal of the waste oil. Location, time of
year, market conditions and oil quality determine whether oil will be
dumped or sold for some type of reuse. Under current and forseeable
market conditions essentially no oil is being dumped by collectors.
- 22 -
-------
Collection is normally carried out by tank wagons with capacities
of between 500 and 2,000 gallons. Until recently, hauls of over 50-100 miles
were usually uneconomical, accounting for the concentration of collectors
in the urban areas. In rural areas these tank trucks can not operate
economically and there is no viable collection system. In 1972 collection
costs varied between Itf and 4# per gallon. Presently the economics of
waste oil collection is in a state of flux due to the shortage in fuel
oil.
Based on a model study carried out by the State of Maryland (22),
it is anticipated that oil can be collected for between It and 3# per
gallon. A system of intermediate storage plants and 2,800 gallon tank
trucks, for local collection, are proposed. These regional collection
systems would then feed into a central reprocessing, or disposal facility
utilizing 6,000 gallon over-the-road tank trucks to bring the oil to
the central facility. The system would require approximately 20 trucks
and cost 3tf per gallon to operate. The initial investment would be
approximately $300,000 for the State of Maryland, assuming the utiliza-
tion of many existing storage tanks. A computer program has been developed
to design and optimize such a system for the State of Maryland and this
could be applied to other regions of the country. It should be noted
that the system, as envisioned, will cover all areas of Maryland, urban,
suburban, and rural.
If the collection problem can be solved in an economical manner,
then it will be possible to dispose of the oil in an acceptable manner.
The solution of the collection problem will depend on establishing
collection systems throughout the country, enforcing collection,
and regulating the collection process through licensing and accountability
records. Under the present economic climate of high oil prices, disposal
by collectors contrary to environmentally acceptable means is unlikely,
but in times of plentiful oil, this may not be the case and adequate
accountability is imperative.
No system has been developed to handle collection from the individual
who purchases oil from a retail outlet and changes the oil in his
automobile. The retail stores that sell oil to the home user have no
provisions for collecting his waste oil; however, some communities are
attempting to set up oil receiving facilities where the do-it-yourselfer
may bring his oil. The do-it-yourselfer generally disposes of his oil
with his trash, or by dumping it on his premises, or on a vacant lot,
and in some cases by dumping it into a sewer. Ultimately some of this
oil ends up in a landfill or in a watercourse. \ Because of the high
degree of geographical dispersion of the do-it-yourselfers, it will
probably not be possible to collect a significant fraction of this
waste oil.
- 23 -
-------
Collection of oil from individuals presents a more difficult problem.
Local regulations requiring returnable containers would be required in
those areas experiencing a problem to encourage the do-it-yourselfer to
return his oil to a collection point affiliated with a suitable disposal
facility. Table 11 provides an estimate of the quantities produced
from various sources and how these materials were disposed of.
RE-REFINING
Petroleum re-refining is a small industry generally using old process
technology and antiquated equipment. In the past re-refiners were
considered marginal operators. The number of re-refiners as well as
re-refining capacity has decreased over the years. In the early 1960s
some 150 re-refiners produced an estimated 300 million gallons of re-refined
products. In 1972 less than 40 companies produced an estimated 100 million
gallons. The reasons for the reduction of this industry are both economic
and technical.
Oils in recent years have become more complex because of the additives
which are used to improve load carrying ability, as antioxidants,
antifoam additives, corrosion inhibitors, detergents, dispersants, pour
point depressants, viscosity index improvers, and color improvers.
Table 12 illustrates the complexity of these additives. Extended drain
periods have concentrated the additives, and increased the amount of
impurities accumulated in the oil through combustion blow-by, engine
wear and tear, and organic degradation. Costs associated with collecting
wastes oils have increased, and certain tax advantages have been eliminated.
Also, because of increased environmental awareness, the disposal of re-
refining wastes have become more difficult and more costly. All of the
foregoing together with inefficient plants, operating at less than design
capacity, have generally eroded whatever price advantages re-refined oil
had over virgin lubricants and have resulted in a drying up of the
market.
A sample of 35 re-refiners indicates that the average processor has
a 28,000 gal/day capacity and operates at 50 percent of that capacity.
Capacities vary between 2000 and 90,000 gal/day. Reported plant sizes
and limitations are summarized in Table 13.
Most of the waste oil presently being reprocessed is sold as motor or
industrial lubes. The motor oil is usually sold through discount or
food chains while industrial lubes are sold in bulk. According to
preliminary studies conducted ty the Bureau of Mines, this oil if not
compounded (no additives added) lacks lubricating power (13).
The recent energy shortage has mitigated the economic uncertainty
which the waste oil re-refining industry faces. As of December 1973,
re-refiners using the acid-clay process were receiving between 9.6$ and
53.5% return on investment. This compares to less than a "\% invest-
ment in July 1973. The industry today appears to be on the threshold
of increasing prosperity.
- 24 -
-------
,
TABLE 11
GENERATION, DESTINATION, AND DISPOSAL OF WASTE OILS (1972)
(millions of gallons)
Category
Automotive
Industrial and Aviation
Other Industrial
U. S. Government
TOTAL
Reprocessed oils
Re-refinery Waste
ULTIMATE DISPOSAL
Generated
Waste Oil
616
394
87
18
1115
To
Reprocessors
202
130
28
4
364
-364
~0~-
To
Re-refiners
105
16
3
3
127
-41
—86-
Road Oils
Asphalts
142
" 25
6
4
177
36
~2T3~
Fuel
19
118
25
4
159
310
10
~479~
Other
148
112
25
3
288
18
31
-337-
-------
TABLE 12
COMPOSITION, APPLICATION AND FUNCTION OF
Name of Additive
Corrosion Inhibitor
Rust Inhibitor
ro
Antiodorant
Antiseptic
Antioxidant
Antifoam
Detergent
Dispersant
Composition
Zn and Ba dithiophosphates,
dithiocarbamates, metal
sulfonates and sulfurized
terpenes
Sulfonates, alkylami nes,
amine phosphates, alkenyl-
succinic acids, fatty acids
and acid phosphate esters
Perfumes, formaldehyde com-
pounds
Alcohols, phenols, chlorine
compounds
Sulfides, phosphites, amines,
phenols, dithiophosphates
Silicones, synthetic polymers,
waxes
Sulfonates, phosphonates,
phenates, alkyl substituted
salitylates combined with
barium, magnesium, zinc
calcium
Alkenyl sucinimides, alkyl —
acrylic polymers, ashless
compounds
LUBRICATING OIL ADDITIVES (22)
Application
1C engines, alloy bearings,
ATF
Function
To react with metal
surfaces to form a
corrosion-resistant
film
1C engines, turbines, electric To react chemically
and mechanical rotary machinery with steel surfaces
fire-resistant hydraulic to form an impervious
fluids film
With EP additives
With water added to oil-
emulsions
1C engines, turbines, and
rotary machinery
Same as rust inhibitors,
excluding ball bearings
1C engines under steady load
1C enaines at low temper-
atures and variable loads
To mask odors
To inhibit microorganisms
To inhibit oxidation
of oil
To permit air bubbles
to separate from oil
To neutralize acids in
crankcase oils to form
compounds suspended in
oil
To disperse contaminants
in the lubricant
Abbreviations: 1C = Internal Combustion Engine: ATF = Automatic Transmission Fluid; EP = Extreme Pressure
-------
Name of Additive
Metal 4)eactivator
Color Stabilizer
Viscosity Index
Improver
Pour Point
Depressant
1^ Extreme Pressure
, Additive
Antiwear Additive
Tackiness Agent
Emulsifier
TABLE 12 (Continued)
COMPOSITION, APPLICATION AND FUNCTION OF LUBRICATINfi OIL ADDITIVES
Composition Application
Organic dihydroxyphosphines, 1C engines, turbines, electric
phosphites and sulfur compounds motors, air compressors, hydrau-
lic oils
Amine compounds
Isobutylene polymers and
acrylate copolymers
Polymethacrylates, poly-
acrylamides, alkylated
naphthalenes and phenols
Organic compounds with sul-
fur, phosphorous, nitrogen,
halogens, carboxyl or
carboxalate salt
Chlorinated waxes, organic
phosphates, lead naphthenate
Polyacrylates and polybutenes
Surfactants, sulfonates,
naphthenates and fatty acid
soaps
When heat and oxidation darken
oil
1C engines, electric motors, air
compressors, hydraulic oils
1C engines, gears, bearings,
transmissions
1C engines, turbines, motors,
hydraulic oils, gears, rollers
and ball bearings
As above
Gear enclosures from which oil
must not drop
Soluble cutting oils
Function
To form protective film
on running surfaces to
inhibit corrosion reaction
To stabilize oil color
To retard loss of visco-
sity at high temperatures
To prevent congealing of
oil at low temperature
To form low-shear-
strength film providing
lubrication at startup
and at hiah bearing loads
As above except for
running condition
To improve adhesive
qualities of base oil
To reduce interfacial
tension and permit for-
mation of water-oil
emulsion
Abbreviations: 1C = Internal Combustion Engine; ATF = Automatic Transmission Fluid; EP = Extreme Pressure
-------
TABLE 13. SURVEY OF WASTE OIL RE-REFINERS
PRODUCT
PROCESS CAPACITY, GPD CRANKCASE
COMPANY ACID CLAY* OTHER DESIGN
OPERATING OIL
XX=MAJOR
X=MINOR PRODUCTS
SOURCES OF FEED LUfeE &
INDUSTRIAL TRANSMISSION
RR DIESEL OILS OTHER OILS OTHER
COMMENT
1. x 10,000
2. x x ~ 25,000
"3. x x — 24,000
i
4. x x 20,000
5. x x — 25,000
6. — x Caustic —
soda/
silicate
7,000 xx
10,000 xx
12,000 xx
8,000 xx (70%)
20,000 xx
6,500 xx
xx Fuel oil
(10%)
x -- xx Gear oil ,
compressor
oil
xx Penetrating
oils
x (20%) x — x Journal box
oil
Al 1 xx
types of
waste
oils
X XX
Experimenting
with acid sludge
lime mixture for
disposal as
powdered sludge
Propane extrac-
tion (inactive)
Pre- 40,000
treat-
ment of
feed &
distil-
lation
25,000
xx
XX
-------
TABLE 13. SURVEY OF WASTE OIL RE-REFINERS (Continued)
PROCESS
:C"?.iJJY ACID CDW OTHER
PRODUCT
CAPACITY, GPD CRANKCASE
DESIGN OPERATING OIL
XX = MAJOR -
X = MINOR PRODUCTS
SOURCES OF FEED . LUBE &
INDUSTRIAL TRANSMISSION
RR DIESEL OILS OTHER OILS OTHER COMMENTS
8. x x
9. x x Caustic
pretreat-
ment
'10.
ro
(O
i
n. - x
12. — — not speci-
fied
13. — x Multistage
continuous
distn.
8,300 5,200 xx
2,500 1,800 xx
45-90,000 20- x
25,000 30,000
(fuel)
2,000
(lube oil)
2,000 xx
8,300 8,300 xx
26,nnn 12,000 xx
x — xx Industrial 1 .5 mm gal .
oil (60%) storage capacity
XX
xx animal x (10%) Fuel (90%) Planning to stop
oils lube oil process-
ing
xx Hydraulic Plans 25%
oil, expansion
machinery
lubricants
xx Fuel (minor) 2 mm gal sto-
rage capacity
xx ~ xx Industrial
oils, trans-
mission oils
machinery
lubricants
14.
12,000
Asphalt flux Planning
oil modernization
-------
TABLE 13. SURVEY OF WASTE OIL RE-REFINERS (Continued)
PROCESS
CG'^NY ACID CtET OTHER
PRODUCT
CAPACITY, GPD CRANKCASE
DESIGN OPERATING OIL
XX = MAJOR
X = MINOR
SOURCES OF FEED
INDUSTRIAL
RR DIESEL OILS OTHER
PRODUCTS
LUBE &
TRANSMISSION
OILS
OTHER
COMMENTS
15. xx —
16. x x Continuous
17. x x de-emul-
sif. of
ind. oil
18. x x
19. x x Dewater &
filter in-
dust. oils,
48,000 40,000 x
2,noo x
22,000 22,000 x
8,nno s.non x
25,000 25,000 x
x
x
X
X
Cutting &
other in-
dust. oils
--
-—
Soluble
& cut-
ting oils
Watered
fuels,
trans-
former
—
XX
X
XX
XX
XX
Journal box
hydraulic,
Hydraulic,
fuel , spray
form oils
Road,
hydraulic
oils.
fuel,
asphalt
blending
oil
Industrial
oils
Planning
modernization
Trying to sell
out
Some custom
industrial work
Planning to
rotary vac. filt-
er odor from water
petrol euro
Expanding capaci-
ty considerable
custom Indus, work
to
o
had had polychlo-
rinated biphenyl
problem-acid sludga
neutralized be-
fore disposal
-------
TABLE 13. SURVEY OF WASTE OIL RE-REFINERS (Continued)
XX = MAJOR
X = MINOR PRODUCTS
PRODUCT SOURCES OF FEED LUBE &
PROCESS CAPACITY, GPD CRANKCASE INDUSTRIAL TRANSMISSION
<:.'r:p;-:;y ACID CLA? OTHER DESIGN OPERATING OIL RR DIESEL OILS OTHER OILS
20. x x — — 6,000 x — — — xx
21. x x ~ 9,000 8,000 x x — xx
22. -- ~ Distilla- 30,000 — x ~ x Contami- x
tion nated
fuels
23. x x — 2,500 2,500 x — — — xx
24. x x Caustic 6,000 4,000 x ~ -- — xx
25. x x — , 4,000 4,000 x — — — xx
oj 26. xx — 2,000 2,000 x ~ — — xx
1 27. -- — Distilla- — — x x x Jet
tion Fuels,
inter-
face
fuels
OTHER
Transmission
oil , form &
spray oil
(little pro-
cessing)
Journal box
oil , diesel
lubes
Fuel
form oil
—
--
Fuels,
asphalt flux
COMMENTS
Trying to
sell out
No longer
has site
for acid
sludge dis-
posal may go to
dehydration only
to make fuel .
None
New re-refining
process under
devel . Customers
segregate oils.
-------
TABLE 13. SURVEY OF WASTE OIL RE-REFINERS (Continued)
XX = MAJOR
X = MINOR
PRODUCT SOURCES OF FEED
PROCESS CAPACITY, GPD CRANKCASE INDUSTRIAL
COMPANY ACID CDW OTHER DESIGN OPERATING OIL RR DIESEL OILS OTHER
PRODUCTS
LUBE &
TRANSMISSION
OILS OTHER COMMENTS
28. x x — 10,000 4,000 x — x —
29- -- x — 15,000 6,000 x x Cutting
and
cooling
oils
30. x x — 6,000 6,000 x
31. ,x x — 7,500 x. — x
32. xx-- — 12,500 x — x —
33. - x Distilla- 25,000 5,000 x
tion
34. xx-- 2,400 1,900 x — — Waste
1 diesel
£ fuel
'35. x x -- 20,000 x xx Solvents
XX
Journal Formerly did
oil , railroad bus.
industri- custom indus.
al oils work major
business
xx Hydraulic
oil
Fuel
Journal
box oil
xx Chain oil,
chemical
carrier
Sweeping
compound *
Transformer
oil
x Journal
box oil ,
diesel
lube
* Normally includes an oil stripping step.
-------
DISPOSAL BY LAND APPLICATION
Soils have been shown to provide a high degree.of physical, chemical,
and biological treatment for organic wastes. Despite their demonstrated
efficiency in assimilating wastes, land spreading has never been used as
extensively as it could be.. Although used by many petroleum refineries,
oily waste disposal by land spreading has not been generally appreciated
and exploited by sanitation and pollution control officials. Several
reasons are apparent for the practice having failed to be used more ,
universally. Fear of pollution of surface and groundwater, using soils
poorly suited to oil assimilation, and lack of information concerning
successful full-scale operations are among the reasons.
When deep, fine-textured soils are used for disposal sites, oil added
judiciously will adhere to the soils and move but little into them, thus
eliminating danger of groundwater pollution. Only indiscriminate, heavy
additions of oil to coarse, porous, or shallow soils would be
expected to cause such pollution. Appendix A is a paper presented at the
5th International Water Pollution Research Conference (1970) describing .
land spreading as non-polluting method of disposing of oily wastes. A
real disadvantage of this method of disposal of waste oil is that it
appears potential as an energy resource.
Jhe Environmental Protection Agency reported on a demonstration (26)
of disposal of oily sludges by a soil cultivation process in Deer Park,
Texas. In this demonstration nitrogen, potassium and phosphorus were
added to stimulate microbial action.
Considerable amounts of waste oil are being used to oil roads for
dust control. A limited study (27) has been carried out at the EPA's Water
Quality Research Laboratory, Edison, New Jersey to evaluate the environ-
mental significance of this disposal method. Two rural roads that had
been treated with waste crankcase oils were examined. It is estimated
that 30 percent of the oil applied volatilized or was biodegraded.
Approximately 1 percent of the total oil estimated to have been applied
to the roads over the 12 year period remained in the top inch of the road
surface. The remaining 70 percent of the oil apparently left the roadway
either on dust particees or in Water runoff. These findings, however,
are not necessarily typical. The road surface predominately clay and
V*Q I s4*^t*Af.lf «• VMMt A*.a« • J ._ . . *. . . •«. *» L*.«fe«i*«1t> A 4 1 M.^4 I t « J A .. J. I*. _ ^ _ _ _ _ - _l • _1_ •
application rate.
USE AS A FUEL
Currently, burning as a fuel is a major outlet for waste oils.
The increasingly favorable economics, environmental pressures to
discourage indiscriminate dumping, and the decline in re-refining
capacity, all have contributed to this increasing trend toward disposal
- 33 -
-------
by burning. The practice was well-established prior to the advent of
the current energy crisis (Table 11), and a reasonable expectation would
be that disposal of waste oils by burning for energy recovery will increase
in the future, unless air pollution control technology, imposed to prevent
lead emissions from waste oil combustion, makes burning uneconomical.
A survey performed in Massachusetts in 1967 by A.D, Little, Inc.,
(24) reported that the total quantity of 12.3 million gallons of waste
automotive oil was generated in the state, and that 36.6 percent or
4.5 million gallons was reprocessed to fuel oil. The 4.5 million gallons
reprocessed to fuel oil represented 60 percent of the 7.5 million gallons
collected. In 1971, the Wisconsin Department of Natural Resources (25)
reported that of the total quantity of 5.6 million gallons of waste auto-
motive oil generated in 1971, 37 percent or 2.1 million gallons was reused
as fuel oil.
As indicated in Table 1, 2.2 billion gallons of lubricating oils were
sold in the Nation in 1971. The quantity of waste oil generated from these
sources was estimated to be 1.1 billion gallons (Table 11). Of this an
estimated 159 million gallons (14%) was burned directly for fuel. Waste
oil processors disposed of an additional estimated 364 million gallons
(33%) most of which was sold for fuel. Thus, an estimated 475 million
gallons per year, or 42 percent of the total quantity of waste lubricating
oil generated annually in the Nation are burned for fuel. The data on
which the estimates are based was generated prior to the advent of the
current energy crisis. A clear picture of the impact of the current energy
crisis on the waste oil market has not evolved. One would expect, however,
the trend toward burning waste oils will increase in the near future since
the current energy crisis has put a premium price on all available energy
sources.
Limitations on the burning of waste oils containing lead may be
necessary and are discussed in Detail in Section III of this Report.
OTHER DISPOSAL METHODS
As indicated in Table 11 an estimated 337 million gallons or 30%
is disposed of by other methods. At least 50 million gallons of this
amount represents the oil in acid clay sludges and tank bottoms from
re-refiners and reprocessors most of which is disposed of in landfills,
and lagoons. Some portion is used for other legitimate uses such as the
oiling of concrete forms in the construction industry. Some is disposed
of in landfills and some is accidentally or intentionally dumped either
on land or in water.
- 34 -
-------
SECTION VI
RE-REFINING TECHNOLOGY
The major re-refining process 1n use today 1s add/clay treatment.
Another process used 1n the United States 1s vacuum distillation followed
by the clay treatment which may or may not include a caustic pretreatment.
Acid/clay treatment can produce a good lube stock; however, add consumption
and tar yields are high resulting in poor economics and a sludge disposal
problem.
Although solvent extraction is old in the art of lube manufacturing,
it has not, in the past, found favor with waste oil reprocessors. High
solvent to-oil ratios result 1n high operating costs, and continuous
operation requires skilled operating personnel. Finally, acid and clay
treatment are not fully eliminated. Several firms have developed solvent
extraction processes at pilot plant scale. Only the Institut Francais du
Petrole (IFF) has commercialized the process. In Europe, a 9 million
gallon per year plant using propane as the solvent, has been constructed..
The Environmental Protection Agency has funded a major program to
develop a non-polluting re-refining process. The major emphasis in this
program 1s the development of a distillation process proceeded by a
pretreatment process or followed by hydrotreating to develop a stable
lubricating oil. In addition, a bottoms product high in lead (13% lead
and 25% solids) will be recycled, reclaiming lead and heat values.
ACID/CLAY TREATMENT
The process scheme for the typical acid/clay re-refining of waste
automotive oils is shown in Figure 2. The incoming materials are unloaded
into a partially submerged tank fitted with grids and screens to remove
the debris normally found in the waste materials. After the free water
settles, the oil is decanted and transferred to feed storage tanks. The
feed is pumped through a steam heat exchanger to the flash dehydrator
which operates at 300°F and atmospheric pressure. The steam/oil overhead
is condensed and separated; the oil to the light end storage to be used
for fuel, and the water to the wastewater disposal system.
The dehydrated oil is sometimes stripped prior to acid treatment but
more often it is pumped directly to dry oil tanks, where it is stored and
cooled. It can be stored for 2 to 4 days before it picks up appreciable
moisture which tends to Increase add requirements during the following
step. After 48 hours storage, the oil temperature has dropped to approxi-
mately 100° F. The dry oil is then pumped to one of the several acid
treating units. These units are steam jacketed and are agitated with
plant air. Sulfuric acid (92%) is added to a reactor maintained at about
100°F. The amount of acid added ranges between 4 and 6 percent of the
-35 -
-------
OIL SEPARATOR
FLASH
DEHYORATOR
FEED
STEAM
CO
£fi
DEHYDRATED OIL
300°F
PRE-TREATMENT
•*• WATER TO SUMP
COOLER
93%
DEHYDRATED
°IL
100'F
ACID
STEAM JACKETED
TREATING TANK
ACID SLUDGE
ACID TREATMENT
COOLER j f\
-^KL
VOLATILE DISTILLATES
TO FUEL
WATER TO SUMP
ccoor
550 F
BATCH REACTOR
HOT OIL
A
CLAY SLURRY
DIRECT FIRED HEATER
COOLER F|LTERS
__tfr\\ 1 ^ LUBE STOCK
1
TO STORAGE
SPENT CLAY
CLAY TREATMENT
RE-REFINING BY AN ACID CLAY PROCESS
Figure
-------
reactor volume. The oxidized products contained in the oil are usually
coagulated within 24 hours, but up to 48 hours may be required depending
on the feed. The acid sludge, containing oil contaminants and ash,
separates from the oil and is drawr; off from the reactor bottom. Acid
sludge disposal, which, usually is done in landfills or lagoons, is one
of the most critical problems in this process.
The acid treated, dehydrated oil is then transferred to the steam
stripping-clay treatment operation. The clay treater is equipped with
overhead condensing equipment and a direct-fired heater through which
the oil is circulated. The capacity of the clay treater is usually on
the order of 5,000 to 10,000 gallons. It is equipped with a sparger
for direct introduction of steam.
The temperature of the batch is brought up to 500-600°F by circulating
through the heater after the batch has been transferred. Simultaneously,
live steam is introduced into the batch. The purpose of this stripping
operation is to remove the remaining light fuel fractions and any
mercaptans which may be present. This operation normally takes 12-15 hours
to complete. The steam-stripped materials are condensed, and the oil
separated from the water. The water fraction is treated through the
wastewater disposal system and the oil fraction used as plant fuel.
The heat is discontinued and part of the fuel oil is diverted to the
clay slurry tank. The oil temperature is permitted to drop to approxi-
mately 400°F. The clay, often a 50% mixture of activated clay and dia-
tomaceous earth (200-250 mesh), is mixed into the circulating oil. The
clay dose is approximately 0.4 pounds per gallon of oil. The clay removes
color bodies as well as colloidal carbon by adsorption.
The hot oil (250-350°F) containing the clay is filtered through a
plate and frame filter press, sometimes followed by a second filter. The
clarified oil is then stored either prior to or after having the necessary
additives blended into the stock.
The filter cake, a mixture of clay, impurities, and oil, is discarded,
usually into a landfill. This is becoming increasingly difficult to do.
Paper often used as a filter medium in the plate and flame press is
discarded with the cake.
DISTILLATION/CLAY TREATMENT
The distillation/clay process (Figure 3) overcomes the serious acid
sludge waste disposal problem connected with acid/clay treatment. The
collected waste oils are received in the usual manner, insuring that
extraneous matter does not enter the process stream. The wet oil is
heated to 300°F in a direct heater, using as fuel, light hydrocarbon
streams generated during processing. The flash tower operates at
atmospheric pressure and 300°F. The oil/water overhead is condensed
- 37-
-------
COOLER
FEED
I
00
A
FURNACE
CAUSTIC
& NAPHTHA
FROM STORAGE
COOLER
FUEL TO STORAGE
I ^ WATER TO
PURIFICATION
VACUUM
DISTILLATION
FLASH TOWER
CENTRIFUGE
SLUDGE
PRE-TREATMENT
ATI ON H
FURNACE
COOLER
VACUUM
*" PUMP
NAPHTHA
TO STORAGE
BOTTOM TO STORAGE
REFLUX PUMP
LUBE DISTILLATE TO CLAY TREATING
(OR HYDROTREATING)
VACUUM DISTILLATION
VACUUM DISTILLATION OF CRANKCASE WASTE OIL
Figure 3
-------
and sent on to an oil decanter. The water phase is separated and
removed to the wastewater disposal system. The oil layer is used
as fuel in the plant.
The flash tower bottoms are passed through a heat exchanger to reduce
the temperature to approximately 100°F. Light oil, having a boiling range
of 150-250°F is introduced into the dehydrated oil stream. The quantity
used is approximately 20% based on oil volume. A small amount of caustic
0.2-2.0%, dependent on feedstock, is also introduced. The addition of
the light oil and caustic tends to break the oil-water emulsion and pre-
cipitate solids. These materials are removed by centrifugation. The
sludge from the centrifuge can be disposed of separately, e.g., by
landfill, or it can be mixed with the distillate bottoms.
The naphtha/caustic/centrifuge pretreatment step may not be a
necessary adjunct to distillation, but it does tend to eliminate some of
the materials which can cause fouling and erosion in the vacuum distilla-
tion furnace, column, and associated heat exchangers. The centrifuged oil
is then pumped to the vacuum distillation tower through a direct fired
heater, where it is heated to about 700°F. The columns operate at a
vacuum of 27 inches of mercury. The overhead naphtha is condensed,
cooled and used a fuel in the plant.
The bottoms, which contain almost the entire ash content of the feed,
are cooled and used as fuel, or blended into asphaltic products, or
stored in a lagoon. The middle cut is sent on to clay treatment for
finishing as a lube blending stock. The clay treatment is similar to
that described for the acid/clay process except that prior stripping
is unnecessary and may be reduced to as little as 0.125 Ibs. of clay
per gallon of oil. The filter cake is usually disposed of in a landfill.
The yields for this type operation, based on input oil, are approxi-
mately 70%, comparable to the best acid/clay treating operations. The
product quality produced by the distillation/clay process as described
is also comparable to that produced by acid/clay treatment; however,
by taking more than one sidestream from the vacuum distillation column,
it may be possible to obtain a part of the yield as higher viscosity
lube stocks.
In some re-refining operations, odors can be adequately controlled
by sealing open vessels and tanks, good housekeeping, and by venting
process vessels to furnaces where, vapors are burned with the normal
fuel. Other plants have resorted to control methods such as caustic
scrubbers.
The wastewater system varies from plant to plant, depending on
cooling water and vacuum facilities, water runoff problems, land avail-
ability, water contamination of feedstocks, governmental regulations, and
availability of a local sewage plant. ;
-39-
-------
Overall lube stock yields for acid/clay treatment have been reported
from 45 to 75%, depending upon operating conditions and feed composition,
with water, sludge, ash and gasoline contents being most critical. The
oil produced by the acid/clay process can be considered a solvent neutral
blending stock, with properties approximating an SAE 20 lubricating oil.
SUS (Saybolt Universal Second) viscosity is generally between 55 and 58
at 210°F. The oil can be blended to a finished lube by the re-refiner
or sold directly to a jobber with blending facilities. Viscosity is
increased by the addition of virgin bright stocks, or by the addition
of polyisobutylene. To meet high performance specifications additive
packages are introduced.
SOLVENT EXTRACTION AND CLAY TREATMENT
The solvent extraction/acid/clay process (figure 4) is a relatively
new development in the re-refining of waste lubricating oils. It has
been tried experimentally in the United States but no plants are now
in operation. A 9-million gallon per year plant is operating in Italy
based on a process developed by Institut Francais du Petrole (IFP).
(28) Similar processes have been developed and patented, but not
commercialized by U.S. firms.
The basis for the process is the use of propane to selectively extract
the base lube stock from the additives and other impurities. The propane,
containing dissolved oil, is removed from the extractor, while the high -
boiling, dark colored asphaltic and oxidized hydrocarbons and suspended
solids are removed from the unit bottom as a residue. The bottoms are
mixed with a fuel oil and used as plant fuel, or otherwise disposed of;
whereas, the propane is flashed from the oil and recycled.
The process scheme consists of thermal dehydration, precipitation
and solvent extraction, vacuum distillation, acid treatment, clay
treatment, and filtration.
The incoming waste oil is unloaded into a receiving tank as described
before. The feed for the process is pumped through the steam heat exchanger
to the flash dehydrator operating at about 300°F and atmospheric pressure.
The overhead is condensed and drained into an oil separator. The water layer
is disposed of through the wastewater disposal system the oil layer is
either stored or processed immediately in the solvent contactor.
The oil is pumped to the precipitation tower (solvent extractor) via a
heat exchanger. The propane is also heated and introduced into the tower
approximately 1/3 of the way up from the bottom. The oil is introduced
1/3 down from the top. The solvent extractor operates at about 500 psig
and elevated temperatures. The propane-oil solution (the oil having dis-
solved in the solvent) goes overhead due to specific 'gravity differences,
whereas the precipitate flows to the extractor bottom.
- 40-
-------
FEED
CONTACTOR
FUEL OIL
PRE-
OISTILLATION
EXTRACTION
-»• LIGHT OIL TO FUEL
-»• WATER TO SUMP
PROPANE
MAKE-UP
PROPANE
FLASH
DRUMS
FUEL&
RESIDUE
COMPRESSION
& COOLING
FURNACE
93% H2S04
CLAY
SLURRY
FURNACE
LUBE STOCK TO STORAGE
PROPANE
PROPANE SEPARATION RECOVERY
FINISHING
RE-REFINING BY A PROPANE EXTRACTION PROCESS
Figure 4
-------
For very high quality lube oil, the solvent to feed ratio should be
approximately 20:1. This will vary depending on the feedstock and must
be determined for each and every feed. The lowest solvent to feed would
be 1:1, yielding poor quality oil in the raffinate. Current operations
use a solvent to feed ratio in the vicinity of 15:1.
The residue is released from the extractor by a liquid level con-
troller. A small amount of fuel oil is added to the pipeline to assist
in the flow of residue from the unit. The fuel oil-residue mixture is
stored for use as a fuel for the direct fired heaters, or for other means
of disposal.
The propane-oil solution is flashed through a pressure reducing valve
into a solvent flash drum. It is usual to use a two-stage flash to
separate the propane and oil. The first stage operates at 250°F and
250 psig. The propane gas is liquified and recycled.
The lube oil is sent on to acid/clay treatment as described in the
acid/clay process. The acid and clay dose is approximately one-half
of the amount used in the conventional acid/clay treatment process. That
is, this process requires only about 2% of 93% sulfuric acid by volume
based on oil, compared with 4-6% for the acid/clay process. After treat-
ment with about 0.15 Ibs. of the clay per gallon at 300°F and filtration,
the lube oil quality is reported to be superior to the acid/clay product,
at least in terms of color and color stability, and perhaps viscosity.
Although the quantities of acid/clay required in the IFF process are
greatly reduced, a disposal problem still exists.
DISTILLATION/HYDROGEN TREATMENT
The distillation/hydrogen treating process is similar to distillation/
clay treating, except for the finishing step, shown in Figure 5 (29).
Although this scheme is widely used in petroleum refineries, no re-refineries,
are using this process; however, two European installations, to be started
up in the period 1974-76, are apparently planning to combine hydrogren
treating with the IFP propane extraction process previously described.
As described before, a pretreatment section can be used ahead of vacuum
distillation to reduce fouling and erosion problems. The distillate (side
stream) from the vacuum distillation column is heated using hydrotreating
product and an oil fired heater before being mixed with recycle and makeup
hydrogen. The hydrogen-oil mixture is contacted with a standard commercial
hydrotreating catalyst in a fixed bed. The hydrogen reacts with oxygen
and nitrogen containing impurities and unsaturates. The pressure is reduced
in two flash drums in series and the recovered gaseous hydrogen is recycled.
The purified oil is used to preheat the incoming feed and is then injected
into a stripping column where the small amount of volatile materials which
may have formed are removed. The purified product leaving the stripper
can be used to preheat the vacuum distillation feed before final cooling
and storage.
- 42-
-------
CATALYTIC
HYDROTREATING
REACTOR
COOLER
STEAM
STRIPPER
I
TO FUEL
WATER TO
PURIFICATION
STEAM
LUBE STOCK
TO STORAGE
VACUUM
DISTILLATION FEED
TO VACUUM
DISTILLATION FURNACE
PURGE
HYDROTREATING
Figure 5
-------
Recent work has shown that the hydrogen treated distillate can match
typical properties of 150 viscosity neutral lube blending stock, (30) Hydro-
treating conditions were 650 psig, 650°F, 800 standard cubic feet of hydro-
gen recycled per barrel of feed, and a space velocity of 1.0 vol./vol./hr.
The distillation bottoms which contain almost all of the objectionable
impurities can be disposed of as discussed before. However, in conjunction
with the distillation/hydrogen treating process development now underway
(31), plans are being made for introduction of this high lead material into
a secondary lead smelting operation. If this is successful, the distillation/
hydrogen treating scheme holds promise of being the first re-refining process
without a solid waste disposal problem.
OTHER RE-REFINING APPROACHES
Many proposals for alternative re-refining processes have centered
about the possibility of using solvents and/or chemical treating agents.
None of these approaches has been commercialized, nor have they reached
an advanced state of development.
The use of several chemical flocculants and solvent precipitants
such as aluminum chloride, triethanolamine, and trichlorcethylene were
studied (32) but showed little promise. A number of non-acid flocculants
were investigated as alternatives to sulfuric acid for treating drain oils.
Alkanolamines and a diglycolamines were found to be the most effective. (33)
RE-REFINING WASTE PRODUCTS
Re-refining waste products include: acid sludge, caustic sludge,
spent clay, pretreatment residues, distillation or extraction bottoms,
condenser liquids, scrubber waters, oily waters and low concentrations of
air emissions (odors, volatile organics, S02, SOs etc.).
ACID SLUDGE
Sulfuric acid treating results in reactions with and the dissolving
of metal salts, aromatic and asphaltic compounds, organic acids, water,'
and other polar compounds. A phase separation occurs whereby acid sludge
settles and is removed from the treating vessel leaving relatively pure
oil behind. The environmental and health and safety aspects of acid
sludge are determined by the presence of: sulfuric acid, combustibles,
lead, organometalics, sulfonates, calcium, phosphorous, sodium, zinc,
o...er metals and carcinogenic materials. Disposal is obviously a problem.
As much as 30-50% of the acid sludge is soluble, complicating land dis-
posal. All acid sludge disposal by U.S. re-refiners is to landfills or
lagoons without neutralization. Landfill ing of acid sludge is the most
common disposal method and appears to be a reasonable method of disposal,
provided sufficient safeguards are used to protect personnel, groundwater,
and nearby streams. The sludge is often mixed with refuse at the landfill
site. The soluble freeacid probably leaches through the soils, but lead,
barium, calcium, silver, arsenic, molybdenum, titanium, strontium, and
- 4ft -
-------
other heavy metal salts may remain in the landfill. The concentrations are
low, and should not be a serious problem in a well designed and operated
landfill. Work in Germany indicates that acidsludge carefully disposed
of does not present serious environmental problems.
The acidity, combustible content, metal content, and possible
carcinogen content make it imperative that this waste must not be indis-
crimi nately disposed of. Unless suitable air pollution control technology
is employed, combustion or incineration of this material, even after
neutralization as is done in Europe, is undesirable due to the major amount
of sulfur oxides and very fine metal containing participates which would
be emitted. Ocean disposal, now generally prohibited in all but the
most extreme cases, is not desirable, although existing data is not
negative. Deep well disposal may be suitable in certain instances, but
it is expensive, and it is difficult to prove that it is an environmentally
sound method.
Lagooning is only a temporary solution. The danger in this type of
storage is illustrated by an incident where a re-refiner had his lagoons
overflow during a hurricane several years ago, contaminating a nearby
river. After lagooning, it is extremely expensive to find a method of
disposing of the millions of gallons of sludges stored in this way.
Neutralization before disposal appears to be desirable; however, the
cost would be significant in this marginal industry.
Acid sludge is generated at the rate of about 10 volumes per 100
volumes raw drain oil, indicating that about 10 million gallons per year
of acid sludge is currently being generated. About 10% or more of the
oil re-refiners' process oils remain in the sludge.
CAUSTIC SLUDGE
Caustic sludge is generated from emulsion breaking of waste oils.
However, only two re-refiners in the U.S. are now known to be using this
approach, though waste oil processors may be doing so. The sludge
contains caustic, sodium silicate, lead and other metals, and oil. The
caustic, lead, other metals, and combustible oils would appear to present
environmental health and safety considerations similar to the acid sludge
and disposal is equally difficult. Heat may be generated, leaching of
metals may occur and personnel are exposed to corrosive materials.
Disposal methods are the same as those for acid sludge.
SPENT CLAY ,
Spent contact clays are generated during the process used to remove
acid residues and' impurities, and to improve odor and color. The clays
themselves contain major portions of silica. Polar compounds are removed
by the clay, including bxygen and nitrogen-containing organics. About
- 4:5-
-------
0.4 pounds of spent clay are generated for each gallon of re-refined oil
produced. The oil content of the clay is estimated to be 20-30%. About
14,000 tons of spent clay are generated per year from re-refining of
auto and industrial lubricating oils. An additional unknown quality is
generated from industrial oil recycling operations.
Spent clay is ordinarily disposed of to a landfill even though some
uses have been found. For example, clay containing oil has been used as
a surfacing material for stables and unpaved road stabilization. Although
petroleum is expensive on a small scale refineries have regenerated clays
by incineration for reuse. Spent clay does not appear to present any
significant disposal problem. As an adsorbent, the clay should retain
the contaminants. The oil gradually is consumed by bacteria in the soil
when clay is disposed of in landfills.
DISTILLATION BOTTOMS
When drain oil is purified by distillation the high boiling non-
volatile residue becomes a waste disposal problem. These distillation
bottoms are higher in ash, sulfur, nitrogen, oxygen, and acidity content
than the lube product. Total ash may reach 10-25$, depending on the
extent of pretreatment with lead contents ranging from 5-15%.
Distillation bottoms have been used as an asphalt blending stock.
They have been disposed of in landfills and have been stored in lagoons.
Distillation and extraction bottoms provide an excellent possibility as
a fuel source for secondary lead smelting reverberatory furnaces which>
are equipped with fine dust collection equipment. Test burning in such
a furnace is planned in the near future under an EPA research grant.
The geography of such a scheme appears to be good, with many furnaces
located across the country (to reprocess batteries). Both fuel and lead
values are expected to be recovered.
WASTEWATER
The wastewater from a re-refining plant comes from several sources;
water separated from the raw drain oil; cooling water used in indirect heat
exchange; cooling water contaminated by direct contact with oil, e.g.
in the barometric condenser of a vacuum system; water from condensed
stream which contacts oil, e.g. in stream jet vacuum systems, or stripping
stream; vent gas scrubbers; and plant runoff water. Both acid/clay and
distillation/clay plants are equipped with oil/water separators and
neutralization facilities to handle the process water separated from the
oil. Vacuum distillations are usually performed with stream jets and
barometric condensers, requiring oil/water separation for these effluents
as well. Cooling water used indirectly is sometimes provided on a once-
through basis with no treatment, sometimes recycled with the aid of a
cooling tower, and occasionally joined to other water streams entering
an oil/water separator. Some re-refiners also provide for oil/water
separators on runoff water.
- 46 -
-------
In the best operations, all direct contact condensers are replaced
by indirect air or water cooling; and stream use is minimized by providing
efficient mechanical vacuum pumps. Maximum water recycle is practiced
with efficient oil separation from the process and runoff waters. Purge
water is sent to a municipal sewer plant or trucked to a landfill site.
Advanced wastewater treatment systems for "zero" emissions are not now
in use.
Little information is available on the analysis of re-refining
wastewater. The composition wf"wastewater will obviously depend
upon the type of oil processed, the nature of the re-refining process
and of wastewater treatment facilities, housekeeping, the degree of
recycle, and other factors. However, one would expect to find traces
of the metals which appear in the raw drain oil, in dissolved and
suspended solids, dissolved phenols and other organics, and suspended
or emulsified oil.
AIR EMISSIONS
A properly controlled re-refining plant will emit very few contaminants
to the atmosphere. Early plants contained many open vessels, but few of
these are now left. Vents from process and wastewater treatment units
and storage tanks in many plants are discharged to a furnace where vented
combustible materials are burned. In other plants caustic or ammonia
scrubbers are used.
Again little is known about the actual composition of the gases, but
some odors are apparent around most re-refining facilities. The odors
are no worse and probably somewhat less intense than those encountered
around petroleum refineries. Most likely these odors are caused by esters
and other organic compounds containing oxygen and nitrogen. Very low-con-
centrations of organic sulfur compounds may also be present, as well as
some S02 and S03 from acid sludge handling.
EUROPEAN PRACTICES (See Appendix B)
Probably the most significant re-refining and recycling movement
is that in Germany. The Germans, historically, have re-refined waste
oil. Currently, of their 300 million gallons per year lubricating oil
requirements, 60 to 80 million gallons are supplied by re-refined oil.
This oil competes on the market with virgin oil. The collection of the
oil is regulated by law and is supported by a tax on the sale of oil,
which is then returned to the re^refiner (or burner of waste oil) who
passes on most of the subvention to the collector. Under the law, all
waste oil must be collected by a licensed collector. However as in the
United States, "do-it-yourselfers" crankcase wastes are probably not
collected 1n Europe. Waste oil is imported into Germany from other
countries, refined,.and sold back to those countries. ,The German
re-refining industry is basically an acid/clay industry. However,
utilization of high-shear mixers and pretreatment with coagulant
reduces the amount of acid and clay required. The acid/clay sludges
are disposed of in landfills.
- 47 -
-------
The Institut Francais du Petrole (IFP) as previously mentioned
has commercialized a propane extraction re-refining process. It is
currently being utilized to produce first-rate lubricating oils at
the Viscolube plant in Milan, Italy. Two other plants, utilizing the
propane extraction process followed by hydrofining, are being built in
Yugoslavia and Sardinia by IFP.
OVERALL ASSESSMENT
Acid sludge disposal is the most serious of the re-refining waste
disposal problems. Acid sludge persents handling problems which can be
overcome with care. Due to its lead, combustibles, and oil content, dis-
posal in lagoons, pits, or by indiscriminate means appears to pose serious
hazards. Mixing with refuse and/or neutralization and spreading in well
designed and operated landfills experienced in receiving hazardous wastes
appears reasonable. Neutralization by mixing with cement kiln tailings,
alkaline fly ash, or other alkaline materials is desirable, though not
widely practiced. Loss of lead to the land in the quantities now
encountered appears to pose no major environmental threat, but obviously
is not desirable from the point of view of resource conservation, since
U.S. lead supplies are limited. .In the long range, it would be very "
desirable to eliminate the acid treating step which generated this
sludge, even though lead content of automotive drain oils will decrease
as gasoline lead limitations take effect.
Disposal of spent clay to a well designed landfill does not appear
to be a serious problem, although additional data on spent clay composition
including the possible presence of carcinogens, and on the rate of oil
degradation is very desirable. Other known waste products from re-refining
are almost negligible.
In order to ensure long-term protection of the environment from
harmful constituents, special consideration of disposal sites should
be made. All landfill sites should be selected so as to prevent
horizontal and vertical migration of these contaminants to ground or
surface waters. In cases where geological considerations may not
reasonably ensure this, adequate mechanical precautions (e.g., imper-
vious liners) should be taken to ensure long-term protection of the
environment. A program of routine periodic sampling and analysis
of leachates is advisable. Where appropriate, the location of hazardous
materials disposal sites should be permanently recorded in the appropriate
office of legal jurisdiction.
Undesirable air and water emissions from re-refining operations have
been reduced considerably in recent years. Additional controls, as
necessary, can be instituted if adequate financing and good engineering
support are available.
- 48 -
-------
SECTION VII
WASTE OIL REUSE AS A FUEL
Examination of the characteristics of waste oil and its comparison
to virgin fuels indicates that the use of waste oil in place of or in
conjunction with virgin fuels may create both beneficial and adverse
impacts on the environment. For example, the use of waste oil in place
of residual oil would reduce such air pollution contaminants as:
. sulfur
. silicon
. sodium
. vanadium
. nickel
Waste oil is also a cleaner burning fuel than coal, generating
significantly less particulate emissions. Substituting waste oil
for coal would also result in a sharp reduction in the emissions of the
above contaminants as well as calcium, iron, magnesium, beryllium,
manganese, silver, strontium, aluminum, titanium, boron, and molybdenum.
The potentially adverse environmental impacts of waste oil combustion
result from significant concentrations of waste oil contaminants (i.e.,
as much as 1 percent lead in waste oil), which may be emitted in part
to the atmosphere with the flue gas. In addition, these contaminants
would be partially deposited out as ash on wall and boiler tube surfaces
in commercial, industrial and utility boilers. Currently the most
common waste oil fuel applications result in oarticulate emissions
during soot blowing operations, and potentially higher occupational
hazards during boiler cleaning.
Table 14 shows that automotive waste oils contain a higher
concentration of the following trace elements than are found in virgin
fuels:
. magnesium*
. calcium*
. iron*
. lead
. copper
. ban' urn
.zinc
. phosphorus
. silver*
. tin
. chromium
Table 14 also shows the relative presence of these elements if
small quantities of waste oil were blended with residual oil and coal.
*Waste 01'1 contains more of these contaminants than fuel oils but
significantly less than coal.
-49-
-------
TABLE 14. INFLUENCE OF DILUTION OF WASTE OIL WITH VIRGIN FUELS (34)
Gravity API @ 60°F
Viscosity, Centistokes
Pour Point, °F
Flash Point, °F
Heating Values, BTU/lb
BS&W, vol. %
Sulfur, wt %
Ash. wt %
Magnesium (ppm)
Calcium (ppm)
Iron (ppm)
Lead (ppm)
Copper (ppm)
Barium (ppm)
Zinc (ppm)
Phosphorus (ppm)
Silver (ppm)
Tin (ppmV
Chromium (ppm)
100%
WASTE
OIL
24.0
99.0
-35
295
16,436
11.0
0.43
1.01
559
1,850
1,025
6,000
177
1,005
1,650
1,250
1
58
29
VIRGIN FUELS
100%
RESIDUAL
OIL
13.2
379
52.5
210
18,945
1.0
2.15
0.25
14
48
120
3
1
*
*
*
0.3
*
13.7
100%
COAL
12,486
2.75
10.5
1,362
7,768
14,467
71
64
258
123
30
1.7
225
24
WASTE OIL-
RESIDUAL OIL BLEND
1 WT %
WASTE OIL
13.3
376
51 .6
211
18,920
.1
2.13
0.27
20
66
129
63
2
10
17
12
0.3
0.6
13.9
5 WT %
WASTE OIL
13.7
365
48.1
214
18,892
1r
.5
2.6
0.33
41
138
166
303
9
50
85
60
0.3
3.0
14.5
WASTE OIL-
COAL BLEND
1 WT %
WASTE OIL
12,526
2.73
10.4
1,354
7,709
14,333
T38
65
265
123
42
1.7
223
24.1
5 WT %
WASTE OIL
12,684
2.63
10.1
1,324
7,412
13,745
375
70
295
138
91
1.7
217
24.3
I
Ol
-------
Examination of Table 14 indicates that blending 1 percent by weight
of waste oil with coal will not result in any substantial difference
in trace element content when compared with unblended coal. A 5 percent
by weight blend of waste oil and coal does, however, have a significantly
higher lead concentration and, to a less degree, higher phosphorus
content than the pure coal. This table also shows that several of the
trace elements in waste oil residual/fuel oil blends would be significantly
higher than for the unblended residual oil. However, in comparing these
higher concentrations with the trace metal content of coal, these waste
oil/fuel oil blends are dramatically cleaner except for lead and phosphorus
MAGNESIUM
As illustrated by Table 14, the magnesium content in waste oil/
residual oil blends increases with increasing blend ratios while the
magnesium content in waste oil/bituminous coal blends decreases with
increasing blend ratios. Magnesium oxide (MgO) is a basic coal ash
constituent. It lessens coal fly ash strength and makes boiler cleaning
by sootblowing easier. Magnesium in fuel oil also forms a high melting
point ash and prevents corrosion. It complexes with corrosive S0? gas
(35) and is often used as a corrosion inhibiting additive. For bituminous
coal blends, the technical impact of magnesium in waste oil is negligible
while for residual oil blends it appears to be beneficial.
CALCIUM
The calcium content of waste oil/residual oil blends Increases
while the content of waste oil/bituminous coal decreases with increasing
blend ratios. Calcium oxide (CaO) is a common basic coal ash constituent.
When coal contains a large amount of calcium, calcium sulfate (CaSCM
will be created upon combustion. This substance forms very hard deposits
that are difficult to remove by water washing. On the other hand,
calcium compounds prevent oil ash corrosion by forming high melting
point complexes (35).
One reference (36) indicates that based on 100 percent waste oil
combustion, 25 percent of the calcium oxidized remains in Indirect
heating boilers while the balance is emitted to the atmosphere. The
manufacture of Portland cement employs direct fired drying kilns.
Since calcium makes up roughly 66 percent-of the cement, the calcium
1n waste oil would be of no consequence (34). The technical impact
created by calcium from blend ratios of 5 percent or less appears to
be minimal. For bituminous coal, the effect of waste oil on calcium
content could actually be beneficial ;•
LEAD
The lead content of both waste oil/residual oil and waste oil/bitu-
minous coal blends appreciably Increases with Increasing blend ratios.
- 51 -
-------
Many potential users are concerned about the health hazard and increased
maintenance cost due to lead deposition on heat exchange surfaces (34).
Conflicting observations concerning lead in waste oil and increased
boiler tube deposition have been reported. When waste oil is used in
place of coal, deposition has remained constant (34). When used with
virgin oil, increased deposition has been reported (36, 37).
Due to the high lead content of waste oil, General Portland Cement
Company was reluctant to use waste oil as a fuel in their direct fired
drying kilns since soluble lead oxide in concentrations as low as 0.001
percent stops cement from setting up (34). This information was con-
trasted with data from Northern States Power. NSP conducted tests in
which a waste oil/coal blend was utilized in a 50 MW boiler equipped
with an electrostatic precipitator. NSP normally sells the flyash
collected by their precipitator to a Portland cement company as aggregate
makeup. The flyash resulting from waste oil combustion contained 230 ppm
of lead (normal lead content is 30 ppm when waste oil is not fired).
Solubility tests conducted by NSP indicated that only 0.1 ppm of this
increased lead content in the flyash was soluble in hot water. It was
therefore concluded that this additional lead content would not inter-
fere with the acceptability of this by-product flyash as a makeup material
in cement manufacture.
In addition to the above considerations, lead in the ash may also
contribute to inefficient boiler operation due to fouling of heat
exchange surfaces. From 40 to 97 percent of the lead entering with
the waste oil has been reported to remain in the boiler system, either
as deposits on heat transfer surfaces or as a part of the bottom ash.
COPPER
The copper content for a 5 percent waste oil/residual oil blend
increases twentyfold over the content in the fuel prior to the addition
of the waste oil. For waste oil/bituminous coal blends, the copper
content does not change greatly with increasing blend ratios up to 5
percent. No technical impacts associated with increased copper content
of the fuel has been determined.
BARIUM
As shown by Table 14, the barium content of waste oil/bituminous
coal blends increases slightly with increasing blend ratios. The
difference between the barium content of virgin bituminous coals and
waste oil/bituminous coal blends up to 5 percent is small. Barium
causes deposition on boiler heat transfer surfaces (34). Based on
100 percent waste oil combustion testing, 73 percent of the barium in
waste oil remains in the boiler while the balance is emitted (36).
- 52 -
-------
ZINC
The zinc content of waste oil/bituminous coal blends Increases
appreciably with increasing blend ratios. Portland cement manufacturers
were concerned about water soluble zinc oxides in their product.
This metallic oxide stops the cement from setting (34). The water sol-
ubility of the zinc oxide generated upon the combustion of waste oil
has not been established in this study. Based on 100 percent waste
oil combustion testing, 38 percent of the zinc 1n waste oil remains
in the boiler while the balance is emitted to the atmosphere (36).
PHOSPHORUS
. ' T' 'i • -
The phosphorus content of waste oil/bituminous coal blends increases
notably with increasing waste oil concentration. As in the case of
zinc, Portland cement manufacturers fear that this element will also
inhibit cement solidification (34). Based on combustion data, 35
percent of the phosphorus is retained in the boiler when firing 100
percent waste oil (36).
OTHER TRACE ELEMENTS
Regarding the other elements shown in Table 14 but not discussed
above, no information was found to indicate any direct technical impacts
created by these elements during waste oil combustion. In fact waste
oil contains significantly less of these materials than is present
in bituminous coal.
Because of the widespread concern regarding lead as a hazardous
pollutant, the remaining discussion will focus on lead emissions and
resulting groundlevel concentrations resulting from these emissions.
LEAD EMISSIONS FROM UNCONTROLLED SOURCES
In estimating lead emissions from a combustion source firing
waste oil, three basic pieces of information are required:
.The firing rate of waste oil (gallons/hour)
. The average lead content of the waste oil
. The ratio of lead emitted with the flue gas to
the quantity entering with the oil
The^firing rate of waste oil is a function of the capacity and
operating conditions of a particular combustion source. For example,
a large 600-megawatt steam generating power plant consumes about
30,000 gallons per hour of No. 6 residual oil, Based on waste oil
supplies, it would be reasonable to assume that such a plant could
not fire in excess of 5 percent by weight of waste oil for extended
durations. A 5 percent by weight waste oil/fuel oil blend would
result in a waste oil firing rate of 1500 gallons/hour, other
proposed and currently practiced applications such as direct firing
waste oil in rotary cement kilns, and as a supplementary fuel in
smaller boilers generating steam for space heating and process use,
- 53 -
-------
consume from a few gallons to several hundred gallons of waste oil
per hour.
The lead content of automotive waste oil varies widely, ranging
up to 1.0 percent or higher. Waste oil, during the process of handling
and storage, may be diluted with other oils and/or solvents but this
would only tend to further dilute the lead content. Consequently,
an estimate of 1.0 wt. % lead in waste oil is a good conservative value
for estimating environmental impacts, as this represent the worst
case situation. The current trend towards low lead gasoline may even
significantly reduce lead as a significant automotive waste oil con-
taminant in the future.
The estimation of the ratio of lead emitted from the combustion
source with the flue gas to the quantity entering with the oil is
difficult to predict as it again is dependent on the combustion system
and operating characteristics. For example, the nature and extent
of soot blowing operations in a boiler will have a significant impact
on lead emissions when firing waste oil. Also the size of the com-
bustion chamber, combustion efficiency, operating temperatures, and
chamber geometry will influence the quantity of ash emissions. A
summary of available information on lead emissions from a variety of
sources has been compiled and is presented in Table 15.
As seen from this table, a significant percentage of lead is
emitted with the-flue gas during normal operation. It is important
to note here that these are emissions estimates upstream of any
collection or control system that may be present. One source, Northern
State Power Co., in their burning of a blend of 3 parts waste oil to
97 parts coal indicated more than 50% of the lead in the waste oil
was emitted. Their estimate was based on an examination of the flyash
collected by their electrostatic precipitator as well as evaluation
of the lead content of the flue gas down stream of the precipitator.
Their flue gas analysis showed no increase in lead content with the
use of waste oil, as essentially all the lead-containing ash emitted
from the boiler was collected as flyash in the precipitator. A portion
of this collected lead-containing flyash, however, was generated during
the short soot blowing operation (lasting approximately 5 minutes and
performed twice per 8 hour shift), and not during normal operation.
For applications where heat transfer surfaces are not present such
as firing waste oil in a rotary kiln or in incinerators, a higher
percentage of lead emission is possible. These cases would have to be
evaluated on an individual basis to effectively estimate lead emissions.
A recent study (40), shows that waste oil can be utilized as an auxiliary
fuel in municipal incinerators. Many applications in which direct firing
is used, such as rotary kilns, are inherently significant generators of
particulate emissions. These processes would therefore require high
- 54 -
-------
TABLE 15. SUMMARY OF AVAILABLE DATA ON QUANTITIES OF LEAD EMITTED WITH
FLUE GAS AS A PERCENTAGE OF LEAD ENTERING WITH WASTE OIL FUEL (34)
Mobil Oil
Shell Oil
! Gulf Oil
Northern States
Power Co.
Hawaiian Electric Co.
Aberden Proving Ground,
Edgewood Arsenal
Esso Research and E
Engineering
DESCRIPTION OF
COMBUSTION SOURCE
Steam Boiler
(18,000 Ib. steara/hr.)
Steam Boiler
(60,000 Ib. steam/hr.)
Small Home Oil Burner
Utility Boiler
( 500,000 Ib. steam/hr.)
Utility Boiler
( 200,000 Ib. steam/hr.)
Steam Boiler
(5,000 Ib. steam/hr.)
Steam Boiler
( 1,000 Ib. steam/hr.)
LEAD EMITTED
PERCENTAGE WITH FLUE GAS
OF DURING NORMAL OPERATION
TYPE OF TOTAL FUEL WASTE OIL LEAD CONTENT SOOT AS A PERCENTAGE REE
VIRGIN FUEL FEED RATE IN FEED OF WASTE OIL BLOWING OF LEAD FEED RATE NO
No. 6 Fuel Oil 147 gal./hr. 5 wt % 1% yes
No. 6 Fuel Oil 374-476 75 wt % 0.5-H no
gal ./hr.
Ho. 2 Fuel Oil 3 gal./hr. 25 wt % 1.1* no
Coal 599,360 Ibs./hr. 3.1 wt % 0.65% yes
No. 6 Fuel Oil 1,900 gal./hr. 7.5 % 0.45% yes
No. 2 Fuel Oil 40 gal./hr. 30% 0.67% no
None 7. 5 gal./hr. 100% 0.4-0.6% no
50%
31%
28%
24-61%*
25-29%
3%
50%
37
37
37
38
34
39
36
* Based on analyses of collected precipitator fly ash which contains ash from soot blowing operations.
-------
efficiency control systems such as scrubbers and baghouses to meet
emission requirements. Installations which generally utilize high
efficiency collectors are potentially suitable for waste oil combustion.
Later this section discusses the impact reductions of lead and other trace
waste oil contaminants obtainable with these high efficiency control
systems and indicates those industries which utilize such control equipment
and which therefore represent attractive potential users of waste oil as
a fuel.
Tests were recently performed by Esso Research and Engineering (36)
which included the combustion of 100 percent waste oil in a small (50 hp)
boiler. The chemical composition and particle size distribution of the
resulting particulate emissions were examined and these results reported
in Tables 16 and 17.
Table 16. WEIGHT PERCENT OF TRACE CONTAMINANTS IN PARTICULATE
EMISSIONS FROM THE COMBUSTION OF WASTE OIL
range
average
Contaminants
Pb
14-19
16
Ca
18 - 13
10
P
6.1 - 7.7
6.9
Zn
3.7 - 5.0
4.3
Fe
0.9 - 1.3
1.1
Ba
1.2 - 2.6
1.9
Table 17. PARTICLE SIZE DISTRIBUTION OF LEAD AND OTHER MAJOR
CONTAMINANTS IN EMISSIONS FROM WASTE OIL COMBUSTION
(units: Wt. percent of the contaminant falling
within the indicated particle size range)
-C 1 micron
1-10 micron
10 micron
Pb
76-79
16-21
2.7-4.4
Ca
10-19
71-74
10-15
P
23-42
49-66
8.9-10
Zn
56-73
23-39
3.4-5.0
Fe
2.7-36
51-80
13-18
Ba
3.3-51
40-79
8.9-18
- 56 -
-------
TABLE 18. SUMMARY OF AVAILABLE ESTIMATES AND MEASUREMENTS OF AMBIENT
LEAD CONCENTRATIONS RESULTING FROM WASTE OIL COMBUSTION (34)
TEST
NO. COMPANY
1 Mobil Oil
2 Humble Oil
i
01
^ 3 Shell Oil
'
4 Gulf Research
& Development
5 CCA/Technology
Division
6 Hawaiian
Electric
•
LOCATION APPLICATION
Port Mobil, Auxiliary Fuel
N.Y. in
Steam Boiler
Sewell's Point, Auxiliary Fuel
Virginia in
Steam Boiler
Wood River Auxiliary Fuel
in
Steam Boiler
Domestic Oil
Burner
Northwest U.S. Auxiliary Fuel
in Municipal
Incinerator
Hawaii Auxiliary Fuel
in
Utility Boiler
VIRGIN
FUEL
TYPE
No. 6
Fuel
Oil
None
No. 6
Fuel
Oil'
No. 2
Fuel
Oil
None
No. 6
Fuel
Oil
TOTAL FUEL
FIRING RATE
100 gal./hr.
100 gal ./hr.
374-476
gal ./hr.
3 gal./hr.
300 gal./hr
1 ,900 gal ./hr.
WASTE OIL
FIRING RATE
5 gal ./hr.
100 gal ./hr
280-360
- gal./hr.
0.8 gal ./hr
300 gal ./hr
140 gal./hr
LEAD
CONTENT
IN
WASTE OIL
(WT20
1.0
. Unk.
0.5-1.0
1.1
1.0
0.45
STACK
HEIGHT
(FT)
60
35
130
15
100
137
CONTROL
DEVICE
UTILIZED
None
None
None
None
None
None
SOOT
BLOWER
UTILIZED
yes
yes
yes
no
no
yes
MEASURED ON
CALCULATED
MAXIMUM
GROUND-LEVEL
CONCENTRATION
ug/m3
1.0
0.05
0.65*
0.2
4
0.05**
0.11
CONCENTRATION
MEASUREMENT REF.
CLASSIFICATION NO.
Calculated 37
30 day
Average
Measured 37
Short Term
Sampler
Calculated 37
30 -day
Average
Calculated 37
One Hour
Average
Calculated 40
30-day
Average
Calculated 34
One hour
Average
* Based on ambient sampling during sootblowing.
** Concentration based on a specific act of operating conditions discussed in reference.
-------
GROUND LEVEL LEAD CONCENTRATIONS
At present national ambient air quality standards for lead have
not been set and it has been indicated that a previously proposed
guideline of 2 micro grams per cubic meter - 3 month average may no
longer be sufficient. Consequently, contributions of ambient lead
concentrations from sources burning waste oil need to be significantly
less than 2 g/mS, averaged over 90 days.
The information available on ground-level lead concentrations from
current and projected applications of waste oil combustion, is sum-
marized below in Table 18. Four applications are presented, for
utilizing waste oil as a fuel, namely:
. In a domestic oil burner
. In industrial steam boilers
. In utility steam boilers
. As an auxiliary fuel in a municipal incinerator
In all the cases presented, parti cul ate control equipment was not
utilized. The estimated ambient air quality could, therefore, in
theory be substantially reduced, if control equipment were employed.
In Test No. 4, in Table 18 waste oil is utilized as an auxiliary
fuel in a domestic oil burner. Emissions from this test were used to
estimate a maximum 1-hour average ground-level concentration of 4 jug/nr
This concentration 1s high. Assuming that 4 /jg/m3 1s representative,
domestic heating and similar area source applications (low ground level,
densely dispersed) is not desirable unless the lead content in waste
oil is greatly reduced.
The tests numbered 1, 2, and 3 are all examples applying waste oil
as an auxiliary fuel 1n industrial steam boilers. Emissions from tests
1 and 3 were utilized to estimate 30-day average ground-level concen-
trations, and in test No. 2, a short-term ambient sample was collected
and its lead content measured. Although the resulting ambient concen-
trations differed significantly (0.05 - 1.0jyg/m3), the data does
illustrate that significant quantities of lead are emitted from industrial
boilers when firing waste oil up to 360 gallons/hour.
Test No. 5 represents a theoretical estimate of ambient lead
concentrations from the use of waste oil as an auxiliary fuel in a
municipal incinerator. The maximum ground-level lead concentrations
were estimated at 0.05 jjg/m3. This test is discussed in more detail
later in this Section.
- 58 -
-------
Test No. 6 1s based on the firing of a 7.5 percent waste oil,
92.5 percent No. 6 residual oil blend in a 56-MW steam-electric utility
boiler operating at 36 percent of capacity (20 MW). The 1-hour average
maximum ground-level lead concentration was estimated at 0.11 jjg/nv3.
The question remains, however, as to the potential impact of utilizing
waste oil in a large utility boiler (500 MW) which services heavily
populated urban areas. The modeling work discussed below which was
performed as part of this study, addresses this specific and important
application.
Under contract with the Environmental Protection Agency, GCA
Corporation (34) of Bedford, Massachusetts, made estimates of ground-
level lead concentrations averaged for two 1-month periods for a large
New England power plant (560 megawatts) theoretically firing a 5 percent
waste oil, 95 percent No. 6 fuel oil blend. The characteristics of
this plant and the fuel oil blend being fired 1s summarized 1n Table 19.
The parameters In Table 19 were selected so as to approximate the .
"worst case" situation for generating adverse lead ambient concentra-
tions. The 5 percent waste oil, 95 percent No. b residual oil blend -
was chosen as it represents a firing rate of 1500 gallons/hour, which
1s the estimated maximum rate at which waste oil could be supplied for
extended durations. A waste oil lead content of 1.0 percent was
selected since previous discussions in this section Indicated that this
value was at the high end of the spectrum for lead concentrations 1n
waste oil. In addition, since earlier discussions 1n this section showed
that the highest ratio of lead out of the stack to lead entering with
the waste oil approximated 50 percent, this value was utilized here.
Finally, we choose to estimate average lead concentrations over a 1-
month period rather than a 3-month average, since shorter time periods
result 1n higher average concentrations.
Average ground-level concentrations expected over a 1-month period
1n the V1dn1ty of a selected New England power plant were calculated
by means of a Gaussian diffusion model for an elevated point source.
Estimates of effective stack height for use-In the model were made
using an expression developed by BHggs (41). Hourly wind speeds and
directions for the calculations were measured at the plant site.
Results of the calculations for 2 months (September and December
1970), presented In Figures 6 and 7 show maximum ground-level .concen-
trations of slightly more than 0.10 and 0.15 jjg/m3. These maximum
values are 1n good agreement with the value presented 1n Table 15 for
a smaller utility boiler. Consequently, this preliminary environ-
mental Impact assessment Indicates that an Increase 1n ground-level
lead concentrations can be expected 1f untreated/waste oil 1s used
as a fuel blending component in large utility boilers.
- 59 -
-------
TABLE 19. ASSUMED PHYSCIAL AND OPERATING CHARACTERISTICS
OF 560 MEGAWATT POWER PLANT FIRING WASTE OIL (34)
Physical Characteristics
plant capacity: 560 MW
number of stacks: 1
stack height: 300 feet
stack diameter: 18 feet
Operating Characteristics
continuous operator - 7 days per week
type of fuel: 95 wt. percent No. 6 residual oil
5 wt. percent - waste automotive oil
waste oil lead content: 1.0 wt. percent
lead emitted with flue gas as a percentage of lead
entering with oil: 50%
average fuel feed rate: 17,600 barrels/day = 31,000
gallons/hour
average heat content of fuel blend: 146,000 BTU/gallon
gas exit temperature: 149° C
gas exit velocity: 84.0 feet/second
- 60 -
-------
Figure 6 Isopleths of average ground-level Concentration
of Pb for September 1970. Units are ug/m . (34)
- 61 -
-------
Figure 7. Isopleths of average ground-level concentration
of Pb for December 1970. Units are jig/ra3. (34)
- 62 -
-------
GCA (40) also made estimates (Test 5 - Table 18) of average ground-
level concentrations in the vicinity of a municipal incinerator using
waste oil as an auxiliary fuel over a 3-month period.
The input data are based on a waste oil auxiliary fuel burner system
in conjunction with a 400 ton per day municipal incinerator. Exhaust gas
were estimated to be 166,000 actual cubic feel per minute (ACFM) based on
a typical incinerator excess air level of 200 percent. Using the esti-
mated quantitites of waste oil needed per ton of refuse fired (0.74
gallons/hour/ton/day of incinerator capacity) an estimated 2,250 IDS.
per hour of waste oil would be fired. It was assumed that waste oil
firing would occur during approximately one-third of the operating time
of the incinerator and that the lead content of the waste oil was 1 percent
percent by weight. A lead collection efficiency of 50 percent was
utilized based on data presented on waste oil burning studies by
Mobil Oil Corporation (42). A stack height of 100 feet was assumed
although stack heights on many facilities greatly exceed this value.
The ground level concentration calculations are based on the usual
Gaussian diffusion model for an elevated source and plume expansion
rates specified in Turner's Workbook for Atmospheric Dispersion
Estimates (43). Wind data for the model calculations were taken from
climatological records obtained over an 18-year period at Falmouth,
Massachusetts. The 3-month period used for the calculations was
comprised of the three winter months of December, January, and
February. The wind data were restricted to the daytime period from
0900-1700 EST, conforming approximately to the daytime period of
incineration. For the model calculations, the wind data were expressed
as frequency of occurrence of 16 wind direction and 5 wind speed
categories. Daytime stability classes from A to D were assigned on
the basis of the observed wind speed categories and estimated solar
radiation categories. For simplicity, only two effective plume heights
were used. The first assumed a plume rise from heat and momentum
forces of 75 meters and was used when the surface wind was equal to
or less than 6.5 knots. The second assumed a plume rise of 35 meters
and was used when the surface wind speed was greater than 6.5 knots.
These values were selected as conservative estimates on the basis of
trial calculations, using Briggs plume rise formula (44).
The results of the calculations of 3-month average lead ground-
level concentrations in ^ig/m3 are presented as concentration Isopleths
1n Figure 8. , The calculations assume that waste oil is burned under
the conditions stated in Table 20.
Figure -8 shows that the estimated maximum 3-month average ground-
level concentration attributable to an Incinerator when operating as
described above is approximately 0.05 ;ug/rrr.
- 63 -
-------
TABLE 20
INCINERATOR INPUT DATA (40)
Incinerator Capacity 400 Tons/day
Exhaust Gas Temperature 500° F
Gas Flow Rate at 500° F ' 166,000 ACFM
Waste Oil Burning Rate 2250 Ibs/hr.
Hours of operation 8 hours/day
Days of operation 5 days/week
Ratio of Waste Oil on 33%
Time to Incinerator on time
Lead Content 11- by weiriht
Lead Collection Efficiency 50E
Stack Height 100 feet
- 64 -
-------
Figure 8-Isopleths of average ground-level concentration of Pb for winter season(40)
(Units are jig/m3)
- 65 -
-------
EPA has not established an ambient air quality standard for lead
principally because airborne lead can either be directly absorbed
through the lungs as people breathe, or can settle out of the air to
contaminate dirt which may then be consumed, for example, by children.
One type of standard has been established, however, for airborne lead
by requiring a reduction 1n the amount of lead 1n leaded gasoline. This
standard was promulgated on December 6, 19/3, under the authority of
Section 211, Regulation of Fuels, of the Clean A1r Act, 1n order to
reduce preventable lead exposure and protect the public health.
Several alternatives were considered concerning the control of
lead emissions from the combustion of waste crankcase oil. These
Include:
(1) Prohibiting the combustion of waste crankcase oil altogether.
(2) Specifying a safe ambient concentration of lead, and allowing
an uncontrolled fuel combustion source to blend untreated
waste crankcase oil with virgin oil so as not to exceed the
specified safe ambient concentration ot lead.
(3) Hladng no limitations on the combustion ot waste crankcase
oil.
(4) Requiring control technology to minimize lead emissions from
combustion of waste crankcase oil. This could be accomplished
by:
a. Developing emission standards for stationary source
categories which use waste crankcase oil as fuel based
on best control (considering cost). These standards
would be developed under the authority of Section III
of the Clean Air Act.
b. Recommending burning the waste crankcase oil only in
sources which employ highly efficient particulate
control systems.
The selection of one of these four options 1s governed by the
Agency's policy established 1n the gasoline lead additive regulations
promulgated on December 6, 1973, The fourth alternative 1s the only
one which 1s consistent with that policy.
Prohibiting the combustion ot waste crankcase oil is a more drastic
measure than that adopted on December 6, 1973. That policy requires only
that the lead additive content in gasoline be gradually reduced, and
tolerates the presence of some lead 1n the environment. Totally prohibiting
the combustion of waste crankcase oil would be 1n order only if the
regulations required immediate elimination of lead as a gasoline additive.
- 66 -
-------
Specifying a safe ambient concentration of lead and allowing waste
crankcase oil to be blended with virgin oil to meet the ambient concen-
tration is also inconsistent with the policy established on December 6,
1973. The preamble to the regulations states:
...the Administrator determined that it (is) difficult,
if not impossible, to establish a precise level of
airborne lead as an acceptable basis for a control
strategy. ..[The basis for this determination is] that
airborne lead can either be directly absorbed through
the lungs as people breathe, or can settle out of the
air to contaminate dirt which may be consumed by children.
Strong evidence exist which supports the view that through
these routes airborne lead contributes to excessive lead
exposure in ...adults and children. In light of this
evidence, the Administrator concluded that 1t would be
prudent to reduce preventable lead exposure. (38 FR 33734)
\
THe third alternative, placing no limitations on the combustion
of waste crankcase oil, is not consistent with the Administrator's
conclusions that airborne lead "contributes to excessive lead exposure
in adults and children (and) that 1t would be prudent to
reduce preventable lead exposure."
The fourth alternative, requiring control technology to minimize
the lead emissions from combustion of waste crankcase oil, 1s consistent
with the Administrator's conclusion "that 1t would be prudent to reduce
preventable lead exposure."
Even though standards to control lead emissions from burning of
waste crankcase oil may be unnecessary due to the effect of removal of
lead additives from gasoline on the lead content ot the waste oil, we
recommend that 1n the Interim between 1975 and 1980 burning of waste
crankcase oil be permitted only 1f lead emissions are minimized to
"reduce preventable lead exposure" by burning the waste crankcase oil
only 1n sources which employ highly efficient particuI ate control
systems. In several emission studies conducted by EPA on a variety
of lead sources, it was found that baghouses collect lead compounds as
efficiently as they collect total particuI ate. Particle sizing studies
by ESSO Research and Engineering on Incineration of waste crankcase,
oil have shown that a large portion of the lead emissions are In the
submlcron range. A limited number of studies on processes other than
combustion of waste crankcase o1I have Indicated that nigh efficiently
wet scrubbers'and electrostatic predpltators effectively remove lead
from the effluent gas stream. Due to the;;h1gh resistivity, of some lead,
compounds, preconditioning of the gas stream may be necessary for
efficient collection by electrostatic preclpltators, It should!also
be noted that waste crankcase oil may be used as'a fuel if a high-level
pretreatment 1s employed to remove the lead prior to combustlohr-
- 67 -
-------
REDUCTION OF WASTE OIL FUEL COMBUSTION IMPACTS
The combustion of waste crankcase oil without removal of contaminants
can lead to environmental problems, added maintenance of combustion
equipment and fouling of boiler and heat exchange surfaces. These problems
may run the gamut from significant to insignificant depending upon the
quality of the waste oil, whether it is being burned without dilution
or whether it is blended in low percentages with other fuel.
The contaminants in waste oil can be classified into three groups:
1. Volatile Contaminants,
2. Soluble Contaminants, and
3. Insoluble Contaminants.
Volatile contaminants are primarily gasoline and water. Gasoline
can be present in amounts up to 10 percent. Water ranges from 1 to
about 10 percent. The water is present as either free water, emulsified
water or oil-soluble water. The free water, but not the emulsified
water, can be removed effectively by the usual settling operations.
Soluble water is present in trace amounts and is not an important factor
in either combustion or processing.
Soluble contaminants include the metal-organic dispersant additives,
viscosity index polymeric additives, and other additivies which have been
blended with oil and gasoline. These compounds which have remained
unmodified through use do not seriously affect the storage, handling
and burning of waste oil, although their removal is desirable in terms
of alleviating asn deposits on heat transfer surfaces as well as
their contribution to ambient emissions. Elements such as zinc, phos-
phorus and sulfur are present as soluble contaminents.
Insoluble compounds are primarily atmospheric dust, carbon, lead
oxide and other metal and metal oxide particulates arising from fuel
combustion, degradation of metal organic additives, and corrosion or
abrasion of engine parts. The removal of coarse particles is relatively
simple but the small particles which remain dispersed by still active
detergents and dispersants are not readily removed by conventional
solid-liquid separation methods. Unfortunately, most of the harmful
metallic constituents in waste oil axist as submicron particles.
About 75 percent of the lead oxide particles are submicron in size.
Lead is of course the primary constitutent of the waste crankcase
oil ash, accounting for roughly 35 percent of the total ash content (36).
Fuel line freezing, burner flameout and variable heating values
are all attributable to the presence of'water in fuel, Water can be
removed to avoid these problems by pretreatment processes. Coarse
solids contribute to the abrasive wear of nozzles, pumps, and
valves; can plug line and burner strainers; and can lead to excessive sludae;
buildup in storage tanks. The added maintenance and operating costs
- 68 -
-------
incurred as a result of coarse sludge can be eliminated by low level
pretreatment, but fine solids are not removed by this pretreatment.
these fine particles and the soluble metal organic additives are the
principal source of adverse environmental emissions and can cause
fouling and corrosion of boiler and heat exchanger surfaces. They can
be removed by high level treatment such as vacuum distillation. The
property of specific gravity must be considered since stratification
can occur during prolonged storage of waste oil blends. This condition
can only be corrected by either convective or some other form of mixing
of the fuel during storage or by blending just prior to combustion.
Pretreatment will not alleviate this stratification tendency except to
the extent that specific gravity is changed by the oretreatment process.
Low level pretreatment processes are defined, for purposes of this
discussion, as those operations which remove course particulates, water
and light ends such as gasoline from waste oil. An adequate low level
pretreatment process will allow utilization of waste oil directly, or
as a fuel blend, without introducing problems associated with abrasion
of valves and atomizing nozzles and burner malfunction due to excessive
water or volatile components in the waste oil. Operating and maintenance
costs associated with the feed and burner systems should be equivalent
to those incurred with conventional fuels. However, the pretreated oil
is a high metals fuel, since pretreatment does little to remove metallic
constituents and does not significantly alter other effects which can
result from waste oil combustion such as fouling of equipment surfaces
and the emission of lead and other metallic elements from stack exist
gases. Settling is the simplest means of removing that portion of the
BS&W not held in suspension by the oil and its dispersants. Although
settling is largely ineffective in removing fine contaminants, it does
remove coarse grit and free water and is usually the first method-
employed in any treatment process. More rigorous treatments would
involve controlled settling at high temperatures or with a diluent
added to reduce oil viscosity.
Other methods of low level pretreatment include centrifugation,
filtration, and demulsification followed, by settling, centrifugation,
or filtration. Demulsification is most successful in removing
suspended water; however, it does not remove small particles'/ Suspended
and dissolved water and other volatiles such as gasoline can be most
effectively removed by thermal processes which drive off the low boiling:
contaminants. Flash distillation at atmospheric or reduced pressure
is a common technique..
The low level pretreatment processes, discussed above, used in
various combinations will produce a fuel oil which can be combusted
in conventional fuel burning equipment; however, the fuel oil produced
will have a metal's content commensurate with the waste oil which
was treated. The removal of these metals would require a high level
pretreatment. There are three primary high level processes. These are
acid/clay separation, solvent extraction, and vacuum distillation.
- 69 -
-------
These three processes have been discussed under "Re-refining Technology."
Other methods or combination of methods could also be used including
ultrafiltration, demulsification, electrolytic deposition, and floccu-
lation or coagulation techniques involving for example, a precipita-
tion of gelatinous solids which physically entrap the suspended
particulates. None of these latter methods or combination of methods
appear commercially suitable at this time for the separation of
the many metallic constituents from a product as variable as waste
crankcase oil.
Re-refineries using high level treatment processes are interested
in the separation of the waste oil into lube oil and other fractions
which in the past offered greater return due to their higher market
value. However, for processes designed solely for fuel oil production,
such fractionation is not necessary and adds unnecessarily to the cost
of equipment and its operation. For fuel grade oil production it is
only necessary that the process be relatively free of operational ,
problems and that the fuel oil is relatively free of volatiles, metallic
constituents, and tarry sediment which could present safety problems,
foul equipment, or provide an unfavorable environmental impact in sub-
sequent combustion operations.
In the selection of waste oil treatment processes to reduce the
technical and environmental impacts associated with processing and
combustion, a decision must be made with regard to the necessity of
any treatment at all other than a simple pretreatment process to remove
most of the BS&W. If the added maintenance, operational and environ-
mental penalties of waste oil combustion are acceptable as the result
of blending and/or through the use of control equipment on stack gases,
then no further waste oiI treatment may be necessary.
The emission of lead and other contaminants resulting from the
combustion of waste oil can be significantly reduced by the employment
of high efficiency pollution control equipment. This method of environ-
mental impact reduction is a particularly viable one for those
industrial sectors which combine high fuel consumption with a high
incidence of high efficiency, particulate control device utilization.
These areas are likely potential users of waste oil since they can
burn waste oil without significantly increasing air contaminant levels
and without incurring cost penalties for extensive pretreatments and
the installation of control devices.
Fabric filtration, electrostatic precipitation, and high energy
venturi scrubbers are the only control methods which will provide
efficient removal of the predominantly submicron sized particles
which constitute the bulk of the lead and zinc emissions.
- 70 -
-------
The electric utility industry is by far the largest consumer of
fuel oil in the United States. Although control equipment, primarily
electrostatic precipitators, is used by this industry they have been
applied almost exclusively to coal burning facilities. The particulate
emissions from oil burning operations are well below those required by
Hederal or state ambient air quality standards. Consequently, electro-
static precipitators are not normally installed by plants burning only
fuel oil.
In addition to electric utilities, many industrial boilers and
processes are equipped with precipitators, fabric baghouses, and high
energy yenturi scrubbers. Table 21 provides a partial list of industries
and indicates the particulate control technology that is used. Table 22
indicates the per annum level of sales of control equipment in the U.S.
In summation, the efficient control of effluent emissions from
utilities, industrial boilers, and certain processing operations will
allow waste oil fuels to be utilized even in high blend ratios. Con-
trol equipment is now used in many industries and waste oil fuel blends
could be utilized with low level pretreatment and investment. The
installation of control equipment for the specific purpose of reducing
waste oil combustion impacts is probably not warranted except for large
users; however, as new source standards are promulgated, the use of
control equipment will increase and extend the potential for waste oil
utilization.
- 71 -
-------
TABLE 21. USE OF PARTICULATE COLLECTORS BY INDUSTRY (34)
_ __
MATERIAL CLASSIFICATION
Utilities & Industrial
FF
-ws
Pulp and Paper
Rock Products
Steel
Mining and Metallurgical
Miscellaneous
0
•f
0
0
0
+ Most Common; (f
FF Fabric Filter;
PROCESS
Coal +
Oil +
Natural Gas
Lignite •+
Wood and Bark 0
Bagasse
Fluid Coke +
Kraft +
Soda +
L1me Kiln
Chemical
Oissolver tank
vents
Cement +
Phosphate +
Gypsum +
Alumina +
Lime +
Bauxite +
Magnes. Oxide 0
Blast Furnace +
Open Hearth +
Basic oxygen
furnace +
Electric Furnace 0
Sintering +
Coke Ovens +
Ore Roasters +
Cupola 0
Pyrites roaster +
Taconite 0
Hot scarfing +
Zinc roaster +
Zinc smelter +
Cooper roaster +
Copper reverb +
Copper converter +
Lead furnace
Al umi num +
Elemental Phos. +
Ilmenite +
Titanium dioxide 0
Molybdenum 0
Municipal
Incineration 0 -. --_
"Not Normally Used; EP Electro Static PrecipitaforT
HS Wet Scrubber
0
0
- 72 -
-------
TABLE 22. AIR POLLUTION CONTROL EQUIPMENT SALES
IN THE UNITED STATES (34)
(millions of dollars)
Electrostatic
1962 17
1963 15
1964 20
1965 26
1966 35
1967 36
1968 41
1969 38
1970 62
1971 92
Type
Fabric
8
8
13
16
19
20
29
34
37
56
Wet
4
5.
6
7
11
9
16
16
19
20
Mechanical Total
8
8
12
13
14
12
12
14
15
14
37
36
51
62
79
77
98
102
133
182
- 73
-------
SECTION VIII
THE EFFECTS OF WASTE CRANKCASE OIL ON
SELECTED MARINE AMD FRESHWATER ORGANISMS
In response to the 1972 Water Bill, P.L. 92-500, the Environmental
Protection Agency undertook research attempting to assess the waste oil
disposal problem. Prior to this effort, virtually no information existed
on the biological effects of waste oil 1n the aquatic environment. This
report is intended to summarize salient features of this research effort.
The report is not intended to replace the specific scientific reports
that have or will result from these studies and the reader is urged to
consult the individual sources (cited below). It is further emphasized
that "waste oils" are part of a generic class of pollutants which are
the object of continued study by EPA.
Limited information exists on the disposal of waste oil however,
some activities are known which result in the Introduction of waste
oil Into the aquatic environment, these Include: road oil use, land
disposal, and dumping in sewers. Oil introduced by these mechanisms
may occur as a surface slick, emulsified, or as a water soluble fraction.
The purpose of this effort was, therefore, to.investigate the effects
of waste oil as it might be Introduced into the environment. This was
accomplished by determining toxiclty levels and tissue accumulation
levels for selected marine and freshwater organisms as well as the
chemical characteristics of the oil 1n Its various forms to identify
potential toxic components.
TEST RESULTS
Toxidty levels were determined for both marine and freshwater
organisms by use of static and flow-through short-term mortality tests
known as bloassays. Static bioasSays are those in which both the
organisms and the toxicant solution are placed in test containers
and left for the duration of the test. Flow-through bloassays are
those in which fresh toxicant solutions are continuously or periodically
added to test containers throughout the test process. In addition,
test were conducted with exposures up to 60 days in the marine studies,
and over the life cycle of a fish 1n the freshwater studies. In all
of these tests, mortality or disruption of normal function, such as
reproduction is the end point criteria. Mortality is then considered
as a function of toxlcity level and time and 1s usually expressed as
the dose level or time of exposure which kills 50 percent of the
species tested.
In freshwater mortality studies, fish were exposed to floating
oil, emulsified oil, and a water extract of oil. The level at which
50 percent of the fathead minnows (Pimephales promelas) were killed
after 96 hours (96-hr LC50) exposure to floating oil was approximately
- 74 -
-------
1.1% oil (11,000 ul oil/liter water or 11,000 ppm). The 96-hr LC50
for the flagfish (Jordanella floridae), exposed to emulsified oil
was 0.03790 oil (370 ul oil/liter water or 370 ppm). Flagfish
exposed to water extracts of oil resulted in a 96-hr LC50 or 0.38%
oil (3,800 ul oil/liter water or 3,800 ppm). Using both species,
the 96-hr LC50 for flow-through tests with water extract ranged
from 0.1 to 0.16% oil (1,000 to 1,600-ill/liter or 1,000 to 1,600 ppm).
Direct mortality as described above is a crude estimator of
toxicity since the effect of exposure may be to alter or upset
important normal functions but not produce direct mortality. Thus,
chronic, sublethal effect must also be considered.
A test to determine the effects of continuous long-term sublethal
exposures of the water extract of a 10 percent oil-water mixture was
conducted with the flagfish. This species was chosen for study due to
its rapid development from egg to reproductively mature adult. The
120 day test began with the egg stages and was continued through to
spawning by the resultant adults (56 days). Changes in survival,
growth, and/or reproduction were used to estimate chronic effects. A
significant decrease 1n fry survival and egg production was found at
concentrations of 310 ul/liter water ahd higher. No effects were
noted at 80 ul/liter.
One of the factors important in interpreting the results of the
waste oil toxicity tests is the chemical analysis of the oil used.
This is primarily important in determining what compounds might accumulate
1n tissues, however, it is also Important in determining whether the
test oil was representative of an "average" waste oil. Both organic and
inorganic components of the waste oil and the freshwater extract of a
10 percent oil in water mixture were chemically analyzed.
Organic components were separated on XAD-2 resin columns into
saturated, aromatic, and polar fractions and subsequently characterized
in more detail by GC/MS analysis. The oil fraction contained 76
percent saturated hydrocarbons, 4 percent aromatic hydrocarbons, and
4 percent polar compounds, the water fraction, as previously described,
contained 80 percent polar compounds, 3 percent saturated compounds,
and 14 percent aromatic compounds.
Characterization of inorganic components was conducted by ...atomic
absorption, a technique which permits qualitative and quantitative
analysis of metallic elements. Analyses-indicate that the major
metallic constituents were lead (18,500 mg/liter in the oil and 4,8
nig/liter in the water extract), zinc (1,350 mg/liter in the oil and
16 mg/liter in the water extract),;and cadmium, (0.6 mg/liter in the
water extract).- Based on available information, these concentrations
approximate the levels commonly found in waste oils throughout the
country. It is suspected, however, that most of these metals were
not in an. Ionic form but rather were in organic complexes. How this
affects toxicity is not known.
-75--
-------
The results of the chemical analysis prompted the investigation of
lead, zinc, and cadmium accumulation in fish tissues. Tissues from
30-45 day old fish (J_. Floridae) in the chronic test were analyzed for
their uptake of waste oil components. Zinc, lead, cadmium, and normal
hydrocarbons were found to be concentrated in the tissues in significant
amounts.
The short-term toxicity of emulsified waste oil under static
conditions was determined for a variety of marine organisms. These
included two phytoplankters, two zooplankton species, molTuscan
and crustacean larvae and a common estuarine fish, the Atlantic
silverside (Menidia menidia). The oil was found to be nontoxic to
two common species of phytoplankton, Skeletonema costatum and
Thalassiosira pseudonana. at levels up to 10 ul/liter. A~ differential
toxicity was noted for the zooplankton species. The 96-hour LC50 for
the free swimming oceanic copepod Acartia tonsa was 15 ul/liter
whereas, for the bottom dwelling esturaine zooplankton Tigriopis
japonicus no effect was seen up to 50 ul/liter.
Molluscan larvae were very sensitive to the oil, with levels of
ul/liter affecting coot clam larvae and 4 ul/liter affecting oyster
larvae. Also lobster larvae were sensitive, with a 96-hour~LC50 of
5 ul/liter. The Atlantic silverside was less sensitive having an
acute LC50 of 1,700 ul/liter.
Additional studies indicated that static exposures over longer
periods of time, i.e., up to 60 days, resulted in morphological changes
in adult M. menidia, oysters, and scallops. The oil was also toxic to
scallops at 20 ul/liter after 20 days and to oysters at 100 ul/liter
after 36 days.
CONCLUSIONS
Complete information regarding waste oil disposal practices is
not available- indications are that discharges resulting in concent-
rations on the order of 310 ul/liter (310 gallons oil/million gallons
water) would not occur except in confined or small bodies of water.
The concentrations used in the various toxicity tests can be
employed to make projections of probable effect in natural systems.
For example, if it is assumed that a lake of 1,000 acres (43,560,000
ft^ or 4,047,000 m^) had an average depth of 10 feet (3.048m), the
volume of the lake would be 3,260,000,000 gallons 12,340,000,000 liters).
To attain concentrations known to be toxic in freshwater tests i.e.,
310 ul/liter, approximately 1,010,000 gallons (3,820,000 liters) of oil
would have to be added. As much as 261,000 gallons (986,000 liters)
could be added and not exceed the level found to be "safe" in the
- 76 -
-------
laboratory, i.e., 80 ul/liter. This is the equivalent of adding 715
gallons (2,700 liters) daily for a year even assuming no degradation
or transport of oil out of the lake.
A second example might be the case where the oil is contained in,
for example, 1% (10 acres) of the lake. In this case a total release
of 10,100 gallons (38,300 liters) of oil or 30 gallons (105 liters)
daily for a year would be required to reach the toxic laboratory
concentrations of 310 ul/liter. A release of 2,608 gallons (9,870
liters) or 7.7 gallons (27 liters) per day would not exceed the 80
ul/liter level. . '
The maximum level recommended for emulsified oil in Water Quality
Criteria, A Report of the Committee on Water Quality Criteria of the
National Academy of Science (in preparation) is 0.05 unit of the
96-hour LC50. A discharge of up to 60,000 gallons (230,000 liters)
would not exceed this criterion in the example lake.
Although a "safe" level was not determined in marine studies, the
lowest level at which adverse effects were found in acute tests was
1 ul/liter. Utilizing another example, the addition of 3,260 gallons
(12,320 liters) of waste oil would be required to reach the 1 ul/liter
concentration level in a 1,000 acre estuary averagirig 10 feet depth.
In this case the addition of approximately 9 gallons (34 liters) would
be required daily for a year. This again assumes the unlikely
occurrence of no degradation or transport of oil out of the estuary.
Marine organisms appear to be more sensitive to waste oil than
freshwater organisms, however large discharges would be required to
cause an adverse effect. A spill of 815 gallons (3,085) liters in the
example estuary would not cause toxic levels with respect to emulsified
concentrations.
Results of the biological studies to date indicate a difference
in toxicity among species, among methods of introducing the oil, and
between marine and freshwater organisms. However, some of the problems
which have not been investigated and could affect our understanding of
the effects of waste oil on the environment include the following:
1. .Effects on reproductive success of marine organisms.
2. Effects on freshwater invertebrates and more sensitive
freshwater fish.
3. Effects on survival and community structure in marine and
freshwater field test conditions.
i ' i ' . % ' '', " ~
4. Effects on fish flavor impairment.
5. Effects on the sensitivity of organisms to other pollutants
or to disease.
6. Synergistic effects of waste oil introduced into demestic
treatment facilities.
-77 -
-------
SECTION IX
ECONOMIC AND LEGAL ASPECTS OF
WASTE OIL POLICY
This section of the report addresses the economic and legal factors
influencing the disposal and/or reuse of waste oil. The economic analysis
presented in the report delineates areas, if any, in the waste oil industry
(collectors, re-refiners, and reprocessors of waste oil) where profits
are unfavorable, identifies the causes of the poor profits, and discusses
different policy options which might effect changes in current conditions.
To facilitate discussion, this section is broken into several sub-
sections: (a) a brief overview of the waste oil problem; (b) waste oil
disposal; (c) waste oil collection (d) waste oil re-refining and reclama-
tion.
i»
THE PROBLEM: AN OVERVIEW
The quantities of waste oil generated in both the industrial and
automotive areas have been reported in Section III of this report. Due
to the great variability of types and quantities of waste generated an
economic analysis of the waste oil problem is very complex. The main
reasons for this are the current energy crisis, which has made much of
the previously reported economic data questionable; and the lack of data
with which to quantify environmental damages resulting from waste oil
disposal. As previously pointed out the waste oil industry is quite
diverse and unstable. It is composed of many small entrepreneurs
scattered throughout the United States. This makes it even more difficult
to obtain comprehensive operating cost data applicable to the whole
industry.
The environmental damages that waste oil can cause are dependent on
local-regional conditions, the type of oil, its contaminants, and its
concentration. Any disposal alternatives for waste oil must be evaluated
with respect to economic efficiency, its effect on other parts of the
environment, and must be considered as a component part of total environ-
mental policy. These criteria should be considered in the implementation
of any policy options adopted to deal with waste oil disposal and/or
reuse.
More specifically: (1) Any costs incurred while reducing the environ-
mental damages of waste oil should be borne by the parties responsible
for the degradation. This is a policy consistent with previous Presidental
messages on the environment. (2) The interpollutant and intermedia trade-
offs resulting from waste oil disposal and/or reclamation (recycling) must
- 78 -
-------
be taken into account. A recovery alternative superior under one set of
conditions and constraints may not be superior under a different set.
In essence, this implies that waste oil disposal should be examined as
only one component of total environmental management system. (3) The
variation in environmental damages that waste oil can produce in various
parts of the country must be recognized in any policy options selected
to deal with the issue, i.e., waste oil disposal may be a problem in some
sections of the country, but not in others.
ENVIRONMENTAL DAMAGES RESULTING FROM WASTE OIL DISPOSAL *
One of the prime reasons for being concerned about waste oil is the
environmental damages which can result from improper disposal. These
environmental damages are usually not accounted for in the private decision-
making of the firm or individuals responsible for the oils improper
disposal, and hence are not reflected in the market place as a cost of
doing business.
Environmental damages resulting from waste oil disposal are a function
of the amount of waste oil disposed of, the concentration and types of
contaminants in the waste oil, the disposal method (direct discharge into .
waterways, sanitary sewers, or onto land surfaces) and the location of the
disposal. It is then necessary to identify threshold quantities of waste
oil and contaminant concentrations which will result in environmental
damages, and then proceed to economically quantify such damages over
relevant contaminant concentration/quantities of waste oil/disposal options.
The disposal costs which must be incurred to prevent such damages should
be quantified in order to determine an optimal disposal method, or mix of
methods, which will maximize net social welfare.
Unfortunately, the necessary data to complete an economic analysis on
environmental damages resulting from waste oil disposal (as defined) is
lacking. Data on the amount of waste oil being discarded in each disposal
option is not of sufficient detail to be useful. Also, there is a paucity
of information in the biological-ecological effects resulting from the
introduction of waste oil into the freshwater and marine environments.
The limited data available is included in Section VIII. Little is known
about the toxic and carcinogenic properties of waste oil to humans and
the extent to which people may be harmed as a result of groundwater
contamination and possible detrimental effects on the food chain resulting
from waste oil disposal. In essence, even if adequate information on the
number of waste oil spills were available, it would not, in many instances,
provide adequate information on potential environmental damages resulting
from such spills (64).
* Waste oil disposal is defined as getting rid of the waste oil in the
environment (dumping waste oil into streams, on the ground, open burning,
etc.) without any treatment to lessen the potential environmental damages
resulting from such dumping, and without any useful benefits (process-
heat resulting from burning the oil) being derived from such action.
- 79 -
-------
The economic analyses presented are, therefore, based on the best
available data on the quantities of waste oil generated, the methods of
waste oil disposal and the quantity disposed of in each alternative, and
the potential environmental damages resulting from such disposal.
WASTE OIL COLLECTION
About the only thing waste oil collectors have in common is the
product they collect, and the fact that the majority of them are small
businessmen. After that, all similarities end. For example, in some
areas of the Nation, waste oil collectors (or scavengers as they are
more popularly called) transport collected waste oil from service stations
to re-refiners, or elsewhere for other uses. In other areas, such a
service does not exist* and the final disposition of the oil cannot be
readily identified. Some industrial users have their waste oil custom
re-refined and reprocessed for reuse. Some re-refineries do their own
collection of waste oils; however, the bulk of all waste oil collected
in the United States is handled by small, independent companies. In most
instances contractual agreements do not exist between the collector and
the company whose oil he handles (45).
The collection procedures of waste oil scavengers are influenced by
economic considerations. When market demand for waste oil is high, the
collector will gather the waste oil and sell it at a profit. If the demand
for the waste oil is sufficiently high, the collector may be willing to
pay the waste oil generator for his oil; however, when the waste oil
market wanes, the marginally profitable scavengers are forced out of
business, and the remaining collectors are less willing to provide collection
services without charging a collection fee (46, 47). Even with a collection
fee, some service station operators in Massachusetts experienced difficulty
in having waste oil removed on a regular basis due to the economic
contraction of the collectors (24).
The collection charges do give the waste oil generator an economic
incentive to dispose of his waste oil at place of use in order to avoid
the collection costs. Alternatively, the collector who is unable to sell
the collected waste oil, because of low market demand, has an incentive to
dispose of the waste oil the cheapest way possible. Such disposal may
include dumping down the sewer, into the nearest waterway, open burning,
etc., without regard for the potential environmental damages which may
result. Since collectors are not, for the most part, adequately regulated
* Such services obviously do not exist where there is not an economic
profit or incentive to provide them. Such geographical areas would most
likely be characterized by wide geographical dispersion of waste oil
collection points and small quantities of oil to be collected at each
point.
- 80 -
-------
by present laws (46), waste oil can easily be disposed of in an environ-
mentally questionable manner.
The general trend in waste oil collection practices over the past
decade can be summed up as follows: In the middle 1960's collectors were
paying for waste oil; they were charging for collections by 1970; by 1973
the price situation had returned to that of the middle 1960's (45, 46).
Several factors have affected significantly (or will affect
significantly) the most recent economic turnabout in the waste oil collection
business. (1) The energy crisis has significantly increased the demand
for waste oil for use as a fuel oil. An economic analysis of using waste
oil as a fuel will be discussed in a separate section. (2) There has been
a significant upturn in the "do-it-yourself" oil changes. In the mid-
1960 's service station, car dealers, and garages accounted for more than
80 percent of automobile lube oil sales (45). It is estimated today that
retail sales of lubricating oils at non-service station outlets (over-the-
counter retail sales) is between 25 and 45 percent. It is obvious that as
services and supplies of drain oil become less concentrated, the costs of
collections will increase. (3) The energy crisis will probably affect the
generation of waste automotive lubricating oil. As gasoline becomes harder
to obtain, automobile owners and drivers will do less driving. This
should precipitate a downturn in the frequency with which crankcase oil
is changed. (4) Increases in the recommended interval between crankcase
oil changes by the major car manufacturer has also helped decrease the
available supply of waste oil. (3) These four factors working together
logically, will, not only affect the supply of waste oil, but also increase
the collection costs as more effort has to be expended to collect the same
quantity of waste oil.
Table 23 presents the potential profits and losses to waste oil
collectors (over different size tank trucks) who sell their oil as road
oil, as re-refinery feed stock, or as a fuel. The profitability of waste
oil collection is influenced by many items. *
* It should be emphasized that the energy crisis made it very difficult
to perform an economic analysis. Unless indicated otherwise, Tables 23 -
52 present the best estimate of national conditions existing in the industry
during December 1973; hence, this economic analysis should be viewed as
applicable only to the very short run. As evidenced by the data, the
industry is in a dramatic state of change. Because of the energy crisis,
and its resulting effect upon cost/price/profit conditions, the long-run
economic status of the industry could not be estimated at this time.
The profit (loss) ranges present the worst and best cost/price/profit
figures which available information indicates as being relevant for the
nation. The actual cost/price/profit distribution of the firms within
the ranges are not known; however, it is expected that most firms will
be concentrated about the center of the ranges.
- 81 -
-------
Table 23
WASTE OIL COLLECTORS: ESTIMATED PROFIT
AND (LOSSES) PER ACTIVITY
I
00
NET AVERAGE CHARGE (COST)
TANKAGE TRANSPORTATION OF WASTE OIL
CAPACITY COSTS PER GALLON COLLECTED PER
(GALLONS) GALLON
2,000 15
2,800 9
4,000 6
6,500 4
4 - (3)
4 - (3)
4 - (3)
4 - (3)
ESTIMATED PROFITS (LOSSES) IN CENTS/GALLON
Road , , Re-re */
Oiling— fineries—
(8) - 4 (12) -1
(2) - 10 (6) - 7
1-13 (3) - 10
3-15 (1) - 12
Non-Treated
Fuel Oil-
dO) - (2)
(4) - 4
(1) - 7
1 - 9
— The first row of profit figures for a 2,000 gallon tank are developed in the following manner:
(a) Total costs of picking up waste oil—lie to 18o per gallon of waste oil, figured as follows:
15C per gallon transportation cost plus 3£ per gallon paid to waste generator = 18
-------
The maximum range for waste oil collection in the United States
is between 100 to 250 miles in size (48). The variables influencing
the profitability of the waste oil collectors-and the size of the
collection districts are as follows: (1) the concentration of waste
oil collection sites within a collection district; (2) the quantities of
waste oil available for collection at each site; (3) frequency of
collection; (4) fluctuation in the availability (supply) of waste oil
over some specific time period (one year, for example); (5) the type and
quality of waste oil to be collected; (6) operating constraints placed
upon the collectors by governmental authorities (environmental constraints
for example); (7) the efficiency of the waste oil collector in managing
the system.
Nationally there is a wide range of collection costs for waste oil.
In some areas, the western part of the United States particularly, service
stations and garages have paid up to four cents per gallon to have waste
drain oil removed, with two cents per gallon being cited for "clean oil
close in." In the Midwest, the collector may (1) charge from l.Oc to
1.60 per gallon to pick up the waste oil; (2) be given the waste oil by
the generator in exchange for picking up the oil; or (3) be paying as
high as 3
-------
this figure may be somewhat high for trucks operated by independent waste
oil collectors,* it does not give a good approximation on operating costs.
From (48) and in ** it was learned that the radius of waste oil collection
districts range in size from 100 to 250 miles. If a round trip per tanker
truck of 200 miles is assumed, then a rough order approximation can be
obtained on what it costs to transport waste oil in different size tank
trucks. This can be seen in Table 23, where the first column represents
the net hauling capacity of different size trucks.*** The second column
presents the estimated transportation costs per gallon of waste oil.****
The table illustrates several concepts. Based on the assumption that
all tank trucks are filled to capacity at the end of the 200 mile
collection trip, the costs of transporting the waste oil per given mile
* The reasons for this are as follows: (1) Most of the independent waste
oil collection trucks are owner-operated. The rate of return on invested
capital can be appreciably lower in such instances than if the entrepreneur
had to pay union wages. (2) Employee supervision and related expenses
are foregone in many owner operated businesses. Maintenance and repair
expenses on the collections truck are probably less expensive, because
the owner-operator in most instances, will do a good share of this work.
Depreciation, maintenance, and overhead costs associated with terminal
facilities will probably be less, because the owner-operator will have
minimal facilities of this nature, or none at all.
**Conversation with Mr. William Penn (one of the authors of ref 48) on
March 29, 1974.
*** The criteria for selecting the different tank sizes are as follows:
(1) the 2800 gallon tank is in common usage for collection of waste
materials from local sources, and is relatively easy to handle in
tight congested places (60); (2) a 4000 gallon tank size was chosen
because it was mentioned as being the tank size used for father-son
operations (45); (3) the 2000-6500 gallon tank sizes were arbitrarily
selected. The net tankage capacity of 6500 gallons represents about
the largest tankage capacity based on weight limitations (approximately
73,000 Ibs. maximum gross weight for a loaded tractor and semi-tractors)-
25,000 Ibs. base weight tract'or-trailer; average weight of waste oil '
7.5 Ibs. per gallon) on interstate highways.
**** These charges are arrived at as follows: $1.46 per inter-city
mile x 200 miles - $292.00 cost per trip; $292.00 7 net tank size =
transportation costs per gallon.
- 84 -
-------
decrease as tankage size increases (i.e., the concept of economies of
scale). Road oiling appears to give the highest return to collectors
(8£ maximum potential loss* per gallon to 15$ maximum gross return per
gallon). The overall return from selling the waste oil as a fuel oil
(10
-------
WASTE OIL RE-REFINING AND RECYCLING
As has been previously noted, in 1960 there were between 125 and 150
re-refiners in operation. At present, the number of firms in the re-refining
business is now around 40 (6,45) and the re-refining capacity has dropped
from approximately 300 million gallons of capacity in 1960 to around 100
million gallons by 1972 (45). It would appear that the economic contraction
which has characterized the industry over the last decade has, for the
moment at least, leveled off.
A number of factors have been identified as contributing to the decline
of the re-refining industry.
1. The volume of waste oil available for re-refining has declined in
certain geographical areas. There has been increased competition for the waste
oil in alternative uses (use as a fuel oil or road oil), which has provided
a higher return to the waste oil collector (as explained previously). This
has resulted in the re-refiner having to pay higher prices for delivered
waste oil feedstock, and also has sharply curtailed the volume of feedstock
available for re-refining. Because of the unfavorable stigma attached to
his product, and because of increased competition from cheaper brands of
yirgin oils, the re-refiner has been unable to readily, in the past at least,
pass these increased costs on.
2. Many re-refining plants are 30 years old or older, and cannot be
modernized to be more efficient C45) or to meet new pollution standards
and constraints without a large amount of new investment. The rate of
return on capital has not been high enough to attract new investment for
plant modernizations.
3. The re-refiner probably has been placed at a competitive dis-
advantage by the 1964 Federal Trade Commission (F.T.C.) ruling that oils
sold in interstate commerce which are compounded in whole or in part of pre-
ious used oils must be labelled as "manufactured from previously used oils"
(45). Detailed information on this ruling are included in Appendix D.
The prime reason for such a ruling was that the industry's reputation has
been blemished by the questionable integrity of some operators who have not
produced high quality products. Particularly tarnished have been those
re-refiners producing a high quality lube product. The stigma has probably
been further perpetuated by the FTC ruling, since to a potential customer
the word "used" would tend to imply an inferior product. However, it
should be mentioned that the FTC is considering the advisability of re-
vising its regulations in this area at the present time.
4. The interpretation of the Excise Tax Reduction Act of 1965 by the
Internal Revenue Service (IRS) removed an excise tax advantage which re-
refiners have enjoyed on sales of lube oil for off-highway use. A sub-
sequent ruling by the IRS concerning the payment of the excise tax on
virgin oil which is blended with re-refined products sold off-highway use
further weakened the re-refiners competitive position. Details on these
- 86 -
-------
rulings are included in Appendix E. In essence, the re-refiners have
to pay a non-refundable tax of six cents per gallon on virgin oils which
are blended with re-refined oils and tare subsequently sold for off-
highway use whereas taxes on lubes composed completely of virgin oil and
used off-highways are refundable.
The economic impact on the industry resulting from the FTC-IRS rulings
is difficult to determine. However, in line with the Agency's policy to
encourage recycling of recoverable materials, the IRS ruling 68-108 should
be reversed to permit the non-highway user of re-refined oil to obtain re-
funds of taxes paid on virgin oils blended with the re-refined lube.
The economic contraction of the waste oil industry over the past decade
appears not to have been without its benefits (51). The industry is probably
healthier and stronger than at any time within the past decade. The reasons
for this can be characterized as follows. The firms which would go out of
business because of economic inefficiencies and/or environmental constraints
have, for the most part, already done so. The re-refining plants in operation
today represents a substantial investment in environmental quality control
systems. The surviving entrepreneurs, while they are not getting rich, are
enduring; i.e., the re-refining Industry is viable.
The successful re-refiners who have survived the past decade have had
the following characteristics.
1. The re-refining plants are located within geographical areas having
sufficient concentration and quantities of waste oil.
2. The re-refiners do not have stiff competition from waste oil used
in alternative uses.
3. An established, readily definable market for the re-refiner's oil
exists; i.e., industries are willing to contract for waste oil re-refined to
their specifications (48).
4. The re-refiner has an established, quality product (48).
5. The re-refiner has contracts with an independent waste oil collector,
or is undertaking other steps to assure a continuous waste oil supply. Re-
refiners who have such contracts or who do their own collection, enjoy a more
stable position regarding feedstock supply (45).
An economic analysis of the re-refining industry is not an easy under-
taking. Each re-refining plant is built to produce a specific product or
mix of products. The costs of operation and the revenues received for pro-
ducts produced and sold by each plant vary across the Nation. For example,
the cost of water varies from 66$ per thousand gallons for one re-refiner in
the Midwest to as little as 30 per thousand gallons for a re-refiner on the
West Coast. The difficulty of the situation has been further compounded by
the current energy crisis. The price of delivered waste oil feedstocks to
- 87 -
-------
the re-refiners has gone up approximately 200% to 400% from July 1973
to December 1973. The prices that re-refiners received for their un-
blended, re-refined lube stock have doubled during the same time period.
Table 24 presents an economic comparison of four re-refining methods.
This table has been adapted from two EPA contract reports (6, 45). The
cited sources present cost/revenue data applicable to July 1973. Relevant
cost/price indices and conversations with industry sources have been used
to update these data to December 1973. The assumptions underlying the
development of this table and the subsequent economic analysis are as
follows:
1. The plant capacities for each re-refining process are assumed
to be five million gallons of raw waste crankcase oil per year. The
plants are assumed to operate 24 hours per day, five days per week, 50
weeks per year. This particular mode of operation allows repair and main-
tenance on weekends when necessary. It is the type of operation most
common in the industry.
Under'normal operating'circumstances, a five million gallon plant is
about the smallest plant size that can remain economically viable (6).
An economic analysis of plants this size will establish minimum levels of
profitability. One would expect profit levels to increase with larger
plant sizes because of the economies of the scale involved.
2. Product quality is assumed the same for each process. Insufficient
data is available to properly examine the validity of this statement.
3. The cost/price/profit data presented in the tables are what an
entrepreneur going into the re-refining business could anticipate from each
re-refining technology at least in the short run. This permits a comparison
on the profitability of each process technology.
4. The process yields for each technological process are optimisitc
when compared to existing re-refiners; however, the yields are obtainable
with some feedstocks and careful operation. The data presented in Table
24 present the profIt/cost potential for a well-run, efficient plant.
5. The economic analysis on re-refining in this report concerns itself
only with the re-refining of waste crankcase oils to lube oil quality. The
reasons for this limitation are as follows. Waste crankcase oils are found
to be more uniform than industrial waste oils. There is a greater spectrum
of virgin oils used in industrial processes as compared to automotive uses.
Hence, those regions having proportionately more industrial concentrations
will have more broadly varying waste oil types. Because of this composition
problem with waste industrial oils, it is extremely, difficult to derive the
economics for a representative plant. However, most industrial waste oil re-
refining processes are cheaper than the reprocessing waste crankcase oils to
unblended lube stock (52).
-------
TABLE 24. CRANKCASE WASTE OIL PROCESSES (6)
oo
vo
Process
Acid/Clay
Extraction/
Acid/Clay
Primary Product
Lube blending
stock
Lube ;blending
stock
Distillation/ Lube blending
Clay stock
Distillation/ Lube blending
H Treating stock
Primary Wastes
& By-products
Acid sludge,
spent clay
Acid sludge,
Investment
(in dollars)
1,176,000
1,391,000
Op. Cost
(cents per
gallons)
26.52-34.86
22.65-29.80
Comments
~ Widely used
in U.S.
One Operatii
spent clay; high
ash fuel by-product
Spent clay;
high ash fuel
by-product
High ash fuel
by-product
1,19.5,000
1,368,000
plant in Italy
21.64-29.54 At least two
plants in U.S.
23.31-31.21 Under
development
Includes 10% per year depreciation, but excludes return on investment,
Table adapted from Ref. (6); All Costs Revised to December 1973.
-------
Table 24 presents an overview on investment and operating costs
for four waste oil-refining technologies. Table 25 provides the supporting
data for the investment costs appearing in Table 24. Tables 26 and 27
show the derivation of the operating costs shown in Table 24. Table 27
also presents the potential profit and percent return on investment from
selling unblended lube stock.
More specifically Tables 24 and 25 show that the extraction/acid/clay
process has the highest initial investment. Table 24 presents operating
cost data showing the distillation/clay process having the lowest relevant
range of operating costs. The acid/clay process has the lowest investment
cost and the highest range of operating costs. The other two re-refining
processes lie between these two extremes.
Table 26 presents the operating costs (exclusive of raw waste oil
feed costs) for each process technology. In all processes it can be seen
that direct and indirect labor costs contribute the most to the unit costs.
Chemicals contribute quite heavily to the total operating costs in the
acid/clay process. Waste disposal costs are minimal under all processes.
The analysis shows that the acid/clay process has the highest operating
costs (18.190 per gallon of finished product), while the distillation/clay
process has the lowest costs at 13,750 per gallon on unblended lube
stock. The input costs of the raw waste oil are excluded from these figures.
In Table 27 the input feed costs of raw waste oil are added to the
operating costs to obtain the total costs of processing raw waste oil to
unblended lube oil. As one can see, the delivered costs of waste oil vary
considerably, and hence, impart a wide range to the total costs of operation.
Unblended lube stock sells from 380 to 440 per gallon. High as fuel
oil (derived as a joint product with lube stock) sells between 80 and 200
per gallon. Given these processes, a profit of 3.14 to 17.480 per unit
of finished product can be realized with the acid/clay process, while 9.010
to 23.740 per gallon of finished produce can be realized with the distill-
ation/clay processes; or, alternatively, a return of investment of 9.61%
to 53.51% for the acid/clay process, or 28.65% to 75.49% for the distill-
ation/clay process. Again, one must remember that the wide range in the
coats and rates of return reflect the different cost/revenue patterns
which re-refineries face nationwide. The costs developed for these
processes do not Include transportation costs and other related expenses
which might be incurred while getting the re-refined waste crankcase
oil to the buyer. To the extent such, costs have not been taken into account,
the net profit ranges associated with each market and process technology
will be overstated.
Most re-refined oils are sold to Independent jobbers in unblended
bulk lost (pore than 2,000 gallons). The jobbers pack the oil in 55 gallon
drums or quart cans, and sell it to commercial accounts, garages, independ-
ent (as opposed to major brand) gasoline stations, automobile supply
stores and discount houses.
- 90 -
-------
TABLE 25. CRANKCASE WASTE OIL PROCESSING CAPITAL INVESTMENT (6)
Basis: 5 Million Gal/Yr. Raw Oil; 250 Days/Yr. Operation
VO
1
Process
Product
Investment I/
$1000
Process Equip. 2_/
Storage Facil. _3/
Office & Lab. 4/
Land & Site 4/
Improvement
Acid/Clay
Lube
676
373
33
1082
94
1176
Extr/Acid/Clay
Lube
847
409
33
1289
102
1391
Dist/Clay
Lube
821
447
33
1101
94
1195
Dist/H
Lube
789
447
33
1269
99
1368
I/ All Costs Revised to December 1973.
2f All costs adjusted by composite wholesale price indexes for machinery and equipment to
reflect costs as of December 1973. (53)
3f Assumed to be storage tanks. Costs adjusted to December 1973 using wholesale price index
for oil storage tanks at 10,000 barrel capacity. (61,62)
4/ Adjusted by the Department of Commerce Composite Construction Index to November 1973. (53)
-------
TABLE 26
CRANK CASE RE-REFINING PROCESS OPERATING COSTS I/
(BASIS: 5 MILLION GAL/YR RAW OIL: 250 DAYS/YR OPERATION)
UD
ro
Process
Product - Main Type
Yearly Prod.
Yield
Investment $1000
Plant (P)
Land & Site
Chemicals
93% H2SO, @3c/Lb.
Clay @ 3737c/Lb. 3/
H @ 0.41C/SCF 4/
Propane @ 2.08c/Lb. 5/
Other 6/
Utilities
Electric Power @ 3.15C/KWH 7/
Water <§ 5.40C/1000 Gal. 8/
No. 6 Fuel Oil @ 18.96c/Gal. 9/
Plant Labor
Wages @ $ll,336/Yr. 10/
Supplies & OH @ 50%
Maintenance (5% of plant/yr)
Ins. & Local Taxes
@ 3% Invest /Yr.
Waste Disposal 8/
Depreciation
<§ 10% P/Yr.
Indirect Costs 10/
Salaries @ $82,400 per year
Suppl. & OH @ 50%
Acid/Clay
Lube Oil,
3.6 x 10 Gal.
72%
1082
94
1176
Basis - c/Gal.
1.06 3.18
0.4 1.35
0.1 0.32
0.017 0.09
8 men 2.52
1.26
1.50
0.98
0.54
3.01
2.29
1.15
Extr. /Acid/Clay
Lube Oil,
4.2 x 10 Gal.
84%
1289
102
1391
Basis
0.36
0.15
0.03
0.3
0.04
0.037
8 men_
-
C/Gal.
1.08
0.51
0.06
0.95
0.22
0.70
2.16
1.08
1.53
0.99
0.22
3.07
1.96
0.98
Dist./Clay
Lube Oil
3.8 x 10 Gal.
76%
1101
94
1195
Basis C/Gal.
.125 0.42
0.41
0.2 0.63
0.021 0.12
8 men 2.39
1.20
— 1 IL<\
~ J. . t J
0.94
0.03
2.90
2.17
1.09
Dist. H_
. 2
Lube Oil
3.8 x 10 Gal.
76%
1265
99
1368
Basis C/Gal.
3.6 1.47
0.27
0.2 0.63
0.2 0.11
8 men 2.39
1.20
1.67
1.08
3.34
2.17
1.09
Oper. Cost (.excluding feed")
18.19
15.51
13.75
15.42
-------
10
00
FOOTNOTES TO TABLE 26 CRANKCASE WASTE OIL PROCESS OPERATING COSTS
I/ Table adapted from Ref. (6): all costs revised to December 1973.
27 Amount; of material required per gallon of finished lube oil.
3_/ Adjusted by the wholesale price index for nonmetallic mineral products to December 1973 (53).
4/ Adjusted by the wholesale price index for industrial chemicals to December 1973 (53).
5/ Adjusted by the wholesale price index for propane to December 1973 (61, 62).
6/ Adjusted by the wholesale price index for industrial chemicals to December 1973 (53).
7/ Adjusted by the wholesale price index for electric power to December 1973 (53).
8/ Adjusted by the wholesale price index for all commodities to December 1973 (53).
9/ Adjusted by the wholesale price index for residual fuels to December 1973 (61, 62).
10/ Adjusted by an index of average earnings to December 1973 (53).
-------
I/
TABLE 27. POTENTIAL PROFITABILITY OF CRANKCASE WASTE OIL PROCESSES UNBLENDED BULK SALES^'
(All costs and revenues in cents per gallon)
Process
Product
Investment, $1000
Oper. Costs excluding feed
(per unit of product)
Feed Costs @ 6-12£/Gal. of
Raw Oil
Acid/Clay
Lube Oil
1176
18.19
8.33 - 16.67
Extr. /Acid/ Clay
Lube Oil
1391
15.51
7.14 - 14.29
Dist./Clay
Lube Oil
1195
13.75
7.89 - 15.79
Dist . /H_
- 2
Lube Oil
1368
15.42
7.89 - 15
Total Costs of Operation
Product Credits2./
Lube Stock @ 38-44e/Gal.
High Ash Fuel Oil @
8-20e/Gal.l/
Total Product Credits
Profit (Loss) Before Tax
Per Unit Product
$/Yr.
%/Yr. Return
26.52 - 34.86
38.00 - 44.00
38.00 - 44.00
3.14 - 17.48
113,040 - 629,280
9.61 - 53.51
22.65 - 29.80
38.00 - 44.00
0.59 - 1.48
38.59 - 45.48
8.79 - 22.83
369,180 - 958,860
26.54 - 68.93
21.64 - 29.54
38.00 - 44.00
0.55 - 1.38
38.55 - 45.38
9.01 - 23.74
342,380 - 902,120
28.65 - 75.49
23.31 - 31.21
38.00 - 44.00
0.55 - 1.38
38.55 - 45.38
7.34 - 22.07
278,920 - 838,660
20.39 - 61.31
±i Table adapted from Ref. (6); all cost and revenues revised to December 1973, and were expressed on the
basis of plant yield (see Table 25).
2/ Product prices revised to December 1973 Ref. (63).
.3/ It was learned (65) that this material is distillate bottoms high in metal content. This by-product used
to be considered a waste product of low value. The source (65) is aware of only one re-refining plant
which is selling the material to an asphalt firm. However, it was also learned (66) that given the current
energy crisis, this material is probably blended with virgin fuel oil and burned. Hence, while the market
value of this waste product was once questionable, it's value does appear to be increasing. Therefore, it
is included as a return on investment to the re-refining processes which produce it.
-------
Table 28 presents the costs of producing a single grade (SAE 30)
top quality (SE grade) motor oil for sales in several markets; non-contain-
erized bulk shipments, bulk shipments in 55 gallon drums, and retail
Coil containerized in quart cans).
The production of an SE grade, SAE 30 weight oil requires the addition
of a performance package and viscosity improver to the unblended base stock.
Adding 3% (by volume) viscosity improver (polyisobutylene) and 6.8% (by
volume) performance package to 90.2% of a gallon unblended lube oil base
stock gives a gallon of SE grade, SAE 30 weight oil. The addition of the
viscosity improver and performance package costs 19.070 per gallon of,
finished product. Hence, the total costs of producing an unpackaged lube
oil of top quality varies between 38.590 and -45.720 a gallon for the distil-
lation/clay process to 42.990 and 50.510 a gallon for the acid/clay process,
Costs for the other two re-refining processes lie in between these two
extremes.
A packaging cost of 8.620 to 12.000 per gallon is incurred when
re-refined oil is sold to bulk accounts which require the oil to be
containerized. This expense represents the reconditioning cost for 55
gallon barrels. The drums must be cleaned and repainted before they can
be put into service after initial use. The total costs of producing for
containerized bulk accounts ranges from 51.61 to 62.510 per gallon for
the acid/clay process to 47.210 to 57.720 for the distillation/clay/process.
*
Producing re-refined oil for sale in the retail market usually means
that the oil is canned in quart size containers. One can see from Table 28
that canning costs amount to 37.700 per gallon of finished product. The
total costs of producing re-refined lube oil for the retail market amounts
to 89.310 to 100.210 per gallon with the acid/clay process. Use of the
distillation/clay process yields a lower cost between 84.910 and 95.420
per gallon of finished product.*
Table 29 shows the net profit a re-refiner could obtain by selling
his high-quality lube oil in bulk lots. The net profit range received by
using the acid/clay process ranges between 22.490 and 32.010 per gallon.
The distillation/clay process returns between 27.280 and 36.410 per gallon.
The other two process technologies yield net profits between these two
extremes.
*lt should be pointed out that only a very small percentage of re-refined
oil is sold in the retail market. Re-refined lube oil sold in the retail
market competes with cheap, low quality virgin oil. There are at least
two reasons for this. The re-refining industry has had a history of
opportunists with questionable integrity. The FTC labeling act has also
served to discourage public acceptance of re-refined oil. As a result,
today most retail consumers seeking a quality oil would not buy a re-
refined product (45). The retail example has been added to show revenue/
coat potential if the re-refiners were able to sell all their oil to the
retail market.
- 95 -
-------
1C
01
TABLE 28. POTENTIAL COST OF PRODUCING SE GRADE, SAE 30 OIL FOR DIFFERENT MARKETS!/
(All costs in center per gallon)
ACID/CLAY EXTR./ACID/CLAY PIST./CLAY DIST./H2
Total Costs of Producing Unblended Base Stock 26.52-34.86 22.65-29.80 21.64-29.54 23.31-31.21
(From Table 27) " ~~~
Costs of Producing One Gallon of SE Grade, SAE
30 Oili/
Unblended base stock (0.9020 gal.) 23.92-31.44 20.43-26.88 19.52-26.65 21.03-28.15
Viscosity improver (0.03 gal.).2./ 3.13
Performance package (0.068 gal.)_3/ 15.98
Sub-Total 19.11
Total Costs (blended oil not containerized)
Add drumming?-/ to total costs blended oil
Total Costs for BulkJL/ Accounts (containerized)
Add earning^/ to total costs blended oil
Total Costs for Retail Sales
19.07
42.99-50.51
8.62-12.00
51.61-62.51
37.70
89.31-100.21
19.07
39.50-45.95
8.62-12.00
48.12-57.95
37.70
85.82-95.65
19.07
38.59-45.72
8.62-12.00
47.21-57.72
37.70
84.91-95.42
19.07
40.10-47.22
8.62-12.00
48.72-59.22
37.70
86.42-96.92
!/ Figures adapted from Ref . (45)
"LI Adjusted to December 1973 basis as per conversation with Mr. Roy Banks (Bayside Oil Corp.; Sal Carlos,
California), February 1974
.£/ Adjusted by the wholesale price index for all commodities to December 1973 (53). Addition of both the
viscosity improvement and performance package raises the viscosity of the oil from 55 Saybolt Universal
Seconds (SUS) to 64 SUS at 210°F.
A/ Adjusted by the wholesale price index for all commodities to December 1973 (53). As per conversation
with Mr. Belton Williams, March 7, 1974.
di Containerized bulk accounts include jobbers, commercial, and industrial establishments who buy their
oil. ILo. SS RaHon. dirums.
-------
TABLE 29. POTENTIAL PROFITABILITY OF SELLING RE-REFINED SE GRADE SAE 30
UNCONTAINERIZED OIL IN BULK MARKETS
(All costs/revenues in centers per gallon)
Acid/Clay
Extr./Acid/Clay
Dist./Clay Dist./H.
Sales price blended Oil -
bulk lots I/
Total costs of producing
blended oil (from Table 28)
Net profit range-non-containerized
shipments
73.00-75.00
42.99-50.51
22.49-32.01
73.00-75.00
39.50-45.95
27.05-35.50
73.00-75.00 73.00-75.00
38.59-45.72 40.10-47.22
27.28-36.41 25.78-34.90
us
I/ Adjusted to December 1973. As per conversation with Mr. Banks and Mr. Williams, March, 1974.
-------
Table 30 presents the potential profit which could accrue to each
process technology as a consequence of selling re-refined, SE grade SAE
30 weight oil to various markets. In Table 30, one can see that the sale
price of the lube oil to jobbers is approximately 76$ to 84$ per gallon,
The approximate net profit to the re-refiner at this sale price ranges
between 13.49$ to 32.39$ per gallon for the acid/clay process, to a return
of 18.28$ to 36.790 per gallon for the distillation/clay process.
The sales price of SE grade, SAE 30 weight oil to commercial accounts
is between 95$ and 113$ per gallon. The net profit of re-refiners selling
to this market would range between 32.49$ to 61.39$ per gallon with the
acid/clay process. The distillation/clay process would return between
37,28$ and 65.79$ per gallon.
As has been previously mentioned, the sale of good quality re-refined
oils to the retail market represents a small part of the sum total of
re-refined oil sales. However, as shown by Table 30, if the stigma associated
with re-refined oils could be overcome, the selling of good quality re-
refined oil in the retail market could be very profitable. For purposes
of this analysis, it is assumed that the retail price of re-refined lube
oil is $1.75 per gallon. Hence, the net profit range would vary between
74.79$ and 85.69$ per gallon for the acid/clay process. For the distil-
lation/clay process the net profit per gallon for retail sales would be
approximately 79.58$ to 90.09$ per gallon.
In essence, the re-refiner could attempt to sell a blended product
equivalent in quality to major brand virgin oils. However, given the
current situation and the public's opinion about re-refined oil, it is
highly unlikely that sales to the retail market by the re-refiner would
be of sufficient volume to make it economically feasible.
- 98 -
-------
TABLE 30. POTENTIAL PROFITABILITY OF SELLING CONTAINERIZED RE-REFINED SE GRADE, SAE 30
OIL TO JOBBERS, COMMERCIAL, INDUSTRIAL AND RETAIL ACCOUNTS
(All Costs/Revenues in Cents per Gallon)
Acid/Clay
Sales price of SE Grade, SAE 30 Oil - Jobbers I/ 76.00-84.00
vo
<£>
Costs of blended SE Grade, SAE 30 Oil for
Sale to Containerized Bulk Accounts (from
Table 28)
Net Profit Range - Jobbers if
Sales price of SE Grade, SAE 30 Oil -
Commercial - Industrial Accounts 2j
Costs of blended SE Grade, SAE 30 Oil for
Sale to Containerized Bulk Accounts
(from Table 28)
Net Profit Range - Commercial - Industrial I/
Sales price of SE Grade, SAE 30 Oil -
Retail 3/
Costs of blended SE Grade, SAE 30 Oil for
Sale to Retail Accounts (from Table 28)
Net Profit Range - Retail Accounts I/
51.61-62.51
13.49-32.39
51.61-62.51
32.49-61.39
175.00
89.31-100.21
74.79-85.69
Extr./Acid/Clay
76.00-84.00
48.12-57.95
18.05-35.88
95.00-113.00 95.00-113.00
48.12-57.95
37.05-64.88
175.00
85.82-95.65
79.35-89.18
Dist./Clay Dist./H2
76.00-84.00 76.00-84.00
47.21-57.72 48.72-59.22
18.28-36.79 16.78-35.28
95.00-113.00 95.00-113.00
47.21-57.72 48.72-59.22
37.28-65.79 35.78-64.28
175.00
175.00
84.91-95.42 86.42-96.92
79.58-90.09 78.08-88.58
I/ Most re-refiners do not employ salesmen to sell their products at the wholesale and/or retail level. Most of
~ the selling is done by the manager of the firm. Hence, selling expenses are part of the managers salary, and
are not specifically segregated out here.
2/ Figures adjusted to December 1973.
3/ Sold in retail markets directly to the customer. This type of sale is rare for reasons given in the text of
~ the report. Figures have been adjusted to December 1973.
-------
BURNING WASTE OIL, AS A FUEL
Waste oil contains the same BTU content per pound as does virgin
oil (3). Waste oil is also low in sulfur content which is desirable
from an environmental standpoint in meeting ambient air pollution
standards for sulfur. However, waste crankcase oil does contain high
concentrations of lead. When waste oil is burned, the lead is emitted
to the atmosphere as submicron range particles which potentially can
endanger health.
Several items must be considered in economically evaluating the
feasibility of burning waste oil. The first item is to identify and
evaluate the technical factors and costs which would allow waste oil
to be burned such that the additional risk to human health from lead
emissions is acceptably minimized. Included within such an examination
is an economic evaluation of the trade-offs involved in using waste oil
versus virgin fuel oil in combustion practices. Particular emphasis is
placed on burner technology, waste oil quality (including identifying
and evaluating the costs of various pretreatment processes that may be
specified), and air pollution control equipment as they effect emissions.
Other costs considered in the evaluation include increased operating and
maintenance costs of boiler or incinerator facilities which may result
from burning waste oil. In conjunction with this the federal, state,
and local laws affecting the burning of waste oil must be delineated.
The relative economic impact of these laws should be determined where possible
particularly their impact on the operating and maintenance costs of the
combustion facility, and the demand for different fuel oils. The effects,
if any, of these laws on the relative prices of fuel oils, including
waste oil used as fuel oil, is also considered.
The G.C.A. Technology Division, Bedford, Massachusetts, under contract
to the Environmental Protection Agency, investigated the burning of waste
automotive lubricating oil as a fuel. Their findings are summarized
below (34).
POTENTIAL MARKETABILITY OF WASTE OIL AS A FUEL
If waste oil is burned as a fuel, either treated or untreated, it
should be recognized that it potentially represents only a small part
of the total petroleum used as a fuel in the United States. More speci-
fically, if all waste oil generated annually were available for
fuel reuse, this total fuel energy would represent less than 1.0 per-
cent of the total annual coal and crude oil energy production in the
United States. Waste oil fuels, therefore, may serve as incremental
regional supply inputs to supplement existing domestic fuel supplies.
- 100 -
-------
As mentioned previously, waste oil generation is a variable
process. The variation occurs over space and time, and hence affects
the regularity and supply of waste oil available for fuel usage. In
the short run, use of waste oil as a fuel may be restricted to use as
a supplemental fuel, while in the longer term, systems may be develop-
ed to promote supply regularity through improved collection, storage
and/or pretreatment, and distribution systems.
A range of alternate blended and unblended waste oil fuel products
may be marketed based on the extent of untreated oil reprocessing and
the nature of fuel combustion. Associated with this range of waste oil
fuel products is a range of market prices, with differences reflecting
the degree of reprocessing and handling.
Comparative fuel costs for coal, virgin fuel oils, and untreated
waste oil show a competitive advantage for waste oil in present fuel
markets. Average prices for untreated waste oil in December 1973
were about 34 percent of average distillate fuel oil prices and 45 per-
cent of residual oil prices. This fuel price advantage leaves a
cost margin for pretreatment to meet technical and environmental quality
specifications.
Rapidly expanding national fuel energy consumption, combined with
an unstable foreign petroleum supply market, have created a domestic
fuel market supply-demand imbalance. This imbalance requires expanded
domestic energy production, energy conservation, and development of new
fuel supply forms and sources. Reuse of waste oil as a fuel, where health
risks are acceptably minimized (as previously discussed) and where it is
economically efficient to do so, promotes energy conservation and provides
a supplemental fuel supply source to help meet demand.
The electrical power industry, which accounts for about 25 percent
of the Nation's total annual fossil fuel consumption, represents a large
potential demand market for waste oil fuels in most regions of the
Nation. Some electric power plants are currently combusting waste oil
routinely or are testing waste oil fuels for potential routine usage;
and 86.5 percent, or 59 of 68 electric utility companies responding to
a nationwide survey, felt that some form of a waste oil fuel product
could be used at their facilities.
The industrial sector of the economy, presently the largest con-
sumer of energy in the United States using about 30 percent of the
Nation's annual energy input, contains numerous process applications
to which waste oil fuels may be applied. Several industrial plant
operating factors may serve as criteria in identifying potential users
of waste oil fuels. These criteria would include, among others, the
following:
- 101 -
-------
- Present fuel energy consumption levels
- Installed particulate matter emission control
technology employed
- Present trends in waste oil fuel use and/or
combustion testing
Based on these factors, selected firms in the following Department
of Commerce Industrial categories could represent prime potential con-
sumers: (1) lumber and wood products, (2) paper and allied products,
(3) chemical and plastic products, (A) petroleum and coal products,
(5) rubber and plastic products, (6) stone, clay, and glass products,
and (7) primary metal industries. In general, industrial firms are
more heterogeneous in character than electric power plants, and hence
would require more detailed analysis of fuel logistical utilization
methods before potential waste oil users could be identified at the
regional level.
The ultimate sale and use of waste oil fuels will probably be
affected by a number of institutional constraints, which are geographi-
cally and/or application specific. These laws (constraints) imply
higher waste oil fuel users costs, a restricted range of user applica-
tions, and a decrease in overall demand for the use of waste oil as a
fuel. For purposes of discussion, the institutional constraints may
be divided into the following categories:
a. Laws and regulations which are uniquely applicable only to
waste oil. These are presently limited, but generally could be con-
sidered favorable toward encouraging waste oil fuel usage. These con-
straints tend to restrict the marketability of waste oil derived products
relative to virgin oil derived products thereby restricting the range
of economically viable waste oil reuse options. Examples of such laws
at the Federal level would include the I.R.S. interpretation of the
Excise Tax Reduction Act of 1965, and the F.T.C. labelling requirements
(Appendices E and D).
C
b. Environmental management and pollution control actions direct-
ly affecting the use of waste oil fuel. Existing or anticipated air
quality and emission standards directly govern the acceptable quality
of waste oil fuel at the federal, state, and/or local levels. These
include particulate matter standards and hazardous pollutant standards
for lead and other metallic and inorganic pollutant standards found
in waste oil (Appendix F).
c. Environmental control actions indirectly influencing waste
oil fuel use. These actions generally tend to enhance its marketability
potential. First, air pollution emission controls have resulted in the
installation of stack gas effluent controls which may remove harmful particle
- 102 -
-------
emissions from waste oil combustion without a large additional outlay of
capital for control hardware. Second, sulfur oxide emission controls and
fuel sulfur content regulations tend to improve the market demand for
recovered waste oils low in sulfur for use as blended fuels.
Technical problems have been encountered as a result of untreated
waste oil combustion. These problems previously discussed in Section VII
occur primarily because of the level and the variability of contaminates
or untreated waste oils.
IMPACT REDUCTION ALTERNATIVES — PRETREATMENT
Technical and environmental impacts can be alleviated by employing
various levels of existing technology to pretreat waste oil prior to
combustion. The pretreatment techniques have been discussed in Section VII.
IMPACT REDUCTION ALTERNATIVES — EMISSION CONTROL SYSTEMS
High efficiency particulate control devices can reduce lead and other
submicron-sized emissions and therefore their resulting contributions
to ambient concentrations by one to two orders of magnitude (i.e., 90 to
99 percent control). Fabric filter baghouses, properly designed electro-
static precipitators, and to a lesser degree high energy venturi scrubbers,
are all capable of this range of performance.
CAPITAL INVESTMENT AND OPERATING COSTS FOR IMPACT REDUCTION ALTERNATIVES
The capital investment and operating costs associated with waste oil
pretreatment options and emission control systems are summarized in Table 31.
These pretreatment costs are based on a pretreatment plant capacity of
15,000,000 gallons per year (85 percent yield or 12,750,000 gallons per
year output for settling, centrifugation, and solvent extraction; 70 percent
yield or 10,500,000 gallons per year for vacuum distillation). The costs
associated with the emission control systems are based upon a stack flow
of one million actual cube feet per minute (ACFM). This is the approximate
stack flow of a large utility boiler (^00 MW) utilizing 12,750,000 gallons
per year of waste oil to supply 5 percent of its energy requirements;
a reasonable example of a large-scale application for waste oil fuel
utilization. Capital and operating costs for different capacities can
be obtained from Figures presented later In this Section.
The Economics of Impact Reduction Alternatives; The economics
associated with the waste oil treatment and particulate control systems
discussed in the previous section include the development of capital
investment and operating costs for each impact reduction alternative.
Factors which permit the calculation of these costs for alternative
capacities are presented. The presentation of these costs, however, will
be preceded by a discussion of the assumptions utilized in their develop-
ment.
- 103 -
-------
TABLE 31. COST OF IMPACT REDUCTION ALTERNATIVES IN THE BURNING
OF WASTE OIL (34)
Impact Reduction Alternative
Capital Investment
Annual Operating Cost
Millions C/gal. of Millions C/gal. of
of $'s Waste Oil of $'s Waste Oil
Pretreatment Options:
Settling
Centrifugation
Vacuum Distillation
Solvent Extraction
Emission Control Options:
1.23
1.15
1.52
1.50
10
9
14
12
1.39-1.42
1.32-2.33
1.30-2.31
1.58-2.60
10.86-19.01
10.36-18.30
12.35-21.98
12.39-20.40
Precipitators
Fabric Filtration
High Energy Scrubbers
2.60
2.38
1.96
20
19
15
0.28-0.31
0.96
0.87
2.18-2.46
7.53
6.82
- 104 -
-------
BASIS FOR COST ESTIMATES
Capital Equipment Costs. The data utilized for purchased
equipment costs were obtained both through personal communications with
equipment manufacturers (54) and the use of the latest published information.
In all cases the capital investments are on the common basis of construc-
tion and equipment costs for the Northeastern United States, in 1973
dollars. Table 32 presents the assumptions utilized in the development
of capital investment costs.
The scale factor for determining capital investment costs for varying
plant capacities is 0.6. This was developed from primary cost data
developed by GCA (34) for plants of three capacities (1 million, 7 million,
and 15 million gallons per year).
Annual Operating Costs. The annual operating costs include the
following fixed, variable, and semi-variable costs:
Fixed Costs -
1. Amortization of capital investment - The capital investments
have been amortized over a period of 20 years. This reflects the expected
lifetime of the equipment based upon discussions with the equipment
manufacturers. A straight line method, which distributes the capital
investment cost uniformly over the 20-year period, has been used. Size
scaling for this and all other fixed cost items should be proportional
to the scale factor used for capital investment costs.
2. Insurance and property taxes - The cost of insurance was estimated
to be 3.0 percent of total capital investment (45).
Variable and Semi-Variable Costs -
1. Waste oil - For treatment processes, an average wholesale cost
of 6 - 12 cents per gallon was assigned to waste oil. This reflects
examination of the recent literature and discussions with waste oil
users (21, 63). The term wholesale implies that the waste oil is delivered
directly to the treatment facility from the generating source, without
intermediate storage and handling.
The cost of waste oil for systems of different sizes will vary
directly with the size. The scale factor is therefore equal to 1.0.
2. Labor costs - The annual labor costs associated with the
operation of the treatment and control facilities was obtained by
taking the number of manhours required during the year and applying
a wage rate of $5 - $7.50/manhour.
- 105 -
-------
TABLE 32. ASSUMPTIONS MADE IN THE DEVELOPMENT OF
CAPITAL INVESTMENT COSTS I/
Assumed Percentage of Purchased
Equipment Costs
1.
2.
3.
4.
5.
6.
7.
8.
9.
0.
1.
Category
Equipment
Installation
Piping
Electrical
Instrumentation
and Controls
Buildings
Yard Improve-
ments
Land
Engineering &
Supervision
Construction
Expenses
Contractor's
Fee
Contingency
Treatment
Plants
36
32
20
28
20
8
4
40
48
8
32
Particulate Control
Systems
Capital Cost
Derived From
Literature
Review
'
'
I/ Adapted from Ref. 34.
- 106 -
-------
For purposes of this study, a scale factor of 0.25 has been used
for determining labor costs as a function of size. This factor is taken
from an article by F. P. O'Connel in "Modern Cost-Engineering Techniques"
(55) and is based on data gathered for 52 chemical processes.
3. Maintenance costs - An annual maintenance cost of 5 - 7 percent
of the capital equipment cost was selected for this analysis. This is
a high figure representative of that normally found for corrosive processes.
Since maintenance costs have been estimated as a percentage of equipment
costs, the equipment cost scale factor should be applied to determine the
cost of other size installations.
4. Overhead costs - The costs of overhead were estimated at 40 per-
cent of labor and supervision.
5. Electrical costs - Electrical costs were estimated at 1.5c to
3.0
-------
TABLE 33. CAPITAL COST ESTIMATION OF TREATMENT
FACILITY: SETTLING I/
Processing Capacity: 15 million gallons/yr
Plant Operation: 24 hr/day - 313 days/yr
Process Yield: 85% (12,750,000 gallons finished product)
Direct Costs
Installed Equipment Cost
Purchased Equipment
Installation
Piping
Electrical
Instrumentation & Controls,
Land and Improvements
Buildings
Yard Improvements
Service Facilities
Land
Total Direct Costs
Indirect Costs
Engineering and Supervision
Construction Expense
Contractor's Fee
Contingency
Total Indirect Costs
$311,910
112,290
99,810
62,380
87.335
$673,725
62,382
24,953
56,700
12.476
$156,511
$124,765
149,718
24,953
99,812
$830,236
$399,248
TOTAL CAPITAL INVESTMENT
$1,229,484
I/ Adapted from Ref. 34.
- 108 -
-------
TABLE 34. ESTIMATED OPERATING COST OF TREATMENT
FACILITY: SETTLINGl/
Total Capital Investment (C.I.) see Table 33 $1,229,484
Fixed Costs Annual Cost Cost Per Gallon
Finished Prod. C/gal
Amortization at 5% of $ 61,474 0.48
Total C.I.
Insurance and Local Taxes 36,885 0.29
(3.0% of C.I.)
TOTAL FIXED COST PER YEAR $ 98,359 0.77
Variable and Semi-Variable Costs
Residual Fuels (20c/gal) $ 42,700 0.33
Electric Power (1.50-3.00C/KWH) 1,090-2,180 0.01-0.02
Waste Oil Feed (6-12
-------
TABLE 35: CAPITAL COST ESTIMATION OF TREATMENT
FACILITY: CENTRIFUGATION1/
Processing Capacity: 15 million gal/yr
Plant Operation: 24 hr/day - 313 days/yr
Process Yield: 85% (12,750,000 gallons finished product)
Direct Costs
Installed Equipment Costs
Purchased Equipment
Installation
Piping
Electrical
Instrumentation &
Controls
Land and Improvements
Buildings
Yard Improvements
Service Facilities
Land
Indirect Costs
Engineering and Supervision
Construction Expense
Contractor's Fee
Contingency
$290,718
104,658
93,030
58,144
81.401
$627,951
$ 58,144
23,257
56,700
11.629
$149,730
$116,285
139,545
23,260
93,030
$777,681
$372,120
Total Capital Investment
$1,149,801
I/ Adapted from Ref. 34.
- 110 -
-------
TABLE 36. ESTIMATED OPERATING COST OF TREATMENT
FACILITY: CENTRIFUGATION1/
Total-Capital Investment (C.I.) see Table 35 $1,149,801
Cost/Gal Finished
Fixed Costs Annual Cost Prod. (g/Gal)
Amortization at 5% of $57,490 0.45
total C.I.
Insurance and local taxes
(3.0% of C.I.) 34,494 0.27
Total Fixed Cost Per Yr 91,984 0.72
Variable and Semi-Variable Costs
Residual Fuels (20c/gal) $42,700 0.33
Electric Power (1.50-3.00C/KWH) 3,817-7,634 0.03-0.05
Waste Oil Feed (6-12c/gal) 900,000-1,800-000 7.06-14.12
Labor (22,536 manhrs at $5.00- 112,680-169,020 0.88-1.33
7.50/manhr)
Overhead (50% of labor) 56,340-84,510 0.44-0.66
Caustic Soda 115 2]
Demulsifier Surfactant 56,250 0.44
Maintenance (5-7 percent of 57,490-80,486 0.45-0.63
Fixed C.I.)
Total Variable Cost
Per Yr $1,229,392-2,240,715 9.64-17.57
Total Annual Cost $1,321,376-2,332,699 10.36-18.30
I/ Adapted from Ref. 34.
2J Costs too small on C/gal basis to be expressed.
- Ill -
-------
Distillation. Table 37 shows a total capital investment of approxi-
mately 1.5 million for a vacuum distillation treatment facility. This
technique yields an annual output of 10.5 million gallons (70 percent of
feed input). As shown in Table 38, the annual operating cost appreciated
with this technique is $1.30 - $2.31 million. The processing cost is
12.35 - 21.98 cents per gallon of waste oil product.
Solvent Extraction. Tables 39 and 40 present, respectively, the
initial capital investment and annual operating cost associated with
solvent extraction. This process requires an outlay of $1.50 million
with a $1.58 - $2.60 million annual operating cost. The waste oil fuel
product produced by this technique is 85 percent of the feed input,
or 12.75 million gallons. The process cost is 12.39 - 20.40 cents per
gallon.
Electro-Static Precipitators. Tables 41 and 42 present the cost
considerations involved in the erection and operation of precipitators.
As with the other emission control devices discussed in this section, it is
assumed that the stack flow is 1 million cubic feet per minute (cfm). This
is the approximate stack flow of a large scale facility which could
potentially utilize the output quantity from the pretreatment options
discussed above. A precipitator of this size would cost approximately
$2,660,000 million with an annual operating cost of $277,626 to $313,559.
Fabric Filtration. Table 43 shows the capital cost to be $2.38
million for a fabric filtration facility. This estimate is based upon
an average cost of $2.38 per cfm (61). The operating cost is $960,400
annually as seen in Table 44.
High Energy Venturi Scrubber. As shown in Table 45 the estimated
capital expenditure for a high energy venturi scrubber is $1.96 million.
Table 46 shows the annual operating cost to be $869,217.
Summary of Impact Reduction Alternatives. Table 47 presents in
summary fashion the capital cost and annual operating cost associated
with each impact reduction alternative.
EFFECT OF CAPACITY ON ECONOMICS OF IMPACT REDUCTION ALTERNATIVES
Treatment Facilities. Figure 9 provides a means of estimating the
capital investment and operating cost associated with pretreatment capaci-
ties other than 15 million gallons per year. These curves are based upon
the scale factor associated with each of the costs as discussed above.
This data can be applied to any of the processes discussed. For example,
the costs associated with a treatment facility processing 22.5 million
gallons per ^ear by settling are:
- 112 -
-------
TABLE 37. CAPITAL COST ESTIMATE OF TREATMENT
FACILITY: VACUUM DISTILLATION1/
Processing Capacity: 15 million gallons/yr.
Plant Operation: 24 hr./day - 313 days/yr.
Process Yield: 70 percent (10,500,000 gallons finished product)
Direct Costs
Installed Equipment Costs
Purchased Equipment $346,229
Installation 124,642
Piping 110,793
Electrical 69,246
Instrumentation & Controls 96,944
$747,854
Land and Improvements
Buildings $69,246
Yard Improvements 27,698
Service Facilities 222,500
Land 13,849
$333,293
Total Direct Costs $1,081,147
Indirect Costs
Engineering and Supervision $138,492
Construction Expense 166,190
Contractor's Fee 27,698
Contingency 110,793
$443,173
Total Indirect Costs $ 443,173
TOTAL CAPITAL INVESTMENT $1,524,320
I/ Adapted from Ref. 34
- 113 -
-------
TABLE 38. ESTIMATED OPERATING COST OF TREATMENT
FACILITY: VACUUM DISTILLATION1/
Total Capital Investment (C.I.) - See Table 37. $1,524,319
Fixed Costs Annual Cost
Amortization at 5 percent of
total C.I.
Insurance & Local Taxes
(3.0 percent of C.I.)
Total Fixed Cost Per Year
Variable and Semi-Variable Costs
$76,216
45,730
$121,946
Residual Fuels (20
-------
TABLE 39. CAPITAL COST ESTIMATE OF TREATMENT
FACILITY: SOLVENT EXTRACTION^/
Processing Capacity: 15 million gallons/yr.
Plant Operation: 24 hr./day - 318 days/yr.
Process Yield: 85 percent (12,750,000 gallons of finished product)
Direct Costs $1,105,250
Installed Equipment Costs $775,110
. Purchased Equipment $358,847
. Installation 129,185
. Piping 114,831
. Electrical 71,769
. Instrumental &
Controls 100,477
Land and Improvements 262,230
. Buildings 71,769
. Yard Improvements , 28,708
. Service Facilities 147,400
. Land 14,353
Indirect Costs 459,320
Engineering and Supervision 143,540
Construction Expense 172,250
Contractor's Fee 28,700
Contingency 114,830
Total Capital Investment $1,496,660
I/ Adapted from Ref. 34.
- 115 -
-------
TABLE 40. ESTIMATED OPERATING COST OF TREATMENT
FACILITY: SOLVENT EXTRACTION!/
Total Capital Investment (C.I.) - See Table 39
Fixed Costs
$1,496,660
Annual Cost Cost Per Gallon
Finished Product
Amortization at 5% of C.I.
Insurance & Local Taxes
(3% of C.I.)
Total Fixed Cost Per Year
$74,833
44,900
$119,733
Variable and Semi-Variable Costs
Residual Fuels (200 gallon) 30,000
Electric Power (1.50
-------
TABLE 41. ESTIMATED CAPITAL COST OF PRECIPITATORS I/
cfm 1,000,000
Total Capital Investment $2,600,000
Direct Costs $1,574,820
Purchased Equipment
Erection (foundation,
erection, electrical)
Indirect Costs $1,025,180
Engineering and
Supervision
Ductwork ,
Air Flow Regulators
I/ Adapted from Ref. 34
- 117 -
-------
TABLE 42. ESTIMATED OPERATING COST OF PRECIPITATOR1/
Total Capital Investment (C.I.) see Table 41, $2,600,000
Fixed Cost Annual Cost
Amortization at 5% C.I. $130,000
Insurance and Local Taxes 78,000
(3.0% of C.I.)
Total Fixed Cost/Yr. $208,000
Variable and Semi-Variable Cost
Labor (675 manhrs at 5.00- $3,375-5,063
7.50/manhr
Maintenance (2% of Erected 31,496
Electric Power (at 1.5-3.0C/KWH) 34,755-69,000
Total Variable Cost/Yr $69,626-105.539
Total Annual Cost $277,626-313,559
!_/ Adapted from Ref. 34
- 118 -
-------
TABLE 43. CAPITAL COST ESTIMATE OF FABRIC FILTRATION I/
cfm: 1,000,000
Total Capital Cost $2,380,000
Planning and Design $100,000
F.O.B. Baghouse 800,000
Freight 50,000
Fan and Motor 250,000
Ducting 650,000
Disposal Equipment 100,000
Instrumentation 50,000
Foundations and
Installation Labor 280,000
Start-Up 100,000
I/ Adapated from Ref. (34).
- 119 -
-------
TABLE 44. ESTIMATED OPERATING COST FOR FABRIC FILTRATION I/
Total Capital Investment (C.I.) see Table 43. $2,380,000
Fixed Cost Annual Cost
Amoritization at 5% C.I. $119,000
Insurance and local Taxes
(3.0% of C.I.) 71.400
Total Fixed Cost/Yr. $190,400
Variable and Semi-Variable Cost
Labor ($.30 per cfm) $300,000
Electric Power (l.Sc/KWH) 2j 120,000
Plant Overhead ($.25/cfm) 250,000
Cloth Purchases ($.10/cfm) 100.000
Total Variable Cost/Yr $770,000
Total Annual Cost $960,400
I/ Adapted from Ref. 34
2/ Electric power costs vary on the average between 1.5c and 3.0c
per kilowatt hour. The cost range was not adjusted to reflect this,
as in previous tables, in order to preserve simplicity.
- 120 -
-------
TABLE 45. CAPITAL COST ESTIMATE OF HIGH ENERGY VENTURI SCRUBBERS I/
cfm: 1,000,000
Total Capital Investment $1,960,390
Purchased Equipment
Installation
Engineering Expense
Start-Up
I/ Adapted from Ref. (34).
- 121 -
-------
TABLE 46. ESTIMATED OPERATING COST OF HIGH ENERGY VENTURI SCRUBBER I/
Total Capital Investment (C.I.) see Table 45 $1,950,390
Fixed Cost Annual Cost
Amortization at 5% (C.I.) . 97,520
Insurance (3.00% of C.I.) 58,512
Total Fixed Cost/Yr 156,032
Variable and Semi-Variable Cost
Labor and Maintenance (.01% of C.I.) 19,500
Electric Power (1.5C/KWH) 2J 493,685
Water (.05/1000 gal) 200.000
Total Variable Cost/Yr 713,185
Total Annual Cost $869,217
I/ Adapted from Ref. 34
2J Electric power costs vary on the average between 1.5$ and 3.0C per
kilowatt hour. The cost range was not adjusted to reflect this, as
in previous tables, in order to preserve simplicity.
- 122 -
-------
TABLE 47. SUMMARY TABLE OF THE ECONOMICS OF IMPACT REDUCTION ALTERNATIVES I/
(millions of $)
(millions of $)
u>
I
Impact Reduction Alternatives
Settling
Centrifugation
Vacuum Distillation
Solvent Extraction
Precipitators
Fabric Filtration
High Energy Scrubbers
Initial Capital Investment Annual Operating Cost
$1.23
1.15
1.52
1.50
2.60
2.38
1.95
$1.39 - $2.42
1.32 - 2.33
1.30 - 2.31
1.58 - 2.60
0.28 - 0.32
0.96
0.87
I/ Adapted from Ref. 34
-------
1.5-
1.0-
0.5-
Waste Oil Feed; raw materials
Labor and Overhead
•Capital Investment; Fixed Costs
and Maintenance
c _ Cost for New Installation
Cost for 15x106 gal/yr Installation
7.5 11.25
15
T
T
18.75 22.5 26.25
PROCESSING CAPACITY
(gallons per year)
Figure 9 Investment and Operating Cost of Pretreatment as a
Function of Treatment Facility Capacity
- 124 -
-------
Capital Investment (1.27 x $1,229,484) $1,561,444
Operating Costs
Fixed Costs (1.27 x $98,359) 124,916
Waste Oil Feed (1.5 x $900,000 and
1.5 x $1,800,000) 1,350,000 - 2,700,000
Labor (1.11 x $150,240 and
1.11 x $2,700,000) 166,766 - 2,997,000
Overhead (1.11 x $75,120 and
$112,680 x 1.11) 83.383 - 125,075
Raw Materials
Caustic Soda (1.5 x $115) 175
Demulsifier Surfactant (1.5 x $56,250) 84,375
Maintenance (1.27 x $61,474 and
1.27 x $86,064) 78,072 - 109,301
Total Operating Cost $3,449,131 - 7,577,370
There appear to be significant economies of scale in the operation of
treatment facilities. Table 48 provides the processing cost in cents per
gallon for different capacities. As shown by the data, lower average costs
are arrived at through large scale operation. This is one factor which
would support the construction of centralized rather than decentralized
facilities.
Emission Control Devices. Figure 10 provides a means of estimating
the capital cost and operating cost associated with emission capacities
other than 1,000,000 cfm. These curves are based upon the scale factor
associated with each of the costs as discussed above. The use of this
figure parallels that of Figure 9.
TREATMENT VERSUS EMISSION CONTROL DEVICES
It is important to note that while both treatment and emission
control devices are forms of impact reduction alternatives, a simple
capital cost or operating cost comparison between any specific treat-
ment alternative* and a given emission control device is not desirable.
The treatment alternatives discussed are evaluated from an entrepre-
neurial standpoint. The data presented serves as an indicator of the
processing cost involved in producing a fuel product, specifically a
Waste oil fuel product. The costs are those of setting up and operating
a business enterprise. Emission control devices represent an added
expense, of both a capital cost and operating cost nature, to an ongoing
- 125 -
-------
TABLE 48. AFFECT OF CAPACITY ON PROCESSING COST
(CENTS PER GALLON)
Treatment Capacity 15 7
Option (million/gals.)
Settling 10.86-19.01 13.82-24.19 22.70-39.74
Centrifugation 10.36-18.30 13.47-23.79 19.69-34.77
Vacuum Distillation 12.35-21.99 15.44-27.49 23.67-42.15
Solvent Extraction 12.40-20.42 15.50-25.53 23.77-39.15
- 126 -
-------
1.5
1.0-
0.5-
Electric Power & Water
Capital Investment; Fixed Costs
and Maintenance
Cost for New Installation
Cost for IxlO6 cfm Installation
0.25 0.50 0.75 1.00 1.25
CONTROL CAPACITY IN TERMS OF CFM xlO6
1.50
Figure 10 Investment and Operating Cost of Participate Collection
Equipment as a Function of Control Capacity
1.75
- T27 -
-------
business establishment. To the extent a user of waste oil would have
to bear these emission control costs, the additional expense would re-
present a deterrent to waste oil utilization unless these added costs
are offset by fuel cost savings which arise from the lower selling price
of waste oil as compared to that of virgin fuel products.
Market Analysis of Waste Oil Fuels. The following analyzes the
primary market characteristics of the waste oil fuel product and blended
fuel products. The selling price of waste oil is first discussed,
followed by a comparison of waste oil fuel prices with the prices of
other energy sources. A qualitative discussion of supply and demand
factors affecting waste oil marketability is then carried out. This
analysis is based on a waste oil plant treating 15,000,000 gallons of
waste oil per year.
SELLING PRICE OF TREATED WASTE OIL
The first market consideration is the selling price of waste oil.
It may be safely assumed that a high selling price for the waste oil
product would deter from its widespread use as an energy source. Thus
far, only the processing cost of waste oil has been mentioned. The
additional determinants of market price are profit and distribution
charges. These are discussed below.
Profit. The treatment facilities discussed in previous sections were
viewed as an entrepreneurial enterprise. As such, it is imperative to
include a profit margin in the selling price of the product as a return
for entrepreneurial talent and effort. For purposes of this analysis,
profit is assumed to be a 10% return on capital investment (before taxes).
This is consistent with the return experienced in similar establishments
C57). Table 49 presents the addition to selling price that reflects
such a return.
Distribution Costs. The distribution of the waste oil product will
increase the selling price by the expense associated with transporting
the product to either the final user or to blend facilities. Transporta-
tion costs will be the same whether the treatment facility entrepreneur
owns the trucks and pays the drivers' salaries or employs the services
of a trucking firm.
It is estimated that the distribution of the product would add
4.5 cents per gallon to the selling price. This figure was derived by
assuming that two trucks carrying 1500 gallons each made two round
trips per day. Each round trip was assumed to be 200 miles. This is
enough, to distribute on a daily basis the amount of product produced
in a 24-hour period. A cost of $1.46 per intercity vehicle mile
traveled was applied based upon an updating of recent figures on motor
vehicle expense (59). The transportation charge is simply the total
vehicle expense divided by the number of gallons transported. The 4.5
cents per gallon figure appears to be compatible with other estimates
of trucking costs.
- 128 -
-------
TABLE 49. EFFECT OF PROFIT ON MARKET PRICE OF TREATED WASTE OIL
Treatment Process
Annual Profit
(10% of Capital
Investment)
Profit in
cents/gal
of Product
Settling
Centrifugation
Vacuum Distillation
Solvent Extraction
$122,948
114,980
152,432
149,166
0.96
0.90
1.45
1.17
- 129 -
-------
TABLE 50. SELLING PRICE OF TREATED WASTE OIL (CENTS/GAL)
Process Selling
Treatment Option Cost Profit Transport Price
Low Level of Treatment
Settling 10.86-19.01 0.96 4.50 16.32-24.47
Centrifugation 10.36-18.30 0.90 4.50 15.76-23.70
High Level of Treatment
Vacuum Distillation 12.35-21.98 1.45 4.50 18.30-27.93
Solvent Extraction 12.39-20.40 1.17 4.50 18.06-26.07
- 130 -
-------
Price to User. The market price of the waste oil fuel product is
a summation of the processing cost, profit markup, and distribution
costs. Table 50 presents the selling price of the waste oil product
according to the treatment process employed.
COMPARATIVE FUEL PRICES
Table 51 compares the prices of various energy sources to those of
the waste oil product. While the data given are the most recent avail-
able, any long-run projection based upon them involves a high degree of
uncertainty given the current chaos in the energy market. It does appear,
however, that all levels of waste oil (high treated, low treated, and no
treatment) can compare favorably with other fuel oil prices. This is not
true with coal prices, however. Coal is less expensive than any of the
waste oil fuels in terms of cents per million BTU.
Since the potential supply of the waste oil product is a small
percentage of total energy demands, and given technical and environ-
mental consideration, it may be advisable to combust a blended product.
Table 52 lists the prices of various blended fuels. The blend percentages
given refer to the percentage, by weight, of waste oil used. As shown
by this table, as the blend percentage increases, the cost per million
BTU declines with fuel oil blends while it increases with waste oil-coal
blends. The blended product prices increase as the level of waste oil
treatment increases.
DEMAND FACTORS AFFECTING MARKETABILITY
The selling price serves as a first indicator of successful market-
ability. Those factors, other than price which influence demand, will
now be discussed. The most significant of these are any additional
expenses that may arise from waste oil combustion. These added costs
take the form of additional labor, maintenance, and equipment costs.
Labor, maintenance, and equipment costs may be viewed as dependent
variables with the blend percentage, blend product, treatment level,
nature of uses, and volume of uses representing independent variables.
The nature of the changes in these.costs as they relate to the independent
variables follows.
Labor Costs
Increase as the blend percentage increases due to added
equipment and maintenance requirements
Decrease as treatment level increases
Remain constant over different user range
Increase as use volume increases
- 131 -
-------
TABLE 51. SELLING PRICE COMPARISONS OF VIRGIN FOSSIL
FUELS AND WASTE OIL FUELS I/
Cents Per Cents Per
Fuel Type Million BTU Gallon
Untreated waste oil (Dec. 73) 43.17-86.33 6.00-12.00
Low treated waste oil 108.69-168.26 15.76-24.47
High treated waste oil 124.55-192.62 18.06-27.93
Residual oil(less than 0.5%
Sulfur; Jan. 73) 2J 151.32-164.47 23.00-25.00
Residual oil (0.5-1.0%
Sulfur; Jan. 73) 3/ 115.13 17.50
Distillate oil (Jan. 73) 136.86-246.35 18.75-33.75
Coal (greater than 3%
Sulfur; 1973) 39.1 NA
Coal (1-3% sulfur; 1973) 44.1 NA
Coal (less than 1% sulfur;
1973) 47.5 NA
I/ Adapted from Ref. 34~~~
2J New York spot price, Number 6 fuel oil; 0.3% sulfur: (68)
_3_/ New York spot price, Number 6 fuel oil, 1% sulfur: (68)
4/ Chicago Midwest Wholesale, Number 2 Fuel oil: (68)
- 132 -
-------
TABLE 52. SELLING PRICE OF BLENDED WASTE OIL PRODUCTS (CENTS/MILLION BTU)
Untreated Waste Oil
Blended With
Blend Ratio
(% waste oil by weight)
o
5
50
100
#2
191.
184.
132.
64.
6U
33
00
75
#6
131.60
124.50
87.00
64.75
Coal
38.96
40.71
52.32
64.75
Low
#2
191.
186.
163.
138.
Treated Waste Oil
Blended With
60
55
15
63
#6
131.60
133.05
136.40
138.63
Coal
38.96
46.27
96.29
138.63
High Treated Waste Oil
Blended With
92
191.60
187.30
173.97
153.34
#6
131.60
133.90
140.47
153.34
Coal
38.96
47.71
107.26
153.34
CO
I
-------
Maintenance (Annual Operating Cost)
Increases as blend percentage increases
Decrease as blend product improves
Decreases as level of treatment increases
Vary according to industry
Increases as use volume increases
Equipment (Additional Capital Investment)
Increases as blend percentage increases based on where
blending is done
Decreases as blend product improves
Decreases as level of treatment increases
Varies from industry to industry depending upon existing
particulate control equipment
Increases as use volume increases
While the nature of these cost changes can be discussed, their
exact magnitude is still uncertain. User firms interviewed mentioned
added pump wear, nozzle clogging, and strainer clogging as examples of
added maintenance and labor costs associated with waste oil combustion,
hut mentioned no exact cost figures. The treatment systems discussed
in previous section (settling, centrifugation, vacuum distillation, and
solvent extraction) would virtually eliminate these technical impacts.
In situations where untreated waste oil is combusted, it appears desirable
to blend it in small percentages (1 to 5 percent) with other energy sources,
This would give rise to significantly lower maintenance and labor costs
relative to higher blends. Where untreated waste oil is combusted in high
blends C25% or larger), any fuel cost savings might be offset by the added
labor and maintenance required to overhaul pumps, unclog nozzles, and
clean strainers. Such maintenance involves not only the direct costs of
labor and parts, but also involves the implicit costs of equipment shut-
downs and of allocation of valuable labor time to something other than
that for which it was intended.
The additional capital investment or equipment costs which arise
from waste oil combustion are mainly in the form of installation and
operation of emission control devices. The magnitude of such costs
has been discussed previously. The need for control equipment is
eliminated when high treated waste oil is used and is significantly
- 134 -
-------
lessened where low treated or untreated waste oils are blended in small
percentages (less than 5 percent). However, low treated or untreated
waste oil in higher blend percentages would necessitate the installation
of such equipment to avoid metal particulate emissions significantly
affecting air quality. In this situation it becomes a matter of com-
paring the fuel cost savings (difference between waste oil price and
that of other fuels) to the added equipment operating expenses.
Figure 11 shows the annual operating costs (including amortized
investment) for an electrostatic precipitator of 1,000,000 cfm installed
at a large utility boiler or industrial facility. These costs in cents
per gallon of waste oil combusted, presented in line A as a function of
the annual quantities of waste oil used, are derived by dividing the
annual operating cost of $300,000* by the annual quantity of waste oil
fired. This figure illustrates the expected phenomenon of decreasing
control equipment operating costs per gallon of waste oil fired as the
annual total volume of fired waste oil increases.
Also, the fuel savings per gallon of waste oil used relative to the
costs of residual oil are presented both for untreated (line C) and
low-level treated (line B)waste oil. The intersection of lines A and C
shows that more than two million gallons of untreated waste oil would
have to be combusted annually in order for fuel savings to offset control
equipment operating costs. For untreated waste oil, however, there are
additional maintenance costs as discussed above which have to be con-
sidered in an overall cost-benefit analysis.
Similarly, the intersection of lines A and B shows that more than
7.0 million gallons of low-treated waste oil need to be consumed in place
of residual fuel in order for fuel savings to offset control equipment
operating costs. In this case, however, low-level pretreatment precludes
the necessity of significant additional maintenance costs associated with
waste oil combustion. Consequently, a cost-benefit analysis need only
consider fuel and control equipment costs as the two primary offsetting
variables.
SUPPLY FACTORS AFFECTING MARKETABILITY
The supply factors which affect marketability include location of the
treatment facility, the organization of the treatment facility, and the
services which the pretreater provides to the user firm.
The location of treatment facilities is of prime importance. They
should be near areas where there is a high degree of waste oil generation,
and high density population centers. At the same time, the distance be-
tween the facility and the purchasers of the product must also be taken
into consideration given transportation costs.
* This figure is determined by taking the approximate midpoint of the
total annual cost range derived in Table 42.
- 135 -
-------
CO
CTV
ANNUAL OPERATING COST
OF CONTROL EQUIPMENT
A
20 -
Figure 11
Comparison of Fuel Savings and Annual
Control Equipment Operating Cost
level of fuel savings
when untreated waste
oil fired in place
of residual
(low sulfur)
C
1.0 1.5 2.0 2.5 3.0 3.5 4.0 4.5 5.0 5.5 6.0 6.5 7.0 7.5 8.0 8.5 9.0
level of fuel savings
when low treated waste
oil fired in place of
residual (low sulfur)
B
ANNUAL WASTE OIL CONSUMPTION ('000,000 gallons)
-------
Another consideration is how the treatment facilities are to be
established. As shown, centralized facilities represent the superior
option given the economies of scale present in the treatment operation.
Decentralized treatment at the plant level appear feasible only in
situations of extremely high use volume.
Finally, the service to be provided by the treater will also affect
the marketability. The desirability of blending the waste oil at the
supply source and not at the user plant is considered desirable. Given
the fact that small amounts of waste oil would be blended with large
amounts of waste oil, or used with coal, it appears desirable for the
waste oil product to be transported to the virgin fuel distributor,
blended at these facilities, and then trucked to the user. Such a
pre-blended product would add to the range of potential users.
- 137 -
-------
SECTION X
FEDERAL PROCUREMENT OF PRODUCTS MADE FROM WASTE OIL '
AUTOMOTIVE ENGINE LUBRICATING OILS
Federal procurement of lubricating oils for military and civilian
vehicles is performed by the Defense Supply Agency. The specifications
according to which most automotive lubricating oils are procured exclude
those oils made from waste oils on the grounds that uniform quality of
the products cannot be assured because the processes and materials (I.e.,
feedstocks) used in making the products vary.
Before this restriction could be removed or reconsidered, the capability
of engine oils formulated from re-refined stocks to satisfactorily pass
the minimum requirements for MIL-L-46152 (corresponds to API/ASTM/SAE
classification of SE and CC) or MIL-L-2104C (corresponds to API/ASTM/SAE
classification of CD and SC). To date there has been no evidence that
re-refined oils can meet these performance levels.
The Army Coating and Chemical Laboratory, Aberdeen Proving Ground,
Maryland, 1n 1973 purchased on the open market two motor oils from
commercial re-refineries. One of the motor oils had markings on the drum
indicating that it met the performance levels of MIL-L-2104C. Both re-
refined oils were subjected to the qualification acceptance engine tests
currently specified in both MIL-L-2104C and MIL-L-46152. The two products
significantly failed to meet either specification.
The Defense Supply Agency has concluded that "any program to procure
re-refined lubricating oil will require, as a preliminary step, the develop-
ment of substantiating data on the general quality level of re-refined
stocks and the variations in batches resulting from different waste oil
sources and treatment methods." At the present time there are no specifi-
cations for automotive lubricating oils utilizing re-refined components.
Until such specifications become available federal procurement of
automotive lubricating oils made from waste oils 1s not prudent.
OTHER LUBRICATING OILS
There are approximately 200 lubricating products procured by
the Defense Supply Agency whose specifications do not preclude com-
ponents made from waste oils. These Include hydraulic fluids, special
oils, greases, etc. It 1s possible to produce these products from
waste oils and chemical additives but it would be difficult for those
who could do so to submit bids competitive with the prices bid by
those who have traditionally been the sources for federal procurement
of these products. This is because the federal government's needs
frequently are for fragmented quantities of products which require quite
special components. Further, the places where the government needs
these products are scattered around the nation, .resulting in high
- 138 -
-------
transportation costs per unit of product. Under these circumstances a
producer of lubricants from waste oils could not compete with the prices
offered by those already equipped to make these lubricants unless he were
located near the point of delivery for relatively large amounts of a
particular product.
QUALITY ASSURANCE
Like many other products, petroleum products must conform to
certain standards governing their constituents and performance. Several
states have inspection programs to check compliance with state-established
standards for both virgin and reprocessed petroleum products. Since the
comparability of re-refined lubricating oils with their virgin counter-
parts has been a long-standing question, the Bureau of Mines has
initiated a research program to compare several quality parameters. The
limitations of most state quality inspection programs and the preliminary
results of the Bureau of Mines research Indicate the need to consider
establishing a national program for testing all petroleum products on
several quality indices.
BUREAU OF MINES RESEARCH
In March 1974 the Bureau of Mines issued the first detailed report
describing the results of Its re-refined lubricating oil research.
While the principal objective of the research has been to develop
efficient methods for reclaiming waste lubricating oils, secondary
objectives have included development of simple laboratory tests to
evaluate the quality of reclaimed lube oils and development of
specification tests for both new and used oils to promote the market-
ability of recycled lubricating oil.
For the research conducted at its Bartlesville Energy Research
Center, the Bureau acquired samples of re-refined oils from manufac-
turers, purchased at retail additional re-refined oils, produced by
various methods Its own re-refined oils, and compared all these with
virgin oils. Comparisons were also made with used oils collected
from the Bartlesville automobile fleet and from local service stations.
All the commercially purchased re-refined oil samples were
straight mineral oils into which no additives had been blended. The
researchers commented:
Mineral oils generally will not stand the rigors of
oxidation, provide protection to the engine from wear
and corrosion, nor provide the lubricity required by
today's modern automobile without the help of additives.
Therefore, 1t was a disappointment that the commercially
re-refined oils purchased locally did not contain most
of the additives required to meet API service designa-
tions for late-model automobiles (SC, SD, or SE).
- 139 -
-------
These same oils might qualify for an SAE 30 viscosity designation and
might pass state-conducted visocity tests, but the motorist purchasing
such oils for his late-model automobile might endanger his warranty
and risk damage to his engine.
The Bureau researchers found that the re-refined oils they tested
tended to have poor lubricity and poor oxidation stability, although
the addition of additives tended to minimize these adverse characteristics,
The researchers found that additive packages helped two samples of
re-refined oil pass corrosion resistance and wear tests which they
had previously failed.
While emphasis was placed on performance of re-refined oils, the
performance of new oils should not be overlooked; two of the ten
new oil samples failed the foam test performed and one of the ten
failed a corrosion test.
- 140 -
-------
SECTION XI .
REFERENCES
1. U.S. Department of Interior, Bureau of Mines, Mineral Industry
Surveys, December 21, 1973
2. Bernard, Harold, "Embroiled in Oil." Proceedings of Joint
Conference on Prevention and Control of Oil Spins, Washington,
D.C.. June 15-17, 1971
3. U.S. Environmental Protection Agency. Waste Oil Study Preliminary
Report to Congress. April 1973. Washington, D.C., 54 pp.
4. Twomey, David W., "Lube Market Getting Tighter," Hydrocarbon
Processing. November 1973
5. National Petroleum News, Fact Book Issue, Mid-May 1973
6. Recon Systems Inc., Waste Oil Recycling and Disposal, unpublished
report, Contract #68-01-1870, Environmental Protection Agency,
January 1974
7. American Petroleum Institute and American Society of Lubrication
Engineers, Industrial Oily Waste Control, API Publication 41,
July 1970
8. "Task Force on Waste Oil Disposal, American Petroleum Institute,
Washington, D.C.
9. Petroleum Analytical Research Corporation, Study on Use of Waste
Lube Oil as Fuel, Report to American Petroleum Institute,
September 23, 1973
10. Wisman, M. L., "Waste Oil Recycling Project B.4 Report," Bartlesville
Energy Research Center, Bureau of Mines, USDI, 3/13/73
11. Schilling, A., Motor Oils and Engine Lubrication. 2nd Ed., England,
Scientific Publications Ltd., 1968
12. Villanova University, Water Pollution Control Demonstration Grant,
#WPD-174-01-67
13. Pu'tscher, R. E., "Study of Re-Refining Waste Disposal," Armour
Resource Foundation Report #ARF 3808-5, January 1960
14. Bylinsky, G., "Metallic Menaces in the Environment," Fortune.
January 1971
15. Private communication, Humble Oil Co., Baltimore, Maryland
16. Lowther, H. V., "Lube Effects With Unleaded Gasolines," API
Proceedings, May 12-14, 1971, San Francisco
- 141 -
-------
17. Chemical and Engineering News, March 16, 1970
18. Ackerman, A. W., "The Properties and Classification of Metalworking
Fluids," Lubrication Engineering, July 1969
19. Conklin, K. R., "Design Philosophy, Turbine Generator Lubricating
Oil Systems," Lubrication Engineering. January 1970
20. Humble Oil Co., Product Bulletin, Lubetest DG-2C
21. Accident Prevention Bulletin; Transformers, Transformer Consultants,
S. D. Myers, Inc., Akron, Ohio
22. Environmental Quality Systems Inc., Waste Oil Recovery Practices
State of the Art, State of Maryland Environmental Service and
Environmental Protection Agency, December 1972
23. Wisman, M., Personal Communication, U.S. Bureau of Mines,
Bartlesville Energy Center
24. A. D. Little, Inc. Study of Waste Oil Disposal Practices in
Massachusetts. Report to Commonwealth of Massachusetts, Division
of Water Pollution Control. January 1969. 37 pp.
25. Ostrander, Ronald 0., Kleinert, S. J., "Drain Oil Disposal in
Wisconsin," Proceedings of Joint Conference on Prevention and
Control of Oil Spills, Washington. D.C.. March 13-15, 1973
26. Kincannon, Buford C., Oily Waste Disposal by Soil Cultivation
Process. Environmental Protection Agency, EPA-R2-72-110, December
1972
27. Freestone, F. J., Runoff of Oils from Rural Roads Treated to
Suppress Dust, Environmental Protection Agency, EPA-R2-72-054,
October 1972
28. Bonnifay, P., et al. "A New Process for Reclaiming Spent Lubricating
Oils." Institut Francais du Petrole (Presented at the National
Fuels and Lubricants Mtg. National Petroleum Refiners Association,
New York City, September 14-15, 1972.) 10 pp.
29. Weinstein, N. J. et al. "A Non-Polluting Oil Re-Refining Process."
RECON SYSTEMS, Inc. (Presented at American Institute of Chemical
Engineers Workshop; Industrial Process Design and Control.
Chicago, Illinois, October 17-19, 1973) 14 pp
30. Bethea, S. R., et al. "To Hydrotreat Waste Oil." Hydrocarbon
Processing; p. 134-136; September 1973.
- 142 -
-------
31. Environmental Protection Agency, Demonstration of Suitability of
Crankcase Uaste Oil Bottoms as Fuel for Reverberatory Furnace,
Grant No. 803027 to National Lead
32. Armour Research Foundation, "Study of Re-refining Waste Disposal,
January 29, 1960
33. Walter C. McCrone Associates, Study of Problems of Refining
linings. Report to Associ ati on of Pet role
Re-refiners, May 11, 19/1
Lubricating Oil Drainings. Report to Associ ati on of Petroleum
34. GCA unpublished report, Haste Automotive Lubrication Oil Reuse as a
Fuel, Environmental Protection Agency, Contract No. 68-01-1859
35. Babcock and Wilcox. Steam. Its Generation and Use. 1972
" ~ - - - - - ^
36. Chappell, G. A. Waste Oil Reprocessing. Esso Research and
Engineering Company.1973
37. Final Report of the API Task Force on Used Oil Disposal. American
Petroleum Institute. May 1970
38. Internal Correspondence from Mr. C. R. Russel. Test Burning Used
Crankcase Drain Oil. Northern States Power Company. September
1973
39. Aberdeen Proving Ground. Waste Oil Utilization Program. Air
Pollution Study No. 21-015-73/74. April and September 1973
40. Chansky, S., McCoy, B, and Surprenant, N. Waste Automotive
Lubricating Oil as a Municipal Incinerator Fuel. Office of
Research and MonitoringU.S. Environmental Protection Agency.
U.S. Government Printing Office. September 1973.
41. Briggs, G. A. Plume Rise. U.S. Atomic Energy Commission,
Division of Technical Information. 1969
42. Mobil Oil Corporation. Heating with Waste Oils. Mobil Technical
Bulletin
43. Personal Communications. D. 0. Carney. United States Steel.
December 1973
44. Personal Communications. Richard L. Bidwell. Reynolds Aluminum.
November 1973
45. Teknekron, Inc. A Technical and Economic Study of Waste Oil Recovery.
Unpublished Report. Prepared for the Environmental Protection Agency.
Washington, D.C. Contract No. 68-01-1806. October 1973
- 143 -
-------
46. The Environmental Law Institute, Legal Aspects of Incentive Approaches
to Pollution Control; Case Study~on Alternative Approaches to Waste
Oil control. Unpublished report. Prepared by the Environmental Law
Institute for the Environmental Protection Agency. Contract No.
68-01-2203. Washington, D. C. February 1974.
47. American Petroleum Institute. Waste Oil Roundup ... No. 1. Committee
on Disposal of Waste Products, Division of Marketing.Washington,
D.C.
48. Penn, William S. and Ross E. Lanser. Waste Lubricating Oils Supply
and Demand. Prepared for Committee on Disposal of Waste Products,
Division of Marketing, American Petroleum Institute. October, 1973
49. Weinstein, Norman J. The Economics of Re-refining. Paper presented
at the International Conference on Waste Oil Recovery and Reuse.
Association of Petroleum Re-refiners. February 12-14, 1974.
Washington, D.C.
50. Personal Communication. Belton Williams, President, Association
of Petroleum Re-refiners. R. Banks, Bayside Oil Corporation, San
Carlos, California. Mr. Lester Caker, Teknekron, Inc. March 1974
51. Personal Communication. Belton Williams, President, Association
of Petroleum Re-refiners, February 7, 1974
52. Personal Communication. N. Weinstein, Recon Systems, Inc.,
Princeton, N.J., February 19, 1974
53. U.S. Department of Commerce. Social and Economic Statistics
Administration. Bureau of Economic Analysis. Survey of Current
Business. 54: 1. 1974
54. Personal Communication. Arthur Evans. Gould Pumps, Inc.
December 1973. (Cited in: G.C.A./Technology Division. Waste
Automotive Lubricating 011 Reuse as a Fuel. A Draft Report.
Prepared for the U.S. Environmental Protection Agency. Washington,
D.C. Contract No. 68-01-1859. February 1974. 159 pp.
55. Popper H., Modern Cost Engineering Techniques, McGraw Hill, N.Y.,
1970 a * a
56. Personal Comnunication. R. D. Meyers and 0. Robertson. Exxon
Corporation. December 1973 (Cited 1n: G.C.A./Technology Division.
Waste Automotive Lubricating Oil Reuse as a FuelI. A Draft Report.
Prepared for the U.S. Environmental Protection Agency. Washington,
D.C. Contract No. 68-01-1859. February 1974. 159 pp.
57. U.S. Department of Commerce. Statistical Abstract of the United
States. 1973.
- 144 -
-------
58. U.S. Bureau of Labor Statistics. Retail Prices and Indices of
Fuels and Utilities. December 1973.
59. American Trucking Association. American Trucking Trends.
60. Environmental Quality Systems, Inc. State of Maryland Waste Oil
Recovery and Reuse Programs. Prepared for the Maryland Environ-
mental Service and the United States Environmental Protection
Agency. Washington, D. C. November 1973. 248 pp.
61 U.S. Department of Labor. Bureau of Labor Statistics. Wholesale
Prices and Price Indices, Data for September 1973. Government
Printing Office.Washington, D. C. 1973.
62. U. S. Department of Labor. Bureau of Labor Statistics. Wholesale
Prices and Price Indices, Data for December 1973. Government
Printing Office.Washington, D. C. 1973.
63. Personal Communication. Belton Williams, President Association
of Petroleum Re-refiners; Ray Banks, Bayside Oil Corporation,
San Carlos, Calif. February 1974.
64. Jaksch, John A. The Waste Oil Industry: An Economic Analysis.
Washington Environmental Research Center.Office of Research
and Development, Environmental Protection Agency (to be published).
65. Personal Communication. N. Weinstein, Recon Systems, Inc.,
Princeton, N. J., March 21, 1974.
66. Personal Communication. Belton Williams, President, Association
of Petroleum Re-refiners, March 21, 1974.
67. G.C.A./Technology Division. Fabric Filter Systems Study. Report
to National Air Pollution Control Association.December 1970.
(Cited in: G.C.A./Technology Division. Waste Automotive Lubrica-
ting Oil Reuse as a Fuel. A Draft Report"Prepared for the U.S.
Environmental Protection Agency. Washington, D. C. Contract No.
68-01-1859. February 1974. 159 pp.
68. McGraw Hill Publication Co. Platts 011 gram Price Service. New
York Edition. Vol. 52, No. 2, January 3, 1974.
- 145 -
-------
APPENDIX A
LAND SPREADING, A CONSERVING
AND NON-POLLUTING METHOD OF
DISPOSING OF OILY WASTES
G.K. DOTSON, R.B. DEAN, W.B. COOKE and B.A. KENNAR
Ohio Basin Region, 4676 Columbia Parkway, Cincinnati, Ohio, 45226, U.S.A.
INTRODUCTION
Disposal of concentrated wastes is a problem of increasing concern
for public officials, industrialists, conservationists and the general
public. Some of the most complex wastes are those associated with
petroleum. The use of petroleum products has increased rapidly in the
industralized areas of the world in the last 30 years. Though this
increase has resulted in many new products and has contributed greatly
to the economics of the areas involved, it has added to the problem of
waste treatment and disposal. Oil and several of the chemical wastes
from petroleum refining and processing are serious pollutants of
surface water and land when discharged without adequate treatment
and proper disposal. Extracting, transporting, refining, and selling
of the petroleum products are operations with potential for polluting
water. Dredging oily sludge from channels and harbors may pollute
lakes and streams when the sludge is dumped back into open water.
Several American refineries are reported to dispose of oily sludge
on the land. This paper discusses land spreading operations for oily
waste disposal by three refineries.
Use of land as a receptacle for organic wastes is an ancient
practice that holds much promise for treatment and disposal of organic
and some inorganic wastes in the future. Transporting digested sludge
for almost 100 miles from Cleveland to strip mined areas for disposal
was suggested by Wirts (1956). Economical conveyance by pipeline
makes land spreading feasible for some municipalities to which land
was previously unavailable. Dalton et al. (1967) calculated that
land spreading of liquid digested sludge on low-productivity sandy
soils after piping more than 50 miles (80.5 kilometers) would be less
than half as expensive as other methods of dewatering and disposing
of Chicago sludge. Templeton (1966) found land spreading at East
Kilbride, Scotland, to be competitive with sea disposal or other
methods and to be virtually trouble free and independent of weather
conditions. Many other plants in this country and abroad continue
to use land spreading even though they have installed more complicated
sludge dewatering devices.
- 146 -
-------
Soils have been shown to provide a hiqh degree of physical,
chemical, and biological treatment for organic wastes when the system
is properly designed. Despite their demonstrated efficiency in
assimilating wastes, land spreading has never been used as extensively
as it could be. Although used by many petroleum refineries, oily
waste disposal by land spreading has not been generally appreciated
and exploited by sanitation and pollution control officials. Several
reasons are apparent for the practice having failed to be used more
universally. Disposal of putresclble wastes causing unfavorable
public reaction; fear of pollution of surface and groundwater; using
soils poorly suited to sludge assimilation; and lack of Information
concerning successful full-scale operations are among the reasons.
UTILIZATION OF WASTES BY SOIL MICROBES
The soil is an excellent medium for growing microbes, thus 1t is
capable of assimilating and decomposing organic matter. Soil is de-
scribed by Smith (I960) is the collection of natural bodies at the
earth's surface containing living matter and supporting or capable
of supporting plants. Many kinds of soils have developed through
Interactions of climate, living organisms, parent materials, and
relief. So, while living organisms have been Influential 1n deter-
mining the kind of soil at a given location, the resulting soil proper-
ties Influence greatly the kinds and numbers of microbes living within.
The soil 1s a complex dynamic system with continuous chemical, physical,
and biological activity. Any sudden change 1n the environment, such
as addition of oil, causes a change 1n soil properties, but when the
cause of change is removed the soil again moves toward equilibrium
with the environment.
Although soils vary from place to place 1n the quantity and kinds
of microorganisms, most soils contain many millions or billions of
microbes per gram (Waksman, 1931), the greatest number of organisms
usually living near the surface. A sufficient quantity of mineral
nutrients and organic matter, near-neutral pH, warm soil, and abundance
of air are conditions that are favorable for reproduction and growth
of microbes. Fungi are more amenable to add soils than bacteria
(Waksman, 1931). Bacteria outnumber fungi 1n most soils by a large
margin and they reproduce much faster so 1t 1s Hkely that bacteria
are responsible for much of the decomposition of hydrocarbons 1n soil.
Crude oil and the wastes that result from Its processing are
complex mixtures, so 1t 1s probable that few 1f any microbes will
attack all fractions. A mixed population such as that 1n soils 1s
more efficient than a single class of microbes. Petroleum hydro-
carbons vary in suceptibility to decomposition. High molecular weight,
viscosity, and crystallinity are properties that Inhibit biological
oxidation and decomposition. Straight chain medium molecular weight
hydrocarbons such as kerosene and light motor oils oxidize readily,
while aromatic types are more resistant.
- 147 -
-------
Many studies of microbes capable of utilizing petroleum hydrocarbon
have produced a list of more than 100 species and 30 genera of bacteria,
actinomycetes, and fungi that attack one or more fractions of crude
oil. Ellis and Adams (1961), citing Haas (1942), reported that 66%
of the hydrocarbon oxidizers found in ordinary soils were Pseudomonas
species. Pseudomonas can grow under a wide range of conditions and
with very little food. They are prevalent in population where petro-
leum hydrocarbons are available and in activated sludge.
There is much evidence, other than that from research studies, to
attest to the capacity of soil microbes to assimilate hydrocarbons.
Peculiar accumulations of organic matter near the soil surface have
been shown to be associated with gas seeps and petroleum deposits.
The organic deposits, called "paraffin dirt" because of their waxy
appearance, consist of cells of hydrocarbon utilizing microbes, and
colloidal organic material produced by them, and are used as a tool
in prospecting for petroleum (Davis, 1967).
Decomposition of the asphalt coating used to protect some under-
ground pipes from corrosion is credited to microbes which have been
found to be present in usually large numbers around such pipes.
Asphalt used in combination with wheat straw by conservationists and
engineers to mulch ditch banks is decomposed at about the same rate
as the straw.
Seepages of oil and natural gas have doubtless existed in nature
for centuries without producing lakes of oil or high hydrocarbon
accumulations in the atmosphere. Microbial assimilation in the soil
is postulated (Ellis and Adams, 1961) to be the cause of this
phenonenon.
The three land spreading operations described in this paper
illustrate different techniques of disposing of oily sludge by
land spreading.
LAND DISPOSAL PRACTICES
The Humble Oil Company, Baytown, near Houston, Texas has disposed
of oily sludge from gravity oil-water separators by spreading on land
for about 16 years. The sludge is pumped from the bottom of API oil-
water separators into one of two storage pits where it remains for
one to two years. When a put is full it is dewatered by decarding and
the sludge removed by a clamshell to dump trucks and hauled to adjacent
grassland where it is dumped and spread with a bulldozer. After partial
drying the sludge is incorporated into the soil by disking with a large
heavy-duty disk and a crawler type tractor. A single disking is used
to mix soil and sludge and stimulate biological decomposition.
- 148 -
-------
The land consists of clay soils. Tests of soil samples taken
prior to the beginning of sludge spreading indicated a pH of 4.4 to 4.8
in the topsoil. The content of available nitrogen was medium, and
available phosphorus was low. Two tons of agricultural ground lime-
stone, 50 pounds of nitrogen per acre (56Kg/Ha), and 60 pounds of
phosphorus per acre (67Kg/Ha) were applied once, but the application
was not repeated. No farther soil testing was done, The purpose of
fertilizing and liming was to produce a favorable medium for microbial
activity and not to fertilize the grass.
An average API oil-water separator sludge consisted of an emulsion
with about 20% hydrocarbon, 25% solids, and 55% water. The solids come
from unclarified river water, storm water runoff, and precipitates in
the system and weight of the emulsion so that it is heavier than water.
The sludge is spread to a thickness of about four to five inches (10 to
12.5 cm). Thus about one inch (2.5 cm) of hydrocarbons, equivalent to
about 100 tons per acre (110 metric tons/Ha) is applied.
By the time that the sludge is dry enough to work into the soil,
the grass has started to grow. It is growing noticably in three to
four months and has usually established a normal grass cover within
a year.
Shell Oil Company's refinery at Houston, Texas has successfully
used an intensive land spreading system for disposing of nearly all
of its petroleum sludges and stable emulsions from tank bottoms, oil-
water separators, sewer boxes, and ship ballast water since 1961. The
tract of land used consists of approximately seven acres (2.83 hectares).
It is divided into four nearly equal sections by built-up roads. The
characteristics of the soils in the disposal area have been altered by
man's activities, which include the dredging of the Houston ship channel
and construction of the disposal area, but H.V. Geib et al. (1928)
described the natural soils in the area as clayey or fine textured,
naturally poorly drained, and neutral or calcareous in reaction.
The climate at Houston, Texas is characterized by hot summers and
mild winters. The average July temperature is 83°F (28°C) and the average
for January is 54°F (12°C). The average date of the last killing frost
in the winter is February 10 and the first one in the fall is December 8.
The average growing season is 201 days. The maximum temperature of
record was 108°F (42°C) and the minimum was 5°F (-15°C). Forty-five
inches (112 cm) of precipitation, almost evenly distributed throughout
the year, is normal (Yearbook of Agriculture, 1941).
A section is prepared to receive sludge by grading it to a very
gentle slope and constructing 20 inch (50 cm) high terrace ridges to
distribute sludge evenly. The lowest point in each section is equipped
with a pipe underdrain which leads to a small oil trap for gravity
separation of entrained of before the water is discharged into the
stream. Oil is retrieved for further treatment or is returned to the
land.
- 149 -
-------
After a section has been properly graded to assure even distribution,
oily sludge and emulsions are brought from the refinery by vacuum truck
and discharged into the enclosed section where it spreads to a depth of
about six inches (15 cm). The sludge consists primarily of oily solids,
but it may contain wax, entrapped water, and pockets of oil. The oil
is recovered by vacuum truck for return to the refinery. After drainage
of excess water and removal of free oil, a bulldozer is used to mix the
sludge with about six inches (15 cm) of soil and stir the mixture to
improve aeration and accelerate drainage. The stiring is repeated from
two to four times each month until the soil returns to a brown friable
condition indicating that biological oxidation has progressed for enough
for oil to be added again. Stirring is an important part of the process
as it keeps the mixture aerobic and disperses hydrocarbon molecules
making them ore readily available for microbial attack. The original
mixture of equal volumes of oil and sludge is very oily and unpromising.
Four sections are used so that as one is being filled another is
prepared to receive sludge, and two others are decomposing the oils.
The time required to decompose the sludge varies from three to nine
months with some of the most important determining factors being moisture
content and temperature of the soil and the types of hydrocarbons applied.
Wet soil has been observed to inhibit consumption of the sludge. Although
a record of soil temperatures is not available, the temperature of a
nearby pond averaged 75°F (23°C) with winter average being 42°F (5.5°C)
and the summer being 99°F (37°C). Beerstecher (1954) gave 86°F (30°C)
as optimum temperature for incubation of most hydrocarbon-oxidizing
organisms.
Two types of hydrocarbons observed to be particularly resistant
to microbial decomposition are paraffin waxes which form hard cakes
that are difficult to mix with the soil and high molecular weight
polyaromatic material. However, even these resistant materials are
eventually decomposed.
At the beginning of the land disposal operation, the refinery con-
ducted a pilot study to determine the rate at which hydrocarbons would
decompose. Two open boxes containing 51 (23.3 Kg) and 56 pounds (25.4 Kg)
of soil respectively were treated with oily sludge at the land disposal
area. The soil and oil were mixed at irregular intervals and the oil
content determined. The rate of decomposition varied from 5 to 60 pounds
(80 to 960 mg/cc) per cubic foot of soil per month. A rapid rate of
decomposition occurred with as much as 23% of oil by weight added to
the soil. Though at a slower rate, oxidation did continue through
the colder months of the year.
MICROBIOLOGICAL STUDIES
Although numerous investigators have reported the use of petroleum
hydrocarbons for food by various microbes, not much information was
available to indicate which genera would be most likely to increase in
numbers and activity in the presence of oily waste in a warm humid
climate such as in southeastern Texas.
- 150 -
-------
In November, 1968, soil samples were taken for bioassay from three
of the sections of the Shell Oil Company disposal area and from the
relatively undisturbed soil outside. Samples one and two were from a
relatively undisturbed soil outside of the disposal area. Three and
four were from a section where oil was about mid-way through the
decomposition phase of the cycle. Five and six represent an advanced
stage of decomposition, and seven and eight were from a section that
has recently received oil.
Samples were collected by a sterile sampling technique. One hundred
twenty milliliter capacity sterile metal cans were pressed into the soil
to obtain the sample. Plastic gloves and wood spatulas were used to
protect the sample from contamination in handling.
BACTERIA
In the study of soils and oil-treated soils, agar pour plates were
made of soil dilutions ranging from 10"' to 10"B in pH 7.2 buffer water.
The numbers of bacteria per gram of soil were determined after three days'
incubation at room temperature, for petri plates containing 30 to 300
colonies. The plating medium contained peptone, glycerol, magnesium
chloride, potassium sulfate agar, and distilled water (King A medium).
Colonies were chosen at random from the lowest count plates with the
number of colonies that could be characterized by the laboratory.
Only aerobic species of bacteria were studied because many investigators
have reported that anaerobes are inefficient decomposers of hydrocarbons.
Table 1 lists the types of bacteria found in the soil samples.
Pseudomonas stutzeri was the species that showed the most rapid growth
after application of the oily waste. The numbers of bacteria increased
as the oil was decomposed until the food source decreased. Genera such
as Bacillus, Streptomyces. Achromobacter, and Flayobacter, present in
the untreated soil, did not increase as much in the oil-treated soil
as the Pseudomonas species did, and were not even detected in samples
three and four where the greatest number of bacteria was found. There
were fewer bacteria per gram of oil-saturated soil indicating a probable
toxic effect of volatile constituents in the oil.
FUNGI
Very little information is available in the literature concerning
the ability of fungi to degrade wastes of the petroleum industry. As a
result of observing molds growing in a stream into which oil wastes from
a refinery in west central Ohio were discharged, as well as interest in
the availability to fungi of hydrocarbon as a seurce of nutrients,
- 151 -
-------
TABLE 1
Ref i nery
Species ^
(/)
and £-
O)
•p
Genera «
•£*
O
^
o
•a:
* *
Q.
10
•
r">
00
IO
3
f—
•r—
O
to
CO
t-
O)
•M
O
_Q
O
n3
i—
u_
•
a
to
(/>
(O
o
3
0)
CO
a.
to
T"
^.
OJ
N
•P
•^
^j
to
ra
c
o
•o
3
ai
CO
a.
a.
IO
^^
a>
|
E
O
•p
0.
CD
s-
•p
t^
*
a,
10
c
3
0
c
^/
c
=
Area 1, Untreated soil, bacterial count/gm soil 4.25x107
Number
of strains 5 6 1
% of total 20 24 4
3
12
10
40
Area 2, Sludge treated soil, oil midway in oxidation,
bacterial count/gm soil 6.5xl07
Number
of strains
% of total
21 4
84 16
Area 3, Sludge treated soil, oil in advanced stage of
oxidation bacterial count/gm soil 3.5x10?
Number
of strains
% of total 12
12 68
8
Area 4, Sludge treated soil, very oily, bacterial
count/gm oil 1.5xl05
Number
of strains
% of total
8 4
32 16
10
40
1
4
2
8
*Species recognized but not identified were combined.
- 152 -
-------
Cooke (1957) substituted S.A.E. 20 motor oil for glucose in a nutrition
experiment in shaken flask culture. It was found that the ratio of
growth in the motor oil to that in a solution containing glucose was
7.58 in the case of Penici Hi urn lilacinum. 6.18 in Geotrichum candidum,
3.96 in Rhinod adiella marsonii and 2.49 in Fusarium aquaeductuum, all
common fungi of polluted waters and sewages; while in other common
species of molds these ratios were only between 0.50 and 0.75 in the
cases of Fusarium oxysporum, PeniciIlium melim'i, P. ochro-chloron.
Aureobasidium pullulans, and Trichoderma" viride sensu lato.
Crosby, Rudoffs and Heukelekian (1954) were more interested in the
control of slime growths which appears in various areas in oil refineries.
However, they observed that in addition to several types of bacteria and
blue green algae, flamentous fungi were present. They noted that as
a^result of their ability to adsorb oils such slime-forming organisms
might be of potential significance in removing polluting substances from
waste discharges from such plants. More recently, it has been noted
that jet engine fuel tanks contain contaminating organisms.
Reese, Cravetz and Mandels (1955) tested the activity of 358 cultures
of fungi on coconut oil and a castor oil derivative, methyl-acetyl-
ricinoleate. The medium used included 0.5 gm of oil in 50 ml nutrient
solution using l.Og NH4NOs, 1 .36g KH2P04, 0.2 g MgSO^/HgO, 0.1 g Difco
yeast extract, in a liter of distilled water with the pH adjusted to
6.4. Ten of the species reported in the following study were included
among the strains tested. Best results were obtained with Aspergillus
terreus of this group. Others producing significant amounts of growth
in this experiment were: A. flayus. A. fumigatus, A. m'ger, PeniciIlium
lilacinum. P. funiculosum, Trichoderma viride sersu latoTHyrothecium
verrucaria. Aspergillus flovipes and Humicola fuscoatra.
Coursey and Eggins (1961) studied microorganisms responsible for
the spoilage of palm oil during storage. Of the 15 species of filamentous
fungi they found, strains of at least one of those to be reported here
were tested for lipolytic activity. Asperginus niger was strongly
lipolytic, while Curcularia lunata and AureobasTdium pullulars (Torula
m'gra) were present amont the species isolated.
Nuus et al. (1968) tested a wide range of fungi to determine their
ability to assimlate a series of hydrocarbon fractions. The orders
mucorales and moniliales were found to provide the larges number of
hydrocarbon-using classes. Aspergillus and PeniciIlium are genera which
provide many strains that assimilate hydrocarbons.
METHODS USED IN FUNGAL EXAMINATION
The samples from Shell Oil Company refinery were plated, using pour
plates, in dilutions of 1:100, 1:1000, and 1:10,000, in neopeptone-
dextrose agar, and neopetone-dextrose-rose bengal agar, in all cases
- 153 -
-------
using tetracycline as a bacterial inhibitor. Dilutions of the samples
were prepared in distilled water using a rotary shaker at about 150
oscillations per minute for breaking up and dispersing the soil particles
in the sample. In the case of samples 3, 4, 5 and 6, approximately
75% of the 15 ml sample remained balled up in water resistant oil during
this process so that probably only about 1/4 of the amount of soil
taken was actually sampled.
Table 2 lists the corrected, estimated numbers of colonies of fungi
recovered from the samples. In calculating oven dry weights 1t was
assumed that, like many samples of soils, these samples were approximately
67% dry material, 33% water. In the case of soils permeated by oil, this
value may be too high. In the case of four samples, where incomplete
dispersion resulted from shaking, the numbers of colonies obtained may
have been low.
TABLE 2
Colonies of fungi recovered from oil soaked soils
Sample Medium Dilution
Avg. No. Avg. No.
colonies colonies
per pair per ml
plates sample
Approx. Avg.
No colonies
per gm "oven
dry weight"
Average
Area 1
1
2
Area 2
3
4
Area 3
5
6
Area 4
7
8
RB*
RB
RB
RB
ND
ND
ND
ND
1:10,000
1:10,000
1:10,000
1:10,000
1:10,000
1:10,000
1:1,000
1:1,000
40
11
7
17
21.5
6
2.5
6
400,000
100,000
70,000
170,000
215,000
60,000
2,500
6,000
1,300,000
380,000
380,000
570,000
710,000
200,000
840
2,000
840,000
1,900,000*
1,840,000*
1,400
Table 3 lists the species of fungi recovered from the four areas
sampled in Table 3, data from pairs of samples have been composited.
Results of a preliminary study such as this Indicate that fungi,
both filamentous and yeast-Uke, are present 1n large numbers In soils
subjected to receipt of oil wastes, especially where these soils and
wastes are thoroughly mixed (aerated) periodically. While 1n a lagoon
area to which oil wastes have been freshly applied the fungus count 1s
low, as in samples 7 and 8, as the mixing and aerating process proceeds
the count rises rapidly, reaching more than twice as many colonies 1n
the treatment area as 1n the presurably undisturbed area nearby, 1f a
correction is made for Incomplete homogenlzation of the sample 1n water.
- 154 -
-------
Table 3 lists the species of fungi recovered from the four area sampled
In Table 3, data from pairs of samples have been compelsted.
TABLE 3
Species of fungi recovered from aoil waste didposal samples
Species
Unidentified molds
Asperglllus terreus
PenlcllHum Uladnum
CurvulaHa lunata
Asperglllus nlger
Trlchoderma vlrlde
Fusarlum spp.
MonospoHum aplospermum
Mucor spp.
PenlcllHum janthlnellum
Asperglllus flavus
Cyllndrocarpon destruens
Myrothedum verrucarla
Fusarlum oxysporum
Humlcola grlsea
Asperglllus fumlgatus
Rhodotorula aurantlaca
Dlheterospora chlamydospora
White yeast spp.
Candida tropical 1s
Rhodotorula sp.
Monascus sp.
Asperglllus flavlpes
Asperglllus sp.
Torulopsls dattila
Candida guH1ermond1
Asperglllus candldus
PenlcllHum funlculosum
Curvularla genlculata
Humlcola fuscoatra
Pen1c1ll1um variable
Leotographlum sp.
Stllbella sp.
1
x
x
x
x
x
x
x
X
X
X
X
X
X
X
X
2
X
X
X
Area
3
x
x
X
X
X
X
X
X
X
X
X
X
X
X
X
4
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
X
Total species—34
Total species from each sample 12-11
Total species from each area 16
7-6
10
11-13
19
10-9
14
- 155 -
-------
On the basis of this preliminary study it appears that there are
species of fungi, strains of which can readily adapt to conditions of
the soil waste disposal area from which the samples were obtained. At
least five species of filamentous fungi and one red yeast are common
to all areas in which waste oil sludges are treated in this area near
Houston, Texas. There is no reason to believe that similar populations
are not present elsewhere.
The Marathon Oil Company at Robinson, Illinois, used land spreading
to dispose of oily sludge from two lagoons in 1969. In contrast to the
other disposal operations, sludge was spread only once. The lagoons which
had been used as settling basins or clarifiers following a trickling
filter in their old waste treatment system, were cleaned in preparation
for construction of a new treatment plant. The sludge accumulated over
a period of five years, had an estimated average composition of 40% water,
25% ash, and 35% oil.
The land used for disposal purposes is owned by the refinery and is
located adjacent to it. The soils are derived from loess mantled glacial
till. They have a silt koam surface and a dense impermeable clay suboil.
They are nearly level, poorly drained, and strongly acid.
The climate at Robinson, Illinois, is cooler than at Houston, Texas,
with an average January temperature of 32°F (0°C). The average for
July is 76°F (24°C). The highest recorded temperature is 108°F (42°C),
and the lowest is --18"F (-28°C). The average growing season of 182
days results from the first killing frost on October 18 and the last
on April 19. Forty-two inches (105 cm) of precipitation are distributed
almost evenly throughout the year (Yearbook of Agriculture, 1941).
The disposal procedure consisted of removing the sludge in May from
lagoons with a clamshell, loading it into a dump truck, hauling to the
field, and spreading. After a few days of drying the sludge was mixed
with the soil to a depth of about 18 inches (45 cm) by disking. Two
applications of sludge of about two inches (5 cm) were applied before
disking.
A rainstorm occurring soon after some of the sludge was applied,
and before cultivation, resulted in erosion of the oily sludge and
deposition of it in a catch basin or small lake on refinery property.
It was of sufficient magnitude to kill some fish in the lake. This
incident illustrates the potential for water pollution from land
spreading.
Soil samples were collected from the disposal area for assay of the
bacteriological population in November, 1969. Samples one and two were
taken from the last part of the field to receive sludge. Samples three
and four were from a part of the field that received sludge first and
was representative of the poorest drainage. Samples five and six were
from an area of similar soils to the site of samples three and four, but
- 156 -
-------
no sludge had been applied. The microbial population may, however, have
been influenced by the proximity of the refinery. Table 4 shows that the
types of bacterial population in the untreated soil are different from
those that have been in contact with the oily waste for about five months.
The presence of hydrocarbons caused the inevitable growth of those types
of bacteria and fungi which are most efficient at using the hydrocarbons
for a food source and at growing under the environmental conditions
produced by the addition of oily wastes. The principal hydrocarbon
users are gram-negative, rod-shaped bacteria. The bioassay of the samples
indicates that Pseudomonas species, particularly Pseudomonas stutzeri,
made the greatest growth after the addition of oil and as a result
Pseudomonads comprised over half of the population of the samples.
Pseudomonads were not detected in the samples from the non-oil treated
soil.
DISCUSSION
Many investigators have shown that microorganisms occurring
ubiquitously in soils will attack petroleum hydrocarbons when they are
added to soil. Unfortunately, the process is too show for effective
disposal of oily sludge or reclamation of soil after oil spills or leaks
without some cultural practice to accelerate decomposition. Conditions
favoring growth of most higher plants are generally favorable for aerobic
microbes, so management of a disposal area can be patterned after a
successful crop production enterprise. Anaerobic decomposition is very
slow, and adding a large amount of oil to soil creates anaerobic con-
ditions if no precautions are taken to aerate the soil. Oil not only
occupies the pore space, thus excluding air from the soil, but it also
greatly increases the oxygen demand for its own oxidation. Disking was
the method first used to stir and aerate the soil by the three refineries,
but the Shell refinery found that the disk compacted soil and interfered
with aeration. The bulldozer was substituted and was found to leave the
soil more loose and open, thus resulting in faster dewatering and better
aeration. The oil-soil mixture is rolled by the blade much as oil
dressing is rolled with soil for use on some secondary roads. Some
of the hydrocarbons, particularly waxes and heavier oils, are more
resistant to decomposition, partially because less surface is exposed to
microbial attack. Dispersion of these by intimate mixing with soil
particles apparently allows the organisms to attack and decompose these
fractions faster. Mineral nutrients, particularly nitrogen and phosphorus,
are important for microbial growth and activity. Although in none of the
disposal operations studied was fertilization a regular practice, it
appears likely that addition of an appropriate fertilizer would accelerate
oxidation. Moisture is important to the microbes, but excess moisture,
by impeding aeration, may be a limiting factor for microbial activity.
Tile or surface drains may be needed for some soils.
- 157 -
-------
Several changes in soil are reported to take place after introduction
of hydrocarbons (Ellis and Adams, 1961). Investigators have reported a
marked increase in organic matter, total carbon, and nitrogen. Davis
(1952) reported natural deposits called "paraffin dirt" were composed of
the residue of microbial cells which had utilized methane gas at the
site of seepage. An analysis of the deposit showed that it contained
17.6% organic carbon and 1.2% total nitrogen. The amounts found in most
natural soils are much lower. Plice (1948), while studying the effects
of crude petroleum on soil fertility, found soil with organic matter
content of 12.4% and nitrogen content of 0.8% near a gas leak, but at
a distance of two feet (60 cm) the soil contained only 0.52% organic matter
and 0.03% nitrogen.
TABLE 4
Aerobic Bacteria Found in Oily Sludge Disposal Area and in Adjacent
Soil at the Marathon Oil Company Refinery at Robinso, Illinois
Species
O)
N
CD
and
Genera
*
Q.
3
r—
•i—
O
(O
CO
Q.
to
to
OJ
u
1*
o
-p
Q.
0)
s-
-M
CO
CL
to
10
0)
C
(U
en
P_
(O
u
r—
et
ZJ
to
to
to
c
P^
o
^3
V)
CD
Q-
.
Q.
nu
E
O
10
CO
s-
1 *
o
(C
-Q
0
E
o
t—
o
i.
CO
D-
CL
to
to
fO
C
0
E
O
TD
3
OJ
to
D-
C
5
0
c
^^
c
=
Soil without sludge, samples #5 and 6, bacterial
count/gm of soil 1.05x108
Number
of Strains
% of total
Number
of strains
% of total
11 4 9
44 16 36
Soil treated with sludge, samples
count/gm soil 1.79x108
2 1 12 2 4
8 4 48 8 16
Soil treated with sludge, samples
count/gm soil 1.03x10
1 and 2, bacterial
1
4
2
8
and
2
8
4 bacterial
Number
of strains
% of total
3
12
1
4
4
16
3
12
5
20
5
20
3
12
- 158 -
-------
Oil has the effect of deflocculating surface soils when it is applied
to them. However, the eventual effect is to imporve the soil tilth by
increasing the organic matter content.
Large oil applications are often toxic to plants. The volatile
fractions, which have great penetrating power, enter plants and seeds
and have a narcotic effect on all living organisms. Reduction of
manganese to the manganous form by the lowered oxidation-reduction
potential caused by addition of oil creates toxicity also, but PI ice
(1948) reportec that most of the damage to plants was caused by mechanical
obstruction which prevented the plant from obtaining sufficient mositure
and air.
Soil productivity may be enhanced by high application of oil. Plice
(1948) observed that petroleum additions of 0.5 to 1% by weight produced
more luxuriant plants than those growing on check plots where no oil was
added. He also noted that soils saturated with oil to a depth of more
than four feet eventually returned to a productive state. One such soil
remained barren and boggy for a few years, but after seven years was
observed to be more productive than adjacent unaffected soil. Ellis and
Adams (1961) cited the work of Carr (1919) in which he found that soybean
growth was improved by adding a small amount of oil. Damage to some plants
has been estimated to begin at more than 1 Kg/square meter of soil
(Schwendinger, 1968). A number of organic acids from petroleum industry
wastes have been shown to stimulate plant growth. Weak solutions of
napthenic acid increased significantly root length of cotton, cucumbers,
onions, and winter wheat (Husinov, 1961).
Deep, fire-textured soils were used for the disposal sites. Oil
is known to adhere to such soils and move but little into them, thus
eliminating danger of groundwater pollution, if oil is added judiciously.
Only indiscriminate, heavy additions of oil to coarse, porous, or shallow
soils would be expected to cause such pollution.
The use of land spreading to dispose of oil spills collected on
beaches has been proposed (R. Stone, Santa Monica, California, personal
communication, 1969). Air movement through the sandy soil behind beaches
might be enhanced by tidal changes in the groundwater levels and this
would favor rapid decomposition of oil and any straw used to help
collection of the oil. As in all other land disposal practices, it will
be imperative to avoid overdosing and the creation of tightly packed
impervious lamps of oil and soil. When straw is used, additional
supplies of nitrogen may be necessary because of the high nitrogen
requirement for decomposition of the straw.
CONCLUSIONS
1. Soil microbes can oxidize and decompose a large quantity of petroleum
hydrocarbons under a wide range of soil and environmental conditions.
- 159 -
-------
Land spreading is an economical and comparatively foolproof method of
disposing of oily wastes.
Although large additions of oil may create toxic conditions for plants,
the eventual effect upon soil is to improve physical and chemical
properties by increasing organic matter and nitrogen content, decreas-
ing volume weight and increasing porosity and moisture holding capacity.
Natural biochemical decomposition of oil in soil may be accelerated
by judicious use of lime and fertilizer, artificial drainage, and
tillage.
Microbiological degradation of oily wastes takes place under a wide
range of temperature, but oxidation is faster in warm or hot climates
than it is in cold.
ACKNOWLEDGEMENTS
The authors express appreciation for information concerning the
disposal operations provided by Mr. A.G. Smith, Process Superintendent,
Houston Refinery, Shell Oil Company; Mr. S.O. Brady of the Humble Oil
Company's Baytown Refinery; and Mr. Joe Crowley, Marathon Oil Company,
Mr. D.M. Esary, U.S. Soil Conservation Service, gave information about
the soils at Robinson, Illinois.
- 160 -
-------
REFERENCES
BEERSTECHER, E., Jr., 1954. Petroleum Microbiology. Elsevier Press, Inc.,
Houston, Texas, 375.
COOKE, W.B., 1957. Nutritional Requirements of Nine Common Sewage Fungi.
Sewage and Industrial Wastes 29, 1243.
COURSEY, D.G., and EGGINS, H.O.W., 1961. Microorganismes responsables
de 1'alteration de 1'huile de palme pendant le stockage. Oleagineux
16(4), 227.
CROSBY, E.S., RUDOLFS, W., and HEUKELEKIAN, H., 1954. Biological Growths
in Petroleum Refinery Waste Waters industrial and Engineering Chemistry
46,296.
DALTON, F.E., 1967. Reclaiming Land with Chicago Sewage Sludge Compost
Science 8,5.
DAVIS, J.B., 1967. Petroleum Microbiology Elsevier Publishing Col,
Amsterdam, Netherlands, 604.
DAVIS, J.B., 1952. Studies on Samples from a "Paraffin Dirt" Bed Bulletin
American Association Petroleum Geologists 36, 2186.
ELLIS, R., and ADAMS, R.S., 1961. Contamination of Soils by Petroleum
Hydrocarbons. Advances in Agronomy 13,197.
EWING, R.C., 1968. Refinery Waste Products Post Pollution Problem. Oil
and Gas Journal 66, 77.
GRIB, H.V., 1928. Soil Survey of Harris County, Texas Bureau of Soils,
U.S. Department of AGriculture, Washington, D.C., 49,
HUSIENOV, D.M., 1960. The Influence of Organic Compounds of Petroleum
Origin upon the Growth of Roots and Crop Capacity of Agricultural
Plants. Transactions of 7th International Congress of Soil Science
3 253.
NYUS, E.J., AUQUIERE., J.P., and WEAUX, A.L., 1968. Taxonomic Values
of the Property of Fungi to Assimilate Hydrocarbons. Atonie Van
Leeuwenhoek 34, 441.
PLICE, M.J., 1948. Some Effects of Crude Petroleum on Soil Fertility.
Soil Science Society of America Proceedings 13, 413.
REESE, E.T., CRAVETZ, H. and MANDELS, G.H., 1955. Activity of Fungi
on Oils. Farlowia 4(4)., 409.
SCHVENDINGER, R.B., 1968. Reclamation of Soil Contaminated with Oil
Journal of the Institute of Petroleum 54(535).
SMITH, G.D., and the Soil Survey Staff, 1960. Soil Classification of
Comprehensive System, 7th Approximation. U.S. Government Printing
Office, Washington, D.C., 265.
TEMPLETON, W.E., 1966. Sludge Treatment and Disposal at East Kilbride.
Water Pollution Control 66, 403.
U.S. DEPARTMENT OF AGRICULTURE, 1941. Climate and Man. Yearbook of
Agriculture, U.S. Government Printing Office, Washington, D.C.
WAKSMAN, S.A., and STARKEY, R.L., 1931. The Soil and the Microbe.
John Wiley and Sons, New York, N.Y., 260.
WIRTS, J.I., 1956. Pipeline Transportation and Disposal of Digested
Sludge Sewage and Industrial Wastes 28, 121.
Permission to Reproduce this Article has been Obtained from Pergamson
Press, LTD., publishers of the Proceedings of the 5th International
Water Pollution Research Conference, July 1970
- 161 -
-------
APPENDIX B
THE EUROPEAN COMMUNITY EXPERIENCE ON WASTE OILS
Two European countries, France and Italy, encourage re-refining
of waste oils by granting tax preferences for re-refined products. Two
other countries, Germany and Denmark, have laws governing collection
and disposal of waste oils. The Commission of the European Economic
Community has proposed to the Council of Ministers a directive concerning
disposal of waste oils which, if adopted, would apply to all members of
the Community. Bills are pending in France and the Netherlands to
regulate the disposal of waste oils. This Appendix summarizes the pro-
visions of these laws and bills.
France
Each ton of oil products in France is subject to a tax of 270 Francs
(approximately $54.50). Re-refined oil products are exempted from this
tax. As a result re-refined products cost 400-450 Francs/ton, compared
to 650-700 Francs/ton for new oil products from the re-refineries.
France bases its tax preferences for re-refined products on several
policies; protection of re-refining businesses; prevention of fire or
pollution from improper disposal; and provision of at least some lubri-
cating oil supplies during periods of internal or external supply
shortages.
There are several private companies in Franch which collect and
re-refine waste oils. The largest is the Societe pour le Remassage et
la Regeneration des Hulles Usagees. Its shares are owned equally by
refiners and re-refiners. The company operates on the basis of an
agreement between the refiners and the re-refiners which limits the
amount of oil re-refined to 50,000 tons. Any more than this collected
by the company is delivered to the refineries where it is burned.
The re-refined products are purchased largely by the French government.
Refineries in Italy must have permits to operate and some of the
refineries are authorized to re-refine waste oils as well as refine
crude oils. Re-refining 1s encouraged by a generous tax preference
provision applicable to re-refined products. The tax is 25 percent of
that levied on fresh oil products and amounts to a preference of
between 93,000-117,500 Lire/Ton (approximately $153.40-$!94.00/ton) of
re-refined product, depending on the quality of the product.
Italy, too, wished to protect its re-refining industry and to be
free of total dependence on shipments of foreign crude oils in times of
- 162 -
-------
crisis. Prices for re-refined products are about 35 percent lower than
for comparable fresh oil products and approximately 20 percent of the
lubricating oil market is occupied by re-refined products.
The Federal Republic of Germany
After World War II Germany granted tax preferences, and in 1964
direct subsidies, to support re-refining in order to conserve foreign
exchange, preserve a range of prices for lubricating oils, protect the
re-refining industry and prevent water pollution. In 1969 a new law
went into effect which converted the source of support for waste oil
collection and disposal from the public treasury to a single-purpose
fund created by a special assessment on lubricating oils payable prior to
sale by all who produce or import them. From this fund payments are
made to private or public entities which collect waste oils and dispose
of them by re-ref1n1ng or incineration in accordance with the provisions
of a contract with the federal office for trade and Industry.
The obllgatibns based on the law which are imposed on the collection
and disposal firms by their contracts require that:
1) amounts of used mineral oils and fluid mineral oil
products over 200 liters within a district defined in
the contract be picked up;
2) collection of these oils be at no cost to the source
unless they contain rrore than 10 percent foreign matter,
in which case the firm nay charge in accordance with a
fee schedule;
3) suitable containers be provided to persons who have less
than 200 liters, for collection later;
4) waste oils be disposed of harmlessly, i.e., without
causing water, soil or air pollution, either by re-refining
or incineration;
5) the firms install devices which will enable the federal
office to monitor the amounts of oil disposed of;
6) applications by the firms for the fixed-rate payments for
disposal be made each month for the amount of oils dis-
posed of the preceding month;
7) payments received for disposal by producing re-refined
products which products are later exported to nations
which are members of the European Economic Community be
repaid to the federal office and that the firms give
notice to that office of such exports;
8) the firms keep records of their costs and make these
records and all other Information relevant to disposal of
used oils available to the federal office;
9) firms picking up used oils with more than 10 percent
foreign matter give receipts for these oils to their sources,
- 163 -
-------
Persons who generate more than 500 kilograms annually of used oils
which would not be picked up for free (i.e., which contain more than
10 percent foreign matter) must keep records of how they dispose of their
oils. Firms which collect these oils must keep similar records, in
addition to providing the receipts mentioned above in No. 9. These
persons and firms must make their records available to officials any time
they are requested to do so.
The federal office has arranged for all areas of Germany to be
covered in the contracts of at least two contractors in order to promote
competition among the contractors.
Denmark
The basic scheme adopted by Denmark's May 1972 law for the control
of waste oil pollution consists of establishing waste oil delivery points,
arranged on a local level, to which waste oil can be delivered for final
disposal. Local governments are required by law to provide such facil-
ities, either individually or in common with neighboring localities.
Waste oil as used in the law is any oil which is intended for a use other
than a use for which it is suited and, conversely, disposal is the use of
the oil for a purpose other than one for which it is suited. In testing
for suitability, consideration is given to whether the use is more
polluting than the normal use of the original product.
Although the law imposes a duty on all persons to store, transport
and dispose of waste oil in a safe and non-polluting manner, commercial
enterprises which generate less than 300 liters of waste lubricating oil
per year are exempt from the duty to deliver to the public disposal
facility. Enterprises which do deliver are required to give reports to
the locality giving the nature, composition and volume of the waste oils.
Persons required by law to deliver waste oil to the public collection
points may be charged a fee set by the locality based on the cost of
the collection and disposal program. Persons not required to deliver
(individuals, non-commercial sources and businesses producing less than
300 liters of waste lubricating oils annually) have the right to deliver
their waste oils for free.
As an alternative to the basic disposal offered by the locality, an
enterprise subject to the reporting and delivery requirements may be
exempted from the delivery obligation if it can establish that its waste
oil is being disposed of in a safe manner, which is usually delivery to
facilities having the capability to reprocess or destroy the waste oil.
The law does not currently apply to Greenland or the Faeroe Islands
but can be put into effect by the Minister for Greenland or by royal
decree, respectively. It is anticipated that the law will soon be ex-
tended to other waste products, especially chemicals, as technology for
disposal improves.
- 164 -
-------
Fines and imprisonment are authorized for violations of the law or
regulations.
In at least one case the exemption provisions have been utilized
by an industry trade association. Two trade groups of the petroleum
industry have made an arrangement for the pick-up of waste lubricating
oil at gas stations and work shops operated by customers of their members.
When a station has a full storage tank it notifies its supplier, who in
turn arranges for a tank truck to pick up the waste oil and deliver it
to one of two refineries depending on the part of the country. The
service is free and apparently is financed by the value of the re-refin-
able lubricating oils.
The Danish scheme carefully keeps the government out of the specific
technology of disposal, limiting its role rather to enforcement of the
duty to dispose of the waste oil in a safe, non-polluting manner, and
to provision of facilities so that everyone has a simple and convenient
method available for disposal of the oil.
European Economic Community
The directive proposed for adoption by the Council of Ministers of
the E.E.C. in accordance with Article 100 of the Treaty of Rome would
prohibit disposal of used mineral oils by any means other than re-using
them, i.e., other than incineration or reprocessing. The member nations
of the E.E.C. would be directed to take all measures necessary to assure
that disposal of used oils into surface, ground or coastal waters, or
into sewers would be prohibited, as would disposal onto land of the used
oils or wastes from reprocessing them. Air pollution would have to be
limited to that which is unavoidable under the state of the art of
incineration.
The member nations would also be required to assure that waste oils
were collected and harmlessly disposed of. Collection and disposal
enterprises would have to be licensed after an examination of their
facilities and would have to comply with the conditions imposed in the
license.
If collection and disposal were not profitable in a certain area the
member nations would have to require one or more firms to collect, per-
haps by designating mandatory collection districts. The directive would
authorize member nations to reimburse firms upon whom an obligation to
collect and dispose was imposed for the average annual costs of similar
disposal firms not covered by sale of the re-refined products or of the
energy from incineration, including a reasonable profit. The costs of
these reimbursements would be financed by an assessment on these products
which later become used oils.
A person having waste oils which he cannot dispose of harmlessly
himself would be required to surrender it for disposal by a licensed
- 165 -
-------
enterprise. Those having waste oils with more than a certain percentage
of foreign matter would have to store them separately from other waste
oils. The collection and disposal firms would be obligated to treat
the wastes so as not to cause avoidable water, air, or soil pollution.
All firms generating, collecting or disposing of more than 200 liters
of used oils per year would have to keep records of the quantities, kinds,
origin, and distination of oils for all transactions involving surrender-
ing, collecting or disposal of these oils. Dates would also have to be
recorded.
The directive provides that enterprises disposing of used oils
should provide information to the governments of the member nations and
that these governments would have the right to inspect these enterprises
periodically.
The Netherlands
The bill introduced in the fall of 1973 in the Netherlands would
prohibit disposing of used oils on land. (The present water law pro-
hibits discharging them into waterways.) The bill would also prohibit
giving used oils to anyone except a person licensed to collect and then
store, treat, transform or destroy them. Each party involved in a trans-
action transferring waste oils would have to notify the Ministry of
Health and Environmental Protection of the date of the transaction; the
name and address of the recipient; the nature, composition and quantity
of the oils transferred; the means and place of delivery; and the name
and address of any third party employed to convey the oil to the
recipient.
The bill would authorize the Ministry to condition the granting of
a license to collect waste oils on the requirement that the licensee
pick up in defined areas only and give the waste oils only to disposal
facilities named in the license. Licenses to dispose of waste oils
would be conditioned with reciprocal requirements to accept waste oils
only from named collectors. The government would issue the licenses
to collect and to dispose so as to cover the entire country and to
assure a balance between supply of and demand for waste oils across the
country.
The bill provides that a special assessment on lubricating and
hydraulic oils levied prior to sale would be imposed to pay for the
expenses of implementing the law. It also provides for the creation of
a commission to advise the Ministry on the implementation of the law.
- 166 -
-------
EUROPEAN ECONOMIC COMMUNITY
The Commission of the European Economic Community has been promoting
a harmonization of the member nations laws on the taxation of oil and
the disposal of oil since 1963. The department concerned with dismantling
impediments to free and equal competitive conditions among the member
nations has sought to coordinate the various kinds of legal provisions
affecting used oil disposal in E.E.C. countries: tax preferences for
products from re-refined oil in Italy and France; tax preferences, then
subsidies, now specially-funded compensation for re-refineries in the
Federal Republic of Germany (compensation for incineration in the FRG
now, too); prohibitions, or simply no regulation at all, in several
countries.
The Commission became involved when the Netherlands objected after
the Federal Republic of Germany enacted a law, effective January 1,
1964, granting a subsidy of DM 22.90 per 100 kilograms of re-refined
oils. This subsidy, which replaced a tax preference of DM 15/100 kg.
re-refined products, would distort competition and discourage trade
between the member nations of the E.E.C., argued the Netherlands. The
Commission's initial investigation revealed that France and Italy granted
tax preferences for re-refined products (with the same effect as the
German subsidy) and that the Netherlands itself did not in practice
collect the oil tax applicable to the products of re-refineries. The
discussions and information generated by the Commission over the next
few years indicated that a satisfactory solution would be difficult
without more technical data.
As a result, in October 1966, the representatives of the member
nations agreed that a technical person should be asked to prepare a
report. J. J. Hopmans, former director of the Netherlands National
Institute of Wastewater Treatment, was granted a contract to report on
the current technical possibilities of disposing of used oil without
water pollution, the costs, advantages and disadvantages of these
possibilities, and their effect on the competition in the lubricating
oils market. The report was presented in April 1968 and contained
recommendations for a Common Market-wide means of regulating the
collection and disposal of used oil.
Hopmans suggested that all forms of direct state support for re-
generating and burning enterprises (whether via tax preferences or
subsidies) be abolished, that regional organizations be created with the
task of collecting and supervising the harmless disposal of used oil and
the by-products of regenerating it, and that the costs of these
organizations be covered by the introduction of an assessment (an "oil
penny") on lubricating substances which become used oils. Hopmans
recognized that this suggested framework would have to be worked out
in light of the existing legal, technical, administrative and geograph-
ical situations. He suggested that levying the assessment on lubri-
cating substances in conjunction with the taxes on these oil products
- 167 -
-------
would be the easiest and cheapest.
He considered that the collection organizations should be public
corporations, like the West German Bilgenentwaesserungsverband, with
bylaws setting forth duties, powers, organization and procedures.
Their boards of directors should include, in addition to government
officials from the responsible departments, representatives of all
interests concerned with used oil — re-refiners, those who burn used
oils, the large oil firms, used oil collectors, industries that produce
significant amounts of used oils — as a means of promoting cooperation.
Their staffs should include mechanics and chemists experienced in oil
production who could advise possessors and collectors of used oils
when questions or problems arose. So that the organizations and their
advice would be trusted, they should not, Hopmans suggested, be given
any powers to enforce or punish. Rather, they should help solve
problems peacefully and refer recalcitrant persons to the proper state
authorities.
For some reason the Commission did not forward any recommendations
on used oil to the Council of Europe after the report was submitted,
perhaps because its chief executives decided that the distortion of
competition in the market wasn't so serious, perhaps in part because the
staff person who had been chiefly concerned about waste oil left the
Commission shortly after the Hopmans report was submitted. The
Commission has written that "discussions were held with national experts
in the light of this report in 1968, but unfortunately failed to open
the way towards this Community solution because the Member States did
not all attach the same importance to waste oil disposal and differed
fairly widely on the appropriate arrangements."
Several inquiries were sent to the Commission by members of the
European Parliament in 1970, '71 and '73 concerning the announced
harmonization of member nations' regulations of used oil disposal and
the alleged inequities resulting from the delay in its realization. As
a result of these promptings and the initiatives taken recently by sev-
eral of the member nations, the Commission in 1973 once again retained
Mr. Hopmans to prepare a report which would include the countries not
members of the Common Market in 1968 and which would be more from the
perspective of environmental protection than relieving market
distortions. The Commission also convened a committee of experts on
waste oils from each of the member nations to advise it during the
process of preparing a proposed market-wide regulation of the area. The
committee of experts met first in May 1973 and again in November 1973.
At its first meeting, the members agreed upon an exhaustive questionnaire
to be answered by each of the member nations and agreed to discuss the
answers to it at the next meeting as a basis for developing a market-
wide policy.
The Commission hopes to develop a regulation for presentation to
the Council in early 1974, which, if adopted, would become effective
- 168 -
-------
by January 1975. It is interested in such a schedule because, according
to a 1973 decision of the Council, a member nation may proceed with its
own legislative or administrative environmental initiatives if the
Commission has not produced a proposed Community measure on the subject
involved within seven months of being notified of the initiative by the
member nation and the Council has not acted on the Commission's pro-
posal within five months of receiving it. In September 1973, France
notified the Commission of a proposed decree governing the disposal of
used oil.
The Commission has prepared a directive for the consideration of the
Council the contents of which are described in the preceding section of
this Appendix. Several of the member nations are deferring work on
developing their used oil disposal programs until the outcome of the
proposed directive is clear.
- 169 -
-------
REPORT ON THE
1968 USED OIL STATUTE
OF
THE FEDERAL REPUBLIC OF GERMANY
William A, Irwln
The Environmental Law Institute
for
The Environmental Protection Agency
Contract No. 68-01-2203
- 170 -
-------
TABLE OF CONTENTS
Introductory Summary 1
Part 3|: Experience Implementing the 1968 Law 4
I. The Pick-Up of Amounts Less Than 200 Liters 4
II. Quality of Re-refined Petroleum Products 6
III. Environmental Controls Governing Disposal Firms 8
IV. Results of Implementing the Record-Keeping Requirements 10
V. Administrative Expenses of the Reserve Fund 12
VI. Disposal Firms' Districts, Competition and Costs 13
Part 2: Clarifications and Elaborations of the 1968
Used Oil Statute 14
I. The Disposal Firms' "Uncovered Costs" (for which they
receive payments) 14
II. The Definition of Used Oils in the 1968 Law 16
A. Legislative History 16
B. Definition of Mineral 011 19
III. The Compensation Fee 22
A. The Goods It Applies To 22
B. Legal Characteristics of the Compensation Fee 23
C. How the Level of the Compensation Fee was Determined 25
IV. The Interpretation of "Business" for Purposes of
Record-Keeping 29
V. Officials Responsible Under State Law for Helping
Administer the 1968 Law 29
VI. Regulations Under the 1968 Law Applicable to
Inland Shipping 30
Part 3: Legislative History of Used Oil Provisions, 1935-1968 31
I. 1935-1945 31
II. Post World War II until 1963 31
III. December 1963 Law Enacting Subsidies for Re-refining 31
A. Amendment of the 1963 Law in Response to E.E.C.
Objections, April 1964 32
B. The First Report to the Parliament by the Ministry
of Economics, June 1965 33
C. The Second Report to Parliament by the Ministry
of Economics, 1966 37
IV. The Two-Year Extension of Subsidies for Re-refining 40
A. The Controversy Over the Bill 40
B. The Third Report to the Parliament by the
Ministry of Economics 42
- 171 -
-------
V. Three Bills Prepared in 1968 Concerning Used Oil
Disposal 46
A. The Government's Bill 46
B. Rep. Dr. Schmidt's Bill 49
C. Rep. Stein's Bill (Association of German Industries) 52
D. The Committee's Report on the 1968 Used Oil Statute 53
Appendix A
Regulations Concerning the Granting of Temporary Subsidies
for the Production of Lubricating Oils from Used Oils 57
First Announcement to Supplement the Regulations Concerning
the Granting of Temporary Subsidies for the Production of
Lubricating Oils from Used Oils 61
Appendix B
Motor Oil Sales and Waste Oils Generated, 1953-1965 64
- 172 -
-------
INTRODUCTORY SUMMARY TO A REPORT ON
1968 USED OIL STATUTE OF
THE FEDERAL REPUBLIC OF GERMANY
The legislative history of used oil legislation in Germany shows
that the country's policy has evolved through the following stages:
1935-1945 mandatory collection in support of a policy
of autarchy
1945-1963 tax preferences and protective tariffs in
order to conserve foreign exchange, support
the small re-refining industry, and preserve
e range of prices of certain goods
1964-1968 subsidies to the re-refining industry for the
same reason as granting tax preferences to
re-refined products (above), and in order to
help prevent water pollution
1968-present industry-financed support of disposal by re-
refining and incineration in order to achieve
comprehensive environmental protection.
In 1964 the change from tax preference and protective tariffs for
re-refined products to a direct subsidy to re-refiners was one of form,
not substance. However, revenues spent for a direct subsidy are more
apparent than revenues foregone for an indirect one, and by 1966 the
attitude of the German Parliament became that the costs for disposing
of waste oils safely ought to be borne by those who caused the problem
in the first place -- those who produce oil and those who use it.
The motive behind the 1968 Used Oil Statute was chiefly to protect
water supplies from the improper disposal of used oils. But the policies
of the past — support of the re-refining industry, interest in encour-
aging a range of prices for petroleum goods, preference for conserving
valuable resources -- and the money it takes to import them -- all
these policies are continued by the system created by the new law.
That system is fairly easy to summarize. All who import or
produce certain lubricating oils (including re-refiners) in Germany
pay 7.50 Deutsche Mark (about $2.25) per 100 kilograms of product to
the federal government in addition to the tax on mineral oils. This
money goes into a special fund reserved for the support of the disposal
of waste oils by incineration or re-refining, the two ways deemed safe
from environmental and public health viewpoints in Germany.
Re-refining and incinerating enterprises under contract with the
federal Office for Trade and Industry are entitled to apply for payments
to cover the costs of disposal not otherwise covered, e.g., by selling
the re-refined products. Payments are made at standard rates, 12 DM for
each 100 kilograms of waste oil which is re-refined, 10 DM for each
100 kilograms incinerated. It is assumed that re-refining yields
- 173 -
-------
70 percent of the waste oil by weight, so the re-refiners' payments are
made on the basis of figures for the weight of a month's re-refined
products in the application. Incinerators are paid on the basis of how
much of what they burn is oil. The federal office's lab analyzes the
contents of special drip devices on a monthly basis and the proportion
of the sample which is oil is the basis for figuring the weight of oil
burned, for which payments can be made.
The obligations imposed on the disposal firms by their contracts are
many. They must: 1) pick up all amounts of waste oils over 200 liters in
the district assigned to them; 2) do so at no charge to the user unless
the waste oils contain more than 10 percent foreign matter; 3) provide
suitable containers for lesser amounts so they can be collected later;
4) keen records of their costs and make their books and other relevant
information available to the federal office, or the auditors it appoints;
5) file their applications for payments monthly; 6) maintain equipment
specified by the federal office for ournoses of checking their output
(e.g., the special drip devices mentioned above); 7) give notice of any
re-refined products shipped to other member nations of the European
Economic Community and renay any payments received for producing these
products (this requirement was imposed by the E.E.C. to avoid favoring
German re-refiners in violation of the Treaty of Rome); 8) give receipts
for waste oils containing more than 10 percent foreign matter.
Those who generate more than 500 liters of waste oils containing more
than 10 percent foreign matter (which is not picked up for free) must
also keep records on how they disnose of the oil, so that it is possible
to trace the chain of disposal from source through collection to final
disposition. The collectors, too, must keep similar records.
Since only lubricating oils subject to the mineral oil tax are also
subject to the disposal fund compensation assessment, the paperwork,
procedures and personnel for levying the assessment are integrated almost
completely with the payment of the mineral oil tax. This results in
substantial savings of administrative costs.
The following discussion is divided into three parts: I. A supple-
ment to the description of the experience of implementing the 1968 law
contained in 1 Ecology Law Quarterly, 480-84; II. An Elaboration of the
Meaning of Some of the Provisions of the 1968 Statute; and III. A
Legislative History of Used Oil Regulation and Research in Germany from
1935-1968. The provisions of German law (translated into English) and
the article about it'which appeared in 1 Ecology Law Quarterly 471-494
(1971) ("A Model ,Waste Oil Disposal Program in the Federal Republic of
Germany", by William A. Irwin and Wolfgang E. Burhenne) are reproduced
in Vol. 118, No. 42 of the Congressional Record (March 20, 1972) at
E 2706-E 2712 and would be helpful to understanding the following
discussion.
- 174 -
-------
Part I: Experience Implementing the 1968 Law
I. The Pick-Up of Amounts Less Than 200 Liters
The Used Oil Statute provides that contractors must prepare for the
later pick-up of amounts of used oils less than 200 liters, for example
by leaving receptacles for persons in their districts who request them.
This was provided in the law because the Parliament agreed with the
experience of those who had disposed of used oil that it was inefficient
to collect lesser amounts than 200 liters. The provision has not alto-
gether answered the question of what should those people who change their
own motor oils do with their used oils. Estimates in Germany vary on the
number of people who actually do this: a survey conducted by the Esso
Company reportedly showed that 15 percent of all drivers changed their
own oil, but officials of the Ministry of Economics estimate that only
1 percent of all used motor oils generated in Germany result from these
do-it-yourself changes.
Several cities in Germany have taken an initiative which offers one
solution to the problem of preventing improper disposal in small quantities
of used oil by self-changers. The city of Bonn, for example, has established
four places where persons with small amounts of used oil may take it and
dispose of it for free. Three of these four are open Monday through Friday
from 7 a.m. to 5 p.m., and one operates during these hours on Mondays,
Tuesdays, Wednesdays, and Fridays. One of them is open from Saturday
morning at 8 a.m. till noon. The city has published and distributed
posters informing its citizens as follows:
To all users of oil and owners of cars: "A better quality of
life" and "environmental protection" are requirements under
wide discussion nowadays. They are, however, also the respon-
sibility of the entire population.
The harmless disposal of used oil belongs among the most
important tasks of environmental protection. The infiltra-
tion of used oil into soil or into the sewer system endangers
in the extreme our water supplies even though public opinion
considers discharges of small amounts insignificant.
Therefore you, too, can and must contribute to this special
environmental protection. Give your used oil to the following
small collection stations established by the city of Bonn:
(The four locations and the times they are open are then
listed.)
Your used oil will be taken without charge to you.
Your contribution to environmental protection to your own
safety costs you only a relatively small detour. It will
be worth it to you for your good conscience.
- 175 -
-------
One of Bonn's collection centers is near the municipal garbage
incinerator. Between May and November 1971 approximately 40,000 liters
of used oil was delivered here, both by private persons and commercial
enterprises, in amounts of up to 50 liters at one time, the maximum
authorized by the city. At two of the other then existing three
facilities during the same period 400 and 500 liters respectively were
delivered by private persons.
Several other German cities have developed similar programs:
Kiel, Braunschweig, Augsburg, Wiesbaden, Muelheim an der Ruhr, Viersen,
Witten, Wurzburg., Bremerhaven.
The subject of what to do to control improper disposal by do-it-
yourselfers was raised by several representatives in Parliament in
written questions to the government. The representatives asked whether
it might not be a good idea to amend the Used Oil Statute to provide
that changes of oil could only be undertaken in gasoline stations and
repair shops. The government responded that such a provision would be
very difficult to enforce even with a thorough and expensive administra-
tive effort. It would furthermore lead to the virtual elimination of
less expensive lubricating oils from the market. This, the government
pointed out, would chiefly affect car owners with less buying power.
The representatives also asked whether better control over improper
disposal of used oil might not be achieved by limiting the sale of
motor_oils to only those firms designed to deal in oil and capable of
handling used oils returned to them. In its answer the government pointed
out that it had suggested this to representatives of the mineral oil
industry in the preliminary discussions of how the Used Oil Statute should
be drafted. The oil representatives indicated reluctance to accept a
requirement that their dealers accept used oils other than their own.
Nevertheless, the government stated, it would pursue again the possibility
of persuading each gasoline station and repair shop to accept used oil
whether or not in connection with the change of oils. It would also
encourage other cities to adopt programs similar to Bonn's. Finally,
it would talk to representatives of the department stores and discount
stores which sell less expensive lubricating oils with the goal of
achieving arrangements whereby these stores would make available to
their customers for free the opportunity to have their oil changed at
certain places. Such stores in Germany already sell tires under an
arrangement that a purchaser of them may have them installed no cost
by various service stations. One exemplary department store chain,
Kaufhaus Karstadt, already enables its customers to give their used
oils to its tire service.
II. Quality of Re-refined Petroleum Products
In Germany there is no requirement that products made from used
oils be so labeled. Except for about 5 to 7 percent of their products,
re-refiners sell their base stocks to large wholesalers who add
- 176 -
-------
Brand
AGIP
AMOCO
ARAL
BP
CASTROL
ESSO
* HERTIE
JET
* KARSTADT
* KAUFHALLE
* KAUFHOF
MOBIL OIL
* NECKERMANN
* QUELLE
SHELL
TEXACO
TOTAL
VEEDOL
Name of Oil
WOOM F 1
SUPER PERMALUBE
SUPER ELASTIC
SUPER ELASTIC
SUPER
SPEZIAL
SUPER VISCO-STATIC
SUPER VISCO-STATIC
ENERGOL HD
ENERGOL HD
GTX
GT
UN I FLOW
EXTRA
EXTRA
GLOBUS
LTX 2050
PREMIUM
HD-SPEZIAL
HD-SUPER
HD-MOTOR-CL
SUPER
SUPER
HD-SUPER
HD-SUPER
LANFZWIT MOTOROL
SPEZIAL MOTOROL
SUPER
X-100
ULTRA
URSA OIL E.D.
GTS
SUPER
SUPER
SUPER
API
Viscosity Classification
10W-40
20W-50
10W-50
20W-50
10H- 30
20, 30
10W-40
20M-50
20W-20
30
10W-50
20, 30
10W-50
10W-30
20W-20, 30
20H-50
10W-50
20W-20, 30
20W-50
20, 30
20, 30
20W-50
10W-50
20W-50
30
10W- 30
10W- 30
10W-50
20, 30
20W-50
20, 30
20W-50
20, 30
10W-40
20W-50
SD
SD
SE
SE
SE
SC
SE
SE
SE
SE
SE
SE
SE
SE
SD
SD
SE
SC
SE
SE
SC
SD
SE
SD
SD
SC
SC
SE
SD
SE
SC
SD
SC
SE'
SE
DM/
Liter
7.00
6.90
7.00
7.00
6.40
4.90
6.60
6.60
4.60
4.60
7.50
5.60
6.95
6.55
4.85
2.50
6.40
4.70
3.75
2.50
2.25
3.75
7.40
3.00
2.00
4.25
3.25
6.95
4.95
6.90
4.50
6.90
4.85
7.20
7.20
The brands which are starred are sold by department stores or
discount stores. All brands on this table meet the
military specification MIL-L-2104 B (equivalent to API Service
Classification CC).
- 177 -
-------
additives to them, package them, and market them. They are marketed by
brand-. These brands are tested by the auto companies, who publish lists
of the brands which will meet the requirements of their various engines.
Government officials in Germany are confident that the brands of
re-refined oil are of the same quality as those of virgin oil and that
a labeling requirement is unnecessary. They believe that such a
requirement would be very damaging to the demand for such products,
for psychological reasons. They point out that the large oil firms
buy considerable quantltites of re-refined base stocks and mix them
with their virgin stocks before marketing the resulting lubricating
oils.
A recently published comparison of the prices and classifications
of lubricating oils by brand is reproduced in the preceding table.
III. Environmental Controls Governing Disposal Firms
Environmental controls over re-refining and incinerating enterprises
are Imposed by state officials in Germany, either in permits to operate
the business or in permits for the business to use waters. There are no
national emission or effluent standards which the officials granting
these permits must apply. There is also a new (June 1972) federal solid
waste disposal law in Germany, administered* as are all such federal
statutes, by state officials.
Various state officials have required almost all of the Incinerating
enterprises to Install some kind of device to cool and clean the emissions
from the burning of waste oils and other substances. Only two or three
Incinerating enterprises, however, have demonstrated to the Federal
Office for Trade and Industry that they incur additional costs from these
devices sufficient to warrant increased payments which are authorized
by the guidelines for air pollution control measures. The federal
office has no authority to ensure compliance with the conditions imposed
by state officials 1n the operating permits of the disposing enterprises.
If a state official complains to the federal office that it cannot
achieve compliance, however, the federal office must cease making pay-
ments to the enterprise in accordance with section 2(1) of the Used
011 Statute. So far state officials have closed only two disposal
facilities, one in Stuttgart and one in the state of Hesse, for failure
to comply with their environmental restrictions. Another enterprise,
whose poor quality effluents came to the attention of the federal office,
was given an extension of time by state officials with jurisdiction
over it.
The re-refiners of solid wastes have come under increasingly strict
controls for disposal. These wastes can be burned and neutralized and
then disposed of in sanitary landfills which are approved. The wastes
are then mixed with other wastes there. Some re-refiners have ovens
which can burn their add-clay wastes. Effective Implementation of the
- 178 -
-------
June 7, 1972 federal solid waste law in Germany, however, has not been
achieved. Several instances of improper disposal of toxic wastes have
come to nublic attention in the oast year, culminating a national scandal
in the state of Hesse in the summer of 1973. A list of substances dis-
covered at 38 dumps in the state of Hesse last summer, illegally disposed
of, included not only oil wastes (e.q., sludges) which should have been
collected for a fee under the Used Oil Statute but also wastes from some
re-refiners. The public outcry at this scandal has made several state
officials much stricter in controlling where re-refiners put their solid
wastes, and many re-refiners are having difficulty finding acceptable
disposal sites now. The federal office cooperates with state officials
in this respect by requiring those enterprises suspected of improperly
clumping their waste products to present, along with their application
for payments for disnosal, nroof of where they have deposited their
wastes which proofs are then checked with the appropriate state officials.
IV. Results of Implementing the Record Keeping Reouirements
The record-keeping books required by section 6 and 7 of the Used
Oil Statute should have been kept beginning January 1, 1972. No specific
investigation has yet been made by the Ministry for Economic Affairs
or the Federal Office for Trade and Industry of the effectiveness of
these records in controlling improper disposal of used oils which need
not be picked up for free. The Ministry and federal office officials
infer from the increasing amounts of used oil disposed of (while sales
of lubricants remain about constant) that the record books plus increased
environmental awareness are causing more non-re-refinable used oils be
burned.
Indeed, there is reason to believe that the capacity for incinerating
non-re-refinable used oils is still not sufficient. As of the end of
1972 there were 19 incinerating enterprises, four which also performed
re-refining. Their total capacity was 184,000 tons approximately.
Usually an incinerating enterprise seeks a mix of used oils and other
not so highly flammable wastes to burn, in a mix of approximately 50-
50, in order to keep burning temperatures and stack gas temperatures
lower. Now that the incinerators have enough used oils there have not
been repeated occurrences as there were in the early days of the law's
effectiveness, of large oil firms persuading their dealers to deliver
their used oils to incinerating firms rather than to re-refining firms.
There is some feeling among German officials responsible for
administering the Used Oil Statute that the provisions of section 6
of the law should be amended so that all persons having more than 200
liters of waste oil be subject to the requirements to keen records and
submit to government supervision. The provision is of course less
necessary to assure proper disposal of good quality waste oils than
of difficult to dispose of waste oils, e.g., emulsions and sludges.
Mot surprisingly, some states in Germany have been more conscientious
in exercising their supervisory duties under sections 6 and 7 than
- 179 -
-------
other states. Likewise some states say they do more than they actually
do. The state of Northrhine Westphalia, which includes one of Germany's
most heavily industrialized areas, has been quite energetic in following
the chain of disposal in accordance with the second implementing regula-
tion (Appendix 3 of the 1972 report to the German Parliament). Likewise
Bavaria's efficient administrative system has performed the supervisory
responsibilities of the law effectively, ^ot surprisingly, rural states,
in which waste oil disposal is less pressing, have concerned themselves
less with careful supervision in accordance with the Used Oil Statute.
The Ministry of Economics has no present plans to suggest to the
Parliament that amendments be made to sections 6 and 7 of the statute
concerning supervisory duties. The official chiefly responsible in the
ministry feels that both state administrative capacity and the economy
affected by the statute itself can be overloaded by being too perfectionist
in prescribing supervisory requirements. It points out that the regulations
provide that wastes with more than 4 percent oil count toward the maximum
of 500 kilograms of oil wastes which may be disppsed nf without keening
the records required. Practically all firms which use oil at all will
arrive at that figure quickly. Experience will indicate whether it is
advisable to lower the 500 kilogram figure or otherwise increase super-
visory provisions after control over the disposal of the large quantities
of the emulsions and sludges works well.
V. Administrative Expenses of the Reserve Fund
The administrative costs of implementing the Used Oil Statute are
1.95 percent of the income to the reserve fund, that is between 650,000
and 700,000 DM annually. Currently 19 persons are employed whose salaries
are paid from this fund. Many of them are involved with collecting the
specimens of materials burned by the incinerators and checking them in
the federal office's laboratory for the percentage of oil in order to
determine how much oil was burned which is eligible to receive payments.
Legal challenges to the administration of the Used Oil Statute have
been few. There have been some proceedings to determine whether certain
goods are subject to the compensation fee or not. Recently the procedure
for determining amounts of oil incinerated eligible to receive payments
established by the contract between the federal office and the incinerating
enterprises was upheld by a court. This was important since the contract
fills many of the gaps in administration not made clear by the Used
Oil Statute.
VI. Disposal Firms, Districts, Competition and Costs
It is important to observe that used oil disposal enterprises are
distributed fairly evenly across Germany. This makes it possible for
the federal office, in assigning enterprises mandatory collection districts,
to divide the country into regions which include both metropolitan and
rural areas. The federal office has arranged it so that everywhere in
- 180 -
-------
the country is included in the nadatory pick-up districts of at least
two enterprises, in order to promote competition among the enterprises.
The competition is reflected in the frequency of service which enterprise
can give to the persons possessing waste oil and also in the prices it
charges for picking un waste substances which are not entitled to free
pick-un under the Used Oil Statute. Competition is also reflected in the
amounts re-refiners are willing to pay to obtain good quality used oil
in some instances.
The collection cf used oil itself is divided about equally between
that performed by disposal firms themselves and that performed as a
service for these firms by collection firms. Many re-refiners, for
example, believe that it costs then less to pay for this service than it
would to suoport a fleet of trucks and the personnel to operate them on
their own.
It is difficult to compare the costs of collection and disposal
among the various enterprises because they are not limited to picking
UD oil in their assigned mandatory nick-up districts. There are also
trade offs in costs: firms assigned large metropolitan areas, for example,
find they must pay for good quality used oil, thereby offsetting their
lower transportation costs due to shorter distances.
There is vigorous competition among re-refiners to get clean used
oil. This results in their willingness to pay for good used oil or to
forego charging for the pick-up of used oil which contains more than 10
percent foreign matter, the limit provided in the regulations above which
they need not pick up without charging a fee. A practical difficulty
with the 10 percent limitation on foreign matter is that there is no
simple, probable testing procedure which collectors of used oil can use
at the point of collection to determine the percentage of foreign matter.
- 181 -
-------
Part 2: Clarifications and Elaborations of the 1968 Used Oil Statute
I. The Disposal Firms, "Uncovered Costs" for Which They Receive Payments
Section 2(1) of the Used Oil Statute states that firms may receive
continual payments for those costs not otherwise covered if they dispose
of used oils without harm to water or soil and without causing air pollu-
tion. Section 2(2) No. 4 of the statute provides that the payments nay
not exceed the uncovered costs which arise on the average for the same
kind of disposal enterprise.
There are two kinds of disposal methods which may receive payments:
re-refining and incinerating. The uncovered costs of re-refining are
figured as follows: the actual expenses of the business (including the
costs of collection and transportation of the used oil), nlus a salary
for the owner of the enterprise, plus 6 percent as return on the use of
the owner's capital, plus a "reasonable" profit, minus revenues from the
sale of the re-refined products. For incinerating enterprises uncovered
costs are calculated in the same manner except there is no deduction
for sales of products since there are no such products.
There is no fixed percentage which is deemed a "reasonable" profit
margin for these enterprises. Tiscussions in Germany are currently in
progress about what constitutes a reasonable profit margin in public
works contracts let by the government. Somewhere between 4 and 6 per-
cent of costs seems to be appropriate. The Federal Office forjrade
and Industry may or may not follow this guideline when it is finally
arrived at.
In order to determine the costs of the enterprises receiving payments
the Ministry of Economics has annual audits done by independent firms^of
the books of the enterprises which perform 60 percent of the re-refining
and of the incinerating work. The results of these audits are weighted
in order to arrive at average costs for the kind of disposal method.
These costs obviously depend on the sizes of the mandatory collection
districts assigned to the enterprises. During the audit the firms' col-
lection costs are compared to their operating costs in order to deter-
mine whether the size of the districts are appropriate. That is, if a
firm has high collection costs because its mandatory district is large
but does not show reduced operating expenses as a result of economies
of scale from obtaining more used oil to re-refine or burn, then the
Federal Office for Trade and Industry will redefine the boundaries of
his collection district to make it smaller in order that average costs
for that kind of disposal methods not be inflated by unnecessarily high
collection costs.
Section 2(2) Mo. 3 states that the payment rates for individual
disposal methods shall take into account and specially compensate costs
caused by collection conditions of above average difficulty. This
provision was intended to authorize extra payments for collection from
islands and for collection by boat of oily bilge waters from inland
shipping.
- 182 -
-------
II. The Definition of Used Oils in the 1968 Law
It is important to understand that not everything which might fit
within the general concept of "waste oil" is covered by the definition
of "used oil" which may be disposed of with the assistance of the Reserve
Fund in Germany. Although the terminology of petroleum products is not
uniform throughout the world, either in technical literature or in
commerce, it is possible to elaborate what the definition includes. This
elaboration may help clarify the meaning of "used engine., machine, cooling
and similar waste oil" contained in section 104(m)(l) of the FWPCA
Amendments of 1972.
Section 3(2) of the Used Oil Statute provides that "used oils within
the meaning of subsection 1 (which nrovides that those having more than
200 liters of used oils may demand their free pick-up) are used mineral
oils and used fluid mineral oil products (and) further(.) mineral oil -
containing wastes from storage, business and transport recentacles."
A. Legislative History
This definition received considerable attention in the Parliament's
deliberations on the various used oil bills under consideration in 1968.
The bill submitted by the government was nhrased in terms of "wastes"
and was designed to establish a record-keeping system to supervise the
disposal of "used mineral oils and mineral oil products, further mineral
oil containing wastes from storage, business and transportation recep-
tacles." The bill also provided that "other fluid or sludgy inflammable
wastes" (e.g., solvents, ether, alcohol, benzene, lacquers, dyes) could
be brought within the scone of the laws provisions by regulations "to
the extent reguired for the protection of waterways." In its explana-
tion of the bill, the government stated the definition encompassed the
fluid substances named in a 1965 report by the Battelle Institute - oil
wastes from motors, transmissions, machines, cylinders, axles, turbines,
spindles, transformers, switches and cable insulation; dark oil and white
oil; wastes from special gasolines and test gasolines; and from kerosene;
oily bilge water; and mineral oil - containing wastes from containers,
including oil and gas separators.
The government's bill was introduced in the Bundesrat. In accordance
with its procedures, the Bundesrat responded with several suggestions
for modifying the bill. Among the suggestions was one that the word
"fluid" be inserted before the term "mineral oil products" in order to
clarify what was meant (e.g., to make clear that road asphalt was not
included). The government accepted this suggestion and added that the
word "used" should be reoeated before "fluid", so that the revised
definition would read "used mineral oils and used, fluid mineral oil
products, further mineral oil - containing wastes..."
- 183 -
-------
In the Bundestag a bill had been introduced which defined "used
oils and used oil - containing wastes" as all "lubricating oils and
fluid as well as sludgy lubricating oil wastes containing a proportion
of mineral oil of more than 40 percent by weight." This definition
was intended to exclude emulsions, for examnle (in which the percentage
of oil is usually about 10 percent) as well as oil mixtures with large
amounts of foreign substances which might be dangerous or difficult
to remove. This bill provided for free nick-un of used oils and its
drafters were concerned that a broader definition would unduly burden
the disposal enterprises. They argued that free nick-up of mixtures
containing less than 40 percent oil was not necessary to prevent water
pollution, since the water law prohibition against unauthorized dis-
charges imnosed a duty to dispose of such mixtures harmlessly and it
would still be possible for persons having them to pay the disposal
firms to pick them up. They argued further that those having a high
proportion of non-oily wastes would derive an unjustified advantage
(from free pick-up) over those who did not, even though all paid the
same assessment. (This bill provided for a fund supported by assess-
ments from those who acquire or possess lubricating oils and with whom
used oils might collect).
Later in 1968 a used oil bill drafted by the Association of German
Industries was introduced which sought to define used oils as only
those used lubricating oils subject to the mineral oil tax (by no means
all lubricating oils) and lubricating substance waste with more than
40 percent lubricating oil by weight. Gas oils used as lubricants would
have been excluded by this definition, for example.
On the recommendation of the Health Conmittee of the Bundestag,
to which the used oils bills were referred for purposes of advising the
Committee on Industry and Commerical Affairs, the Committee on
Industry and Commercial Affairs recommended to the Bundestag that the
bill be passed with the definition in the revised form in which it had
come from the Eundesrat, i.e., in the form presently in the lav/.
B. Definition of Mineral Oil
An essay by K. K. Rumpf in the handbook ^ineralole und verwandte
Produkte (Mineral Oils and Related Products) by Professor Dr. Carl
Zerbe explains that the general concept "mineral oil" encompasses
primarily petroleum, liquid condensations from natural gas, liquid
or salve-like distillates or sediments of petroleum, and natural asphalt,
and secondarily, distillates from lignite, bituminous slate, peat or
hard coal. This description has been used by German officials to give
content to the broad definition of used oils contained in section 3 (2).
The definition in the law was intentionally drafted broadly in
order that the law's purpose to protect water, soil and air could be
realized as comprehensively as required and as economically as possible.
- 184 -
-------
The obvious but crucial qualification to add to this description is
"as far as they have been used." This qualification means that petroleum,
i.e. unrefined oil, is not covered by the definition since it is rarely
the source of used oils. As a general rule it is products made from
petroleum which are intended for use. Thus the oil from cleaning oil
tankers is not covered by that part of the definition which reads "mineral
oil - containing wastes from storage, business or transport receptacles,"
since the oil from which these wastes came was not used or intended for
use. Nor does the definition cover oil wastes resulting from refining
petroleum or cleaning drill rigs, drill holes, pipelines or raw oil trans-
port containers.
Not entirely clear under this definition is when an oil is deemed
ready for use. The oils used in the process of producing some lubri-
cants could be seen as a raw material or as an end product ready for
use in the production process.
The section 3(2) definition also emphasizes that mineral oil products
must be fluid to be used oils. The line between fluid and solid mineral
oil products was drawn to make the law practicable. Had this distinction
not been made the entire range of solid bituminous substances would have
been included, for example. Likewise, greases are excluded by this
element of the definition.
In summary, the German law covers minerals oils, mineral oil products
and wastes containing mineral oils which 1) have been used and 2) are
fluid.
III. The Compensation Fee
A. The Goods It Applies To
Section 4 of the statute provides that the resources of the reserve
fund shall be raised by a compensation fee of 7.50 DV per 100 kilo-
crams of certain oils which are also subject to an oil tax. The following
are goods for which the compensation fee must be paid:
1) lubricating oils and other heavy oils from section 27.10-C-III
of the customs tariff schedule, that is, lubricating oils and other
heavy oils
a) for processing by a supplementary procedure (e.g., vacuum
distillation, redistillation, cracking, reforming, refining
with selective solvents, polymerization, alkylization, isomeri-
zation, desulphurizing, deparafination, treating with con-
centrated sulphuric acid);
b) for chemical conversion by other processes than specified
above;
c) for mixing by the importer with other oils or substances
to make them thicker-, and
d) for other uses.
- 185 -
-------
Lubricating oils are defined in the customs tariff under heavy oils as
oil or other preparations which, when distilled in accordance with
ASTM D 86 up to 250 C, do not exceed 65 hundredths including distilla-
tion losses or with which the percentage of distillation at 250 C cannot
be determined by this method. 2) Gas oils for the functions described
in l)a), b) and d) above, to the extent used as lubricating oils. Gas
oils are defined as those which when distilled in accordance with ASTM
D 86 up to 350 C exceed at least 85 hundredths including distillation
losses. 3) Greases with their heavy oil components.
B. Legal Characteristics of the Compensation Fee
German officials emphasize that the money paid by producers of
lubricating oils which goes to the Used Oil Reserve Fund is neither
a tax nor a user charge nor an assessment. In German law, user charges
and assessments are only levied on those who benefit from the public
facility or service (e.g., sewage treatment plant, waste removal) to
which they must contribute. The producer of oil has no economic benefit
from the resources of the Reserve Fund since payments are made to those
who dispose of used oil, not to him.
The amounts paid by the oil producers are designated as a
compensation fee to support a system of economic regulation. The
characteristics of the fee are: that it is not intended for the revenues
needed for covering the State's financial requirements, but rather
for definite purpose of economic management; that the receipts are
not administered by finance officials but rather are collected in a
special fund; that the collected receipts are all scent in the grant-
ing of assistance and are thus, except for the administrative expenses
incurred, promptly disbursed. This last mentioned characteristic
is the so-called equalization principle, i.e., the correlation between
imposing a burden and granting a benefit. This principle is the crucial
distinguishing factor separating these fees from taxes.
Thus, the fee is a form of self-help compelled from the industry
for the benefit of the industry. The state levies the fee not for
itself but only as an intermediary. It makes payments within the same
circumscribed industrial sector as is subject to the fee (in this case
the oil industry, in which the refineries are those burdened and the
used oil disposers are those benefitted).
Such fees are based on the Article of the German constitution
which authorizes laws which intervene in economic life to order and
manage it. They are an instrument of state control of the economy
designed to equalize the market situation to the burden of a tempo-
rarily advantaged sector and to the benefit of a temporaily disadvantaged
sector which functions by imposing fees on the one side and granting
assistance to the other side. They are most common in the agriculture
and food sectors of the economy. For example, the German grain law
provides for a fee which may be levied in order to generate funds to
equalize freight costs (and thus grain prices) for producers distant
from shipping centers.
- 186 -
-------
C. How the Level of the Compensation Fee Was Determined
The Ministry of Economics suggested to the Parliament that it be
allowed to set the level of the condensation fee by regulation. This
suggestion was not acceptable, however, so Ministerial rat F. Kruse
proceeded to prepare a chart predicting the resources needed for the
Reserve Fund and the level of compensation fee required to generate
these resources.
Based on his experience in administering the subsidy paid for
re-refining used oils, Kruse projected for three years the amount of
consumption of lubricants, the amount of used oil which would be eligible
for payments for disposal under the bill (including a 15 percent
tolerance for foreign substances and excluding the wastes from tanks
and separators and the amounts of used oil re-used prior to disposal).
He predicted approximately 40 percent of the lubricants consumed would
become used oils and of this amount he forecast that 65 nercent would
be suitable for re-refining. These percentages were based on extra-
polations from data accumulated during the 1960's.
Next Kruse calculated the costs of disposal, including collection
and transportation. He estimated 9DM per 100 kilograms for the incinera-
tion and 12DM per 100 kilograms for re-refining. He included the costs
for land disposal and burning it oneself in the predicted costs for
incineration since there was no way to predict how much used oil would
be disposed in these ways. Costs of administration were also included.
Total costs were predicted to be 39,000,000 DM in 1969, the first year
of operation, 40 million in 1970 and 41 million in 1971.
To figure the basis for the proposed compensation fee it was
simply necessary to take the figure for total import and production
of the lubricating oils prooosed to subject to the fee and deduct
from that amount lubricating fats (5 percent) and the oils used as
raw materials (for which the fees paid would be reimbursed) (15 per-
cent).
It then was simply necessary to multiply this remainder by a
DM amount per 100 kilograms which would result in the DF1 amount for
total orojected expenses. An original suggestion of 5Df-" was seen to
be too little as a result of the later decision not to subject oil
used as raw materials to the fee. 5.50DM multiplied by the estimated
remainder produced figures that were only about a million DM short
per year. This shortage might not actually occur, Kruse suggested»
since the costs for disposal would be reduced by 1.7 million annually
if payments were made for disposal of used oil with only 10 nercent
foreign matter, as was planned, rather than the 15 nercent contained
in the prediction. And since figures weren't available on how much
greases were produced or imported, no amounts were figured as sub-
ject to the fees; in fact the actual amounts night produce as much
as another 1 million DM.
- 187 -
-------
Contravening these possibilities which supported a suggested fee
level of 5.50 DM per 100 kilograms lubricating oils were two unknowns.
One, it was not clear as of the time Kruse prepared his prediction
(September 6, 1968) whether it would be possible to collect the fees
for the products in inventory on January 1, 1969, the first day of the
proposed bill's projected effectiveness. The other unknown was whether
the re-use of used oils by those who generate them for lower lubricating
functions would decline below the projected levels, as it had tended
to do in the late 1960's. If so, then there would be more used oils
to dispose of than predicted without corresponding resources in the
Fund.
In the course of deliberations, it was decided that it would be
administratively much easier and less expensive if only those lubri-
cating oils already subject to the tax on mineral oil products would
be subject to the used oil compensation fee. The result of this
decision was that the amount of oil subject to the fee was reduced,
necessitating an increase in the amount of fee per 100 kilograms.
This change, coupled with the one suggested by the Ministry of Health ~
namely, that not only used oils from lubricating oils be disposed of
with the aid of the Reserve Fund, but all v/astes containing mineral
oils (e.g., including heating oil sludges) -- which increased the
amount of oils to be disposed of, resulted in elevating the compen-
sation fee rate to 7.50DM per 100 kilograms. It was later decided
that this could also be applied to inventory existing on January 1,
1969, a decision which assured the result that the Reserve Fund would
have a sufficient extra amount in it at the beginning of its life to
enable it to operate for several years without the need to request the
Parliament to increase the rate of the compensation fee.
IV. The Interpretation of Business for Purposes of Record Keeping
Section 6 provides that commercial and other economic enterprises
must keep a record book for each business in which at least 500
kilograms of waste oils not entitled to free pick-up accumulate for
a year. Business is interpreted not to mean the legal entity, for
example, a corporation or a partnership, but rather a business unit
in the sense of having its ov/n equinment and personnel. For example,
a drilling unit of a company with its own equipment and operating
personnel would be a business for purposes of Section 6(1). That
unit would have to keep records of used oil generated if more than
500 kilograms were not entitled to free pick-up.
V. Officials Responsible Under State Law for Helping Administer
the 1968 Law
Section 6 and section 7 of the statute provide respectively that
an "official responsible under a state law " may either approve cen-
tralized maintenance of records or exempt one from duty to keep
records and that the official responsible under state law must be
- 188 -
-------
furnished with certain information. These officials named are quite
uniform: for enterprises under the jurisdiction of a mining official,
that mining official is the official responsible under state law for
purposes of the Used Oil Statute; for other businesses the official
responsible under state law is the local official authorized to grant
permits for the use of state waters. Occasionally these latter enter-
prises have building officials or .county supervisors as their named
responsible state officials.
These same officials responsible under state law are charged
with administering fines which result from the violations of regula-
tions which are enumerated in section 10 of the statute.
VI. Regulations Under the 1968 Law Applicable to Inland Shipping
Section 8(2) of the Used Oil Statute authorizes the Federal Minister
for Traffic to issue regulations in agreement with the Federal Minister
for Health Affairs with provisions for inland waterway transportation
concerning the collection of waste oil from water craft, barges, etc.
There are three sets of such regulations, one for the Rhine, one for
the Mosel, and one for other inland waterways, issued on August 5,
1970, June 8, 1971, and March 3, 1971, respectively. These regulations
are part of amendments to general regulations implementing federal laws
governing inland waterways. With respect to used oil disposal they
provide that authorized collection places are those listed in an
appendix as duty-bound to collect as well as those authorized to collect
by state officials with jurisdiction over the waterways. The regula-
tions also provide that it is a violation of section 10(1) No. 5 of
the Used Oil Statute to intentionally or negligently keep an oil record
book improperly, fail to keep the oil record book on board, or fail to
deliver oil wastes or liquid inflammables including waste waters con-
taining oil.
- 189 -
-------
Part 3: Legislative History of Used Oil Provisions
I. 1935-1945
In 1935 a law was passed obligating all re-refineries to file
reports. In conjunction with this, a duty was imposed that all used
motor oils be delivered to the re-refiners. The re-refiners picked
up from all gas stations and repair shops, though not from self-
changers, or users of small amounts or from industry (which either
burned its used oils or otherwise disposed of them). This system,
which was instituted as part of a policy of autarchy, also had a
beneficial effect in limiting water pollution - approximately 40
percent of the used lubricating oils generated at that time were
collected and re-refined. (The Germans imposed the same system in
Poland, Norway and the areas which are now part of the German Demo-
cratic Republic. Reportedly it still exists in these countries).
II. Post World War II until 1963
After World War II, the support of collecting and re-refining
used oils was continued. Lubricating oils made from used oils
received a mineral tax preference of 13 DM per 100 kilograms. In
addition re-refined lubricating oils were protected by provisions of
the customs law: imported petroleum was subject to a duty of 12.50
DM per 100 kilograms, while the duties on imported virgin lubricating
oils ranged from 12.90-22.50 DM per 100 kilograms. The duty on
imported re-refined products was 25.90 DM per 100 kilograms. This
latter provision was justified as necessary "to keep domestic
re-refining of used oils profitable." With the support of these
provisions the re-refiners - which were all small - were able to
increase their collection of used oils from 37,000 to 123,000 tons
between 1953 and 1963. That represented an increase of from 20 per-
cent to 34 percent of the used motor oils.
Germany was obligated to dismantle these tax advantages and customs
protections in accordance with an agreement to alter the provision
governing the taxation of oil which all the signatory nations of the
European Economic Community accepted.
III. December 1963 Law Enacting Subsidies for Re-refining
This was accomplished as part of a law passed by the Parliament
in December 1963 reforming several provisions concerning taxes and
customs. However, on the initiative of the Finance Committee of the
Bundestag, this compensatory provision was added as an amendment to
the bill prepared by the executive branch; "Enterprises located in
the Federal Republic which paid taxes for lubricating oils in accord-
ance with section 2(1) No. 1 of the Mineral Oil Tax Law in 1962, may
receive, upon application, a temporary subsidy for lubricating oils
(re-refined products) which they produce from used oils generated and
- 190 -
-------
collected in the Federal Republic and shio from their firm...The temporary
subsidy for lubricating oils which were defined as the heavy oils enu-
merated in the customs tariff which are shipped from the firms in the
years 1964 and 1965 is 22.90 DM oer 100 kilograms." The new section pro-
vided that no subsidy be paid for lubricating oils not subject to the
Mineral Oil Tax as a result of other sections of the revised Mineral Oil
Tax Law and authorized the Minister of Finance to adopt regulations
governing the procedures for implementing the new section.
In explaining the new section the Finance Committee stated that it
had thoroughly discussed the business and political economy issues
raised by the bill for the small enterprises currently re-refining used
oils. "The existence of these firms would be threatened if their
products, which are more expensive to produce, are subject to the same
tax as fresh oils. If these enterprises close, a possibility is lost
for the disposal of used oils which is important to our political
economy."
The Finance Commmittee also called on the executive branch to
"investigate the situation and cost structure of the field of collecting
and re-refining used oil and to suggest to the Parliament by June 30, 1965
new provisions which promote the collection, re-refining or disposal of
such oils in the interst of protecting waterways, ground water and soil."
A. Amendment of the 1963 Law in REsponse to E.E.C. Objections, April 1964
This subsidy provision provoked objections from the Commission
of the European Economic Community and from the other member nations.
They argued that the payment of such a subsidy for re-refined products
exported from Germany was a kind of export subsidy which contravened
the Treaty of Rome that is the basis for the E.E.C. The Parliament
reacted promptly, in March 1964, by considering a bill which would have
prohibited the export of re-refined products to member nations of the
E.E.C. The Finance Committee decided, however, that rather than such
a prohibition it would be consonant with the Treaty of Rome and consistent
with the Committee's goals in adopting the subsidy if payments made for
re-refined products which were exported to the E.E.C. nations were
repaid by the re-refiner. Such a bill became law in April 1964.
The regulations adopted to implement the December 1963 subsidy
provisions, as amended, are included as an appendix A, pages 57-63.
B. The First Report to the Parliament by the Ministry of Economics,
June 1965
The report called for by June 1965 was submitted punctually. Since
the Parliament had already extended the subsidy orovisions for another
year, however, the report provided considerable information about the
country's waste oil situation (although not about the cost structure
of collection and re-refining) but postponed any specific recommendations
- 191 -
-------
to the Parliament. The apparent reason for the extension and postponement
was the expectation that the Commission of the European Economic Community
would propose waste oil regulations for all the Common Market Nations.
The 1965 report was based on one prepared by the Battelle Institute
in Frankfurt under contract with the Ministry of Economics. It stated
that of the 750,000 tons of lubricants sold in 1963, 55 percent was con-
sumed so the consistency and distribution of any wastes offered were no
practical threat of water or soil pollution. Of the remaining 345,000
tons, 30 percent was re-used for other lubricating purposes without
generating significant wastes, 30 percent was burned and 33-35 percent
was collected and re-refined.
Thus, only 8-10 percent of the lubricants not fully consumed in
their first use presented - to the extent not properly disposed of on
land - constituted a continual threat to water and soil. Nevertheless,
this amounted to approximately 35,000 tons a year. How much of this
actually ended up in the nation's waterways could not be definitely
determined, the report stated. But some indications were given by
the results of an investigation conducted by the state of Northrhine-
Westphalia of the pollution of the Rhine in that state. Within the
boundaries of that state alone 10,000 tons of oil ended up in the
Rhine. Almost all of it flowed in with the tributaries. In addition
shipping on the Rhine itself contributed approximately 8,000 tons
annually of waste oils, comprised of un to 70 percent fuels. This
latter figure would be 3,000 tons higher but for the work of a state-
supported public corporation which collected oils from the ships and
took them to re-refiners. "These figures show," the report stated,
"to what extent the Rhine has become a kind of collection sewer for the
waste oils from many individual disposal sites and to what extent the
surface waters which are being increasingly used for water supply are
endangered."
The Eattelle report had concluded that an altogether satisfactory
disposal of all waste oils not heretofore collected would be practically
no problem in a few years. The Ministry of Economics considered this
a reasonable view, given that the re-refiners were expanding their
collecting capacity with the support of the federal subsidies, that
oil users were delivering more waste oils or disposing of them them-
selves and that the states' water pollution control officials were
having more success in preventing danger from waste oils. The Ministry
nevertheless concluded that the 35,000 tons of waste oil improperly
disposed of should be brought under control as quickly and completely
as possible "to prevent a danger to soil and water." It also suggested
a lone-range goal that the federal budget should not be burdened with
the costs of harmless disposal of used oil. Rather users of oil should
pay them. In order to avoid sudden changes in the business conditions
of the re-refiners, this conversion should occur gradually, beginning
with a reduction in the subsidy affective January 1, 1967, the report
concluded.
- 192 -
-------
(The following is a summary of some of the technical information
contained in the Battelle Institute's report to the Ministry).
In Germany, according to the Battelle Institute's 1965 report,
somewhat more than one-half of the wastes generated by the use of lubri-
cants and mineral oil solvents or cleaning agents collects at gas
stations and repair shops. The rest is distributed among countless
sources. In consistency - the most important factor in their disposal -
80-90 percent of these oil wastes (including foreign matter) were'
liguid, 5-15 percent were in the form of sludge, and 5-10 percent were
more or less solid. The amount of foreign matter (also important tc dis-
posal possibilities and consisting of water, metal rubbings, dust, sand,
etc.) in each of these categories varied greatly. The report foresaw
only a slight increase in the amount of liquid waste oils in the coming
years, but more liquid/sludge wastes from cleaning oil and gas separators
and tanks.
There were, the report's summary concluded, no technical limits
preventing harmless disposal of oil wastes: there are several means of
disposal for each waste product. But in some cases disposal entailed
high costs. Thus the most economic solution can only be determined
for individual situations.
The section of the report dealing with kinds of wastes and possibilties
for their disposal pointed out that only general values can be given for
the characteristics (percentage of oil, water, foreign matter, additives)
of each general form of waste and that in practice the wastes are mixed
in countless ways in the process of collection. Therefore the choice of
which of six possible disnosal methods to use irost depend on the cir-
cumstances of the particular case. As possible disnosal methods the
report listed:
1. Re-use for the same or inferior nurposes
a. without prior treatment (i.e., filtering or
centrifuging), or
b. after prior treatment;
2. regenerating (i.e., distilling, refining);
3. burning
a. without prior treatment
b. after prior treatment, or
c. mixed with mineral oil-containing or other wastes
or products or with the help of supporting fire;
4. depositing in places where danger to water and soil is
not present and where it can be done in accord with legal
provisions;
5. chemical binding;
6. biological degradation in relatively short time.
The first three of these - reuse, regeneration end burning -
without expensive pretreatment were described as technically the least
- 193 -
-------
problematic and economically the most promising methods. 80-90 percent
of all mineral oil containing wastes could be taken care of in these
ways. Pretreatment before burning was also technically possible, although
it did increase costs and result in small amounts of a new waste -
sludge.
Depositing was seldom seen as oractical due to lack of suitable
land. Chemical binding involves transforming the oily wastes into
products harmless to water by means of the so-called irreversible oil
binders introduced in the mid-1960's for use in controlling oil spills.
This means of disposal was seen as economic under special conditions:
the treated wastes could be deposited in specially prepared ditches.
The possibility of employing biological degradation was described as
not yet sufficiently clear from a scientific viewpoint. In principle,
mixtures containing small amounts of oil are rapidly degraded where
the living conditions for micro-organisms are favorable, i.e., plenty
of movement of water and oxygen.
The forms of oil wastes most difficult to dispose of are sludges
and unseparated emulsions from metal-working. For the former the
method used chiefly is burning in special ovens, although this method
has problems with charging the ovens and detoxifying the emissions.
Large garbage incinerators can also accommodate oily sludges. Unseparated
emulsions normally have too much water content to make burning possible
without an expensive supporting fire. Separation followed by burning
the oil portion is trore economic.
C. The Second Report to Parliament by the Ministry of Economics, 1966
Further investigation by the government revealed more information,
some of which modified the thrust of the 1965 report. This information
was brought out in answers to several questions put by representatives
in the Bundestag in August 1966 and in a supplementary report to the
Parliament dated October 27, 1966.
"Is the government aware," began the representatives' series of
questions, "that the collection of waste oils for regeneration or
disposal has not kept pace with the increased amount'of oils used thus
increasing the danger to soil and water?" Yes, the government answered,
it was aware. Lubricants sold had increased from 1963 to 1965 by
106,000 tons to a total of 844,000 tons while in the same period the
collection of waste oils increased by 34,000 tons to 157,000 tons.
To the extent waste oils are not oroperly disposed of they are a con-
tinuous danger to water and land.
"How much are the annual amounts of waste oils disposed of in
uncontrolled ways," was the second question. The answer: by statis-
tical extension of the 1963 figure of 35,000 tons, in 1946, 46,000
tons and in 1965, 51,000 tons were disnosed of by unknown means.
- 194 -
-------
Three days after these answers were published a bill sponsored by
Rep. Dr. Schmidt and 31 fellow members of the Bundestag was introduced
to extend the subsidy for two more years (until December 31, 1968) and
reduce it from 22.90 DM per 100 kilograms to 19.50 DM per 100 kilograms.
In their justification of the bill the sponsors stated that only by
means of the subsidy to private firms was the collection and regeneration
of used oils - "a task of the highest significance to our health and
political economic policies" - made possible. Since the E.E.C.'s effort
to harmonize member nations' provisions had not yet been successful,
it was necessary to extend the temporary provisions in order not to
interupt the firms' work, the sponsors stated. The reduction in the
amount of the subsidy was, based on a check of the industry's economic
development, acceptable as well as desirable for budgetary reasons.
Since this bill also reflected the views of the government, the
Federal Minister of Economics stated at the conclusion of his October
1966 report that detailed recommendations from the government would be
superfluous. The report did provide, however, the results of the investi-
gation into the cost structure of collecting and regenerating used oil.
By way of introduction, the report reiterated the amount of used oil
collected (pointing out that 38% of the motor oils sold were collected,
equivalent to the percentage collected by the system established in
1935). There was also a cautionary note in the introduction. An
increase in the amount of used oils used for heating was problematic
for several reasons. Insurance companies would not provide protection
for enterprises heating with used oil because of the increased risks of
fire and explosion. Further, the Federal Minister of Labor and Social
Affairs and the local building and commerce officials (who are respon-
sible for granting permits for many new enterprises to operate) raised
objections to the use of used oils for heating instead of heating oils,
on similar grounds, especially if proper burning facilities were not
employed.
The investigation of costs for 1964 and 1965 was complicated by
the fact that the tax preference was not replaced by the subsidy until
May 1, 1964, and frequently the re-refineries did not keep records
in a way that distinguished between these two aspects of 1964. Never-
theless, it was evident that without the 22.90 subsidy there would have
been losses amounting to 17.75 DM per 100 kilograms for the re-refineries
in the period in 1964 after the subsidy became effective.
The weighted average prices for re-refined products declined
steadily during 1964-65. In 1962 the price was 60.94 DM per 100 kilo-
grams; in 1963, 59.43 DM; and in 1964, between 'lay and December, 58.64
DM. A comparison of the 1963 and 1964 prices shows a possible effect
of the subsidy: a sinking of the average price of .79 DM per 100 kilo-
grams, or 1.3%. This development in prices contrasted with the con-
trary tendencies of the fresh oil market. While the oil firms lowered
the prices of goods which were in direct competition with re-refined
products, the prices of lubricating oils in the firms' own gas stations
were raised significantly.
- 195 -
-------
Average net receipts for re-refined products rose 1.86 DM per 100
kilograms between May 1 and December 31, 1964, Coupled with costs reduced
by .03 DM the average profit from producing re-refined products was 1.89
DM per 100 kilograms. This development meant that if the subsidy were
reduced by 1.90 DM to 21 DM per 100 kilograms the domestic market would
be in the same situation as when tax preferences were granted (until
April 30, 1964) without on the average weakening the re-refiners' capacity
to compete with the large oil firms. Such a reduced subsidy would still
compensate on the average for the losses which the re-refiners would
experience without it: in the best situation normal expenses would result
in losses of 11.60 DM per 100 kilograms; in the worst, all expenses would
result in a loss of 21.25 DM per 100 kilograms. The average loss would
be 17.75 DM per 100 kilograms'.
The government's October 1965 report also observed that collectors
of used oils, e.g., gas stations, were receiving approximately 2.20 DM
per 100 kilograms in payment for their waste oils. This subsidy of col-
lection, the report said, was not tolerable for the federal budget in the
long run and offered the possibility of a further reduction of the subsidy
by 1.10 DM per 100 kilograms. Too rapid a removal of the "collection
premium," however, would mean that used oils would no longer be separated
by kinds for collection or kept free of avoidable wastes and water and
that more users would dispose of their oils in uncontrolled ways leading
to enhanced water pollution. The report recommended more efforts to
increase public understanding of the dangers of oil pollution for land
and water as a means of promoting care in sorting and storing of oils
and eventually of giving up oil without expecting to be paid for it.
The report pointed out that the answers provided by the governments
of several Laender to questions from their representatives indicated that
not only was the disposal of used oils not systematically supervised but
also that burning them in proper facilities was not even to a starting
point. On the positive side, some re-refiners had committed themselves
to picking up used oils whenever possible. The report recommended
publicizing these pick-up points.
IV. The Two-Year Extension of Subsidies for Re-refining
A. Controversy over the Bill
Dr. Schmidt's bill to extend the subsidy to re-refiners for two years
and reduce its amount from 22.90 to 19.50 DM per 100 kilograms was referred
to the Finance Committee, (of which Schmidt was chairman) with the Budget
Committee in an advisory role. These two committees disagreed, however.
the Finance Committee reported the bill favorably as drafted. The Budget
Committee, on the other hand, pointed out that the proposed 1967 budget
contained no provision to cover the 26 million DM in expenditures which
the bill would occasion. Further, the committee thought the amount was
- 196 -
-------
too much to be justified by keeping in business 20 middling firms with a
total of 1,000 employees. As for the argument that the bill would con-
tribute to water pollution control, that field was under the jurisdiction
of the Laender and it was improper to burden me federal budget with
expenditures for that purpose. The Budget Committee recommended to the
Finance Committee that the bill be rejected and reported thus to the full
Bundestag.
These contradictory reports caused the Bundestag to refer the bill
back to the two committees for further deliberations.
The Finance Committee informed the Budget Committee that it was in
sympathy with the tendency to eliminate subsidies, but that here an
exception was in order. The subsidy only became necessary because the
change in the tax preference for re-refined products and the customs
duty"on fresh oils had been required. It was also important for reasons
of water pollution control. The Budget Committee v/as requested to
support the bill in spite of some difficulties with where in the budget
the expenditures would be covered.
The Budget Committee resnonded that the bill violated the principle
that each person who caused water pollution was responsible to undertake
control at his own expense. The Budget Committee wanted a phasing out of
the subsidy, to be replaced by increasing the price of fresh oil to
cover the costs of waste oil collection and disposal. It voted to
recommend to the Finance Committee that the subsidy be reduced from 22.90
DM per 100 kilograms to 17 DM per 100 kilograms for 1967 and 14 DM
per 100 kilograms in 1968 (instead of to 19.50 for both years as the
bill provided). For this amount the budget could cover the bill's •
expenses.
Reluctantly, but in order not to lose the whole bill, the Finance
Committee decided to follow the Budget Committee's recommendation and
to urge expeditious study of the problems involved, including the
E.E.C.'s harmonizing efforts, so that a permanent approach could be adopted
as soon as possible.
The debate on the bill in the Bundestag which runs nine printed
pages, was not without rancor. It was essentially a debate between
the two committees. Finance argued that Budget's suggestion would
save a mere three million DM. Budget said that many re-refiners operated
efficiently enough that they didn't need more subsidy than would cover
the average losses of 17.75 DM per 100 kilograms. Finance replied
that some needed more, some needed less and the end result would be
the same if one wished to make subsidy payments based on the individual
situations of each of twenty-odd re-refiners. It appeared that the
government's proposed budget had not contained an entry to cover the
extension of the subsidy its report sunoorted because the Budget Division
of the Ministry of Finance disagreed with the government position and
had left the entry out intentionally. (The Division had likewise
- 197 -
-------
approached the Budget Committee in opposition to the Finance Committee's
bill). Throughout the debate it was clear that all parties agreed that
a permanent solution was urgently needed. One of the reasons it had
proposed a reduction to 14 DM per 100 kilograms in 1968, Budget said,
was to add an element of financial pressure toward achieving a solution.
To this Finance answered that there was a strong risk several re-
refiners would close, thereby reducing the amount of waste oil collected
and increasing the danger to public health.
The upshot was that the bill passed the Bundestag in the form
suggested by the Budget Committee. The upper house, however, the
Bundesrat, shared the views of the Finance Committee and requested a
conference committee. The conference committee recommended the subsidy
be extended for two years but reduced to 19.50 DM per 100 kilograms
re-refined product, i.e., the original bill. The conference committee's
recommendation was approved in both the Bundestag and the Bundesrat.
The bill was signed into law in May 1967, effective retroactively to
January 1, 1967.
B. The Third Report to the Parliament by the Ministry of Economics,
April 1968
One of the August 1966 questions to the government posed by
Representative Dr. Schmidt and his colleagues requested it to update
the February 1965 Battelle Institute report on the causes, sources and
whereabouts of mineral oil-containing wastes "with the goal of reviewing
and more closely determining for what reasons, in what kinds of uses,
and how much used oils are not collected or properly disposed of."
This question also requested the government to present the Parliament
with suggestions for improving the situation when the results of the
renewed investigation were available.
The Ministry of Economics, in concert with the Ministry of Health,
presented this third report on Aoril 5, 1968. The government's covering
memorandum to the Parliament highlighted three conclusions to be drawn
from the second round of research:
1) the frequently-suggested supposition that as a result of
technical developments and sinking demand for lubricants the amounts
of used oils would steadily decline was false: from 1963 to 1966 the
amounts of used oils generated had increased by 35,000 tons to a total
of approximately 370,000 tons and by 1970, 400,000 tons was
anticipated;
2) by 1966, 50,000 tons less used oil were burned or re-used
by industry than in 1963, perhaps because of stricter application
of air pollution provisions. On the other hand, re-refining of col-
lected used oils increased by 60,000 tons;
3) the amounts of used oils disposed of in uncontrolled ways
- 198 -
-------
increased by 6,000 tons to 39,000 tons. The question "why do these
amounts exist and from what kinds of uses do they come" couldn't
be answered, the report stated, despite specific questioning in more
than 150 interviews, although for the most part they seemed attribut-
able to oil emulsions (discharged into sewers) whose proper disposal
was freighted with heavy costs, especially for small and medium
sized businesses. The reasons for dumping waste oils on land or
discharging them into water ways were a) avoidance of the costs of
collection and proper disposal, b) negligence and c) inadequate know-
ledge of proper procedures..
Fifty percent of the 369,000 tons of used oils in 1966 were
generated by traffic (45 % from automobiles, 1% from trains and 4%
from inland shipping). Thirty-five percent came from industrial,
commercial and craft industry sources, another 12 percent from the
agricultural sector. Wastes from cleaning oil tanks and/or gas
separators amounted to 2 percent and 1 percent respectively. While.
for 1963, Battelle estimated that 30 percent of the used nils WPKP
re-used, 35 percent re-refined and 30 percnet incinerated or burned
for heat., these percentages for 1965 were 20 percent, 49 percent and
20 percent respectively. The dumping or discharging of the 39,000
tons constituted approximately 11 percent of the disposal, up 1 per-
cent from 1963.
As mentioned, most of this 39,000 tons (4.6 percent of all
lubricants consumed) was in the form of water-soluble oil emulsions
discharged to sewers by small and medium sized metal working plants
without proper facilities. Improper disposal by do-it-yourself auto-
mobile oil changers, at construction sites and from inland ships could
not be determined. Oily sludges and solid wastes normally found their
way to public garbage dumps along with other industrial wastes. It
was clear, according to the 1968 Battelle report, that primarily those
oil wastes whose proper disposal is expensive or difficult or both
are dumped on land or in water. Only large firms could afford to
separate the oil from their used emulsions, for example, or centri-
fuge the oil from metal shavings.
The report included the results of a questionnaire requested by
the Ministry. Gas stations and automotive repair shops were asked
whether, if they had to pay to have used oils collected from them,
they could charge drivers .10 DM per liter of drained oil at the time
of changing their oil. Industrial and commercial plants were asked
if they"would dispose of used oil themselves or continue to give it
to collectors if it would cost .10 DM to dispose of each liter of
oily wastes. The gas stations and repair shops replied that to
directly pass the costs fo used oil disposal on to drivers was out of
the question. They feared the loss of customers. Approximately
5 percent stated that if such a regulation were adopted they would
absorb the costs themselves. Even those who said they would con-
tinue to deliver their used oils for disposal assumed that a system
- 199 -
-------
which charged the user of oil for its pick up would lead to an increase
in uncontrolled disposal of used oils. The breakdown of industrial and
commercial response to what they would do if it cost .10 DM per liter to
dispose of oil wastes:
-continue to deliver-
-burn in an incinerator- 25%
-heat with it- 10%
-burn it in open- 10%
-re-use it until consumed- B%
-dispose of it self, by undefined means- 5%
The 1968 report concluded with a few predictions of trends in
waste oil generation and disposal. Consumption of lubricants had
increased from 700,000 tons in 1963 to 845,000 in 1966. This rate
of increase was not expected to continue, however, because of improve-
ments in the quality of oil (longer intervals between changes), improved
sealing (reducing leaks) and machine construction, and closer super-
vision of the use of lubricants by businesses. By 1970, Battelle
estimated, 900,000 tons of lubricants would be sold. Taking the same
percentage as 1966 of oil totally consumed in used (58%), approximately
380,000 tons of used oils would be generated in 1970, excluding the
wastes from cleaning tanks and separators. Battelle foresaw an increase
of these latter wastes since its questionnaire indicated that 25% of all
industrial and commercial plants had never cleaned their tanks or
separators. Municipalities, furthermore, were making efforts to pro-
vide for more cleaning and for the disposal of the resulting wastes.
Developments in disposal would depend on the factors influencing
each of the disposal methods. As of the time of the 1968 report, 82%
of the businesses polled said they had no problem disposing of their
oily wastes. Whether this figure could continue depended on develop-
ments. Reuse of oils, for example, was hindered by the fact that tax-
favored transformer oils could not be used where other higher-taxed
oil would normally be. On the other hand re-use would increase as
the difference between the price of new oils and the costs of collecting
and pretreating used oils increased. Re-refining had increased 46%
between 1963 and 1966 (during a period when oil sales had increased 14%),
but predictions about whether this trend would continue were not possible
due to the uncertainty of whether the subsidy payments would be continued.
Incineration or burning of used oils for heat was still too expensive
(60-180 DM per ton) for most firms to consider this disposal method.
More garbage incinerators were being constructed although even present
capacity to burn oil wastes was not" being utilized. The number of firms
burning used oils for heat had declined since 1963, even though they
had to pay no heating oil tax. Disposal of emulsions remained a problem,
particularly for the small firms which couldn't afford devices to separate
the oil from the water.
- 200 -
-------
V. Three Bills Prepared in 1968 Concerning Used Oil Disposal
In anticipation of the December 1968 expiration of the subsidy
payment provisions, representatives of the federal ministries of
economics and health began to collaborate with a special committee of
the Landerarbeitsgmeinschaft Wasser, an "interstate" working group
for water matters, late in 1967. Concurrently Representative Dr. Schmidt
and his colleagues in the Interparlamentarische Arbeitsgemeinschaft,
a kind of legislative council made up of representatives from all
parties elected to state and federal parliaments, were working on a
bill. The government sent its draft bill to the Bundesrat in'June
1968 for its advisory comments prior to introducing it in the Bundestag.
Dr. Schmidt's bill was introduced directly into the Bundestag in the
same month and referred to the Committee for Economics and Commercial
Affairs. The government's bill was forwarded to the Bundestag in
September along with the Bundesrat's comments and the response of the
government to the comments. In October, a bill prepared by the
Association of German Industries was introduced by several representa-
tives. The government's bill and the Association's bill were referred
to the same committee in late October.
A. The Government's Bill
The government's bill provided that all industrial and commercial
enterprises where 500 kilograms or more of used mineral oils or mineral
oil products or wastes would be generated annually and enterprises
collecting such wastes would keep record books indicating kind, amount
and whereabouts of such wastes. It also provided that enterprises
collecting oily wastes from others would be licensed. A license was
to be denied if the applicant could not demonstrate that he or someone
to whom he would transfer the wastes could re-use, regenerate or dis-
pose of them in a way that would cause no concern for water pollution.
It was also to be denied if the applicant's proposed facilities or
means of collection posed a threat of water pollution or if facts
supported the assumption that the applicant or the manager or the
personnel of the business was not sufficiently reliable. Conditions
designed to protect waterways could be attached to a license and, once
granted, the license could be revoked if these conditions were broken
or if any of the reasons for denying the application subsequently
appeared. The bill also provided that any person holding a license
or keeping a record book was required to provide to authorized officials
all information needed to implement the law, especially concerning the
supervision of the ultimate disposal of the wastes. The officials
responsible for implementing the law would be named by the Lander. A
special provision was included in the bill exempting shipping from
the foregoing and authorizing regulations to be promulgated governing
collection of oily wastes from ships at certain intervals and places.
The bill concluded with provisions declaring penalties for revealing
trade secrets learned in implementing the bill and for violating any
of the duties set forth in it.
The explanation accompanying the government's bill promptly
- 201 -
-------
conceded that the bill contained no provision for financial support of
harmless disposal by regeneration, incineration or otherwise, since
there were no resources 1n the federal budget after 1968. Without these
subsidies the government could not say how the problem of proper dis-
posal was to be solved economically. The explanation stated that the
purpose of the bill was to protect the waterways from pollution, since
even a small amount of oil could make a surface or underground water
supply unusable. The existing legal regime - the municipalities' sewer-
ordinances proscribing the disposal of oil; the commercial code authorizing
conditions in the operating permits of businesses to prevent discharges
of used oils; the water law's provisions authorizing officials to take
action to halt discharges which are or may be polluting - offered
recourse only against individual cases of pollution by businesses which
generate them, not any possibility to prevent collection techniques which
threaten water pollution. The bill was designed to remedy these defi-
ciencies.
The Bundesrat's first comment to the government on its draft bill
was that it should investigate whether and to what extent its bill should
be changed in light of Representative Dr. Schmidt's bill or perhaps
simply combined with it. "The commercial regulation foreseen in the
draft bill should be supplemented by a financial regulation which provides
payments for the harmless disposal of mineral-oil-contalning wastes
and these provisions should take effect, if possible, at the same
time." The Bundesrat suggested that businesses with small branches
be allowed to apply for permission to keep the record books centrally
so long as the necessary supervision of disposal was not hindered. The
Bundesrat also suggested that it was not necessary to require enterprises
collecting oil wastes from others to be licensed. Collectors had been
in business without being licensed since 1935 and no difficulties
were known which would justify the requirement of a personal license.
The licensing requirement would involve an administrative burden and
was contrary"to the government's announced policy, enacted into law in
the commercial code, that as few businesses as possible be regulated
by licensing. The combination of record-keeping and the government's
power to obtain information from those keeping records should be sufficient
means to the bill's end of assuring that waste oils be properly dis-
posed of so as not to pose a threat of water oollution. Instead,
suggested the Bundesrat, one should simply be required to give notice
that he collects and the government be authorized to order him to take
measures to prevent water pollution or to prohibit him from collecting
if he proves unreliable.
The government's response to the Bundesrat readily accepted the
suggestion that it investigate aligning its bill with Dr. Schmidt's
but disagreed with the suggestion that licensing collectors was
unnecessary, particularly in light of the forthcoming expiration of
the subsidy payments to re-refiners. A final decision would be made
after the suggested investigation, the government concluded.
- 202 -
-------
B. Rep. Dr. Schmidt's Bill
Representative Dr. Schmidt's bill was essentially what is now
contained in the first four sections of the Law Concerning Measures to
Assure the Disposal of Used Oils, a title taken from his bill. It pro-
vided for the creation of a reserve fund for the purpose of enabling
payments to compensate the uncovered costs of firms disposing of used
oils by harmless means. The fund was to be supported by an assessment
on producers of 5 DM per 100 kilograms of lubricating oils. Pick-up
of oil in amounts more than 200 liters was to be free. The bill pro-
vided that if used oils could be re-refined, that means of disposal
should be preferred.
Since this bill - along with the committee's report - show the
most about what the Parliament had in mind in establishing this new
system, it is important to relate its legislative history in some
detail.
The explanation accompanying Representative Dr. Schmidt's bill
stated in its introduction that the subsidies in force until the end
of December 1968 had been enacted for the threefold purpose of pro-
tecting waterways, encouraging a supply of lower-priced oil and sup-
porting the re-refining industry. Since without these subsidies the
re-refining firms couldn't exist, a new law was required so that the
approximately 180,000 tons of used oils collected from nearly 280,000
sources would not be disposed of uncontrolled.
"The premise (of the bill) is that the lubricating oil producing
and using sector should solve the problem of waste oil disposal itself.
Because of the strongly divergent interests of the parties an approach
based on voluntary cooperation would not assure the required protection
of the general public. Therefore a public arrangement should be
created to intercede between those having used oils and the firms which
dispose of them. The costs of used oils disposal should be borne by
those who cause them by paying an assessment. This assessment con-
stitutes no additional financial burden; rather it only reflects the
costs which in any event occur from the use of lubricating oil. The
assessments would support a capable network of firms who would have
to pick up used oils subject to the assessment."
The bill's first section is identical to section l(l)-(2) of the
present law. The purpose was to create a special fund solely for the
purposes of the law. Administration of the fund was assigned to an
existing federal agency to avoid the costs of creating a new adminis-
trative organization. The costs of administration were specifically
to be drawn from the fund in order not to burden the general budget.
Section 2 provided that payments could be made to commercial
enterprises for costs they could not cover in disposing of used oils
without damage to water, soil or air. In which cases firms disposed
- 203 -
-------
those oils assessed would be collected for free under section 3 of the
bill, assessing only lubricating oils meant that heating oil, wastes
or bilge oils would not be included. The rate of 5 DM per 100 kilograms
was estimated "based on experience to date."
According to section 5 the assessment was to become due when oil
was shipped from the firm or cleared customs after import. Levying
the assessment on those who had used oil not only would cost more
administratively but would give them reason to dispose of used oils
improperly in order to avoid the assessment. The bill's sponsors
pointed out that from the standpoint of the fund it made no difference
who paid the assessment but that "in accordance with experience it
would follow the laws of the market and be passed on to the last user.
The extent to which producers and importers were called on to make
payments was based on a benefit to them from the fund which existed
even if not mentioned explicitly, namely that the fund solves the prob-
lem of waste oil disposal which is in fact caused by putting a dan-
gerous good on the market. In addition reasonable considerations of
the public interest indicate that any additional burden is neither
inappropriate or intolerable."
C. Rep. Stein's Bill (Association of German Industries)
The bill introduced in October 1968 by Representative Stein and
colleagues on behalf of the Association of German Industries paralleled
Dr. Schmidt's bill in many respects and also incorporated sections of
the government's bill. This bill offered three principal differences
from the others: 1) it suggested that waste oil be defined as only the
lubricating oils from section 27.10-C-III of the customs tariff which
have been used; 2) it suggested that payment rates be equal according
to kind of used oil disposed of rather than kind of disposal method
used; and 3) it suggested levying the assessment for used oils on gas
stations and other enterprises required (by the bill) to keep records
of the amounts of used oil generated if more than 500 kilograms annually,
rather than on the producers or importers of fresh oil.
D. The Committee's Report on the 1968 Used Oil Statute
The report of Representative Opitz on behalf of the Committee
for Economics and Commercial Affairs refers to the reservations with
which Parliament enacted the existing subsidy provisions and reports
that the Budget Committee did not even respond to an inquiry whether
the subsidy could be extended for a short time in order to avoid incur-
ring the additional administrative expenses of converting to a new
system which was likely to be replaced soon by one adopted by the
European Economic Community.
The report indicated that the government had conferred with
Representative Dr. Schmidt and his colleagues and that all agreed,
as did the Committee, that merely requiring possessors of used oils
- 204 -
-------
to keep records of their disposal would not be sufficient. "What must
be achieved is to assure that the disposal of used oils is accomplished
without additional water and air pollution. If one possessor were bur-
dened alone and directly with the cost of disposal a greater part of the
used oils collected until now would be disposed of uncontrolled. There-
fore the Committee has followed...(Representative Dr. Schmidt's) bill to
the extent that at the point of bringing fresh oil on the market there
should be an assessment for the harmless disposal of used oil," The
report stated it had decided in favor of assessment at this level rather
than the level suggested by the Association for reasons of administrative
ease and efficiency, of having a procedure which would assure maximum
protection of water quality, and of having a system which would not be
difficult to coordinate with the forthcoming European Economic Community
regulation.
The report enumerated other decisions the Committee made on the
alternatives before it. Since the principal goal of the act was to
assure disposal of used oil in order to protect water, chiefly ground
water, the Committee could not agree with Dr. Schmidt and his colleagues
that re-refining used oil should be treated preferentially. "On the
contrary, the Committee believes that over the long run a strong price
competition must develop between the individual methods of disposal in
order that the payments and the assessment may be kept low." The Com-
mittee decided to limit the assessment to the lubricating oils subject
to mineral oil tax, in order that the administration of the assessment
could be based on the already existing tax procedures. But the definition
of the waste oils to be collected for free was not limited to the oils
subject to the assessment. Instead, a provision was added that used oils
with more than a certain amount of wastes would not have to be picked
up for free.
As general observations the Committee noted that the payments should
encourage the trend to disposal facilities with larger capacities in
order to make continued observation of the air pollution from the disposal
firms possible. It also stated that means for disposal of other wastes
should not be prejudged in the light of the used oil statute. This
law provides special measures to deal with the special dangers posed
for water by used oil.
In its discussion of the individual provisions of the bill it
reported, the Committee explained some of the other changes it made
in the bills it considered. In section 2 the Committee added language
authorizing public corporations and other non-commercial enterprises
as a means of enabling facilities set up by municipal cooperatives,
for example, to qualify if they disposed of oil properly. Although it
dropped the language in Dr. Schmidt's bill specifically providing"it,
the Committee indicated in its discussion of section 2 that payments
would be made to those who held contracts with the federal office for
trade and industry obligating them to fulfill conditions derived from
the Minister of Economics1 guidelines in order to receive payments.
- 205 -
-------
of oil without damage would be determined by regulations promulgated by
the Minister of Economics. The bill's section 2 also provided that pay-
ments would be made in accordance with guidelines which were to fulfill
certain legislative requirements. Most of the enumerated requirements
were eventually incorporated in section 2(2), with the exception of the
one providing that "re-refinable used oils shall be re-refined to the
extent economically and technically reasonable." The present law's
section 2(3) is verbatim what was in the bill's section 2(3).
The bill's explanation pointed out that the provisions of section
2 extended financial support of waste oil disposal to other methods
than re-refining. The regulations were designed to establish "binding
standards" for what constituted harmless disposal. Of special sig-
nificance was the explanation of the payments: "The payments should
not compensate the individual costs, not covered by profits, of
collecting and harmlessly disposing of used oil, but rather the costs
determined to be average for a kind of disposal method. If individual
losses were compensated there would be no incentive for a firm using
a certain disposal method to improve his efficiency. Furthermore, the
administration of the fund would be over burdened if it could not work
with generally applicable payment rates instead of concerning itself
with the situations of individual firms. Thus, firms working at
unfavorable above-average costs will not receive payments which assure
their existence." Likewise only uncovered costs specifically from
collecting and disposing of used oils were to be compensated, not
costs from other branches of a firm. The bill's sponsors recognized
that the payments would compensate to varying degrees the costs arising
from varying collection and disposal circumstances, but suggested this
could be equalized by considering carefully the distances assigned for
mandatory free pick-up.
Section 3 of the Schmidt bill provided that pick-up of more than
200 liters would be free and preparation for pick-up of lesser amounts
was required. But it defined the waste oils to be picked-up as all
lubricating oils and fluid or sludgy wastes with more than 40 percent
by weight of oil. (See the discussion of this suggested definition
under the section entitled "Definition of Used Oils"). It also pro-
vided that only used oils subject to the assessment would be picked
up for free. The pick-up of other substances would be in accordance
with fee schedules filed with the federal agency administering the
fund.
Section 4 was the funding provision for the fund created by
section 1. It provided that those who produced or possessed lubri-
cating oils or substances containing them and with whom waste oils
could collect would pay a charge of 5 DM per 100 kilograms of the
lubricating oils enumerated in section 27.10 C-III of the customs
tariff schedule. This suggestion was based on the analogous and
familiar concept in German water law that those benefitted by a pub-
lic service should pay the assessments which support it. Since only
- 206 -
-------
Not included in a contractor's obligations, however, would be pumping out
tanks, separators or ship bilges.
In its discussion of section 3 the Committee explained why it had
followed the government's characterization of the means for funding the
reserve fund rather than the suggestions contained in the bills pro-
posed by Representative Dr. Schmidt or Representative Stein. Assessments
implied a benefit to those assessed, it pointed out, and there is not
a complete identity between those liable and those gaining the benefits
from pick-up. (For a more complete description of the nature of the
funding system, see the discussion of the Legal Characteristics of the
Compensation Fee). The government's characterization makes it clear
that what is involved is a self-help mechanism operating within the oil
producing and using sector of the economy.
The bills introduced by the representatives had included provisions
authorizing payments to industrial firms which disposed of used oil harm-
lessly itself. The Committee decided not to follow this suggestion
because: 1) the Committee on Health had argued persuasively that it was
important to concentrate used oil disposal in large facilities, for
health reasons; 2) the over-all effectiveness of the system would not
be able to be evaluated; and 3) the compensation fee would have to be
raised significantly.
The Committee limited the record-keeping called for by section 6
to those persons having more than 500 kilograms of used oils which would
not have to be picked up for free in the belief that free pick up would
remove any reason for people to dispose of their oils improperly. This
would also limit the burden of keeping and checking records to about 20
percent of all used oils generated, e.g., emulsions.
The Committee on Industry and Commercial Affairs received two of the
three bills concerning used oil disposal on October 23, 1968. It gave
them priority review "in recognition of the special urgency of estab-
lishing a system for used oils, above all for reasons of public health"
and filed its report on November 29, 1968. The bill, as reported by the
Committee was passed by the Bundestag and forwarded to the Bundesrat
on December 6, 1968. The Bundesrat passed the bill in the same form
and it became law December 23, 1968.
- 207 -
-------
REGULATIONS CONCERNING THE GRANTING OF TEMPORARY SUBSIDIES
FOR THE PRODUCTION OF LUBRICATING OILS FROM USED OILS
(RE-REFINED PRODUCTS)
On the basis of Article 8, section 6 of the Law Concerning the
Amendment of Taxes on Mineral Oil of December 20, 1963, amended by
the Law to Amend the Law Concerning the Amendment of Taxes on Mineral
Oil of April 16, 1964, the following regulations are promulgated.
Section 1: Certification of Right to Subsidy
(1) The temporary subsidy in accordance with Article 8 of the
Law Concerning the Amendment of Taxes on Mineral Oil may only be
approved when the right to the subsidy has been certified.
(2) Certification is to be applied for in duplicate within two
months of the effective date of this regulation.
(3) The central customs office responsible for the location of
the enterprise is responsible for the certification.
(4) The application shall include 1) name and purpose of the
enterprise, 2) owner of the enterprise, 3) name of the person respon-
sible for the management of the enterprise, 4} weight of the lubricating
oil taxed in 1962 in accordance with Section 2(1) No. 1(g) of the
Mineral Oil Tax Law, 5) weight of re-refined products produced in
1962 and sold in 1962 and 6) capacity of the enterprise for producing
re-refined products.
(5) The information required in paragraph (4) 4)-6) shall be
substantiated at the request of the central customs office.
(6) If the deadline named in subsection (2) is missed without
fault an extension may be granted.
(7) The certification is to be given in writing. Thereupon
the one entitled to receive the subsidy shall acknowledge that 1) he
must keep the records described in Section 3, 2) he must label re-
refined products in accordance with Section 5, and 3) he must repay sub-
sidies improperly paid out.
Section 2: Revocation of the Recognition
The certification shall be revoked if the conditions for its
granting did not exist or later expired.
Section 3: Record Books
(1) The one entitled to subsidies must keep records of 1) the
- 208 -
-------
amounts of used oil processed, separated according to used oils generated
and collected in the Federal Republic and other used oils, 2) the weight
of the lubricating oils produced from used oils generated and collected
in the Federal Republic, 3) the weight of lubricating oils produced from
other used oils, 4) kind and weight of the substances added to the
lubricating oils designated under 2) by the producing firm and 5) the
day of shipment from the producing firm of the lubricating oils designated
in 2).
(2) If the information required in subsection (1) is apparent
entirely or in part from records already kept on the basis of other
legal provisions then the records required by subsection (1) are to
that extent not required.
Section 4: Granting of the Temporary Subsidy
(1) The temporary subsidy will be granted upon application for
the amount of lubricating oils shipped fron the producing firm in a
month. The application is to be submitted in duplicate by the fifteenth
of the month following to the central customs office specified by
Section 1, subsection 3. The application shall certify that the lub-
ricating oils shipped from the producing firm were produced in that
firm from used oils generated and collected in the Federal Republic.
(2) The central customs office determines the amount of the
temporary subsidy on the basis of the extent to which it is justified
and the proof required in Section 3 is furnished.
(3) The central customs office sets off the temporary subsidy
against the mineral oil tax to be paid by the applicant by the twenty-
fifth of the second month following the shipment. In the case of Section
6(1). sentence 2 of the Mineral Oil Tax Law of 1964 the subsidy is to
be set off against the mineral oil tax due by the fifteenth of the
second month following the shipment and, to the extent that it exceeds
the tax liability, with the mineral oil tax due on the fifth of the
third month following the shipment.
(4) If the mineral oil tax liability is not sufficient in accordance
with subsection (3) the amount of subsidy in excess of the tax liability
is to be paid.
(5) If the deadline named in subsection (1) is missed without
fault an extension may be granted.
Section 5: Duty to Label
Th labeling required by Article 8, section 4, sentence 1 of the
Law Concerning the Amendment of Taxes on Mineral Oil must be by printing
on the bill or delivery slip. The printing must read as follows: "For
this product a subsidy was paid in accordance with Article 8 of the Law
- 209 -
-------
Concerning Amendment of the Taxes on Mineral Oil of December 21, 1963,
amended by the Law to Amend the Law Concerning Amendment of Taxes on
Mineral Oil of April 16, 1964. Upon export to member nations of the
European Economic Community the amount of 22.90 DM per 100 kilograms
is to be repaid to the federal government in accordance with Article
8, section 3 of the law."
Section 6: Investigations
(1) The central customs office specified by Section 1(3) may
undertake investigations of the enterprise in order to determine whether
the conditions for receiving a subsidy exist or have existed. For these
investigations the one entitled to the subsidy is required to present
documents relevant to the temporary subsidy; he is further obligated
upon request to provide information. The federal auditing office is
entitled to the same rights of investigation.
(2) If re-refined products are exported to the member nations
of the European Economic Community the customs administration may
undertake investigation of the exporter to determine whether temporary
subsidies were paid for the exported re-refined products. For this
investigation the exporter must present documents related to the
re-refined products and must provide information upon request. The
federal auditing office is entitled to the same rights of investiga-
tion.
(3) For public entities and personal corporations the individuals
accorded representative status bylaw, contract or bylaws are to fulfill
the duties of subsections 1 or 2.
(4) A person obligated to provide information may refuse to provise
information to those questions whose answers would subject he himself or
one of the employees listed in section 383(1) No. 103 of the Civil
Procedure Law to the risk of criminal prosecution or a proceeding in
accordance with the Law Concerning Violations of Regulations.
Section 7: Validity in Berlin
This regulation is also effective in the state of Berlin in
accordance with Section 14 of the Third Transition Law of January 4,
1952 in conjunction with Article 14 of the Law Concerning Amendment
of Taxes on Mineral Oil.
Section 8: Effective Date
This ordinance is effective on the day after its publication.
Bonn, the 23rd of April 1964
- 210 -
-------
FIRST ANNOUNCEMENT TO SUPPLEMENT THE REGULATIONS CONCERNING THE GRANTING OF
TEMPRORARY SUBSIDIES FOR THE PRODUCTION OF LUBRICATING OILS FROM USED OILS
(RE-REFINED PRODUCTS) OF APRIL 23, 1964
I offer the following comments on the implementation of the above-named
regulations:
(1) Article 8 of the Law Concerning Amendment of the Taxes on Mineral
Oil of December 20, 1963 was amended by the Law to Amend the Law Concerninq
the Amendment of Taxes on Mineral Oil of April 16, 1964. In accordance
with these amendments no temporary subsidies are paid for exoorts of re-
refined products to member nations of the European Economic Community and
temporary subsidies paid are to be repaid in these cases. The recipient of
temporary subsidies - that is the producer - is subject to the notification
requirement of section 5 of the Regulations.
(2) "Taxed" within the meaning of Article 8, subsection 1, sentence
1 of the Law Concerning the Amendment of Taxes on Mineral Oils includes
those lubricating oils which were subject only to a conditional tax
liability in the year 1962. That is, an enterprise which for example
in 1962 only shipped re-refined products from its firm upon order is like-
wise entitled to receive subsidy payments.
(3) Used oils which originated from German and foreign shios in
German harbors as well as from ships from free ports and from the occupy-
ing forces count as generated within the Federal Republic.
(4) Use of re-refined products by a producer himself or the use of
re-refined products to produce other products in that same firm is not
entitled to subsidies. The temporary subsidy is expressly linked with
shipment from the producing firm. As is for example evident from Section
3 of the Mineral Oil Tax Law of 1964 this factual situation shipment
does not include use within a firm.
(5) Untaxed re-refined products or those shipped from the producing
firm uoon order are likewise eligible for subsidy.
(6) Lubricating oils in accordance with Article 8, section 1,
sentence 2 of the Law Concerning the Amendment of Taxes on Mineral
Oils are only eligible for subsidy if they are re-refined products, as
is evident from Article 8, section 1, sentence 1 of the law. A product
is still as a whole a re-refined product if in addition to re-refined
substances per se other substances (for example additives) up to a maxi-
mum of 5 percent by weight are included. If a product has more than 5
percent by weight of other substances it is as a whole no longer a re-
refined product and is therefore as a whole not entitled to subsidy pay-
ments. Mixing of other substances outside the producing firm does not
influence the eligibility for subsidy since only the condition and amount
of the product at the moment of shipment from the producing firm are con-
trolling.
- 211 -
-------
(7) Because of the small number of enterprises eligible for payment
and the provisional limitation to two years of the temporary subsidy I
am providing for a central printing of the forms for applying for certifi-
cation of subsidy rights and for grants, as well as for the record books.
(8) The central customs office shall request an investigation of
applications for payments by the auditing official responsible for the
firm of the applicant.
(9) The official of the auditing service certifies the result of
his investigation on the application and returns it to the central customs
offi ce.
(10) The central customs office determines the amount of the
temporary subsidy and requests the financial officer to pay the applicant
by way of his customs account. If the tax notices of the person entitled
to subsidy are submitted to a customs office the central customs office
shall send the payment request to the cashier's office of the customs
office which establishes the set-off.
(11) The temporary subsidy is to be booked under Chapter 6002,
Title 994. The budget funds are deemed to have been appropriated.
(12) Legal disputes are subject to the provisions of the Administrative
Court Regulations of January 21, 1960. The form giving information about
legal procedures is printed in the Federal Customs Gazette of 1960 at page
658.
(13) For the execution of repayments the provisions of the
Administrative Execution Law of April 27, 1953 apply.
(14) I request to be informed concerning issues of controversy
of large significance. By November 1 of each year the central customs
offices inform the upper financial administration, and by December 1 of
each year the upper financial administration informs me about issues
of controversy, special expenses, difficulties, and the experience with
investigations. I request that the number of firms entitled to receive
subsidy also be given. In the report filed on December 1, 1964, the
amount of payments paid between May 1 and September 30, 1964 are to be
indicated and in the report for December 1, 1965 the amount of payments
between October 1, 1964 to September 30, 1965 are to be given.
- 212 -
-------
APPENDIX C
THE EFFECTS OF WASTE OIL ON FRESHWATER AQUATIC LIFE
compiled by
Steven F. Hedtke
with contributions from
Frank A. Puglisi, Oilman D. Veith, John E. Poldoski,
Douglas W. Kuehl, and Lawrence F. Mueller
National Water Quality Laboratory
6201 Congdon Boulevard
Duluth, Minnesota 55804
Project ROAP 25AIC
Task 01
Program Element 1BA021
NATIONAL ENVIRONMENTAL RESEARCH CENTER
OFFICE OF RESEARCH AND DEVELOPMENT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORVALLIS, OREGON 97330
- 213 -
-------
ABSTRACT
This study was undertaken to assess the toxicity of waste oil
to freshwater aquatic organisms. A summary of the preliminary data
obtained during the initial six months of the study is presented in
this report.
The major organic component of the waste oil was found to be
saturated hydrocarbons (76 percent) while major inorganic components
were lead (1.9 percent) and zinc (0.1 percent). Equilibrating a
10 percent mixture of oil (v/v) with water produced a solution of
water soluble components containing 80 percent polar organic compounds,
4.4 mg/1 lead and 16 mg/1 zinc.
Acute mortality studies showed that the levels lethal to freshwater
fish ranged from 0.1 to 1.1 percent by volume total oil depending on
the species tested and the method of introducing the oil.
A chronic exposure of the water soluble fraction of waste oil
to the freshwater fish, Jordanella floridae, was conducted. The
"no effect" level, based on egg production and fry survival, was
estimated to be between 0.08 and 0.33 percent of the water soluble fraction
solution. Tissue residue analysis indicated that significant
accumulation of normal hydrocarbons, lead, zinc, and cadmium occurred.
- 214 -
-------
CONTENTS
Page
Abstract ii
List of Figures iv
List of Tables v
Acknowledgments vi
Sections
I Conclusions 1
II Recommendations 2
III Introduction 3
IV Materials and Methods 4
V Results and Discussion 10
VI References 57
- 215 -
-------
FIGURES
No. Page
1 FID Trace of Volatile Compounds in Waste Oil 12
2 FID Trace of Aliphatic Compounds in Waste Oil ^
3 FID Trace of Aromatic Compounds in Waste Oil 1^
4 Molecular Ion Plots of the First 10 Minutes
of the Aromatic Fraction Chromatogram 16
5 FID Trace of Acidic Compounds Found in Waste Oil ^3
6 Mass Spectra of Three Compounds in the Base
Wash of Waste Oil 20
7 FID Chromatogram of XAD Extract from Water
Soluble Fraction of Waste Oil 22
8 FID Chromatogram of the Hydrocarbon Residue in
the Exposed Fish 28
9 Chromatogram of Hydrocarbon Residue in NWQL
Jordanella Culture 29
10 GLC Analysis of Brine Shrimp 3-^
11 Relationship between N-hydrocarbons in Fish and the
Total Hydrocarbons in the Water 33
12 Correlation of Metals Residue in Whole Jordanella
floridae Tissue with Toxicant Concentration 35
- 216 -
-------
TABLES
No. Page
1 General Characteristics of the Selected Oil H
Composite
2 Major Volative Hydrocarbons on the Waste Oil 10
3 Major Aromatic Components in the Waste Oil 17
4 Summary of Aromatic Hydrocarbons in Waste 23
Oil and Water Soluble Fraction
5 Metals in Water Soluble Fraction Stock Solution 25
6 Summary of Residue Analysis for First 45 Days of 27
Jordanella Chronic Exposure to the Water Soluble
Fractions of Waste Oil
7 Metals Residues in Whole Jordanella floridae T.issues 34
8 Concentrations of Oil Measured During Acute and 37
Chronic Exposures as Determined by Lead and Zinc
9 Routine Chemical Analyses for Acute Test Waters 41
10 Survival, Growth, and Reproduction of Jordanella ^2
floridae in the Chronic Exposure
11 Thirty-day survival of one-day old Jordanella 43
fry with the Same and in other Exposure Test levels
12 Toxicity of Some Compounds Found in Waste Oil 46
(From the Toxic Substances List, 1973 ED., U. S.
Department of Health, Education, and Welfare,
Public Health Service, National Institute for
Occupational Safety and Health, Rockville, Maryland
20852)
- 217 -
-------
ACKNOWLEDGMENTS
The authors would like to thank the following National Water
Quality Laboratory personnel: Dr. G. Glass, Mr. J. Arthur, and
Mr. R. Spehar for their technical assistance during this project;
Ms. B. Halligan for performing routine chemical analyses for the
toxicity tests; and Mr. C. Stephan for his editorial comments.
- 218 -
-------
SECTION I
CONCLUSIONS
The waste oil studied contained about 76 percent saturated
hydrocarbons, ranging from 20 to 30 carbon atomn/molecule, 4
percent aromatic hydrocarbons comprised primarily of alkyl benzenes
and polynuclear compounds, and 4 percent polar compounds. Metals
present included lead (18,500 yg/gm), and zinc (1,350 yg/gm).
The fresh water soluble fraction of work oil tested was markedly
different from the oil in that it contained 80 percent polar compounds,
only 3 percent saturated compounds, and 14 percent aromatic compounds.
The metals found included zinc (16,000 vg/1), lead (4,400 vg/1)
and cadmium (60 yg/1).
The waste oil was essentially free of chlorinated compounds.
Short-term laboratory mortality tests indicated that the
approximate lethal level to freshwater fish was 0.1 to 1.1 percent by
volume total oil depending on species tested and the method of
introducing the oil.
A chronic "no effect" level, based on egg production and fry
survival, for the freshwater fish, Jordanella floridae was between 0.08
and 0.33 percent by volume of a water soluble fraction stock
solution. This corresponds to between 80 and 330 yl/1 total oil
as defined by experimental conditions.
Tissue residue analyses indicate that significant accumulation
of normal hydrocarbons, zinc, lead, and cadmium occurs. No
evidence of accumulation of aromatic hydrocarbons above the yg/gm
level was found.
219
-------
SECTION II
RECOMMENDATIONS
Toxicity information from the tests conducted in this study
suggest that a recommended safe level be between 80 and 330 yl/1
total oils. However, the chemical characterization of the waste
oil indicates the potential for damage due to lead exists at
concentrations less than 8 yl/1 total oil.
Studies on organisms other than fish, on fish flavor impairment,
and in field test conditions are necessary to determine if levels
below the "no effect" level for fish are hazardous.
The possibility of creating chlorinated hydrocarbons during the
effluent chlorination process and their effects on aquatic life
should be determined.
Studies should be conducted to determine present contamination
levels for waste oil in the freshwater ecosystem.
- 221 -
-------
SECTION III
INTRODUCTION
In recent years concern has been expressed over the realization that
each year as much as 500 million gallons of used crankcase oil may be
introduced directly into the environment with another 250 million gallons
disposed of in an unknown fashion (Bernard, 1971; Ostrander and Kleinert,
1973). Therefore, in the 1972 Amendments to the Federal Water Pollution
Control Act, the U. S. Congress requested EPA to study the waste oil
disposal problem. Since virtually no information existed for the
biological effects of waste oil, research in this realm was part of
their request. Waste oil has been defined for this study as
used crankcase oil.
Although little information existed on the disposal of waste oil,
some of the known uses which result in the introduction of oil into the
environment include: road oil use (estimated at 150-200 million gallons),
land disposal (estimated at 300 million gallons), and dumping in sewers
(estimated at 12 million gallons). It had been reported that as much
as 70% of the road oil used is lost due to runoff (Freestone, 1972).
This runoff was in the form of oil and oil-wet soil particles. The
oil might be as a surface slick, emulsified, or only the water
soluble fraction. The purpose of this study was, therefore, to
investigate the effects of waste oil as it might be introduced into
the environment. This was accomplished by determining acute and
chronic waste oil toxicity levels for fish, tissue accumulation
levels and the characteristics of the oil in its various forms to identify
potentital toxic components. The following report is an interim report
based on preliminary analysis of data available at report preparation.
A final report will be prepared upon completion of experimentation.
- 222 -
-------
SECTION IV
MATERIALS AND METHODS
Toxicant Preparation and Characterization
Two separate samples of used crankcase oil were obtained from
Arrowhead Refinery Company of Duluth, Minnesota. The oil was collected
from several gas stations, mixed and stored in 55-gallon drums. When
oil was required for specific tests, equal amounts were taken from each
sample and mixed.
Oil was introduced into the various biological tests either as an
emulsion, as a layer, or as the water soluble fraction. The oil-water
emulsions were prepared by blending oil and water at the required ratios
in a Waring Blender for two minutes. For layering, oil was gently
poured on top of the dilution water in the test containers. Solutions
of the water soluble fractions were prepared by pumping Lake Superior
water through oil at a 9:1 ratio for 18 hours. This mixture was
allowed to separate for 6 hours after which the aqueous phase was
remoyed and used as the soluble fraction stock solution. A new stock
solution was prepared weekly for chronic tests and every 4 days for
acute tests.
The oil and the water soluble fractions were characterized both for
comparison to other waste oil studies and to determine the possible toxic
components in the oil. Components characterized include physical,
metallic, and organic compounds.
The organic fraction of the waste oil was characterized in a prelimi-
nary manner by separating the compounds into volatiles, saturated
Mention of trade names or commercial products does not constitute
endorsement or recommentation for use.
- 223 -
-------
hydrocarbons, aromatic hydrocarbons, polar compounds, and solids. The
volatile compounds were isolated by stripping the oil with N2 and trapping
the vapors on a column of XAD-2 nonionic resin (15 ml). The non-volatile
components were further separated through chromatography on silicic acid
in which the oil (1 gm) was transferred to a 120 x 7 mm silicic acid
column and eluted sequentially with 12 mis of hexane, benzene, and
methanol to give the saturated, aromatic, and polar fractions, respectively.
The materials not eluted from the coiumn were presumed to be solids (particulates)
The saturated and aromatic chemicals were characterized in more
detail by GC/MS analysis. The saturated and aromatic mixtures were
separated on a 6f x 2 mm column containing 3 percent OV-101 and programmed
from50°C to 250°C at 4°C/minute. The classes of chemicals present
were assigned on a basis of the mass spectra obtained and/or GLC
retention data.
Additional analyses on the oil were performed by the U. S. Bureau
of Mines Bartlesyille Energy Research Center. Included were general
descriptive characteristics of lubricating oils and thirteen metals.
The organic components of the water soluble fraction stock solution
Were characterized by passing the water through XAD-2 resin columns and
subsequently eluting the adsorbed material with methanol or ether. The
data indicated that approximately 80 percent of the saturated and fluo-
rescent compounds were removed from the water. The extracts from the XAD
columns were impregnated on activated silicic acid and eluted with hexane,
benzene and methanol to determine major compositional changes between
the waste oil and the water soluble fraction. The resulting fractions were
examined in -more detail by GC/MS analyses discussed in the appropriate
section of this report.
Metal concentrations in the water soluble fraction toxicant were
measured by atomic absorption. Standard flame techniques (Perkin-Elmer,
1973) were employed for the analysis of cadmium, nickel, iron, manganese,
copper, lead, zinc and chromium. Flameless atomization methods (National
Water Quality Laboratory unpublished data) utilizing an HGA-2000 Graphite
Furnace (Perkin-Elmer), were also employed for the analysis of cadmium,
lead, molybdenum, cobalt, arsenic and selenium.
- 224 -
-------
The "dissolved" metal ion component of the soluble fraction was
determined by analyzing filtrate from membrane filtration (Millipore)
using various pore size filters. Experiments were also done to make
certain that contamination and absorptive effects from the filter were
not a problem.
Tissue residues for the various oil components were analyzed in
fish exposed to the water soluble fraction. Both organic and metallic
residues were investigated using the following techniques.
Because of the small size of the fish after 45 days of exposure,
the organic tissue residue analyses were performed on composite samples
from toxicity tests, blended with Na.SO,, and extracted with three 50 ml
portions of 25 percent CH_C12 in hexane. The combined extracts were
concentrated to 5 ml, centrifuged to remove particulates, and evaporated
to dryness in tared pans to determine the lipid content of the fish.
The "hydrocarbon residue" in the fish was operationally defined as
the residue which is stable to fuming H-SO,. This residue was obtained
by transferring the extract to a column containing 15 gm Celite 545
impregnated with 9 ml of fuming H^SO, (10 percent SO ). The residue
was eluted wi.th 200 ml hexane, evaporated to dryness, and weighed
with, a six-decimal balance. The residue was transferred to a centrifuge
tube and diluted to 3 ml for GLC analysis of electron capturing materials
and hydrocarbons.
To assure that the acid-Celite technique did not alter the results
of the hydrocarbon analysis, several samples were prepared for GLC
analysis with Florisil. A column of 20 gm dry Florisil was prepared
and the sample was eluted with 250 ml of hexane.
Fish tissue digestions for metal residue analyses employed a nitric
acid-perchloric acid digestion procedure (Leonard, 1971). Zinc,
cadmium and lead concentrations were measured by atomic absorption
as previously indicated.
Biological and Physical Test Conditions
Lake Superior water was used as the dilution water in all tests.
Temperatures in flow-through tests were maintained by mixing heated
- 225 -
-------
and ambient Lake Superior water, whereas temperatures were maintained
in static tests by placing all tanks in a water bath. All flow-through
tests were conducted with the water soluble fraction of the waste oil
using a modified 2-liter proportional diluter (Mount and Brungs, 1967;
Benoit and Puglisi, 1974).
In the acute tests duplicate concentrations of 5, 2.5, 1.25, 0.62,
and 0.31 and 0.00% by volume of the water soluble fraction stock solution
Were used. Since the stock solution was derived from 10% oil in water,
these concentrations correspond to a range from 0.50 to 0.00% in terms of
total oil. For comparison between tests, LCSO's will be given, when
applicable, both in terms of percent total oil and percent of the water
soluble fraction. The glass test containers were 36x22x26 cm deep and
held 14 liters. Test containers were randomly arranged and received
approximately 10 tank water volumes of toxicant solution per day. A
combination of Gro-lux and Duro-test fluorescent bulbs were used to
provide a constant 16-hour daylight photoperiod at 40+5 foot candles
measured at the water surface.
In the water soluble fraction chronic test, duplicate nominal
concentrations of 1.0, 0.40, 0.16, 0.064, 0.026 and 0.0% by volume of
water soluble fraction stock solution were tested. The glass and
silicon glue adult and fry test containers were 30x60x30 cm deep
holding 42.5 liters, and 30x38x30 cm deep holding 10.6 liters
respectively. A constant 16-hour daylight photoperiod of 100+15 foot
candles measured at the water surface and a flow rate of 6 tank water
volumes per day were used.
In the static acute mortality tests 30x38x30 cm deep tanks holding
12 liters were used with emulsified oil and the water soluble fraction tests.
For layered oil tests containers 30x24x24 cm deep holding 18 liters with
a baffle at one corner were used. The baffle was needed for aeration of the
tank without disturbing the floating oil. Fish were added after the addition
of oil to test containers In the tests with the water soluble fraction
and with emulsified oil and before the oil was added in the tests with
layered oil. Concentrations tested were 10.0, 5.0, 2.5, 1.25, 0.62,
- 226 -
-------
and 0.0% by volume stock solution for the water soluble fractions; 4.0,
2.0, 1.0, 0.5, 0.25 and 0.0% by volume of total oil for the layered oil
and 2.5, 1.23, 0.62, 0.31 and 0.0% by volume total oil for the emulsified oil,
Static and flow-through acute mortality tests were run with the
flagfish, Jordanella floridae and the fathead minnow, Pimephales promelas.
In all exposures organisms were held at test temperatures for at least
two weeks previous to testing. Static mortality tests with flagfish were
conducted with the water soluble fraction and emulsified oil using ten
four- to six-week old juveniles per test container. Temperatures were
maintained at 24jfl° C. A static test with Pimephales promelas was
also performed with layered oil using fifteen two-month old fish per
tank at 20° C.
Two flow-through acute tests with the water soluble fraction of
oil were conducted using fifteen four- to six-week old flagfish juveniles
per test container at 25 C and ten two-month old fathead minnows per
container at 20 C.
Mortalities for dissolved and layered oil acute tests were measured
at 0, 1, 3, 6, 12, and 24 hours and daily thereafter. Mortality was
determined by the lack of movement upon gentle prodding and dead fish
then removed. Since fish in the emulsified oil test could not be seen
due to the oil, all fish were removed after 96 hours and mortality
determined.
The chronic Jordanella toxicity test was conducted utilizing the
Recommended Bioassay Procedure for Jordanella floridae (Goode and Beane)
Chronic Tests (National Water Quality Laboratory Report, 1972). This
test can be summarized as follows:
a. fifty eggs were distributed in each tank for hatching.
b. Twenty of the surviving fry were raised until 30 days old
when they were thinned to 15 fish per tank.
c. At 5 weeks two spawning substrates were placed at the end
of each tank. When a male became territorial over each
substrate, the extra males and all but five females were
removed.
- 227 -
-------
d. Eggs deposited on substrates were counted and tested for
hatchability.
e. The mortality and growth of one-day old fry were determined
in. the same and different toxicant levels at which they
were hatched.
f. Chemical residues were measured in tissues of fish thinned
at various times during the test.
g. Survival, growth, eggs produced per female, and egg
hatchability were, the parameters used to determine effects.
Since lead and zinc organometallic compounds are added to lubricating
oils, the concentrations of these metals, as determined by flameless
atomic absorption spectroscopy, were used to monitor the test systems.
Samples for the chronic exposure were taken twice weekly from each tank.
Samples for acute exposures were taken several times per test.
Temperatures on all tests were checked daily while dissolved oxygen
w.as: measured in each test container with a YSI Model 51 Oxygen Meter
three times per week. Hardness, alkalinity, pH and acidity were
measured in 4 tanks each week for the chronic tests and twice during
acute tests according to Standard Methods for the Analysis of Water and
Wastewater (1971).
- 228 -
-------
SECTION V
RESULTS AND DISCUSSION
Toxicant Characterization
I. Characterization of Waste Oil
The waste oil was fractionated into volatile, saturated, aromatic,
polar, and particulate compounds. This section presents a summary of
the characterization of the selected test oil.
A. Composition of Major Fractions of the Test Oil (Table 1)
The selected waste oil was shown to contain approximately
three percent volatile chemicals by weight. The volatile
compounds trapped from the N,, were separated by GLC as indicated
by the chromatogram in Figure 1. GC/MS analysis of the volatile
fraction indicated that the major volatile components were
alkyl benzenes and naphthalenes. Table 1 summarizes the major
volatile compounds found.
Table 2. MAJOR VOLATILE HYDROCARBONS IN WASTE OIL
Type of hydrocarbons Number of isomers present
C alkyl benzene 3
C3 alkyl benzene *
C alkyl benzene 4
C,. alkyl benzene 5
naphthalene
methylnaphthalene 1
C alkyl naphthalene 2
- 229 -
-------
Table 1, General Characteristics of the Selected Waste Oil Composite
Waste Oil Characteristics Concentration on Measured Value
INSPECTION TESTS FOR LUBRICATING OILSa
SP. GR. (60/60°F) 0.906
Viscosity
A. SUS 100°F 290
B. SUS, 210°F 60.9
Viscosity Inoex 170
Carbon Residue (percent) U.3
Flash Point (°F) 138
Nitrogen (percent) 0.090
Sulfur (percent) 0.5*t
BS&W (Percent) 1
Pentane Insoluble (percent) 2
Antifreeze (percent) <0.1
Safonification N. lb.5
Gasoline Dilution 3.2
Total Acid No. 2.91
Total Base No. 2.06
Particulate (percent) 15.6
Pentane Insolubles (percent) 3.2
Coagulated Pentane Insoluble (percent) 11.1
Benzene Insoluble (percent) 1.^5
Coagulated Benzene Insoluble (percent) 1.85
CONCENTRATION OF METALS (ug/gm)a
Aluminum 15
Copper 18
Iron 220
Lead 18,500
Nickle 0
Silicon 17
Antimony 6
Vanadium 0
Sodium . 59
Barium 177
Calcium 688
Zinc 1350
Magnesium UlO
CLASSES OF ORGANIC COMPOUNDS*'
Saturated Hydrocarbons (percent) 76.6+1.0
Aromatic Hydrocarbons (percent) U.1+0.1
Polar Compounds (percent) 3.8+0.6
Volatile Hydrocarbons (percent) 3-2
aAnalyses conducted at Bartlesville Energy Research Center, U.S. Bureau of Mines.
Analyses conducted at the National Water Quality Laboratory.
- 230 -
-------
Figure 1. FID Trace of V olat^le Compounds in TJaste Oil.
(Programmed from 50°C. to 100°C.)
ro
oo
I I
10
20
T i na '' Mi nu t e s ]
-------
The nonvolatile components of the w.aste oil were fractionated on
silicic ac5.d and shown to contain 76.6 + 1.0 percent saturated
hydrocarbons, 4.1 + 0.1 percent aromatic hydrocarbons, 3.8 + 0.6
percent polar compounds, and 15.6 + 2.0 percent particulate
materials. The particulate fraction contained solids presumed
to be taetal particles which settled slowly in the waste oil
but w.ere more rapidly removed when the oil was diluted with two
volumes of hexane to decrease the viscosity.
B. Saturated Hydrocarbons
The saturated hydrocarbons comprised the largest fraction of
the waste oil selected for this study (76 percent). Figure 2
presents a chromatogram of this fraction which shows that the
fraction consists of a complex mixture of normal and non-normal
hydrocarbons. Because of this complexity, the individual
components cannot be separated by packed GLC columns and
detailed identification of the mixture is precluded. However,
the range of molecular size of the hydrocarbons as expressed
by carbon number can be estimated by the GLC retention time
relative to normal hydrocarbon standards. As indicated in
Figure 2, carbon numbers of the major saturated hydrocarbons
range from about 20 to 29 carbon atoms per molecule, with
distribution centering around the 24 carbon molecules.
C. Aromatic Hydrocarbons
The waste oil contained only four percent aromatic hydrocarbons.
Figure 3 is a chromatogram of the aromatic fraction and, in
contrast to that of the saturated hydrocarbon fraction, a
series of discrete components were resolved by GLC. Figure 4
illustrates the use of computer-reconstructed mass chromatograms
of the early-eluting aromatic components. The mass intensities
plotted as a function of elution time (spectrum number, i.e.
seven seconds per spectra) are M/e 106, 120, 134 which are the
molecular ions for C~, C~, and C, alkylbenzenes, respectively.
These GC/MS techniques produced tentative identifications for
approximately 30 aromatic hydrocarbons in the aromatic fraction
- ?32 -
-------
Figure 2. FID Trace of Aliphatic Compounds in Waste Oil
Solvent
26
30
Time (Minutes)
160°C
I
10
225°C
I
20
- 233 -
-------
Figure 3. FID Trace of Aromatic Coumpounds in Waste Oil
ro
CO
50°C
100°C
200°C
10
Time
'20 (Minutes)
'30
-------
I
I-O
in
t '' • i
1C 20 '3D «Q
1- ISSUV t^CL 73ilS GIL IS-3-QD2
S3 S3
1,IMT=iCOO
Figure A. Molecular Ion Plots of the First 10 Minutes of the Aromatic Fraction Chromatogram.
-------
of the waste oil. Table 3 presents a list of these chemicals
and the number of isomers of each type identified.
Table 3. MAJOR AROMATIC COMPONENTS IN THE WASTE OIL
Number of
Type of hydrocarbons isomers present
ethylbenzene 1
C, alkyl benzene 3
C^ alkyl benzene 4
C,. alkyl benzene 4
naphthalene
methylnaphthalene 2
C_ alkyl napthalene 2
C_ alkyl napthalene 2
phenanthrene
methylphenanthrene 2
C2 alkyl 2
C3 alkyl 2
dihydrodimethylphenanthrene -
dihydrodimethylindene -
diphenylmethane
ethylstyrene
D. The polar chemicals are generally thought to be those chemicals
which contain atoms other than carbon and hydrogen in the
molecule. Since the oil contains about 1.9 percent lead and
organo-lead components such as lead dialkyldithiocarbamates
are often used as motor oil additives in concentrations of one
to five percent, it is probable these additives comprise a
substantial part of the polar compounds and an investigation
of possible organo-lead compounds has begun.
- 236 -
-------
Figure 5. FID Trace of Acidic Compounds
Found in Waste Oil
Time Minutes
- 237 -
-------
Other polar chemicals are likely to be the acidic and phenolic
oxidation products which form in the internal combustion engine.
A study of acids and phenols was begun by extracting those
classes of chemicals from the oil with strong base. The
extracted chemicals were converted to methyl esters using a
variety of methylating reagents and examined by GLC and GC/MS.
Figure 5 is a chromatogram of the methylation products of the
waste oil which indicates that there are nine major and six minor
esters in this fraction. Figure 6 shows several spectra of the
components of the ester mixture which indicate that the
components have similarities and may represent a homologous
series. For example, all components have odd masses for
predominant ions and it is likely the heaviest major ion
is not the parent ion. Moreover, the heaviest major ion in the
last two spectra differ by 14 mass units which suggests two
similar compounds differing only by one methylene group (one
carbon number).
II. Characterization of the Water Soluble Fraction Stock Solution
Composition of the water soluble fraction was found to be
considerably different from that of the waste oil. The waste
oil contained 76 percent saturated hydrocarbons but the water
soluble fraction stock solution contained only 3.2 percent
saturated hydrocarbons. Conversely, the polar components
accounted for only 4 percent of the waste oil but 82 percent of
XAD-2 extractable residue in the water soluble fraction. The
aromatic hydrocarbon content increased from 4.1 percent in the
waste oil to 14.5 percent in the water soluble fraction.
Although the magnitude of changes in composition could not be
predicted becasue of the complexity of the mixtures, the general
trend of the more water soluble components being enriched in
the water soluble fraction is expected.
- 238 -
-------
'- 'j *-
'*«-;
so-
so.:
301
»Vr^r^M^
! ' I
i co
NUCi. 73077 «99+l 00+10!
Trr"!"
aoc
STEP
SSD
:oo
?o
80-
70
to
so
td-
30-
EO
'
200
Figure 6.
Mass Spectra of Three
Compounds in the Base Wash
of Waste Oil.
STEP MfiSS=i» I/E'S
fcCJ
5C-!
1C-5
-fT-1
0
i no
0i. LM
£•00
S1LC II
- 239 -
-------
A. Saturated Hydrocarbons
It was anticipated that the mixture of saturated hydrocarbons
would behave similar to many other lipophilic compounds in the
bioassay system in that the mixture would be partitioned in the
fish lipids in approximately the same proportions occurring in
the test water. Therefore, the saturated hydrocarbon fraction
in the wastes was examined by GLC to estimate a total saturated
hydrocarbon concentration and possible compositional changes.
Using the saturated hydrocarbon fraction from the waste oil as
a standard, the concentration of the total saturated hydrocarbon.
concentration in the bioassay system should be 0, 2.5, 4.9, 10,
41 and 94 ug/1 in the six tanks. The composition of the saturated
hydrocarbon mixture was examined by GLC and shown to be slightly
enriched with respect to the normal hydrocarbons. Figure 7 is a
chromatogram of the mixture which shows that the normal hydro-
carbons are readily discernible in the mixture in the water,
whereas they could not be distinguished from the non-normal
compounds in the oil. GC/HS analysis confirmed the FID
chromatogram in Figure 7 and verified that the overal distribution
of hydrocarbons (carbon number range and mode) was similar to that
in the waste oil.
B. Aromatic Hydrocarbons
The percentage aromatic hydrocarbons increased from 4 percent in
the oil to 14 percent in the stock solution. The aromatic
fraction of the XAD residue from the water was examined by
GC/MS to determine possible compositional changes. The data
indicated that although there was a three-fold enrichment of
aromatic compounds in the stock solution, the concentration of
the higher molecular weight compounds (three ring polyaromatic
hydrocarbons) was diminished to below the detectable limit in
this preliminary analysis. The major aromatic components in
the water included the same alky1 benzenes and naphthalenes
as the waste oil. Table 4 compares the major components in the
stock solution with, those in the waste oil.
- 240—
-------
Figure 7. FID Chromatogram of XAD Extract From Water
Soluble Fraction of Waste Oil
- 241 -
-------
Table 4. SUMMARY OF AROMATIC HYDROCARBONS IN WASTE OIL AND WATER SOLUBLE FRACTION
Aromatic compounds in waste oil
Compound No. of isomers
Aromatic compounds in water soluble fraction
Compound No. of isomers
0,2 alkyl beneene 3
Ca ^Ikyl benzene 3
Cif alkyl benzene 4
GS alkyl benzene 4
naphthalene -
methyl naphthalene 2
C2 alkyl naphthalene 2
GS alkyl naphthalene 2
phenanthrene
methyl phenanthrene 2
G£ alkyl phenanthrene 2
Ca alkyl phenanthrene 2
dihydrodimethyl-
phenathrene -
dihydrodimethyl-
indene
diphenyl methane -
ethyl styrene
C2 alkyl benzene
GS alkyl benzene
Cif alkyl benzene
GS alkyl benzene
naphthalene
methyl naphthalene
dimethyl indene
3
2
2
3
- 242 -
-------
C. Polar Compounds
The polar fraction of the water soluble fraction stock solution
has not been examined extensively, but has been analyzed for the
possible presence of chlorinated industrial compounds such as
solvents, PCB's or related chemicals. A PCS mixture similar to
Aroclor 1254 (Monsanto) was found in the waste oil but was less
than in the stock solution. A study of the possibility that the
major components in the polar fraction are organic lead additives
to the oil is planned. Since the oil contains 1.9 percent lead,
the percent of a lead additive such as lead oleate would be
approximately 4.0. percent. The measured polar fraction of
the oil was 3.8 + 0.6 percent, which suggests the residue may
be an organo lead compound such as the oleate. Moreover, the
experiments using the XAD resins to remove organic material from
the stock solution showed that greater than 90 percent of the
lead in the stock (^ 4.4 mg/1) was removed by the XAD column
indicating an organic form of lead.
D. Metals
Results of preliminary screening of two water soluble fraction
stock samples for several metals are given in Table 5. Compari-
sons of the two methods for cadmium and lead analyses on tissue
and water samples agreed to within experimental error, which was
typically <_ + 10% relative. Mercury was analyzed by a
conventional flameless vapor technique (National Water Quality
Laboratory unpublished data; Hatch and Ott, 1968). Judging
from past data on water quality and considering that the nominal high
exposure concentration was onepercent it was predicted that
likely metals to be of concern were cadmium, lead and zinc.
This evaluation prompted further studies to be focused more
on these metals.
Filtration studies with the stock solution indicated that greater
>_ 90% of the lead, zinc and cadmium was in the "dissolved fraction".
The term "dissolved fraction" refers to components 0.05 microns
- 243 -
-------
Table 5. METALS IN WATER SOLUBLE FRACTION STOCK SOLUTION
Metal
Mercury
Cadmium
Molybdenum
Cobalt3
Arsenic
Selenium3
Chromium
Nickel
Iron
Manganese
Copper
Lead
Zinc
Concentration
ug/1
< 0.1
60 + 2
< 200
0.4 + .4
< 300
< 100
< 140
< 100
< 100
< 100
< 100
4400 + 200
16000 + 1000
Atomic Absorption
method
Flameless vapor
Flameless
Flameless
Flameless
Flameless
Flameless
Flame
Flame
Flame
Flame
Flame
Flame
Flame
JDoes not necessarily include any possible contribution from a
highly volatile metal fraction.
- 244 -
-------
and smaller. However, due to the fact that there is essentially
no difference (< 10%) between the unfiltered water soluble fraction and
the various pore size filtrates, in addition to the fact that
Q.05 niicrons is in the middle of the colloidal range, it is
possible that the major portion of these metals is in true
solution. Further studies of possible metal ion complex-
states would be a valuable characterization.
I. Residues in Fish Exposed to Water Soluble Fractions of Waste Oil
The residues in the exposed fish were examined for hydrocarbons
by determining the weight of chemicals which are stable to fuming
H2S04 as wel1 as ky those evidenced by GLC. The results of these
analyses together with the PCB analyses are presented in Table 6.
The data indicate that there is some reduction of weight of the
fish sampled after about 45 days of exposure in that the average
weight of all control fish was about 330 mg but the average weight
of the fish from the highest concentration of the stock solution
(1.0 percent nominal) was only 220 mg. The fish from the highest
test concentration also contained 28 percent less total
lipids than the control fish, although there is not a discernible
trend at the other exposure concentrations.
The range of PCB concentrations expressed as Aroclor 1254 for
all fish, was 0.43 to 0.66 ug/gm. These concentrations are comparable
to other control fish at NWQL and likely results from minor food
and/or water contamination rather than from the small amount of
PCB's in the oil. No relationship between exposure level and PCB
residues exists for this oil.
The hydrocarbon residue stable to fuming H SO, ranged from 200
to 1000 ug/gm; however, the concentration of this class of
chemicals was highly variable and the exposure to the water
soluble fractions did not appear to have effect on the concentration
of stable hydrocarbons in the fish. Equally unanticipated was the
fact that the fish from the control tanks contained approximately
300 -ug/gm of these stable hydrocarbons. Thus, more detailed studies
of the. hydrocarbon residue were necessary to adequately assess the
- 245 -
-------
CHRONIC
THE HATER SOVJ8LE
Measured water concentration
of water soluble 'fractions
(t cf stock solution)
fish
45-day pxp.inure
Control
Control
Control
Control
0.02
0.02
0.02
0.02
0.04
0.04
0.04
0.04
0.08
1 0.08
£ 0.08
cn
0.34
0.34
0.77
0.77
Eggs until
hatched
0.77
0.77
Control
Control
0.08
Control
Control
0.08
0.34
Control
Control
0.34
Control
0.77
0.77
0.08
0.34
0.08
0.34
Number of
fish in
composite
16
20
14
9
18
14
15
16
15
14
10
16
IS
17
17
15
7
12
17
Mean weight
dtrn) (S.E.l
0.32(0.01]
0.27(0.02]
0.31(0.04]
0.42(0.04]
0.26(0.02]
0.38(0.04]
0.33(0.02]
0.23(0.02]
0.25(0.03]
0.28(0.03]
0.36[0.03]
0.29(0.03]
0.27(0.02]
0.30(0.02]
0.26(0.02]
0.25(0.02]
0.31(0.04]
0.22(0.02]
0.21(0.02]
Llpid
(percent)
3.7
4.3
5.5
5.2
6.7
7.1
5.6
6.4
6.7
6.5
6.5
6.9
6.5
4.1
6.5
5.7
6.5
3.5
3.2
PCBs
A-1254
(ug/gm-vet)
0.43
0.50
0.45
0.66
0.57
0.45
0.45
0.52
0.64
0.74
0.58
0.60
0.44
0.60
0.65
0.44
0.44
*
PCBs
A-1254
(ug/gm-lipid)
11.6
*
9.1
8.6
9.8
8.0
8.0
7.0
7.8
9.8
11.4
8.4
9.2
10.7
9.2
11.4
6.8
12.6
*
Hydrocarbon
residue9
(ug/gm-vet)
310
*
340
230
1,000
340
220
510
400
510
290
330
630
200
340
390
280
570
*
Hydrocarbon
residue*1
(ug/gia-llpld)
8,400
*
6,100
4,400
14,900
4,800
3,900
8,000
6,000
7,800
4,500
4,800
9,600
4,900
5,200
6,800
4,300
14,500
*
N-hydrocarbonb N-hydrocarbon
(ufi/em-wet) (ug/cm-lipid)
0.29
0.26
0.43
0.33
0.77
0.77
0.18
1,94
1.24
1.64
0,29
1.10
1.94
1.14
1.61
1.61
0.44
0.37
0.62
7.8
6.0
8.7
6.3
11.5
10.8
3.2
13.3
13.5
25.2
4.5
15.9
29.3
27.8
24.8
28.2
6.S
11.6
17.7
Hydrocarbon residua is defined as the residue which is stable to fuming H.SO,
b »
estimated K-hyurocarbons • (I Peak height of N-hydrocarbons in sample) X ug/nm for pentaeosane internal standard. Although this term represents a
relative ir-asa, the upper bound for the concentration of N-hydrocarbons is the hydrocarbon residue. There Is no discernible relationship between the
hydrocarbon residue and the relative N-hydrocarbon residue due, in part, to non-normal hydrocarbons from the brine shrimp food.
No data - these samples prepared by Florlsll cleanup for N-hydrocarbon analysis.
-------
Figure 8. FID CHROMATOGRAM OF THE HYDROCARBON RESIDUE
IN THE EXPOSED FISH
Solvent
Time
- 247 -
-------
Figure 9. CHROMATOGRAM OF HYDROCARBON RESIDUE
IN NWQL JORDANELLA CULTURE
t
-------
relationship of the hydrocarbons in the water and those in the
fish.
The residues were anlyzed by GLC in an effort to better quantitate
the hydrocarbon residues. Figure 8 is a chromatogram of a typical
fish extract and shows that the hydrocarbon mixture in the fish
bears little resemblance to that in the water (Figure 7), and
that a remarkable enrichment in the normal hydrocarbons occurred.
The distribution of the normal hydrocarbons (i.e., distribution of
carbon numbers) is essentially the same as that in the toxicant
stock solution; however, the complex mixtures of branched chain
hydrocarbons and polynuclear aromatic hydrocarbons are either
absent or greatly diminished.
The usual group of compounds eluting with the C_,- hydrocarbons
suggested small amounts of branched compounds but the contribution
of this group to the total residue was not consistent among the
fish and had no relationship to exposure level. It was this group
of compounds which undoubtedly made the earlier hydrocarbon residue
determination meaningless. Fish from the NWQL culture stock which
are totally isolated from the waste oil bioassay were analyzed to
determine if similar stable compounds were present in this species
of fish. Figure 9 is a chromatogram of the culture stock fish
which shows the presence of the unidentified group of chemicals
as well as small amounts of normal hydrocarbons. These findings
were confirmed by GC/MS; however, the composition of the mixture
has not yet been identified.
The similarity of residues in these fish from two different
sources suggests the compounds are of biogenic origin or that there
was a common source of contamination. To investigate the latter
possibility, the brine shrimp which is the primary food was analyzed.
Figure lOa is a FID chromatogram of the shrimp extract showing the
presence of the components common to the two different groups of
fish. Figure lOb is a computer reconstructed chroma to graph from
the GC/MS analysis confirming the presence of the unknown group,
- 249 -
-------
Figure 10. GLC ANALYSIS OF BRINE SHRIMP
30000-
20000-
1 0000
B. GC/MS analysis
reconstructed chromatogram
s
p j. . .,., I .... ,,r , ,„ ,,,,,,„!„, ,,.,,T.r i . r,r i
0 50
SPECS i - eot Ln NWQL
. j , ,, „ ,, .,„ , .,,„„, .„.„ , . „ | „ , . ! „ ..„ ! ,. . ....... ,,.,,„ ,,,„ | 99
ICO ISO 800
BRINE SHRIMP
A. FID analysis
25
- 250 -
-------
but indicating that the mixture of normal hydrocarbons detected
by the M/e 99 plot is not present in the brine shrimp.
The problem of distinguishing the hydrocarbons in the fish
tissue originating from the waste oil toxicant from those from
other sources was remedied by determining the concentration of only
the normal hydrocarbons in the fish. Because the residue involves
many normal hydrocarbons, the estimate was made (Table 6) by
strnmarizing the peak heights of the major normal hydrocarbons
and calculating an equivalent mass using pentacosane (the median
hydrocarbon in the distribution). This estimate of normal hydro-
carbons appears in Table 6 expressed as ug/gm on a wet tissue
basis and on a lipid basis.
The dependence of the normal hydrocarbon residue on the concen-
tration of saturated hydrocarbons in the water is demonstrated in
Figure 11. The linear line was drawn through the data, neglecting
the outlying points and assuming the fish have reached a steady
state with respect to the uptake and elimination of the hydrocarbons.
The slope of the line is approximately 2,000 which is the bioaccumulation
factor expressed as normal hydrocarbons in fish to total saturated
hydrocarbons in water. This factor is much smaller than other lipophilic
chemicals such as pesticides (& 10 ); however, the estimated factor
for normal hydrocarbons in the fish must be related to normal
hydrocarbons in the water to be directly comparable. This has not
been achieved because of the difficulty in quantitatively separating
normal hydrocarbons from branch hydrocarbons with chemical techniques.
A summary of metal tissue residue analyses of whole fish for
lead, zinc and cadmium is given in Table 7 and Figure 12. Percent
recoveries for known amounts of metal added to 0.02 - 0.3 gm
fish, samples were generally 100 + 15% for cadmium, lead and zinc.
Reagent blank values were generally below those of the sample by
a factor of 10 to 1,000. Samples were reported "less than" if
the reagent blank was greater than or equal to one-half the sample
value.
- 251 -
-------
Figure 11. RELATIONSHIP BETWEEN N-HYDROCARBONS IN FISH AND THE TOTAL
HYDROCARBONS IN THE WATER.
po
ui
ro
•rl
a
(0
•H
14-4
a
•H
a
o
•g
n)
o
o
it
30
25
20
15
10
This point neglected in line
4 6 8 10
Saturated hydrocarbons in water (ug/1)
12
-------
Table 7. METALS RESIDUES IN WHOLE JORDANELLA FLORIDAE TISSUES
Measured
toxicant Exposure
concentration time
(%) (days)
Control 30
75
0. 015 30
75
0.33 30
57d
0. 80 30
64b'd
Metal residue
(ug/gram, dry wt.]
Lead Cadmium
<1.3 0.11 + .03
1.4°+ .2 0.30C + .03
1° + 1 0.15° + .04
1.3° + .2
25+4 1.1 + .2
22+2 0.92 + .2
40C + 4 1.2C + .1
50 + 10 1.3 + .2
>
Zinc
119
99C
146
102
187
143
256
291
± n
+ 10
c + 15
c + 10
± 18
+ 15
C + 25
± 25
o
Averageof atleast duplicate digestions of a two-fish composite per digestion.
Average of three 64-day samples and one 75-day sample of twx>-fish composits.
Q
Based on a single digestion of a two-fish composite.
Value plotted as a 75-day exposure.
- 253 -
-------
IN ™OLE•
ro
2
50 r
Lead
1.0
2.5 r
8 - 75-day exposure
• - 30-day exposure
Cadmium
2.0 -
500 .-
400 _
Zinc
300 -
0.5 1.0 0
Percent Toxicant Concentration
1.0
-------
Results correspond to essentially two exposure times and
three different exposure concentrations plus controls. From the
data, it is obvious that all three metal residue levels are
substantially higher for both exposure times and the 0.75% and 0.31%
exposure concentrations. For lead and zinc, residue levels vary
almost linearly with concentration. However, with cadmium there
appears to be a leveling off effect. For all three metals there
appears to be little difference in residues between 30-day and
75-day exposure fish. If one assumes that an equilibrium has been
attained, the corresponding dry weight bioaccumulation factors for the
On O
longest exposed fish are 1.5 x 10 , 2.9 x 10 and 1.6 x 10 for lead,
cadmium and zinc, respectively. This bioaccumulation is in direct
accord with past residue data on cadmium and lead (National Water
Quality Laboratory unpublished data), however, exact comparisons
were not made due to some experimental procedural differences.
Biological Tests
The 96-hour LCSO's for the static tests were as follows: water
soluble fractions with Jordanella floridae, 3.8% by volume of water
soluble fraction stock solution (0.38% by volume total oil) and layered
oil with Pimpehales promelas, 1.1% by volume total oil. The 96-hour
LC50 for emulsified oil was .037% by volume total oil. The
96-hour LC50's for flow-through tests with water soluble fractions were
1.0% and 1.6% by volume of stock solution (0.1 and 0.16 percent by
volume total oil) for Jordanella and Pimephales, respectively. LCSO's
were estimated for this report by straight line graphical interpolation
as described in Standard Methods for the Examination of Water and
Wastewater (1971). Estimations of LCSO's were made using pooled
mortality data from duplicate exposure levels. Variations between
duplicate tanks in acute tests based on lead analyses were 6% or less
(Table 8). Since the oil was added volumetrically in the static tests,
it was felt that nominal concentration was acceptable accuracy for
calculating LCSO's.
- 255 -
-------
Table 8. CONCENTRATIONS OF OIL MEASURED DURING ACUTE AND
CHRONIC EXPOSURES AS DETERMINED BY LEAD AND ZINC
A. Water soluble fraction flow-through tests with Jordanella
Floridae and Pimephales promelas.
Nominal test
concentration
(in % of stock
solution)
5.0
5.0
2.5
2.5
1.25
1.25
0.63
0.63
0.32
0.32
0.00
0.00
Stock solution
(yg/1)
Measured soluble
(in %
Leada
Mean
4.54 +
4.56 +
2.21 +
2.25 +
1.05 +
0.99 +
0.54 +
0.55 +
0.25 +
0.23 +
0.004 +
0.004 +
6,650 +
.44
.32
.20
.11
.08
.15
.03
.04
.01
.02
.005 0
.004 0
974 5
fraction oil concentrations
stock solution)
Range
4.05-5.11
4.33-5.11
1.90-2.19
2.12-2.34
0.95-1.12
0.78-1.12
0.49-0.57
0.49-0.58
0.24-0.25
0.20-0.25
.000-0.009
.010-0.000
,670-8,180
Zincb
4.63
4.69
2.20
2.30
1.10
1.09
0.59
0.60
0.28
0.28
0.00
0.00
24,700
Five measurements.
One measurement only
- 256 -
-------
B. Layered oil acute static test with
Jordanella floridae.
Measured lead
Nominal concentration (yg/1)
(% oil by volume) after 5 days
4.0 919
4.0 881
2.0 675
2.0 713
1.0 478
1.0 497
0.50 350
0.5 350
0.25 217
0.25 211
0.00 3
0.00 0.0
- 257 -
-------
C. Water soluble fraction chronic test with Jordanella florldae.
ro
en
00
Nominal concentration
(% of stock solution)
1.0
1.0
0.4
0.4
0.16
0.16
0.064
0.064
0.026
0.026
0.00
0.00
Stock solution
Measured lead concentration
(wg/D
X
37.0 + 8.3
38.7 + 8.5
16.0 + 3.9
15.5 + 4.2
4.50 + 1.94
4.22 + 1.47
1.56 + .467
1.48 + .346
.770 + .340
.706 + .237
.187 + .189
.147 + .141
4670 + 750
Range
22.7-56.0
24.8-55.1
7.33-23.4
7.22-23.8
2.68-11.8
2.52-8.42
1.03-2.65
0.98-2.54
0.30-1.97
0.32-1.29
0.01-0.64
0.01-0.60
3440-6610
Number
analysis
23
21
22
20
22
21
21
20
22
21
23
21
30
% Stock solution
based on X lead
concentration
0.792
0.829
0.343
0.332
0.096
0.090
0.033
0.032
0.016
0.015
0.004
0.003
Total oil
required
792
829
343
332
96
90
33
32
16
15
4
3
Based on stock solution prepared from 10% oil in water.
-------
The difference between the layered and dissolved oil acutes may
be a matter of solubility rate. The dissolved oil tests began with
the toxic compounds in the water. However, the amount of toxic
compounds in the water from an oil layer is at least partially a
function of oil and water contact time. Thus in a four day period,
all the toxic components may not have leeched into the test water.
This also can account for the non-linear relationship of nominal
concentration and lead concentrations in the layered oil test.
Additional factors could be a delay in response of the fish to the
toxicant and the loss of volatile components due to aeration.
The results of the routine chemical analysis for acute tests are
reported in Table 9. In general, the addition of waste oil caused a
lowering of pH and dissolved oxygen concentration and an increase in
acidity. The dissolved oxygen concentration was greater than 60%
saturation in all tests except the high concentration in the water
soluble fraction static. At this concentration, the dissolved oxygen
concentration dropped to 53% saturation.
Since the chronic exposure was not completed at the time of the
report preparation, complete analysis of the lead monitoring data has
not been presented. The data available is reported in Table 8. Results
of routine chemical analysis for the chronic test, however, were not
available upon report preparation.
Preliminary biological data available from the Jordanella chronic
test are reported in Tables 10 and 11. The egg production and fry
transfer data suggests that the "no effect" level is between 0.08 and
0.33 percent by volume of the water soluble fraction stock solution.
Since the stock solution is derived from 10% oil in water, the effect
level, assuming total removal of soluble components from the oil, is
approximately 0.031% by volume or 310 yl/1 total oil. Using this
extrapolation sets an upper boundary of acceptable total oil levels.
An estimate of the lower boundary may be made by calculating the
quantity of oil required to produce the concentration of lead previously
found to be chronically toxic. Assuming total availability of the lead
in the oil (18,500 mg/1) and an effect level of 125 yg/1 lead (NWQL report,
in preparation), the effect level for oil would be 8 yl/1.
- 259 -
-------
Table 9., ROUTINE CHEMICAL ANALYSES FOR ACUTE TEST WATERS
ro
en
o
Chemical
parameter
PH
Day 1
Day 4
Acidity
(mg/1)
Day 1
Day 4
Hardness
(mg/1 as CaCO )
Day 1 J
Day 4
Alkalinity
(mg/1 as CaCO.)
Day 1 J
Day 4
Layered oil static
test with Pimephales
(% oil)
4.0
7.56
7.45
2.45
3.43
46
46
43
42
0.0
7.86
7.80
1.47
1.96
45
47
45
44
Water soluble
fraction static
test with Jordanella
Water soluble fraction
flow through tests a
with Jordanella and Pimephales
(% stock solution)
10.0 2.5
7.43 7.52
7.28 7.48
3.43 2.45
6.32 3.43
46 46
46 45
43
42
0.0
7.79
7.80
1.96
1.96
43
44
45
45
5.0
7.47
(4)
4.66
(4)
47
(3)
43
(3)
(% stock solution)
2.5
7.61
(1)
6.37
(1)
47
(1)
43
(1)
1.25
7.56
(2)
2.74
(2)
45
(2)
43
(2)
0.62
7.71
(3)
2.61
(3)
45
(3)
43
(3)
0.0
7.76
(3)
1.96
(3)
44
(3)
43
(3)
clean value (number of samples)
-------
Table 10. SURVIVAL, GROWTH, AND REPRODUCTION OF JORDANELLA FLORIDAE IN THE CHRONIC EXPOSURE
I
ro
Nominal oil
concentration
(% stock)
1.00
1.00
0.40
0.40
0.16
0.16
0.064
0.064
0.026
0.026
0.00
0.00
Number
alive
5
5
4
4
5
3
5
5
6
5
6
5
Females
Mean
weight
(gm)
0.4321
0.8597
0.8455
1.2285
0.9278
0.8562
1.0773
1.4393
1.0162
0.9018
1.1021
0.9574
Mean
length
(cm)
2.4
3.1
2.8
3.2
3.1
3.0
3.2
3.5
3.2
3.1
3.4
3.2
Number
alive
3
2
3
2
2
2
2
2
2
2
2
2
Males
Mean
weight
(gm)
0.9786
1.3074
0.8642
2.9183
2.1099
2.0118
1.6142
1.4990
1.7650
1.9655
2.1533
2.1380
Hatchabilitv
Mean
length
(cm)
3.0
3.4
3.0
4.5
4.1
4.0
3.7
3.6
4.0
3.9
3.8
4.2
Total
eggs
produced
3
53
110
5
973
603
2073
1424
1075
827
1957
1158
Eggs
per
female
0.6
10.6
27.5
1.25
194.6
201.0
414.6
284.8
179.2
165.4
326.2
231.6
Range
% hatch
—
67
—
28-100
43-76
46-89
32-82
38-92
38-76
18-96
28-76
Mean
%
hatch
—
67
—
58.3-
61.7
60.4
59.0
68.6
57.3
46.5
50.8
Number
Tests
0
0
1
0
9
3
15
9
11
6
8
5
-------
[able 11. THIRTY-DAY SURVIVAL OF ONE-DAY OLD JORDANELLA FLORIDAE FRY WITHIN
THE SAME AND IN OTHER EXPOSURE TEST LEVELS
Nominal concentration Nominal concentration
for source of fry for exposure to fry
(% stock solution) (% stock solution)
0.00 1.0
0.4
0.16
0.064
0.026
0.00
0.026 1.00
0.40
0.16
0.026
0.064 1.00
0.40
0.16
0.064
0.16 1.00
0.40
0.16
0.026
0.40 1.00
0.40
0.064
1.00 1.00
0.16
0.00
Mean %
survival
0.0
1.7
47.5
86.7
100
73.8
1.25
0
23.3
79.2
0.8
53.3
81.0
78.6
24.3
66.7
76.0
95.0
93.3
83.3
92.5
77.5
97.5
92.5
Range %
survival
0-0
0-6.7
20-75
80-93.3
100-100
40-100
0-5
0-0
6.7-53.3
45-100
0-5
40-80
78.6-83.3
45-100
0-86.7
10-100
60-90
95-95
93.3
65-95
90-95
60-95
95-100
85-100
Number
tests
3
4
2
2
2
8
4
5
3
6
6
3
2
6
5
3
5
2
1
3
2
2
2
2
- 262 -
-------
The fry survival data indicates that exposures of eggs allow the
resultant fry to survive in some toxicant concentrations that are
lethal to fry which hatched from unexposed eggs. Exposures of eggs
to levels greater than 0.016 and 0.03% are necessary for fry survival
in 0.33 and 0.81% by volume stock solution, respectively. At the 0.33
and 0.81% levels, however, reproduction was also inhibited, limiting
the fish population at those concentrations to one generation.
A review of the identified compounds in the water soluble fraction
stock, previous toxicity data, and tissue residue analysis, suggest
that the metals zinc, lead, and cadmium probably account for the
toxicity in the tests reported here. Chronic no effects levels, based
on egg production, for zinc with Pimephales promelas in hard water
(Brungs, 1969) and Jordanella floridae in soft water (Spehar, report
in preparation) have been reported as less than 180 and 139 yg/1,
respectively. In addition, Spehar (report in preparation) found that
the 30-day LC50 for fish starting as one-day old fry was 58 yg/1 for
fry not exposed as eggs and 170 yg/1 for fry exposed as eggs. Chronic
no effect levels, based on deformities, for lead and brook trout,
Salvelinus fontinalis (NWQL report in preparation) were reported as
125 yg/1. Cadmium no effect levels for Jordanella floridae have been
determined to be less than 6-8 ug/1 (Spehar, report in preparation)
and less than 3 yg/1 for brook trout (NWQL unpublished data). All these
levels are within or close to the range of concentrations found in the
waste oil tests. The effects of combinations of these metals has not
previously been determined. However, Eaton (1973) in a chronic with
Pimephales promelas and copper, zinc, and cadmium concluded that the
mixture was little, if any, more toxic than the zinc component alone.
The zinc concentration in Eaton's test at the no effect level, based
on embryos per female, was less than 42.3 yg/1.
The fish tissue residue levels indicate that there was an accumu-
lation of both persistent organics and metals. In addition to the metal
toxicity values listed previously for aquatic organisms, toxicity
levels, as reported by the Public Health Service, for some of the
compounds identified in this study are listed in Table 12. Continual
releases of waste oil in freshwater systems may result in a buildup of
these toxic components. Fish subjected to this condition may, therefore,
- 263 -
-------
be more sensitive to additional stresses. Additional questions which
were not addressed in the present study include the possibility of
fish flavor impairment due to the organic components, the effects on
organisms of waste oil hydrocarbons chlorinated during sewage treatment,
the effects of waste oil on organisms other than fish, and the effects
of waste oil surface films on surface exchange rates. Some of these
problems will be investigated in the future.
- 264 -
-------
Table 12. TOXICITY OF SOME COMPOUNDS FOUND IN WASTE OIL (FROM THE
TOXIC SUBSTANCES LIST, 1973 ED., U. S. DEPARTMENT OF HEALTH, EDUCATION,
AND WELFARE, PUBLIC HEALTH SERVICE, NATIONAL INSTITUTE FOR OCCUPATIONAL
SAFETY AND HEALTH, ROCKVILLE, MARYLAND 20852)
Naphthalene (16282)
TXDS dtl-rat LD50=2200 rag/Kg
ipr-mus LDLo*150 rag/Kg
U.S.O.S.-air FEREAC 37,22139,82
Xylene (24890)
TXDS: ihl-hmn TCLo=200 ppm TFX=IRR
orl-rat LD50=4300 mg/Kg
U.S.O.S.-air FEREAC 37,22139,72
Toluene £23487)
TXDS: ihl-hmn TCLo=500 ppm TFX«CNS
orl-rat LD50=3000 mg/Kg
ipr-rat LD50=1640 mg/Kg
U.S.O.S.-air FEREAC 37,22139,72
Phenanthrene (18120)
TXDS: orl-mus LD50*=700 mg/Kg
skm-mus TDLO=2160 mg/Kg 13WI TFX=NFO
Benzene, Ethyl (3039)
TXDS: occ-hmn TDLo=?200 ppm TFX=IRR
orl-rat ID50=3500 mg/Kg
Benzene, Propyl (3076)
TXDS: orl-rat LD50=f4830 mg/Kg
Cadmium as chloride (4793)
TXDS: orl-rat LD50=?88 mg/Kg
scu-rat TDLo=?2.2 mg/Kg TFX-CAR
Lead as chloride (14128)
TXDS: orl-gpg LDLo - 2000 mg/Kg
U.S.O.S.-air FEREAC 37,22139,72
Zinc as chloride C24994)
TXDS: ivn-rat LDLo = 75 mg/Kg
par-ckn TDLo = 1 mg/Kg TFX = NEO
U.S.O.S.-air FEREAC 37,22139,72
- 265 -
-------
SECTION VI
REFERENCES
1. American Public Health Association. "Standard Methods for the
Examination of Water and Wastewater." 13th edition. 1971.
874 p.
2. Benoit, D. and F. Puglisi. "A Simplified Flow-Splitting Chamber
and Syphon for Proportional Diluters." Water Research. Vol. 7.
In Press. 1973.
3. Bernard, H. "Embroiled in Oil." In: Proceeding of 1971
Conference on Prevention and Control of Oil Spills, Sponsored
by American Petroleum Institute, U. S. Environmental Protection
Agency, and U. S. Coast Guard. Washington, D. C., American
Petroleum Institute, 1971. p. 91-96.
4. Brungs, W. A. "Chronic Toxicity of Zinc to the Fathead Minnow,
Pimephales promelas Rafinesque." Trans. Amer. Fish Soc. 98(2):
272-279, April 1969.
5. Eaton, J. "Chronic Toxicity of a Copper, Cadmium and Zinc
Mixture to the Fathead Minnow (Pimephales promelas Rafinesque)."
Water Research. 7:1723-1736, 1973.
6. Freestone, F. J. "Runoff of Oils from Rural Roads Treated to
Suppress Dust," U. S. Environmental Protection Agency, Edison
Water Quality Research Laboratory. EPA Research Reporting Series,
EPA-R2-72-054, October 1972. 29 p.
7. Hatch, W. and W. Ott. "Determination of Sub-Microgram Quantities
of Mercury by Atomic Absorption Spectrophotometry." Anal. Chem.
14:2085, 1968.
8. Leonard, E. N. "The Determination of Copper in Fish Tissues by
Atomic Absorption Spectrophotometry." Atomic Absorption
Newsletter. 10:4, 1971.
9. Mount, D. I. and Brungs, W. A. A Simplified Dosing Apparatus for
Fish Toxicology Studies." Water Research. 1:21-29, 1967.
10. Recommended Bioassay Procedure for Jordanella floridae (Goode
and Beane) Chronic Tests. U. S. Environmental Protection
Agency, National Water Quality Laboratory. October, 1972. 9 p.
11. Ostrander, R. 0. and Kleinert, S. J., "Drain Oil Disposal in
Wisconsin." Wisconsin Department of Natural Resources. Madison,
Wisconsin. Tech. Bull. No. 63. 1973. 4 p.
- 266 -
-------
12. Perkin Elmer. "Analytical Methods for Atomic Absorption
Spectroscopy." 1973.
13. Spehar, R. "The Chronic Toxicity of Cadmium and Zinc to Jordanella
floridae." Report in Preparation.
- 267 -
-------
APPENDIX D
EFFECTS OF EMULSIFIED WASTE CRANKCASE OIL ON
SELECTED MARINE BIOTA
By
Peter Rogerson
National Marine Water Quality Laboratory
South Ferry Road
Narragansett, Rhode Island 02882
Project 16AAV-17
Program Element 1BA022
NATIONAL ENVIRONMENTAL RESEARCH CENTER
OFFICE OF RESEARCH AND DEVELOPMENT
U.S. ENVIRONMENTAL PROTECTION AGENCY
CORVALLIS, OREGON 97330
- 268 -
-------
ABSTRACT
The acute toxicity of a waste oil, used crankcase oil, has been
determined for a variety of marine organisms. The oil was not
acutely toxic to two species of phytoplankton, Skeletonema costatum
and Thalassiosira pseudonana, at levels up to 10 ppm. To Acartia
tonsa it had a 96 hr. LC-50 of 15 ppm, but there was no apparent effect
on Tigriopis japonicus at 50 ppm. Molluscan larvae were very sensitive
to the oil, with levels of 1 ppm affecting coot clam larvae (Hulinia lateralis)
and 4 ppm affecting oyster larvaeCCrassostrea virginica). Also, lobster
larvae(Homarus americanus) were sensitive, with a 96 hr. LC-50 of 5 ppm.
Menidia menidia, an estuarine fish, was less sensitive, having a acute
LC-50 of 1700 ppm.
From sub-acute studies it was determined that the oil causes morphological
changes in Menidia as well as oyster and scallop. The oil was also
shown to be toxic to scallop at 20 ppm after 20 days, and to oysters
at 100 ppm after 36 days.
Neither the values obtained from the acute nor the sub-acute studies
can be interpreted as safe lower levels in the environment. Such
values must be based on more sensitive parameters than death and
major morphological changes. They must include sublethal effects
and community structure changes before the numbers can be considered
as lower values for protecting the environment.
- 269 -
-------
ACKNOWLEDGEMENTS
A number of scientists at the National Marine Water Quality Laboratory
contributed their expertise to this study. We are grateful to
John Cardin for his work on the copepod and fish larvae assays, and
to Mary Johnson for her lobster larvae assay and phytoplankton assays.
John Gentile was also instrumental to the success of these assays.
The molTuscan larvae assays were performed by Gerald Zaroogian, while
the adult molluscs study was handled by Paul Yevich.
Thanks are also due to George Gardner for conducting the fish bioassays
and assistance in writing this report.
The histological examinations were handled by George Gardner for the
fish, and by Paul Yevich for the molluscs and other invertebrates.
- 270 -
-------
CONCLUSIONS
Emulsified waste oil, as exemplified by used crankcase oil, was
demonstrated to be toxic to selected marine organisms. Emulsified
waste oil concentrations lethal to 50% of the larval coot clam
(Mulinia lateral is), oyster (Crassostrea virginica)and lobster(Homarus
americanus) tested ranged between 1 and 5 ppm, while the toxicity
to phytoplankton, zooplankton, and larval fish (Menidia) ranged from
greater than 10 ppm to greater than 50 ppm. The toxic concentration
acutely lethal to 50% of the adult Menidia tested for 96 hrs. was
1700 ppm. Based on the above, and other toxicity bioassays conducted
at the National Marine Water Quality Laboratory, emulsified waste
motor oil is not as toxic as crude oils, such as Texas-Louisiana
crude, to marine phytoplankton, zooplankton, invertebrates and fishes.
In comparison, refined crude oil, such as #2 fuel oil, is much more
toxic than crude oil.
Waste motor oil caused vascular changes in adult oysters subjected to
concentrations of 100 ppm and higher for exposure periods which
ranged up to 36 days, while vascular alterations prevailed in adult
Menidia at the lowest concentration tested (20 ppm) during exposures
up to 60 days. Although the significance of these vascular alterations
remains unknown, they have been consistently observed in these two
species when subjected to crude oil. Therefore, a morphological response
pattern to petroleum products has now emerged.
It must be stressed that the concentation values reported herein are
primarily for acute lethal responses or for major morphological changes.
These values cannot be considered as lower levels which will protect
the environment, for we have not considered sublethal or community
structure effects. Therefore our values must be considered to be too
high to ensure no long-term ecological damage.
- 271 -
-------
RECOMMENDATIONS
Based on research conducted at the National Marine Water Quality
Laboratory, and on information currently available in the literature
for comparison, waste motor oil is not as toxic to marine biota
as are either raw crude oil, or many of the products refined from
crude oil. Knowledge about the toxic effects of waste motor oil to
aquatic biota remains somewhat sparse. However, data now available
does warrant our recommendation that no protective laws or regulations
be enacted that would be unique to waste motor oil, but rather that
waste oil be considered under more general guidelines which relate
to oil pollution.
Past research which has been conducted at the National Marine Water
Quality Laboratory with crude and refined oils, both in field and
experimental conditions, has demonstrated the potential of petroleum
to cause cancer in certain marine fauna. The vascular systems of
some organims are also susceptible to petroleum products, including
waste motor oil as herein presented. Obviously, these are potential
hazards to the biological community which could cause considerable
concern with the advent of widespread oil pollution.
Both these results and previous results have looked primarily at
death and major morphological changes as the only response parameters
of concern. There has been little work done on either sublethal
effects or on community structure changes. This means that most of the
toxicity values generated cannot be considered safe levels for the
environment without further knowledge of these more sensitive effects.
- 272 -
-------
INTRODUCTION
In response to the 1972 Water Bill, P.I. 92-500, a preliminary waste
oil study report was sent to Congress in April 1973. A lack of
knowledge about the biological effects of waste oils was evident at
that time, although data were presented which related to the deleterious
effects of other types of oil. Since the above mandate, studies have
been completed on the biological effects of the most common type of
waste oil, used crankcase oil, on various segments (phytoplankton,
zooplankton, invertebrates and vertebrates) of the marine biota.
- 273 -
-------
METHODS AND MATERIALS
PHYTOPLANKTON
Axenic cultures of the phytoplankton test species Skeletonema costatum
and Thai assiosira pseudonana were maintained in enriched synthetic
seawater, 30ppt, 20°C, and continuous cool white illumination to 2500
lux prior to experimentation. Stock cultures of these species were
transferred every four days, for two weeks, prior to their use in
bioassays. Two short-term bioassays were conducted, each having
identical waste oil concentrations of 0.0, 0.5, 1.0 and 10.0 ppm.
Each bioassay concentration was accomplished by aseptically transferring
forty-nine ml of culture medium, containing 2.5 x 10^ cells/ml, from
a one liter glass dispenser into each of ten sterile, foam-plugged
125 ml Pyrex Erlenmeyer flasks, which served as test containers. One
ml of ?. v::" -.. _.;;. ....:.. • "sion was added to each test vessel,
dependent on concentration, for a total volume of 50 ml. These cultures
were incubated for four days. At twenty-four hour intervals, five ml
of the oil-water emulsification was aseptically removed and the cell
density was determined using an electronic particle counter. Growth
rate was calculated from the following expression.
k = (In Nt - In NQ)/(t2 - t,)
where Nt = Cell density at time t2
NQ = Cell density at time tj
- 274 -
-------
ZOOPLANKTON
Cultured adult zooplankton, of the same age, were used for the waste oil
bioassay at concentrations of 0.0, 10.0, 25.0, 50.0 ppm. Test species
Acartia tonsa and Tigriopis japonicus, were reared in laboratory cultures
at 20°C and 20ppt salinity, and under 1000 lux of cool white light
on a 14:10 hour day-night cycle, prior to testing. These zooplankton
were fed on a diet of three algal species, Rhodomonas baltica, Isochrysis
galbana, and Thalassiosira pseudonana, prior to experimentation. Feeding
was omitted during experimentation. Five adults, captured using a wide
bore pipet, were transferred to borosilicate test dishes containing 100 ml
of the above salt water medium. The salt water-waste oil emulsion was
added following addition of test species. There were four replicate
assays at each oil concentration. These animals were examined every twenty-
four hours to monitor the death ratio. Experimentation is considered
invalid if a mortality in excess of 15% is recorded in the control bioassay.
LARVAL FISH
Larvae of Menidia menidia were hatched from eggs spawned artificially in
the laboratory. The eggs were incubated in artificial sea water at 20°C
and SOppt salinity. Test conditions, and waste oil concentrations were
the same as for the zooplankton, except that only three exposure dishes
per toxicant level were used.
MOLLUSCAN LARVAE
The adult oysters (Crassostrea yirginica) and coot clam (Mulinia lateralis)
were ripened for spawning at 20°C, and then induced to spawn by increasing
the temperature to 27-28°C, One hundred freshly fertilized larvae
obtained by the above method were placed in each of 22 test containers.
Small, disposable plastic dishes, which served as test containers,
contained 10 ml of artificial seawater having a salinity of 22ppt
Waste oil was added at concentrations of 0.0, 1, 2, 3, 4, 5, 6, 7, 8, 9,
or 10 ppm. The larvae were then cultured for 48 hours at 20°C and
then examined for completeness of shell formation.
LARVAL LOBSTER
Lobsters (Homarus americanus). of the first larval stage, were exposed
to waste motor oil concentrations of 0.0, 2.5, 5.0. 7.5, and 10.0 ppm.
Due to the cannibalistic tendencies of lobster larvae, it is essential
that each test organism be maintained in individual test containers.
Therefore, ten individual lobster larvae at each oil concentration were
placed in each of ten 70 x 50 mm Pyrex culture dishes. These dishes
contained 100 ml of 32ppt salinity, filtered seawater which was
maintained at room temperature (20-22°C). Following additon of the oil,
the dishes were covered with watch glasses. The organisms were observed
every 24 hours, for 96 hours, to record mortality. The lobster larvae
require continuous feeding. Therefore, 1/10 ml of concentrated Artemia
nauplii.were fed to each larva every two days during the course of
experimentation.
- 275 -
-------
FISH
Acute and Sub-Acute
A total of approximately 400 adult Atlantic silversides (Mem'dia menidia).
collected from Rhode Island estuaries, were utilized for the present
study. The exposures were carried out at both acute and sub-acute levels
of waste motor oil.
Adult Mem'dia were exposed to waste motor oil in their aquatic media.
Acute exposures were conducted at initial concentrations of 0.0, 10.0,
50.0, 250.0, 1000.0 and 5000.0 ppm.
Sub-acute exposures were conducted at initial concentrations of 0.0,
20.0, 100.0, 250.0 and 500.0 ppm. Control organisms were maintained
under prevailing environmental conditions of the experimental holding
which was conducted at 20°C and SOppt salinity. Test organisms were
held at least 7 days prior to exposure.
Test aquaria for acute exposures consisted of glass jars which contained
2 liter of the above salt water. The sixty test organisms in this portion of
the study were limited to five per test aquarium. Ten organisms were
exposed at each concentration. These organisms were removed when moribund,
dead, or after 96 hours. Test aquaria for sub-acute exposures consisted
of circular, fiberglass tanks having a total capacity of 650 liters.
These aquaria contained 500 1 of the above saltv/ater. Fifty to 75 test
organisms were added to each aquarium for testing purposes. The waste
oil was added as an emulsion to the test media following the introduction
of the fishes. The aquatic media and the oil concentration were renewed
on a weekly basis in the sub-acute portion of the study.
Sufficient aeration was administered in the acute exposure study to
maintain adequate dissolved oxygen levels (6-8 mg/1). Initially, aeration
was not administered in the sub-acute study. However, high mortality at
the two highest oil concentrations dictated aeration, which was accomplished
by the use of one air-stone to maintain a satisfactory DO level. Fishes
in the sub-acute test were fed a commercial fish food preparation on a
daily basis. Sub-acute exposures to 20 mg/1 of emulsified waste oil were
maintained for 60 days, to 100 mg/1 for 36 days and a 250 mg/1 for one
week.
ADULT OYSTERS AND SCALLOPS
Adult Amercian oysters (Crassostrea virgim'ca) and bay scallops (Acquipectin
irradians) were simultaneously exposed to the same sub-acute waste oil
concentrations as were the adult Menidia. Approximately 20-25 oysters
and 12 scallops were exposed at each concentration (0.0, 20.0, 100.0
and 500.0 ppm).
Adult Atlantic silversides, oysters and scallops were prepared for histological
processing when they were observed to be in a moribund state, or at termination
of the experiment. Atlantic silversides were immediately immersed in
Dietrich's fixative, while oysters and scallops were shucked and placed
- 276 -
-------
in Zenker-Formal fixative. Following fixation, selected tissues underwent
routine histological processing. Tissue sections, cut at 6u, were
stained with Harris Hematoxylin and Eosin (H&E).
All oil concentrations are based on a volume-to-volume ratio and are
expressed as parts-per-million (ppm). A concentration of one ppm thus
refers to a concentration of 1 ml waste oil per 1000 1 seawater. Unless
otherwise specified, waste oil emulsions were obtained by homogenizing
waste oil and salt water with a laboratory blender for approximately
two minutes. The physical and chemical characteristics of the waste
oil used in this study is provided in Table 1, Appendix C, The Effects
of Waste Oil and Freshwater Aquatic Life.
- 277 -
-------
RESULTS AND DISCUSSION
Waste oil concentrations acutely lethal to 50% of the larval coot clam,
oyster, and lobster ranged between 1 and 5 ppm (Table 1). These larval
fauna were the most sensitive of the organisms tested. Phytoplankton,
zooplankton and larval fish were more resistant to the waste oil, since
waste oil concentrations of from 10 ppm to greater than 50 ppm were
required to achieve the same results. In terms of acute toxicity, the
adult Atlantic silversides were the most resistant.
- 278 -
-------
TABLE 1
ACUTE TOXICITY OF EMULSIFIED WASTE OIL
LC-50* Time, hr.
Coot Clam (Larval) 1_2 48
Oyster (Larval) 4.5 48
Lobster (Larval) 5 96
Phytoplankton
S_._ cos ta turn >10 95
J_._ pseudonana > 1 0 95
Zooplankton
A_^ tons a 15 96
LL Japom'cus > 59 95
Fish
Mem'dia (Larval) >25 72
Menidia (Adult) 1700 96
Concentration required to kill 50% of the species in the stated time
- 279 -
-------
PHYTOPLANKTON
Waste oil concentrations from 0.5 to 10.0 ppm had little apparent
effect on the growth of either of the test species. During the first
twenty-four hours of exposure the growth rate of Skeletonema costaturn
was depressed by 40% at 1.0 ppm to 10.0 ppm. However, only at 10 ppm
did the inhibition persist after twenty-four hours. Duplication of
the experiment in a different synthetic seawater resulted in less than
10% inhibition at 10 ppm after ninety-six hours. Likewise, similar
experiments using Thalassiosira pseudonana failed to produce significant
inhibition of growth.
Although the above results indicate that emulsified waste oil has a
low hazard potential, further experimentation with unemulsified oil
may produce quite different results. Such experiments should be
included in further testing, because crude oils added directly to
seawater at concentrations ranging from 2 to 10 ppm have had a marked
lytic effect on phytoplankton. Further, #2 fuel oil is markedly toxic
to phytoplankton at 0.25 ppm (Gentile, unplublished).
ZOOPLANKTON
The concentration of emulsified waste oil acutely lethal to 50% (LC-50)
of A. tonsa after 96 hours was 15 ppm, while the LC-50 for T. japonicus
was greater than 50 ppm.
The two species of copepods demonstrated an anticipated sensitivity,
since A. tonsa, which is a free-swimming oceanic form, has in the past
demonstrated a high degree of susceptibility to a variety of pollutants.
Tigriopis japonicus, on the other hand, is an estuarine species that is
a bottom dwelling organism which inhabits lower salinity saltwater, and
has demonstrated a much higher resistance to pollutants in general.
Unlike the other species in the present report, A. tonsa was utilized to
determine the toxicity of the waste oil as applied directly to the salt
water medium (layered) and the salt water soluble extract of waste oil.
Seven experimental concentrations of waste oil (0.0, 50, 100, 250,
500, 750, and 1000 ppm) were used. The toxicity of waste motor oil as
applied by these methods was not significantly different than that of
emulsified waste oil. The 96-hr LC-50 for layered waste oil was 15 ppm
while the 96-hr LC-50 for the salt water soluble extract was 35-40 ppm.
LARVAL FISH
The lethal concentration of emulsified waste oil required to kill 50%
of the larval stage of M. menidia in a 72-hour exposure period was
greater than 25 ppm (Table 1).
- 280 -
-------
MULLUSCAN LARVAE
Acute toxicity values of emulsified waste oil were not determined for
oyster and coot clam larvae. Rather, the development of shell growth
served as an index of toxicity to these organisms. The toxicity of
oils and oil dispersants has previously been investigated by these
methods (Tarzwell, 1969), and they have proven to be a sensitive
indication of relative toxicity. Emulsified oil concentrations of 1 ppm
or higher retarded the normal shell growth of the coot clam, while a
concentration of 4 ppm or higher caused similar retardation of oyster
larval shell growth. Deformation of the shells also occurred at these
concentrations.
LOBSTER LARVAE
The lethal concentration required to kill 50% of stage one larval
lobsters was 5 ppm. This value compares very closely with previous tests
with Venezuelan crude by Wells (1972).
FISH
Petroleum products are known to be carcinogenic to some marine invertebrates,
(Blumer, 1971; Barry, 1971; Barry, 1972), and the lethal effects of an
oil spill can continue to affect an invertebrate community for periods
of up to a year or more (Blumer, 1971). The known effects of petroleum
on pelagic, benthic and estuarine fishes, however, remain relatively
sparse. Recent investigations have indicated that sensory coordination
may be impaired in some fishes. Precancerous lesions in the olfactory
organs have been documented in the estuarine teleost Menidia menidia
(Atlantic silversides) following an experimental exposure to the salt
water soluble fraction of Texas-Louisianna crude oil (Gardner, 1972).
Menidia has demonstrated prior sensitivity to a petroleum derivative
and, therefore, was selected as a representative estuarine teleost
to evaluate the potential effects of waste motor oil.
Acute
The lethal concentration of the waste motor oil required to kill 50%
of the adult Menidia exposed to 10, 50, 250, 500, 1000 and 5000 ppm was
established at 2250 ppm for 48 hours and 1700 ppm for 96 hours. These
values were not determined for the sub-acute exposures.
Sub-acute
Historically, an irregularity in the pigmentation, or staining capacity
of connective tissue which accompanies the dorsal aorta occurred as a
rather consistent finding regardless of the waste oil concentration.
The connective tissue in'these cases appeared "olivelike", or golden-brown
in color following an H&E stain. The irregularity was variable, in a
case-by-case comparison, in terms of the density of coloration or
pigmentation.
- 281 -
-------
Muscle bundles and muscular valves in the auricle of the heart were
affected. The change associated with these structures again involved
pigmentation. Clusters of dark-pigmented spherules aligned the periphery
of the muscular structure throughout the auricle. The spherules, ranging
from approximately 0.5u to 4u, were also incorporated into the nuclear
and cytoplasmic morphology of the musculature of the auricle and its valves.
In severe cases, the morphology of the musculature was masked by the presence
of numerous spherules. The condition was evident following exposures to
20 ppm of waste oil and at all higher concentrations. The ventricle of
the heart was affected in a similar pattern in one case, in an organism
exposed to 100 ppm of waste oil.
The pseudobranch was affected in specimens which reached the maximum
exposure period of 36 days at the 100 ppm level. The secretory cells
of the organ were necrotic, while the vasculature remained intact. The
condition is not unlike that in Menidia following exposure to the salt
water soluble fraction of crude oil as described by Gardner (1972).
The significance of the irregularities associated with the dorsal aorta
and the auricle of the heart cannot be determined at the present time.
Likewise, the significance of lesions associated with the ventricle
of the heart and the pseudobranch cannot be determined at present.
However, the pseudobranch, a specialized pressure and chemoreceptor, is
very sensitive to P02 and Po>2 in arterialized blood. Plausibly,
alterations which were observed throughout the major arterial system of
Menidia may relate to an alteration of the extensive nerve plexus which
accompanies the pseudobranch.
ADULT MOLLUSCS
Relative toxicity values for adult oysters and scallops to sub-acute
exposures of emulsified waste motor oil (Table 2) were estimated
following termination of enperimentation. The scallop proved to be
more sensitive to the waste oil than was the oyster. These toxicity
findings are comparable with prior research results that indicate the scallop
to be much more susceptible to pollutant exposures than is the oyster.
- 282 -
-------
TABLE 2
RELATIVE TOXICITY OF EMULSIFIED WASTE OIL TO:
a) Scallop
011 Concentration, ppm
500
TOO
20
0 (control)
b) Oyster
Oil Concentration, ppm
500
100
20
0 (control)
% Mortality
100
100
100
40
% Mortality
80
50
20
20
Time
6 hours
24 hours
20 days
60 days
Time
2 days
36 days
60 days
60 days
- 283 -
-------
Oysters
Macroscopic - Visual examination of oysters necrospied at the termination
of experimentation revealed numerous, small black foci throughout their
mantle. The condition was most common in the animals surviving 100 ppm
of the waste oil, since 65% of these oysters displayed the condition,
while only 15% surviving the 20 ppm test concentration displayed the
condition. These black foci were not evident in control specimens.
Microscopic - The gastro-intestinal tract of the five oysters surviving
the 500 ppm test concentration had a detached mucosa, while extensive
vacuolation occurred within the mucosa proper.
Involvement of the vascular system was apparent in three of four oysters
sampled for the 100 ppm level after six days exposure. The efferent vein
and its branches into the gill arches were occluded with clots as indicated
by the presence of "acute and chronic" amebocytes and fibroblasts ("acute
and chronic" relates to the morphological state of these cellular
constituents as observed in response to an inflammatory condition). The
occulusions primarly contained "acute and chronic" amebocytes. Many
amebocytes had attached to the vascular wall of the gill. The hearts of
two oysters had amebocyte accumulations, wherein attachment to the cardiac
muscles had also occurred. Fibroblast accumulations in the heart were
observed in only one case. Two oysters, of the four sampled, had black,
granular material dispersed throughout the gill filament structure.
Five of the nine oysters surviving 60 days exposure to 100 ppm of
waste oil had lesions which involved the cardio-vascular system. Eight
of these oysters had spherical, yellowish-brown granules, refractile
and variable in size, located in the gill filaments, mantle and visceral
organs. These granules were also concentrated in the food groove
associated with the gill. The lumen of the gastro-intestinal tract was
outlined by these granules in four of the nine oysters examined. The
granule deposition was heaviest in the basement membrane of the mucosa,
while a limited presence was observed in the epithelial cells of the
mucosa. The mantle and its ligament in five of nine animals examined
was also outlined by the presence of these granules, while other cells
were in a state of degeneration. Detachment and vacuolation of the mucosa,
as observed in oysters exposed to 500 ppm oil, was also present in eight
out of nine oysters exposed to 100 ppm.
Eighteen oysters were necropsied at the termination of the 20 ppm exposure
level, of which, nine had cardio-vascular involvement such as that
previously mentioned. Substantial areas of the mantle of three animals
possessed the previously mentioned deposition of black granular material.
Three of the eighteen control oysters had an "acute" amebocyte
accumulation in the vascular system. However, no "chronic" amebocytes
or fibroblasts were noted in these accumulations. Neither the vascular
walls, nor any other areas affected by the used oil, were involved.
- 284 -
-------
Scallops
Scallops exposed to 500 ppm oil had several acute responses.
gill filaments were necrotic as indicated by loss of the cilii
f+r\ I i IIYIVN -\ w» r\r\ ** ^]^r\ ^ •? i im TwAJJ^^^_ j_l_____l» • i M.I
The
Hated
columnar epithelium. In addition, the plicate membranes of the gills
were dilated due to congestion by amebocytes. Fine, black granular
material was deposited between and within the gill filaments. Gills
of scallops exposed to 100 ppm waste oil were devoid of cilia, which
are associated with the ciliated columnar cells of the gill filament.
The kidneys had an amebocytic infiltration (inflammatory response)
along the kidney folds. Necrosis and sloughing of the renal epithelium
had also occurred. Mo lesions were observed in those scallops exposed
to the 20 ppm of waste oil that could be attributed to the action of the
emulsion.
Cystic formations, which contained cellular debris and amebocytes, were
observed in the kidney of control scallops. However, the condition does
not compare with that observed following oil exposure.
Lesions in the kidney of the scallop and in the cardio-vascular system of
the oyster are important. Although very little is presently known about
the etiology of the cardio-vascular lesion in the oyster, it is consistently
found in oysters which have been exposed to oil in both laboratory and
field situations. Previous studies with oysters have demonstrated amebocytic
infiltation of the gastro-intestinal tract, which indicates that the
gastro-intestinal system serves as an excretory site for the amebocytes.
The meaning of the refractile, yellowish brown, round granules also remains
unknown. Possibly they represent a form of excretory product, for the
greatest concentrations of them continue to be found in tissues which are
excretory in function. Finally, it might be indicated, based on past
experience at the National Marine Water Quality Laboratory that the
vascular system of the oyster is highly susceptible to crude oil and
distillates of crude oil. Hov/ever, many other invertebrate fauna, which
were not studied for the current report, are known to be susceptible to
cancer. These observations have been documented following exposures to
accidental oil spills which have occurred in the environment.
- 285 -
-------
REFERENCES
1. Barry, M.M., P.P. Yevich, and N.H. Thayer. Atypical Hyperplasia
in the Soft-Shell Clam Mya arenaria. J. Invert. Pathology. 17:
17, 1971
2. Barry, M.M. and P.P. Yevich. Incidence of Gonadal Cancer in the
Quahaug. Onocology. 26; 87, 1972.
3. Blumer, M. Scientific Aspects of the Oil Spill Problem. Environmental
Affairs. 1: 54, 1971.
4. Gardner, G.R. Chemically Induced Lesions in Marine or Estuarine
Teleosts. Proc. Symp. Fish Patholo., Armed Forces Inst. Pathol.,
Wash. D.C. (In Press).
5. Tarzwell, C.M. Standard Methods for the Determination of Relative
Toxicity of Oil Dispersants of Mixtures of Dispersants and Various
Oils to Aquatic Organisms. Proc. Joint Conf. Prevention Control
Oil Spills. Am. Petro. Inst. and Fed. Water Poll. Control Admin.
New York, N.Y 1969.
- 286 -
-------
APPENDIX E
FEDERAL TAX TREATMENT OF THE RE-REFINING INDUSTRY
TAX CODE TREATMENT OF RE-REFINERS, 1932-1964
The tax on lubricating oil dates to 1932, when a 4* a gallon tax
was levied as part of a broad effort to increase federal revenue during
the depression. The proceeds from the tax were treated as general
revenue, and were not earmarked for special use. In the revenue bill
passed by the House, (1) the only lubricating oils to be taxed were those
of viscosities suitable for use in internal combustion engines. How-
ever, the Senate voted to eliminate the viscosity limitations of the
House bill, noting that the tax could be evaded by mixing tax-free light
and heavy oils. (2) The enacted Revenue Act of 1932 (3) reflected this
Senate concern and imposed a tax of 4<£ per gallon to be paid by man-
ufacturers or producers on all grades of lubricating oil.
The tax rate was raised an additional one half cent in 1940 (4)
and one and one half cents in 1942 (5) to produce revenue to finance
the war effort.
The applicability of the tax to the lubricating oil products of
the re-refining industry was the subject of a controversy spanning
twenty-four years focused on the question of whether the re-refiners
were to be treated as "manufacturers" under Internal Revenue regulations.
Since only "manufacturers" were subject to the excise tax, resolution of
this definitional question was of considerable interest to both the
re-refiners and their competitors.
In the Revenue Act of 1932, no definition of "manufacturer"
was provided, nor was there explicit exclusion of re-refined products
from tax. Twelve days after the Act's enactment, the first Internal
Revenue regulations describing its scope were promulgated, but still
no effort was made to define the term "manufacturer." (6) One month
later, however, the regulations were amended, and included within the
definition of "manufacturer" or "producer" were all reprocessors of
used lubricating oil. (7) The revised regulations were amended by a
Treasury Decision nine months later, in March 1933, which limited the
definition of "manufacturer" or "producer" to re-refiners using one
specified process which produced oil with substantially the same
physical and chemical characteristics of new lubricating oil. (8) The
regulations were amended yet again, in September 1934, to provide that
any person who cleans, renovates or refines used or waste
lubricating oil by any method or processing which produces an
oil substantially equivalent to new lubricating oil
- 287 -
-------
would be considered a "producer" or "manufacturer." (9) (emphasis added)
The Bureau of Internal Revenue seemed uncertain how to apply its
constantly changing regulations. For example, in late 1933, the
reprocessed products of Super Refined Oil Company were being exempted
from the tax, while the reprocessed products of Triplex Oil Refining
Company and Keystone Oil Company were being taxed. (10) However, in early
1934, Triplex received a ruling that its re-refining process did not con-
stitute it as a manufacturer or producer under the law, and in late 1934,
Keystone received a refund for the taxes it had paid.(11)
By 1938, IRS was reconsidering the wisdom of attempting to tax
reprocessed oil under its regulations. From the end of 1938 until late
1954, favorable rulings were given all re-refiners who applied for tax
exemptions. (12) Though re-refiners were thus made exempt from paying
excise tax on their end products, they had to pay tax on the virgin oil
which they mixed with their reprocessed oil to uoarade it. Had thpy
been officially treated as "manufacturers", they would have had to pay an
excise tax on their end products, but they would have been able to purchase
virgin oil free of tax for use in blending, for the IRS regulations stip-
ulated that no tax would be imposed upon any material used in the manu-
facture or production of a taxable article. (13) A Treasury Department
official familiar with the history of reprocessed oil taxation contends
that the Internal Revenue Bureau declined to tax the re-refiners because
it had difficulty proving that the re-refiners' product was equivalent
to virgin lubricating oil. (14) The re-refiners reply, however, that
the quality question was immaterial, and, that the Bureau actually de-
clined to tax them because it knew a tax could not withstand court
challenge. The re-refiners contended that their products should be tax
exempt not because they were alleged to be qualitatively inferior, but
because Congress did not intend for the re-refining industry to be taxed
at all. (15)
The administrative decision to forego taxing the re-refiners
stimulated a series of legislative proposals to tax the re-refining
industry. Between 1939 and 1949, seven such bills were introduced by
four members of the House Ways and Means Committee and the Senate Finance
Committee, but none were reported from Committee. (16)
In late 1950, Donald O'Hara, the Assistant General Counsel of the
National Petroleum Association, called to the Internal Revenue Bureau's
attention the fact that a re-refiner in an FTC proceeding had contended
that the quality of his lubricating oil matched that of most premium
motor oils. (17) O'Hara's implication was that the re-refiner should be
taxed. The Bureau responded by noting that three unsuccessful attempts
had been made to legislate an excise tax on reclaimed and re-refined oil
and that it was not going to alter its position. (18)
- 288 -
-------
In August 1954, O'Hara filed suit on behalf of Barkow Petroleum
Company against the Commissioner of Internal Revenue. The suit sought
a mandatory injunction requiring IRS to collect excise tax on reprocessed
oils represented and sold as equivalent to new lubricating oils. (19)
O'Hara requested dismissal of the suit when he received a letter
from the Commissioner of Internal Revenue stating that the IRS would
re-examine its position on reprocessed oil and that it would, if
necessary, test the issue in the courts. (20) The IRS notified the
Association of Petroleum Re-refiners in March 1955 that it was going to
attempt to tax reprocessed oil and that the re-refiners were welcome to
test the action judicially. But after meeting with the re-refiners to
discuss its proposed new policy, IRS abandoned it. Instead, in T. D.
6197, the Service changed its definition of the term "manufacturer" to
give recognition to the de facto taxation situation that had existed
since 1938. Its new definition provided that
The term "manufacturer" does not include (1) a person who
merely blends or mixes two or more taxable lubricating oils,
(2) a person who merely cleans, renovates, or refines used
or waste lubricating oil, or (3) a oerson who merely blends or
mixes one or more taxable lubricating oils with used or waste
lubricating oil which has been cleaned, renovated, or re-
fined. (21)
Those re-refiners falling within class (2) were those who had been
legally subject to the excise tax on their end product, but who had
never paid such a tax because the quality equivalence of their end pro-
duct with virgin oil was not proved. Re-refiners in category (3) were
those who continued to produce non-taxable products on whose virgin oil
component an excise tax had been paid.
The struggle over the revenue regulations had been intense because
they provided a competitive advantage in the lubricating oil market to
the re-refiners. For those of their products made exclusively of re-
processed oil, the re-refiners were able to avoid the 6
-------
THE EXCISE TAX REDUCTION ACT OF 1965
In 1964, Congress and the administration began to weigh gradual
elimination of many excise taxes which had developed over the years and
which were widely viewed as imposing excessive burdens on the marketplace.
As part of Its tax reduction program, the administration suggested complete
elimination of the excise tax on lubricating oil. (23)
At hearings on the administration proposal before the House Ways and
Means Committee, two speakers addressed their remarks to the proposed
reduction in the lubricating oil excise tax. Rudolph Cubicciotti, rep-
resenting the American Petroleum Institute and Pennsylvania Crude Oil
Association, organizations comprised of the major virgin oil marketers,
supported elimination of the tax. (24) Noting that lubricating oils used
for non-lubricating purposes were tax-exempt, he argued that the excise
tax represented a tax on use of a commodity, rather than on the commodity
per se. He observed that the tax also presented an administrative burden,
for certificates of tax exemption had to be maintained and processed.
Furthermore, he contended that the excise tax had developed in the course
of revenue emergencies which were no longer of any concern. Since the
tax served no non-revenue social policy goals, he argued, it should be
removed. Cubicciotti also observed that the tax was an especial burden
for farmers and motorists.
The second individual speaking on the lubricating oil tax question
was a representative of the Association of Petroleum Re-refiners. (25)
V. T. Worthlngton, Executive Director of the Association, contended that
the re-refining industry would be hard hit by elimination of the excise
tax. He observed that the price level of re-refined products was
determined in large measure by the price set for virgin lubricating
products, and that the re-refiners' profit margin was so small that
elimination of the 6tf per gallon competitive edge provided by the excise
tax would drive many re-refiners out of business. Worthington conceded
that the reasons given for eliminating the excise tax were forceful, but
for equally compelling reasons, he suggested, it should be retained. The
industry, he said, performed a public service by providing an alternative
to the mere dumping of waste oil into the environment, an alternative! that
promoted resource conservation and elimination of waste oil as an environ-
mental pollutant. Worthington concluded that the excise tax status quo
should be maintained, with the tax accepted as creating, in effect, a
payment for the services of the industry. He noted in this context that
the virgin oil producers were themselves recipients of a government
subsidy, in the form of a 27.5 percent depletion allowance.
The House Ways and Means Committee developed a statute which it
believed would eliminate much of the excise tax without unduly harming
the re-refiners. Section 202 of the House bill maintained the 6
-------
earmarked the tax proceeds for the Highway Trust Fund. (27) However,
Section 202 also provided for a rebate of the tax paid, when the tax
was paid on lubricating oil purchased for non-highway use. The rebate
provision was to be made Section 6424(a) of the Internal Revenue Code
and was to read as follows:
If lubricating oil (other than cutting oils, as defined
in Section 4092(b), and other than oil which has pre-
viously been used) is used otherwise than in a highway
motor vehicle, the Secretary or his delegate shall pay
(without interest) to the ultimate purchaser of such
lubricating oil an amount equal to 6 cents for each gallon
of lubricating oil so used. (28)
The Ways and Means Committee expressed concern for the economic
health of the re-refining industry in its report on the excise tax re-
duction measure:
Your committee concluded that generally the lubricating oil tax
was an undesirable tax to continue. However, it was recognized that to
the extent that lubricating oil is used in highway motor vehicles, the
tax represents an appropriate charge on the users of highways similar to
the gasoline and tire taxes are presently assigned to the Highway Trust
Fund. Your committee also recognized that the outright repeal of this
tax might also present problems for the re-refiners of oil, who are not
subject to the lubricating oil tax and whose profit margin generally
is smaller than the amount of this tax. Therefore, to repeal this tax
outright in many cases would drive re-refiners out of business. This
would have the effect of encouraging the dumping of used oil in our
streams rather than salvaging it through re-refining.
Your committee's bill for the reasons indicated above in effect
removes the tax on all lubricating oils except those used in highway
vehicles. (29)
The Senate Finance Committee believed that the House measure did not
provide adequate protection for the re-refining industry. Accordingly,
it sought to maintain the excise tax on lubricating oil by striking the
House bill's lubricating oil provisions. The Senate report commented:
The House recognized that the outright repeal of this tax
might present problems for the re-refiners of oil who
presently are not subject to the lubricating oil tax and
whose profit margin generally is smaller than the amount of
this tax. The House recognized that to repeal this tax out-
right would drive many re-refiners out of business and it was
noted that this would have the effect of encouraging the dumping
of used oils in our streams rather than salvaging it through
re-refining.
- 291 -
-------
It was pointed out to your committee that much the same type of
problem exists in the case of non-highway use Thus, retaining
the tax on lubricating oils for highway purposes alone does not
completely remove the competitive problem of the re-refining in-
dustry nor remove the encouragement to dump used oil. It was for
these reasons that your committee fully restored the present tax
in the case of ... lubricating oils. Since much of this tax, as
reconstituted by your committee, is not basically a highway use
revenue, your committee also removed the provision in the House
bill which would have allocated this revenue share for the High-
way Trust Fund. As compared to present law, the changes made by
your committee with respect to lubricating oil will have no effect.
(30)
The tax reduction measure ultimately signed into law contained the
House lubricating oil tax provisions, the Senate's serious reservations
notwithstanding. The law's legislative history reveals that retention of
the provisions was solely the consequence of a "log-rolling" conference
committee compromise. The Senate conferees withdrew their objections to
the House lubricating oil tax provisions in exchange for the House
conferees' withdrawal of objections to a Senate provision providing in-
come tax credit to farmers for taxes paid on gasoline used for farm or
other non-highway uses. (31)
POST-1965 INCOME TAX REGULATIONS AND REVENUE RULINGS
The Excise Tax Reduction Act (ETRA) caused the re-refiners to lose
their 6£ per gallon competitive advantage in the non-highway lubricating
oil market. Its effects can be demonstrated in the following example:
Suppose that to a non-highway user the net cost of both virgin oil
and a 50-50 blend of virgin and reprocessed oil is $1.20. Prior to
ETRA, the user would have had to pay an additional 6tf on the virgin oil
product and an additional 3£ tax on the blended product. Other things
being equal, the non-highway user would have preferred to purchase the
relatively cheaper reprocessed product. Following ETRA, the non-highway
user was eligible for a rebate on the tax paid on virgin lubricating oil.
Thus, the purchase price of the 100£ virgin lubricating oil was reduced
to its net cost of $1.20. Theoretically, the purhcase price of the mixed
product would also have been $1.20, if the tax was refunded on its virgin
oil component. With the two products at parity, it was unlikely that a
non-highway user would be inclined to purchase a "used" product when a
"new" product could be had at no additional expense.
In theory, then, the re-refiner was likely to suffer somewhat from
ETRA, the good intentions of the House and Senate notwithstanding. In
practice, the re-refiner was to suffer even more, for under IRS revenue
ruling 68-108, the re-refiner and his off-highway customer were declared
- 292 -
-------
ineligible for rebate of the tax on the virgin oil component of blended
products. The re-refiner was thus placed at a 3<£ per gallon competitive
disadvantage vis-a-vis the virgin oil marketer.
In reaching the 68-108 decision, IRS argued that even though a
re-refiner had "used" the virgin oil in his blending process, he had not
"used" it "otherwise than in a highway motor vehicle" within the meaning
of Section 6424 of the Internal Revenue Code and thus he was not entitled
to a rebate. IRS maintained that the type of "use" contemplated with
Section 6424 was
use of lubricating oil (previously unused) through which use
the oil is consumed or rendered unfit for further use as a
lubricant. In the case of blending by the re-refiner, the
"new" oil is not consumed in the blending process but becomes a
part of the non-taxable resultant product which the company
sells to consumers who use it in non-highway vehicles. (32)
Furthermore, the non-highway user purchasing a blend of virgin and
reprocessed oil was not entitled to a rebate; for he was not using "new"
(previously unused) lubricating oil within the meaning of the ETRA re-
bate provision, but was using the re-refiners' nontaxable product in
the blending of which the virgin oil had become "used."
IRS's conclusions in 68-108 are quite questionable. First, as the
statute presently reads, it is the clear intent of Congress that the
lubricating oil tax in effect becomes a special fee paid by highway
users to promote highway building. While one might argue that the re-
refiners have an indirect interest in seeing highways built, so that more
automotive lubricating oil is consumed in their use, one is hard-pressed
to find any other logical nexus between the re-refiners' blending
activity and highway use. Second, it could scarcely have been the intent
of Congress to have railroad purchasers of blended reprocessed oil pay
a tax that underwrites a highway construction subsidy for the railroads'
competitors, the trucking industry. (33)
Reversal of Revenue Ruling 68-018 is suggested because, on its
face, it places the re-refiners at a disadvantage in the non-highway
lubricating oil market. It permits rebate of excise taxes on virgin
oil products without permitting a rebate of taxes on reprocessed pro-
ducts, it appears to run contrary to congressional intent, and it
produces an anomolous situation in which railroads may pay subsidies
to their highway competitors.
Reconsideration of Revenue Ruling 68-108 by the Internal Revenue
Service would be consonant with the requirements of the National
Environmental Policy Act. (34) Section 101(b)(6) of the lav declares
that the Federal Government should improve its plans and programs to
- 293 -
-------
"enhance the quality of renewable resources and approach the maximum
attainable recycling of depletable resources." Section 103 requires
federal agencies to review their policies and procedures as a first
step in bringing them into conformance with the national environmental
policy embodied in Section 101.
- 294 -
-------
(1) See H. Rpt. 72-708 (March 8, 1932) at 35.
(2) See S. Rpt. 72-665 (May 9, 1932) at 43.
(3) Public Law 72-154. Section 601. Excise Tax on Certain Articles
* * *
(c) There is hereby imposed upon the following articles sold in
the United States by the manufacturer or producer...a tax at
the rates hereinafter set forth, to be paid by the manufacturer,
(or) producer...: (1) Lubricating oils, 4 cents a gallon;
(4) Revenue Act of 1940, 1650.
(5) Revenue Act of 1942, 608.
(6) Regulations 44 Relating to the Taxes on Lubricating Oil...under the
Revenue Act of 1932 (1932 ed.) at 8.
(7) T. D. 4339, XI-2, C. B 446 (1932.
(8) T. D. 4362, XII-1, C. B. 380 (1933).
(9) Regulations 44 (1934 ed.) at 33; 314.40, Internal
Revenue Code of 1939.
- 295 -
-------
(10) Example, cited in "Memorandum: Excise Tax on Lubricating Oil,"
(Arlington: Virginia: Association of Petroleum Re-refiners,
1955) at 2.
(11) Id.
(12) Id.
(13) 620, Revenue Act of 1932.
(14) In a report to a Council on Environmental Quality Task Force on
Waste Oil, John Copeland of Treasury's Office of Tax Analysis
wrote:
"...Legend has it, the Bureau of Standards would not testify that
reclaimed oil was the equivalent of or substantially equivalent to
new oil."
"Waste Oil Study," (May 25, 1970, 7pp. mimeographed) at 1.
(15) Interview with V. T. Worthington, Executive Director of
Association of Petroleum Re-refiners, October 23, 1973.
(16) H. R. 5133 introduced into the 76th Congress on March 20, 1939,
by Rep. Disney; H. R. 6498 introduced into the 76th Congress on
May 24, 1939, by Rep. Disney; H. R. 3071 introduced into the 77th
- 296 -
-------
Congress on February 4, 1941 by Rep. Disney; Amendment to H. R. 7378
introduced into the 77th Congress on August 3, 1942 by Sen. Guffey;
H. R. 5386 introduced into the 81st Congress on June 9, 1949 by
Rep. Gavin; S. 2172 introduced into the 81st Congress on June 30,
1949 by Sen. Martin; H. R. 5448 introduced into the 81st Congress on
July 14, 1949 by Rep. Gavin.
(17) Reported in National Petroleum News, June 18, 1952, 44:25 at 33.
(18) Reported in National Petroleum News, July 22, 1953, 45:22 at 33.
The reference to three attempts probably refers to the seven bills
introduced into three Congresses. See note 16 supra.
(19) Barkow Petroleum Company v. T. Coleman Andrews, Commissioner of
Internal Revenue (D. D.C.).
(20) Petition for dismissal filed October 21, 1954 following receipt of
letter from Commissioner Andrews dated October 15, 1954.
(21) T. D. 6197, Cum. Bull, 56-2,803 (1956).
(22) See text accompanying notes 25 and 29.
(23) See 202 of the administration proposal in "Legislative History of
H. R. 8371, 89th Congress, the Excise Tax Reduction Act of 1965,
- 297 -
-------
Public Law 89-44, "House Committee on Ways and Means, 89th Congress,
1st Session at 62 (Hereinafter cited as ETRA Legislative History).
(24) See "Hearings on the Federal Excise Tax Structure before the
Committee on Ways and Means, U. S. House of Representatives, 88th
Congress, 2nd Session, July-August, 1964 at 620-627 (Hereinafter
cited as ETRA Hearings).
(25) Id., at 686-690.
(26) See ETRA Legilsatlve History, supra note 23 at 161, 195.
(27) Id_. at 177.
(28) Id_. at 162.
(29) Id. at 231.
(30) W. at 534.
(31) IcL at 811, 815. The Senate had with its amendment #7, deleted the
lubricating oil provisions of the House bill. With its amendment
!
#101, it added the gasoline tax rebate for farmers. The House
agreed to the Senate addition of amendment #101, and in exchange, the
Senate withdrew amendment #7 that had deleted the lubricating oil
- 298 -
-------
provisions. The "Statement of the Managers on the Part of the
House" explains the trade as follows:
Amendment No. 7: The bill as passed by the House continued the
6-cent-a-gallon excise tax on lubricating oil, but provided for
refunds to ultimate purchasers of taxes paid with respect to
such oil used for nonhighway purposes. It also allocated the
tax attributable to lubricating oil used for highway purposes to
the highway trust fund...
The Senate amendment deleted these provisions of the house bill.
The House recedes with amendments conforming to the action on
amendment No. 101...
Amendment No. 101: Under present law, farmers and other non-
highway users may obtain refunds of taxes used for farm and other
off-highway purposes. Credits for such taxes are not provided.
The bill as passed by the House made no change in this refund
procedures. Senate Amendment No. 101 provides that the tax on
gasoline used for farm use or other nonhighway purposes may be
credited against the farmer's or other user's income tax
liability. Under the amendment, if the exercise tax on such
gasoline exceeded the user's income tax liability the excess
would be refunded to the user.
- 299 -
-------
The House recedes with an amendment which provides the same
procedure for lubricating oil used for nonhighway purposes.
(32) Rev. Ruling 68-108, Cum. Bull. 68-1, 561.
(33) This argument was made in a May 18, 1966 letter from the
Re-refiner's attorney to Mr. Bernard Fischgrund, Chief of
IRS' Excise Tax Branch.
(34) Pub. L. 91-190, 42 U.S.C. 4321 et seq.
- 300 -
-------
APPENDIX F
GOVERNMENT ACTION GOVERNING OIL CONTAINER LABELING
State laws and federal regulations provide that labels on
containers of reprocessed oil must disclose that the con-
tainers' contents have been reprocessed from previously used
lubricating oils. The discussion below surveys the mix of
state and federal requirements for reprocessed oil labeling,
and evaluates proposals made for their reform.
STATE LABELING LAWS
State labeling laws governing reprocessed oil can be divided
into two categories:
(1) Statutes specifying that purchasers of lubricating oil
and other petroleum products shall not be deceived as to the
nature, quality or identity of their petroleum product pur-
chases,
(2) Statutes stating that reprocessed lubricating oil must
be labeled so as to disclose its previous use.
General Deception Statutes
Seventeen states presently have general petroleum product
misbranding statutes. ]_/ As column 1 of Table 1 shows, most
were enacted in the 1920's and 1930's. The provisions are
fairly uniform and the Florida statute is typical:
No person shall store, sell, offer, or expose for
sale any liquid fuels, lubricating oils, greases, or
other similar products in any manner whatsoever which may
deceive or tend to deceive, or which has the effect of
deceiving, the purchaser or said products as to the
nature, quality, or quantity of the products so sold,
exposed, or offered for sale. 2/
Such statutes arguably forbid sale of reprocessed oils not
labeled as such; absent disclosure, purchasers of such products
- 301 -
-------
Table 1. CHRONOLOGY OF GENERAL AND SPECIFIC STATE
OIL LABELING LEGISLATION
Period
General laws enacted
Specific
laws enacted3
1925-1929
1930-1934
1935-1939
1940-1944
1945-1949
1950-1954
1955-1959
1960-1964
1965-1969
Date uncertain
5
6
3
0
2
1
1
2
3
6
2
1
aln instances where states have amended their specific
labeling laws to incorporate new requirements, only the
earliest enactments are included in the above chart.
- 302 -
-------
would likely mistake them for virgin lubricating oil. 3/
Disclosure Provisions Specific t£ Reprocessed Oil
Disclosure provisions specific to reprocessed oil are found
in the laws of twenty states; 4/ in seven states they supplement
the general misbranding provisions described above while in
thirteen others they stand alone. 5/
Column 2 of Table 1 traces the chronology of state labeling
statutes specific to reprocessed oil. Most were enacted in
the 1950's, at about the same time that the Federal Trade
Commission was initiating much of its reprocessed oil
regulatory action.
The state statutes are quite diverse. Table 2 (and its
explanatory footnotes) summarizes their provisions. Sixteen
states specify the language and lettering in which previous
use disclosure must be made. Three states require previous
use disclosure on containers' front panels. These latter
state laws v/ere enacted after promulgation of an FTC trade
regulation ruling requiring frontpanel disclosure on all
reprocessed oil sold in interstate commerce. 6/
State Labeling Laws: Legal Challenges
State labeling laws have twice been challenged by oil re-
processors and have been upheld on both occasions.
In Paraco, Inc. et al v. Department of Agriculture, 7/ an
oil rerefiner challenged the application of California's
reclaimed oil labeling requirements 8/ to its product. In
its complaint, Paraco argued that the California law was uncon-
stitutional, because it was vague, uncertain and deprived the
company of equal protection under law. 9/ Paraco contended
that because in the public mind "reclaimed" was synonomous
with "inferior," the labeling requirement would unfairly
demean its rerefined product that was equivalent or superior
in quality to virgin lubricating oils. TO/ Paraco maintained
also that the labeling law, by adversely affecting its sales,
"would result in the v/aste of a valuable asset and prevent
- 303 -
-------
Table 2. PROVISIONS OF STATE REPROCESSED OIL LABELING LAWS
State
Al abama
California
Colorado
Connecticut
Florida
Georgia
Idaho
Illinois
Indiana
Louisiana
Maryl and
Massachusetts
Mississippi
Missouri
New Mexico
New York
Nevada
North Carolina
Texas
Wisconsin
ABC
X
X X
X
X
X
X
X
X
X
X
X
X
X X
X
X
X
X
X
X
X
D E F
X
XXX
X
X
X
X
X
X X
X
X
G
X
X
X
Code:
A Previous use disclosure required on containers. Specific
words and letters not indicated.
B Previous use disclosure required on containers. Specific
words and letters indicated.
C Previous use disclosure required on front panel containers,
D. Previous use disclosure required in advertising.
E Record-keeping or invoice requirements.
F Minimum specification for reprocessed oil established.
G Bottle segregation required.
- 304 -
-------
conservation of limited underground petroleum stocks. 11 /
The California 3rd District Court of Appeals upheld both
the legality of the labeling statute and its applicability
to rerefined products. The court opined that the public
has a right to know what it is buying. The public's pre-
ference for virgin products might be "founded entirely upon
prejudice, which, in turn, is founded on ignorance;" never-
theless, because the public should not be led through the
absence of labeling into buying something it does not desire,
reprocessed lubricating products must be distinguished by
labeling from virgin lubricating products.]2J The court,
in its unanimous decision, did not address Paraco's resource
conservation claims.
In Double Eagle Lubricants v. Texas, 13/ the Double Eagle
Refining Company sought an injunction against enforcement
of Texas' labeling statute. 14/ Double Eagle contended that
the Federal Government had preempted the regulation of used
oil labeling, so that state regulation could not be allowed
to stand. Double Eagle also maintained that the Texas
statute placed an undue burden on interstate commerce.
In upholding the legality of the Texas labeling law, the
court reasoned as follows: in the area of federal-state
jurisdiction covering the same subject matter, federal law
is paramount if Congress has clearly indicated an intention
to preempt the field. 15/ No such clear statement of Congressional
intent is found in the Federal Trade Commission Act. Therefore,
state laws providing for regulation of unfair or deceptive practices
in commerce are valid unless they conflict so much in the same
area with federal law that both cannot stand. 16/ No conflict exists
between the phraseology and intent of the Federal Trade Commission
order and Texas law at issue in this case. 17/ The Texas
law, a valid exercise of the state's police power is
reasonable in its requirements. It incidentally affects
but does not discriminate against interstate commerce. 18/
- 305 -
-------
FEDERAL OIL LABELING REQUIREMENTS
Since 1940, the FTC has concerned itself with the trade
practices of the oil reprocessing industry. In the twenty-
four year period 1940-1964, the Commission issued 17 orders
and agreed to 26 stipulations involving individual oil re-
processors. In 1964, it promulgated a trade industry regulation
applying to all oil reprocessors1 marketing practices.
FTC Action
Beginning in 1940, the FTC challenged reprocessors' affirmative
misrepresentation of their products. Individual reprocessors
were ordered, or agreed in stipulations, to end labeling as
"100% Pennsylvania Oil" products made from reprocessed crank-
case drainings. 19/ In some cases, misrepresentation involved
products whose trade names (e.g., "Cert-o-Penn") could lead
consumers to believe they were purchasing lubricating oil
refined from Pennsylvania crude. 20/ In addition to ordering
the end of affirmative misrepresentation or products, the
Commission required reprocessors to disclose that their
products were made from previously used oil. The Commission,
in so ordering, observed that the public had a preference
for new oil and was therefore entitled to know the origin
of its oil purchases. 21/
From its early cases involving both affirmative misrepresenta-
tion and non-disclosure, the Commission moved into the
arena of simple non-disclosure, wherein it sought to require
reprocessors to indicate on containers that their products
had been reprocessed from used lubricating oils. In these
cases, for which stipulations and orders were first reported
1n 1956, Commission staff maintained that since the public
preferred virgin products to reprocessed products, any
reprocessed oil containers not indicating that its contents
had been manufactured from previously used oil was deceptive,
for in the absence of such disclosure, the public assumed
it was purchasing a virgin oil product. 22/ The FTC staff
argued, further, that in these proceedings, the reprocessors1
contentions that their products were equivalent in quality
- 306 -
-------
to virgin oil products were immaterial. 23/ Four FTC decisions
and court rulings following from them have been selected for
detailed examination here, for they highlight the major issues
attending oil container label regulation.
The Mohawk Case
In the Mohawk Case, 24/ the Commission staff obtained testi-
mony from retailers and consumers to the effect that when
they bought oil not labeled as "reprocessed" they assumed
they were purchasing virgin oil. 25/
Testimony revealed consumer preference for virgin lubricating
oil though purchase choice seemed more greatly influenced
by price and brand name considerations. 26/ Those preferring
virgin lubricating oil to reprocessed lubricating oil indicated
that they had no factual basis for their preference,
but assumed that the virgin lubricating oil was better. 27/
However, a few indicated that they would purchase reprocessed
oil if it could be proved to be equivalent in quality to
new oi1. 28/
Mohawk's expert witnesses testified that within the industry,
purchases were made on the basis of specifications of finished
oil, not on the basis of feedstock source 29/ and that virgin
crudes from various parts of the United States differed from
one another in their lubricating quality. 30/ They also
indicated that virgin lubricating oil marketers, except for
those selling Pennsylvania oil, did not reveal the sources
of the crude feedstock they used in their lubricating oil
refining processes and that the public, in its purchasing,
was not interested so much in sources as it was in the
finished lubricating oils' SAE and API ratings. 3V
The hearing examiner ruled against Mohawk. 32/ He rejected
its argument that if it was required to disclose the source
of its feedstock, then marketers of virgin lubricating oil
should be subject to similar disclosure requirements. 33_/
A cease and desist order was entered which was upheld on
appeal to the Commission. The final Commission order read
- 307 -
-------
as follows:
It is ordered, that respondents, Mohawk Refining Corp. . .
in connection with the offering for sale, sale and
distribution of lubricating oil in commerce, as "comnerce"
is defined in the Federal Trade Commission Act, do forth-
with cease and desist from:
(1) Representing, contrary to the fact, that their lubricating
oil is refined or processed from other than previously used
oil;
(2) Advertising, offering for sale or selling, any
lubricating oil which is composed in whole or in part of
oil which has been reclaimed or in any manner processed
from previously used oil, without disclosing such prior
use to the purchaser or potential purchaser in advertising
and in sales promotion material, and by a clear and
conspicuous statement to that effect on the container. . .34/
Mohawk appealed the FTC order to the Third Circuit Court
of Appeals. 35/ It contended that the FTC opinion and final
order were arbitrary and capricious and lacked substantial
supporting evidence; that the Commission erred in holding that
failure to disclose the source of Mohawk's lubricating oil
product was a violation of the Federal Trade Commission Act;
and that the Commission had erred in excluding testimony
from the hearing record pertaining to the selling practices
of lubricating oil marketers. 36/ The court unanimously
upheld the FTC actions, ruling as follows: The public
prefers new oil to reprocessed used oil. Though the two
might be equivalent in quality, the public is being misled
if it purchases used oil that it believes to be new; "the
public is entitled to get what it chooses, though the choice
may be dictated by caprice or by fashion or perhaps by
ignorance." 37/ Labeling is therefore necessary to distinguish
new oil from used oil. Furthermore, the Commission did not
err in excluding expert testimony to the effect that it was
industry practice not to disclose to wholesale or retail
purchasers the sources of motor oils, but rather to sell oil
on the basis of SAE grades and API service classifications.
- 308 -
-------
These facts are Immaterial, because the record also indicated
a desire on the part of dealers and the public not to sell
or buy rerefined motor oil. 38/
Double Eagle I Case
The Double Eagle I matter 39/ was decided by the FTC on the
same day as Mohawk, February 14, 1958, and it had the identical
outcome.
Double Eagle argued that its rerefined product was equal
in quality to lubricating oil refined from virgin crude and
that to label it as being made from used oil would mislead
an ignorant public into believing it was a low grade product.
Double Eagle contended it would be unfair to require the use
of a label which would cause the public to undervalue its
product and thereby decrease sales. 40/ The rerefiner also
contended that it performed a public service by providing
proper disposal of waste oil. 41_/
The full Commission responded that assertions of qualitative
equality were "immaterial" to its considerations, for it
was solely concerned with the question of whether the public
was led to purchase rerefined oil out of the mistaken belief
that it was buying virgin lubricating oil. 42/ The Commission
added that if consumers have a preference for virgin goods,
such a preference cannot be satisfied by imposing upon them
an article similar to a virgin one but having a non-virgin
origin. 43/ The Commission added, while upholding a hearing
examiner1!; earlier decision, that the rerefiner's "public
service" argument was "without merit." 44/ A cease and desist
order similar to that in Mohawk was entered.
The Double Eagle Refining Company brought suit in the 10th
Circuit Court of Appeals in 1959 seeking to reverse the
FTC order. 45/ The court majority, over a vigorous dissent,
sustained tRe FTC action. The dissenting judge based his
opinion on the assumption that rerefined oil was qualitatively
equivalent to oil refined from virgin crude. He reasoned
as follows: Nothing can be found in the record to sustain
- 309 -
-------
a finding that the public prefers new lubricating oil; the
one witness describing public attitudes stated that purchasers
desire quality and prefer brand names. 46/ Omission of feed-
stock source information has no relation to product quality
and absent "affirmative misrepresentation" it is quality
that is material in determining whether there is customer
deception. The fact that a buyer desires a good oil or a
brand name oil does not mean he has any interest in the oil's
origin. The assumption that the public prefers virgin oil
does not follow from the fact that the public seeks good
oil; yet the Commission made such as assumption, and from it
found deception. 47/
The Royal Oil Corporation matter 4^was decided two months
after the Mohawk and Double Eagle I matters. Prior to the
filing of an FTC complaint against it, Royal Oil, a Maryland
company, had been labeling its reclaimed oil as "re-processed,"
in compliance with a North Carolina statute. 49/ The FTC
staff contended that though required by North Carolina law,
this label did not adequately disclose the used oil origins
of the reclaimed product. 507 The FTC hearing examiner agreed
and issued a cease and desist order similar to those described
above. 51 / The full Commission affirmed the examiner's decision,
declaring that FTC action was not incompatible with state
action. 52/
The Royal Oil Corporation challenged the FTC order in the
4th Circuit. 53/ Royal argued that the FTC had no authority
to require any disclosure beyond that required by state
laws. Royal maintained that Congress had not entered this
field of regulation, and thus the FTC could not nullify a
valid state statute. 54_/
The Fourth Circuit panel unanimously upheld the FTC action,
reasoning as follows: Congress, through the Federal Trade
Commission Act, has given the Commission broad authority
to restrain unfair competition. Unless Congress specifically
-------
withdraws this authority, within particular areas, the
Commission can restrain unfair business practices, even
if these have been subject to state regulation. Furthermore,
the Commission can order halted an unfair method of competition
authorized by state law. 55/ The FTC action, moreover, does
not deprive the company of equal protection under North
Carolina law, though its inter-state marketed products
may be subject to stiffer disclosure restrictions than its
North Carolina competitors' intra-state marketed products;
intra-state competition is not subject to federal regulation
even though it competes with interstate commerce, and the
FTC does not lose its interstate commerce jurisdiction merely
because interstate goods are in competition with intrastate
goods beyond federal control. Finally, although the testimony
in the record is not very strong as to possible deception
of the public stemming from incomplete label disclosure,
it gives some indication that deception might occur. This,
coupled with the Commission's own observations based on
expert knowledge, is sufficient evidence that the labels
can be deceptive. 56/
Double Eagle II
In 1963, the Double Eagle Company became the target of a
second FTC complaint. In a resulting 1964 order j>7/ the
full Commission decided that the company's compliance with
previous full disclosure rulings was inadequate. In this
instance, the Commission reversed an examiner's finding that
no deception of the public had occurred. 58/
The second Commission action against Double Eagle was evidently
prompted by a change in the FTC's standards of full-disclosure.
While in 1958 the Commission felt that the full disclosure
goal was adequately served by having a notice of previous
use printed on side panels of oil containers, by 1961 the
Commission decided that only front panel printing of a previous
use disclosure would meet this goal. This change in standards
caused the Double Eagle Company, which had altered its
labeling to conform to a 1958 Commission order, to fall into
non-compliance.
- 311 -
-------
In reaching its Double Eagle II decision, the Commission
decided that it did not have to examine the hearing record
for evidence of whether deception had been testified to,
for its own visual examination of the containers involved
was adequate for deciding if deception was likely to occur.
597 The Commission found that it was and issued a cease and
desist order requiring front panel disclosure on Double
Eagle's labels. 60/
Double Eagle petitioned the Tenth Circuit to review the FTC
order. 61/ The court upheld the Commission, noting that
though many members of the public might testify that they
had not been deceived, the Commission was acting within
its discretion when, exercising its expert knowledge, it
decided on the basis of visual inspection that Double Eagle's
container labels were deceptive. 62/
Trade Regulation Ruling
Having ruled on a number of cases Involving individual
reprocessors, 63/ the Commission ultimately decided to es-
tablish a trade regulation, governing sales of reprocessed oil.
The regulation, 64/ established after a public hearinq, addressed
many of the issuecf discussed in earlier agency decisions. In
response to re-refiner assertions that they performed a public
service in disposing of waste oil and that their products were
as good as or better than many oils produced entirely from virqin
crude stock, the Commission commented:
The value of the service rendered by this industry is
not germane to this consideration, nor is the quality
of reclaimed oil involved here. It is not necessary
therefore for the Commission to pass upon the relative
merits of new and reclaimed oil. 65/
The Commission determined in its ruling that it constitutes
an unfair method of competition and an unfair and deceptive
act a) to represent used lubricating oil as new and unused;
b) to fail to disclose clearly and conspicuously that such
- 312 -
-------
used lubricating oil has been previously used, and c) to
use the term "rerefined" to describe previously used lubrica-
ting oil unless the physical and chemical contaminants
acquired through previous use had been removed by a refining
process. 667
Although the Commission contended that oil quality was not
germane to its proceedings, it had nevertheless obtained
information from technical experts on the quality of rerefined
oils. Research submitted to the Commission disclosed that
reprocessed lubricating oils were of questionable durability.
It was speculated that removal in the rerefining process
of some of these oils' important components produced this
shortcoming. 67/
In 1971, FTC Chairman Miles Kirkpatrick made the following
comments concerning reprocessed oil quality:
Technical experts...are convinced that actual performance
capabilities of rerefined oil vary greatly in stringent
requirement areas such as motor oil because of the
unknown origin of the waste oil. Although the purity
of rerefined oil...can possibly be controlled by laboratory
specifications and testing, apparently many experts are
convinced that equally important characteristics such
as durability under in-use conditions cannot be determined
without extensive performance testing. 68/
Kirkpatrick added that the Comnission would re-examine its
labeling rule when "valid, impartial, scientific tests"
are available indicating that rerefined .used motor oil is
equal in quality and performance to an acceptable grade of
virgin motor oil. 697 His comments suggest that while the
FTC did not officially weigh product quality in its proceedings,
its action in promulgating a trade rule may have been in
part motivated by a feeling that rerefined oil, though it
met lab specifications, might differ in its durability
characteristics from oil refined from virgin crude.
- 313 -
-------
Impact of FTC Trade Regulation Action
The rerefiners contend that the FTC trade regulation ruling
hurt them economically. TO/ They maintain that many middle-
men marketing their products simply ceased handling them so
as to avoid a relabeling burden. T\J They also contend that
the labeling decision changed theTr competitive position
in the marketplace by altering retailers' shelf-stocking
habits. Prior to the decision, apparently, rerefined oils
competed directly with the more expensive, high quality
virgin lubricating oils, but following the decision, the
reprocessed products were placed >1n shelf locations where
they competed against somewhat less expensive low quality
virgin lubricating oils. 72/ Little data is available either
to support these contentions or to refute them.
Post-Trade Regulation FTC Action
In 1972 the FTC began to reconsider its trade regulation
ruling. The revaluation is part of a broader study of
labeling rules affecting "recycled" products.
Commission staff have met with EPA and Association of
Petroleum Rerefiners (APR) representatives, and have been
furnished information by the rerefiners on the quality of
reprocessed oil. The staff has prepared a labeling proposal
for consideration by the full Commission. It is presently
undergoing review.
Proposals for Changing Label Requirements
EPA Proposals -
EPA staff have suggested that FTC consider establishment
of labeling guides for recyled materials. 73/ Products
made from recyled material with performance characteristics
which are essentially comparable to those of products made
from virgin materials would be treated as new and would
not be required to make a prominent "new" or "recycled"
- 314 -
-------
disclosure. Products containing more than a specified per-
centage of recycled material (i.e., post-consumer waste)
could be labeled as "recycled," 1f the manufacturer so desires
and recycled products inferior in quality to virgin products
would have to have their limitations disclosed. Previously used
products subjected to little or no reprocessing would have to be
labeled as "used."
The National Oil Recycling Act -
H.R. 5902, introduced by Representative Charles Vanik takes
a somewhat different approach from EPA's to the labeling
question. 74/ Section 3(2) of the Vanik bill defines "re-
cycled oiV^as used oil which has been rerefined or other-
wise processed to remove the physical and chemical contaminants
acquired through use, which by itself or when blended with
new oil or additives is substantially identical or superior
to new oil intended for the same purposes. Section 7(a)
of the bill requires that recycled oil shall be labeled as
such when packaged for sale.
The_£PA and Vanik Proposals - An Evaluation
Under the EPA proposals, reprocessed oil would appear to
fall under two labeling categories. On the one hand, for that
reprocessed product equivalent in quality to new oil, no
prominent source disclosure would have to be made. On the
other hand, for that reprocessed product containing more
than a specified percentage of recycled material (i.e.,
crankcase drainings, which are a post-consumer waste), then
regardless of quality, a "recycled" label would be in order.
As they apply to waste oil, the guidelines are ambiguous -
a reprocessed product equivalent in quality to new oil yet
containing more than a specified minimum percentage of re-
processed oil could fall within either of the two regulatory
guidelines just described.
Vanik would label all reprocessed blends
- 315 -
-------
as "recycled" if they were equivalent in quality to virgin
oils but his bill does not require that such blends contain
more than a specified amount of reprocessed oil to qualify
for this label. In addition, his bill selects high quality
reprocessed oil for special labeling treatment. But unless
sales of recycled oil would be assisted by this procedure, there
seems to be no compelling reason to require special labeling.
The Question of Quality -
An alternative approach to both the Vanik and EPA proposals
would be for all lubricating oil products, regardless of
their feedstock source, to be subjected to engine and lab
tests to determine specifications, and to have the specif-
ications be the only labeling requirement. The matter of
quality would need to be resolved in any case as a first
step in determining product equivalence for purposes of
labeling under both the Vanik and EPA proposals.
Considerable controversy presently exists as to whether
rerefined oils are equivalent in quality to virgin lubricating
oils. In question are not only equivalence in lab specifi-
cations but equivalence as well in engine performance tests.
In June 1973 the rerefiners furnished the FTC with results
from an Armour Research Foundation study of used oil
drainings from throughout the country. 75/ Armour reported
that the drainings were rather uniform in composition, more
uniform in composition than virgin crude oils from different
geographic areas of the United States. The rerefiners assert
that this finding is significant because it means that a
rerefiner's feedstock is fairly uniform, thereby eliminating
the need for running expensive engine performance tests to
assess the quality of each batch of rerefined oil. The
rerefiners also furnished the results of a 1953 survey of
rerefined oils that disclosed product uniformity.
The rerefiners have always argued that their rerefined product
is equivalent in quality to virgin lubricating oils, but it
is unclear whether this equivalence is for lab tests, engine
- 316 -
-------
performance tests, or both. As noted previously, research
submitted to the FTC questioned the durability of
reprocessed oil. 76/
Some Defense Supply Agency procurement specifications ex-
plicitly preclude the acquisition of reprocessed oil. 77/
A DSA study indicated that the primary cause for the pro-
hibition is the lack of substantiating data on the quality
of rerefined oil stocks. 78/ The study reported that little
if any test information is available on how the quality
of rerefined is affected by such variables as treatment
method and waste oil feedstock composition. 79/ DSA reported
Bureau of Mines tests on rerefined oil as indicating that
many metal contaminants of waste oil can be substantially
removed by rerefining, but the effect of rerefining on oil
performance characteristics is not known. 80/ The DSA study
concluded that the Defense Department should initiate a
program to develop specifications for an automotive lubricating
oil containing rerefined stocks. 81/
Conclusions -
While the FTC ostensibly did not take product quality and
environmental impact into consideration at the time it promul-
gated its trade regulation ruling, law and reason require
that future rulings consider both. First, Sections 101
and 103 of the National Environmental Policy Act of 1969
require FTC to re-examine its action and to take its environ-
mental impact into account. 82/ Second, since under both
the EPA and Vanik proposals product quality would have to
assessed, and since there is considerable variation among
virgin lubricating oil sources, it would seem that any proposal
for new labeling action should be predicated on the establish-
ment of quality specifications.
Research on product quality is presently under way at the
Bureau of Mines and such research has been proposed by the
Defense Supply Agency. If quality specifications and simple
testing procedures can be established, and products can be
- 317 -
-------
compared on the basis of their lab and performance specifi-
cations, it would seem that, in the absence of both intra-
industry concern with feedstock source and national consumer
preferences regarding feedstock source, there would be little
purpose served by distinguishing virgin oils from reprocessed
oils.
- 318 -
-------
FOOTNOTES
I/ Arkansas: Tit. 41, §41-1918 Arkansas Stats. '64.
Colorado: Ch. 100, §100-2-16 Colorado Revised Statutes
'63.
Connecticut: Tit. 14, Ch. 250, 14-342(a), Conn.
Gen'l. Stats. '58.
Florida: Tit. 31, Ch. 526, §526.01(1), Fla. Stats.
Anno. '72.
Georgia: Tit. 73, |73.222(A)(3) Code of Georgia.
Maine: Tit. 10, Ch. 307, |1654 Maine Revised Statutes '64.
Maryland: Art. 27, §231(a) Ann. Code of Public Gen'l. Laws
of Md. (1971).
- 319 -
-------
Michigan: §75.241(1), Michigan Compiled Laws Anno. '68.
Missouri: Tit. 26, Ch. 414, §414.150 Ann. Missouri Stats.
Nebraska: Ch. 66, §66-318, Rev. Stats, of Nebraska.
New Jersey: Tit. 51, Art. 1, §51:4-1, New Jersey Stats. '70
New York: Art. 26, §391-a(l), McKinney's Consolidated Laws of
N. Y. Annotated '68.
Oklahoma: Tit. 52, Ch. 7, §391, Oklahoma Stats. '69.
Ohio: Tit. 37, §3741.17 Ohio Revised Code Ann.
South Carolina: Ch. 6, Art. 4 §66-461, Code of Laws of South
Carolina '62.
West Virginia: Ch. 47, Art. 10 |47-10-1 W. Va. Code Anno. (1966),
- 320 -
-------
Illinois once had a general deception law (Ch. 104,
§15, Illinois Annotated Statutes 1935), but this was
repealed in 1969.
2/ Title 31, Ch. 526, §526.01(1), Fla. Stats. Anno. '72.
3_/ See discussion in text accompanying footnotes 22-62.
4/ Alabama: Tit. 2, §437(1)-(4), Code of Alabama (Recompiled)
(1958).
California: Div. 8, Ch. 7, Art. 4, §20800 et seq.
Cal. Bus. & Prof. Code.
Colorado: Ch. 100, §100-2-13, Colorado Rev. Stats. '63
Connecticut: Tit. 14, Ch. 250, |14-342(c), Conn. Gen'l. Stats,
Anno. 1958.
Florida: Title 31, Ch. 526, §526.01(2)(a)-(3), Fla. Stats.
Anno. '72
- 321 -
-------
Georgia: Tit. 73, §73-222(4), Code of Georgia of 1933.
Idaho: Tit. 37, §37-2514 et seq. Gen'l. Laws of
Idaho Anno. '64.
Illinois: Ch. 104, §101 et seq., 111. Stats. Anno.
(1973 Pocket Part).
Indiana: Tit. 35, |35-4016, Annotated Ind. Stats. 1969.
Louisiana: Ch. 2, §51-901, La. Rev. Stats. Anno. '65
Maryland: Art. 27, |231(a), Ann. Code of Public Gen'l.
Laws of Md. '72.
Massachusetts: Ch. 94, |295F, Mass. Gen'l. Laws Anno. '72
Mississippi: Tit. 75, Ch. 55, §75-55-13 of Miss. Code
Anno. '72.
- 322 -
-------
Missouri: Tit. 26, Ch. 414, §414.150(2), Ann. Mo. Stats.
Nevada: §590.060(4), Nevada Revised Stats. 1971.
New Mexico: Ch. 65, §65-6-12 et seq., New Mex. Stats.
Anno., 1971.
New York: Art. 26, §391-a(5), McKinney's Consolidated
Laws of N.Y. 1968.
North Carolina: Ch. 1137, Art. 2A, §119-13.1-13.3,
Gen'l. Stats, of N.C.
Texas: Art. 1106(b), Vernon's Ann. P.C.
Wisconsin: Tit. 16, Ch. 168, §168.14(1 )-(2), Wise.
Stats. Anno. '57.
5_/ Colorado, Connecticut, Florida, Georgia, Maryland,
Missouri, New York. See Footnotes 1 and 4 supra.
6_/ See text accompanying Footnotes 64-66 infra.
- 323 -
-------
y 257 P.2d 981 (3rd Dlst. Ct. of Appeal, Cal., 1953).
8_/ Div. 8, Ch. 7, Art. 4 §20800 et seq., Cal. Bus. &
Prof. Code Anno. These sections declare that: crankcase
drainings, lube distillate or any other petroleum
product shall not be sold for use as lubricating oil
in an internal combustion engine unless free from water
or suspended matter and possessing certain flash point
ratings; that if lubricating oil sold has been pre-
viously used for lubrication of such engines, or gears
or shafts attached thereto or for any lubricating
use or has been rerun or filtered, redistilled or
claimed the container shall be labeled "reclaimed
motor oil" or "lubricating oil reclaimed" in red
letters of specified type and size; that anyone who buys,
sells or stores lubricating oil required to be so labeled
shall keep records of purchases, sales and storage.
9/ Paraco, supra note 7, at 983.
- 324 -
-------
JK)/ Id. In this regard, it should be noted that the state
could only enforce the labeling statute by checking
Parace's records, because it was impossible to determine
by any test whether an oil was virgin stock or rere-
fined.
IV Id_.
12/ Id_. at 985.
1_3/ 248 F. Supp. 515 (N.D. Texas, 1965).
14/ Art. 1106(b) Vernon's Ann. P.C.
"(b) No person, firm, association of persons or
corporation shall sell or offer for sale as lubricating
oil, any oil that has been rerun, refiltered, reclaimed
or refined from crank case draining or any other oil
that has been theretofore used for purposes of lub-
rication, unless the said oil is sold as and labeled
'Reconditioned Motor Oil1. The words 'Reconditioned
- 325 -
-------
Motor Oil' shall be plainly and legibly printed on each
container, which said lettering shall be imprinted
in two (2) places on the container or label in a
manner that said lettering will appear both on the
front and back surface of the container when displayed
to the public in sale displays, and which said lettering
shall be in letters of not less than three-sixteenth
(3/16) of an inch in height and not less than one-
sixteenth (1/16) of an inch in the width of each line
used to form said letters." Also see discussion in
text accompanying footnotes 57-66.
J5/ Double Eagle, supra note 13 at 517.
16/ Id_. at 518.
IT/ Id-
18/ Id., at 519.
- 326 -
-------
1_9/ Economy By-Products Co., Inc., Stip. No. 2920 (August
27, 1940); Mouren-Laurens Oil Co., et al, Stip. No.
3301 (December 8, 1941); Free State Oil Co., Stip.
No. 3584 (December 11, 1942); In the Matter of Penn-
Lab Oil Products Co., Docket No. 4524, 34 FTC 1049
(1942); In the Matter of Westville Refinery, Inc.,
Docket No. 4370, 36 FTC 402 (1943); In the Matter of
Dabrol Products Corp. et al, Docket No. 5656, 47 FTC
791 (1950).
2p_/ In one proceeding, the FTC found the trade name and
corporate name alone misleading, even though there was
no claim made that the product was refined from 100%
Pennsylvania crude. See in the Matter of Pennsylvania
Oil Terminal, Inc., et al, Docket No. 5868, 48 FTC
356 (1951).
21_/ Westville Refinery, supra note 19 at 405, 406.
22/ As in all the reprocessed oil proceedings, the bases
- 327 -
-------
of FTC authority were sections 5(a)(l) and 5(a)(6)
of the Federal Trade Commission Act, 15, U.S. C. §45
(a)(l) and §46(a)(6), which declare unfair methods
of competition and unfair or deceptive practices in
commerce to be unlawful and which empower the Commission
to prevent their use.
23/ See discussion infra accompanying footnotes 68-69.
24/ In the matter of Mohawk Refining Corp. et al., Docket
No. 6588, 54 FTC 1071 (1958).
25/ "Transcript of Proceedings before Hearing Examiner
J. Earl Cox in the matter of Mohawk Refining Corporation,
at 8, 35, 159, 197, 209, 215.
26/ Id. at 8, 13, 142, 166, 171, 176, 188, 191, 202-202,
205, 253, 347.
27/ Id. at 17, 18, 173, 180, 191, 227,
- 328 -
-------
287 Id. at 143, 181, 192-193, 205, 217, 228.
29/ Id. at 242-254.
30/ .Id. at 93-96.
31/ Jd. at 256, 261, 270.
32_/ Supra, note 4, at 1074.
337 Id. at 1073.
34/ Jd. at 1078.
357 Mohawk Refining Corp. et al v. FTC, 263 F 2d 818,
(3rd Circ., 1959) 1959 Trade Cases, 69,276.
367 Id..
377 Id., at 69,277 citing FTC v. Alan™ Lunher Co., 291 U.S.
67,77-78 (1934).
- 329 -
-------
387 Id.
397 In the Matter of Frank M. Kerran et al Doing Business as
Double Eagle Refining Co., Docket No. 6432, 54 FTC
1035 (1958).
40/ 14. at 1040.
4J/ Id..at 1041.
42/ I£. at 1039.
437 Id. at 1040.
447 Id. at 1041.
457 Kerran et al v. FTC, 265 F.2d 2461 (10th Clrc., 1959)
1959 Trade Cases, 69,322
46/ Id.
- 330 -
-------
47/ Id.
48/ In the matter of Royal 011 Corp. et al, Docket No.
6702, 54 FTC 1292 (1958).
49/ Royal Oil marketed its oil in North Carolina. Chapter
119, Section 119-13.1-13.3, General Statutes of North
Carolina: Section 119-13.2 reads as follows: Labels
required on sealed containers; oil to meet minimum
specifications. —It shall be unlawful to offer for sale
or sell or deliver in this State re-refined or re-
processed oil, as hereinbefore defined, in a sealed
container unless this container be labeled or bear a
label on which shall be expressed the brand or trade
name of the oil and the words "re-processed oil" in
letters at least one-half inch high; the name and
address of the person, firm, or corporation who has
re-refined or re-processed said oil or placed it in
the container; the Society of Automotive Engineers
(S. A. E.) viscosity number; the net contents of the
- 331 -
-------
container expressed in U.S. liquid measure of quarts,
gallons, or pints; which label has been registered
and approved by the Gasoline and Oil Inspection Division
of the Department of Agriculture; and that the oil
in each sealed container shall meet the minimum
specifications as hereinbefore described for each Society
of Automotive Engineers (S. A. E.) viscosity number.
50/ Royal Oil, supra note 48 at 1292.
51/ Id., at 1298.
52/ Id_. at 1299-1303.
5_3/ Royal Oil Corp. et al v. FTC, 262 F.2d 741 (4th Circ.,
1959), 1959 Trade Cases 69,324.
54_/ Id_.
55/ Id.
- 332 -
-------
56/ Id. at 69,235.
57/ In the Matter of Double Eagle Lubricants et al, Docket
No. 8589, 66 FTC 1039 (1964).
58/ Id_. at 1055.
59_/ Jd_. at 1066.
60/ ]d_. at 1068.
61/ Double Eagle Lubricants et al v. FTC, 360 F.2d 268
(10th Circ., 1965), 1965 Trade Cases 71,613.
62/ Id/ at 71,614.
63_/ Orders:
In the Matter of Salyer Refining Company, Inc.. et al,
Docket No. 6339, 54 FTC 1026 (1958); In the Matter of
High Penn Oil Company, Inc., Docket No. 6492, 53 FTC
- 333 -
-------
256 (1956); In the Matter of Deep Rock Refining Co.,
Docket No. 6579, 54 FTC 1123 (1958); In the Matter of
Acme Refining Corp. et al, Docket No. 6581, 54 FTC
1126 (1958); In the Matter of Lincoln Oil Co. et al,
Docket No. 6669, 54 FTC 1080 (1958); In the Matter of
Supreme Petroleum Products, Inc., Docket No. 6682,
54 FTC 1129 (1958); In the Matter of Allied Petroleum
Corp., et al, Docket No. 6709, 54 FTC 1132 (1958);
In the Matter of Seaboard Oil Co., et al, Docket No.
6717, 54 FTC 1135 (1958); In the Matter of Pierce Oil
& Refining Co., et al, Docket No. C-80, 60 FTC 342
(1962); In the Matter of Porte Manufacturing Co., Inc.
et al, Docket No. C-586, FTC ( ).
Stipulations were agreed to in the following cases:
Virginia Iron & Metal Co., Inc., et al, Stip. No. 8784
(June 19, 1956); S & R Oil Co., Stip No. 8785 (June
19, 1956); Pioneer Oil Co., et al, Stip. No. 8786
(June 19, 1956); Thompson Chemical Co., Stip No. 8831
(November 6, 1956); United Oil & Grease Co., et al,
Stip. No. 8834 (November 6, 1956); Jenney Manufacturing
- 334 -
-------
Co., Stip. No. 8835 (November 6, 1956); Quincy Oil
Co., et al, Stip. No. 8841 (December 11, 1956); Pacific
Oil Co., et al, Stip. No. 8852 (January 1, 1957);
Three Rivers Refining Co., et al, Stip. No. 9124
(November 18, 1958); Warren Oil Co., et al, Stip. No.
9218 (September 1, 1959); Christopher Oil Company,
Stip. No. 9286 (May 12, 1960); State Wide Oil Company,
Stip. No. 9290 (May 26, 1960); Top Oil Co., Inc., et
al, Stip. No. 9369 (December 13, 1960); Searle Petroleum
Co. of Neb., et al, Stip. No. 9380 (January 12, 1961);
Wynne Oil Co., et al, stip. No. 9384 (January 31, 1961);
Kincheloe Oil Company (Industrial Oil Works Company),
Stip. No. 9386 (February 16, 1961); Beckett Brothers,
et al, Stip. No. 9388 (February 16, 1961); Henley
Oil Co., et al, Stip. No. 9434 (May 25, 1961); Tulsa
Refined Oil Company, et al, Stip. No. 9457 (July 13,
1961); Graham Penn Oil Co., et al, Stip. No. 9464
(July 18, 1961); R. E. Moore Co., et al, Stip. No.
9471 (August 3, 1961); Jackson Oil Products Co., et al,
Stip. No. 9473 (August 23, 1961).
- 335 -
-------
64/ "Trade Regulation Rule Relating to Deceptive Advertising
and Labeling of Previously Used Lubricating Oil,"
16 CFR 406. (Adapted July 28, 1964; effective September
1, 1965).
65/ Id_. (Slip text at 4).
66/ Accordingly, for the purpose of preventing such unlawful
practices, the Commission hereby promulgates, as a
Trade Regulation Rule, its conclusions and determination
that in connection with the sale or offering for sale
of lubricating oil composed in whole or in part of
previously used lubricating oil, in commerce, as
"commerce" is defined in the Federal Trade Commission
Act, it constitutes an unfair method of competition
and an unfair and deceptive act or practice to:
(1) Represent in any manner that such used lubricating
oil is new or unused; or
(2) Fail to disclose clearly and conspicuously that
such used lubricating oil has been previously used,
- 336 -
-------
in all advertising, sales promotional material and
on each front or face panel of the container. For
the purpose of this rule the front or face panel means
the part (or parts) of the container on which the brand
name is usually featured and which is customarily
exposed to the view of prospective purchasers when
displayed at point of retail sales; or
(3) Use the term "re-refined," or any other word
or term of similar import, to describe previously
used lubricating oil unless the physical and chemical
contaminants acquired through previous use have been
removed by a refining process.
67/ Letter to FTC dated June 5, 1964 from R.E. Streets, Chief,
Power Sources Section, Chemistry and Materials Branch,
Research Division, Research and Development Directorate,
U.S. Army Material Command.
68/ Letter to Congressman Charles A. Vanik, August 19, 1971,
at 2.
- 337 -
-------
69/ Id.
7Q/ See "Message to President?Nixon, Members of Congress,
The Federal Trade Commission, Pollution Control Agencies
& Others From Association of Petroleum Rerefiners"
(December 1972) at 2.
717 Interview with V. T. Worthington, Executive Director,
Association of Petroleum Rerefiners, October 23, 1973.
72/ Oral Presentation by Teknekron Corporation, contractors
to EPA, September 17, 1973.
73/ See "Solid Waste Disposal Act Extension, Hearing before
the Subcommittee on Public Health and Environment of
the House Committee on Interstate and Foreign Commerce,
93rd Congress, 1st Session, at 59.
747 Introduced March 20, 1973, Congressman Vanik reintroduced
the bill as H.R. 9338, H.R. 9339 and H.R. 9860, so as
to add additional cosponsors for it in accordance with
- 338 -
-------
House rules.
75/ Letter to William D. Dixon, Assistant Director, Rules
& Guides, FTC, from V. T. Worthington, June 25, 1973.
76_/ See text accompanying footnote 66.
TJJ MIL Spec MIL-L-46152, MIL-L-2104C.
78/ "Waste Oil Recycling Study (September 1972).
79/ Id. at 33.
80_/ Id.
8V Id.
82_/ Pub L. 91-190, 42 U.S.C. 4321-4347, Section 101(b)(6)
of the law declares that the Federal Government should
improve its plans and programs to "enhance the quality
of renewable resources and approach the maximum attain-
- 339 -
-------
able recycling of depletable resources. Section 103
requires federal agencies to review their policies
and procedures as a first step in bringing them into
conformance with the national environmental policy
embodied in Section 101.
- 340 -
-------
APPENDIX G
Federal and State Jurisdiction
Over Waste Oils
- 341 -
-------
CURRENT AND POTENTIAL FEDERAL JURISDICTION
A. DEFINITION OF WASTE OIL AND OF JURISDICTION ANALYZED
Not all oily wastes fall within the scope of the definition provided
in section 104 (m) (1) of the FWPCA Amendments of 1972. That section
calls for a study of the generally, effects and potential market of "used
engine, machine, cooling and similar waste oil" (emphasis added). This
definition excludes animal and vegetable oils and excludes unused mineral
oil wastes, e.g., the wastes from drilling for, refining, or transporting
petroleum. It includes mineral oils and mineral oil products which have
been used in machines, motors, engines, compressors, cylinders, axles,
transmissions, transformers, turbines, cable or circuit breaker insula-
tions, and spindles.
This analysis of federal jurisdiction over disposal of waste oils
within the boundaries of the United States and its territorial seas
distinguishes between current and potential federal jurisdiction, i.e.,
that which presently grants regulatory authority over waste oil to an
agency of the U.S. government and that which may do so in the future.
B. CURRENT JURISDICTION
1. Federal Water Pollution Control Act Amendments of 1972
a. Section 311
The definition of oil in section 311 (a) (1) includes a specific reference
to "oil refuse" and is comprehensive enough to include waste oil as defined
above. Section 311 (b) (3) prohibits the discharge of oil "into or upon
the navigable waters of the United States /er/ adjoining shorelines" in
quantities determined in regulations issued~by the President to be harmful.
By Executive Order No. 11735, issued August 3, 1973, the President dele-
gated the authority to issue these regulations to the Administrator of
the Environmental Protection Agency. The regulations were issued in
September 1970 under the predecessor provision to section 311 (b) (3) and
are regarded by the Agency as continuing in effect without being re-issued.
They provided that a discharge is harmful if it leaves a visible sheen
on the receiving water, a definition which withstood judicial review in
U.S. .v. Boyd, 3 ELR 20434, decided in April 1973. A discharge is defined
Fy section 311 (a) (2) as including spilling, leaking, pumping, emitting,
emptying or dumping. A harmful discharge must be reported to the Coast
Guard and is subject to a civil penalty after notice and an opportunity
for a hearing. Section 311 (b) (5)-(6), Executive Order No. 11735.
- 342 -
-------
Section 311 (c) (1) authorizes the President to act to arrange for the
removal of any oil discharge (whether or not in harmful amounts), a
power which he has delegated to the heads of federal agencies having
responsibility under the National Contingency Plan. This plan is
required under section 311 (c) (2) for the purpose of providing for
coordinated action to minimize damage from oil discharges. 36 F. R. 16215.
The Council on Environmental Quality has been assigned the responsibilities
of publishing and revising the plan. Exec. Order No. 11735.
Section 311(j)(l)(c) likewise authorizes the President to issue regulations
establishing procedures, methods and equipment to prevent and contain
discharges of oil from offshore non-transportation related facility or
onshore facility. The President has delegated these responsibilities to
the Administrator of the Environmental Protection Agency and the
Secretary of the Department in which the Coast Guard is operating by
Exec. Order No. 11735. EPA implemented this order in 40 CFR11Z.
b. Section 402
Direct discharges (i.e., not into a municipal sewer system) of waste
oils in quantities less than harmful for purposes of section 311 (for
example, by a firm which cleans fuel oil tanks or service station inter-
ceptors, e.g., the Metropolitan Sewer Cleaning and Pumping Association of
Washington, D.C.) are governed by the requirement to obtain a permit
contained in section 402 of the Federal Water Pollution Control Act
Amendments of 1972. (Presumably, harmful discharges of oil prohibited by
section 311 would not be eligible for a permit under section 402.)
Section 301 (a) proscribes the discharge of any pollutant (defined in
section 502 (12) as any discharge from a point source into navigable
waters, arguably giving broader jurisdiction than section 311, which refers
to "navigable waters of the United States") unless the discharge is
authorized by a permit under section 318, 402, or 404. It is not likely
that section 318, concerning permits to discharge pollutants in connection
with an aquaculture project, or section 404, concerning permits to discharge
dredged or fill material, would be applicable. Section 402, however,
would be. It authorizes the Administrator of the Environmental Protection
Agency, after an opportunity for a public hearing, to issue a permit
for the discharge of a pollutant or combination of pollutants "upon
condition that such discharge will meet either all applicable requirements
under sections 301, 302, 306, 307, 308 and 403 of this Act, or prior to
the taking of necessary implementing actions relating to all such require-
ments, such conditions as the Administrator determines are necessary to
carry out the provisions of this Act." Briefly, this means that the
- 343 -
-------
discharger must (1) meet by July 1, 1977, effluent limitations which
shall require application of the best practicable control technology
currently available, as defined by the Administrator of the EPA pursuant
to section 304 (b) of the Act (section 301 (b)(l)(A));
(2) meet by July 1, 1977, any more stringent limitation established
pursuant to state law or other federal law or regulation or required to
meet water quality standards established pursuant to the Act (section 301
(3) meet by July 1, 1983, effluent limitations which shall require appli-
cation of the best available technology economically achievable for a
category or class of point source (section 301 (b) (2) (A));
(4) meet — if discharges in compliance with the effluent limitations
established in accordance with section 301 (B)(2)(A) would interfere with
the attainment or maintenance of water quality which will assure protection
and propagation of a balanced population of shellfish, fish and wildlife,
and allow recreation all activities in and on the water — effluent
limitations which can reasonably be expected to contribute to the attain-
ment or maintenance of such water quality (section 302 (s));
(5) meet — for discharges from facilities listed by category by the
Administrator of the EPA in accordance with section 306(b)(l)(A) —
federal standards of performance reflecting the greatest degree of
effluent reduction determined by the Administrator to be achievable with
the application of the best available demonstrated control technology,
if the discharge is from a new source of that category, i.e., if construction
of the facility was commenced after publication of proposed regulations
by the Administrator for that category in accordance with section 306
(b)(l)(B) (section 306(e));
(6) meet effluent standards or prohibitions for toxic pollutants
(defined by section 502(13)) listed by the Administrator of the EPA in
accordance with section 307(a)(l) (section 307(d));
(7) monitor effluents as required in accordance with section 308(a)(A)
and permit access in accordance with section 308(a)(B); and
(8) comply with guidelines issued by the Administrator for determining
the degradation of the waters of the territorial seas in accordance
with section 403 (c).
- 344 -
-------
c. Section 313
Section 313 of the FWPCA Amendments of 1972 provides that all federal
agencies having facilities or conducting activities which may result in
the discharge of pollutants "shall comply with Federal ... requirements
respecting control and abatement of pollution to the same extent as any
person is subject to such requirements . . . ."
Discharges of oil without a permit, or in violation of its conditions,
are liable to suit in accordance with section 309 or 505 of the Federal
Water Pollution Control Act Amendments of 1972 and with section 17
of the Rivers and Harbors Appropriations Act of 1899, in addition to the
liability to civil penalties for harmful discharges established by section
311(b)(6).
d. Section 208
Section 208(b)(3) gives the Administrator of the EPA authority to approve
areawide waste treatment management plans submitted by state governors
for areas which have substantial water quality control problems. These
plans must include "a process to control the disposal of pollutants on
land or in subsurfaces excavations within the area to protect ground
and surface water quality. Section 208(b)(2)(k). The Governor must
designate a waste treatment management agency for the area which the
Administrator must accept unless the designated agency does not have
adequate authority to implement the plan. Section 208(c).
2. Marine Protection, Research and Sanctuaries Act of 1972
Discharges of amounts of oil into territorial waters which are not
prohibited as harmful under section 311(b){3) of the Federal Water
Pollution Control Act Amendments of 1972 are not covered by section 402
of the Act. Rather they are covered by the permit program established by
section 102 of the Marine Protection, Research and Sanctuaries Act of 1972.
See comment 13(iii) on revisions to 40 C.F.R. Part 125, 1 ELR 46304. That
section provides that the Administrator of the Environmental Protection Agency
may issue permits for the transportation from the U.S. of material for
the purpose of dumping it into ocean waters if he determines that such
dumping will not unreasonably degrade or endanger human health, welfare,
or amenities, or the marine environment, ecological systems or economic
potentialities. Section 102 also directs the Administrator to establish
and apply criteria for reviewing and evaluating permit applications.
Part 227 of 40 C.F.R. contains the EPA's criteria for evaluation of permit
applications for ocean dumping issued under authority of Title I of P.L.
92-532. Section 227.22 provides:
- 345 -
-------
"Subject to the exclusion of paragraph (h) of this section, the
dumping, or transportation for dumping, of wastes containing the
following materials as other than trace contaminants will not be
approved by EPA.
(d) Crude oil, fuel oil, heavy diesel oil, and lubricating oils,
hydraulic fluids, and any mixtures containing these, taken on board
for the purpose of dumping, insofar as these are not regulated under
P. L. 92-500."
This is so even though the definition of "material" in section 3 of the
Marine Protection, Research and Sanctuaries Act of 1972 specifically provides
that material "does not mean oil within the meaning of section 11 of the
Federal Water Pollution Control Act," i.e., within the meaning of section
311(a) (1) of the FWPCA Amendments of 1972.
H. R. 5450 would amend the definition of material in section 3 to make
clear that Congress intends to exclude oil only to the extent regulated
under the Federal Water Pollution Control Act Amendments of 1972. Until
this definition is amended the authority of EPA to deny applications to
dump waste oils in the ocean is questionable.
3. The Clean Air Act
The disposal of waste oils by burning, either undiluted or combined with
other fuels or matter, produces emissions of particulates. Some of the
particulate matter is heavy metals, principally lead. These particulate
emissions are controlled under the implementation plans for achieving
national primary and secondary air quality standards for particulate
matter prepared by the States in accordance with section 110 of the Clean
Air Act, for approval by the Administrator of the Environmental Protection
Agency. If the waste oils are burned by a stationary facility subject to
standards of performance applicable to new sources of certain categories
of sources (e.g., fossil fuel steam generators, Portland cement plants or
large incinerators), under section 111 of the Act, then the particulate
emissions must not exceed these standards of performance if the facility was
constructed or modified after the publication data of the regulation
containing the standards. See 40 C. F. R. 60.1.
- 346 -
-------
C. POTENTIAL JURISDICTION
1. Clean Air Act, Section 112
If the administrator of the Environmental Protection Agency determines, as
he has for mercury, beryllium and asbestos, that lead is a hazardous air
pollutant, i.e., an air pollutant to which no ambient air quality standard
is applicable and which may cause or contribute to an increase in mortality
or an increase in serious irreversible, or incapacitating reversible, illness,
then the burning of waste oils containing lead (e.g., crankcase drainings)
will have to be conducted so as to comply with emission standards for lead
adopted in accordance with section 112(b)(l)(B).
2. Hazardous Waste Management Act of 1973 (S. 1086, H. R. 4873)
Section 3 (4) of the Administration's bill governing the disposal
of hazardous wastes on land defines hazardous wastes as "any waste
or combination of wastes which pose a substantial present or potential
hazard to human health or living organisms because such wastes are
nondegradable or persistent in nature or because they can be biologically
magnified, or because they can be lethal, or because they may otherwise
cause or tend to cause detrimental cumulative effects." Should
this bill or a modified version of it pass with this definition
substantially intact it is likely that its provisions would apply
to the disposal of waste oils. A report to the EPA by the Battelle
Institute under section 212 of the Resource Recovery Act treated
oils as hazardous.
The staff of Senate Commerce Committee's Subcommittee on Energy and the
Environment is revising S.2753 for consideration by the Subcommittee at the
end of February 1974. This bill would govern unsafe waste disposal
practices and the disposal of hazardous wastes. It would establish
guidelines for the disposal of all wastes from federal facilities and
for unsafe disposal practices of non-hazardous wastes. For hazardous
wastes certain practices and procedures would be prescribed. The deter-
mination of which wastes are deemed hazardous would be subject to the
discretion of the Administrator of the Environmental Protection Agency.
The proposed standard for inclusion on the list is "unreasonable risk
to health and environment." EPA would also set standards to be met by
mandatory state-administered permit programs governing generators,
transporters and disposers of hazardous wastes. The bill defines wastes
to include fluid and gaseous wastes.
3. Toxic Substances Act (S. 426)
Depending on what action the conference committee takes on this bill,
its provisions could apply to waste oils.
- 347 -
-------
CONCLUSION
These legal provisions do not offer comprehensive control of collection
and disposal of waste oils. Additional control over collection is
provided by some municipal fire prevention ordinances which require
service stations to have underground tanks to store waste oils. These
ordinances usually do not apply to other enterprises which generate
waste oils, often in large quantities.
Disposal of waste oils by uncontrolled burning, by road oiling, by
dumping on land, by putting it in the garbage or down the drain, by
mixing them with fuel or house heating oils — all of which have demonstrated
or probable harmful effects -- is not adequately controlled by present
laws. Nor do present state or federal laws either require waste oils to
be saved or collected, or control how they are stored.
- 348 -
-------
Section Three: Alternative Legal Approaches
I. INTRODUCTION
The findings of this report resulted in a recommendation that regulatory
authority for the collection and disposal of waste oil should be vested
in State and/or local authorities. This section presents several
alternative methods for federal/state intervention if conditions change,
and such intervention is warranted with respect to improving economic
efficiency.
Defining alternative legal approaches to used oil problems requires
knowing what problems are and what means would be feasible (tech-
nically, legally, administratively and economically) and effective in
addressing the problems.
This section will state these potential problems generally: discuss
what means could address them effectively; suggest several alternative
approaches which could employ these means; analyze the federal-state-
local relations, the advantages and disadvantages of, and the possible
legislative vehicle for each alternative approach; and propose alternative
possibilities for funding the alternatives.
II. THE PRINCIPAL PROBLEMS
There are two principal used oil problems. First, unknown amounts of
lubricating oil are being used once and then disposed of. Second,
many means of disposing of used oils may be causing unnecessary air,
water and soil pollution.
- 349 -
-------
III. MEANS FOR ADDRESSING THE PROBLEMS
A review of existing programs to control collection and disposal of used
oils in the U.S. and abroad indicates that the following elements offer
effective means for achieving comprehensive control.
1. Discharging used oils on land or in water, or burning them in other
than properly equipped incinerators should be prohibited. Some programs
proscribe giving used oils to other than officially approved collection or
disposal facilities.
Such provisions are necessary to discourage such wasteful and harmful
practices as dumping used oils down drains, into sewers, onto empty lots,
or burning them in the open.
2. Persons or companies having more than specified minimum amounts (e.g.,
50 gallons) of "clean" used oils should either be able to give them to
authorized collection centers or have an approved collector pick them up
without charge.
Disposing of severely contaminated used oils can be costly — an
alternative in such cases is to charge for picking up or accepting
such wastes. Likewise it is usually uneconomical to collect less
than certain minimum amounts. What the minimum is depends upon the
costs of collection and the cost/revenue resulting from alternative
waste oil uses. Approximately fifty gallons is the minimum amount
in Germany.
If a person or company has to pay to have his used oils picked up he is
tempted to dispose of them "for free" by dumping them somewhere. Likewise,
if it is much less convenient to have them picked up or to give them to
a proper collector, the same temptation will exist. For persons having less
than the specified minimum of used oils, either municipalities should
establish collection centers where they can be deposited for free or
sales outlets for oil products should be required to accept them without
charge.
3. If persons are to be able to give their used oils away or have them
picked up, then there needs to be a corresponding capacity to either accept
or collect them on a regular basis. These collectors or collection stations
should be reliable. That is, they must have enough safe facilities to
perform their functions and enough at stake to prevent them from disposing
of the used oils improperly once collected. In many jurisdictions they
must obtain a permit to do business based on a demonstration that their
facilities are adequate. In some jurisdictions one may only give his
used oils to a licensed collector.
- 350 -
-------
4. Just as it is important that collection methods and facilities be
approved, so it is that the means of "ultimate" disposal of used oils
be carefully controlled.
There are many possibilities for ultimate disposal: incineration, rerefin-
ing, reprocessing prior to re-use, among others. Which of these possibilities
are preferred or acceptable varies from place to place with varying
circumstances. Whichever ones are acceptable must be carried out properly,
however. For this reason, these operations should also be subject to
supervision.
5. The best means for assuring compliance by collectors and disposers
with the conditions of their doing business is that they maintain records
of the transactions involved — date, name, amount and kind of oil collected
or transferred to a disposer, means of disposal, etc.
6. Compliance must also be checked by government officials and those
subject to this supervision must make available the information the officials
need to perform their functions. Proprietary information must be kept
secret by these officials.
7. Those who violate the requirements outlined above must be liable to
criminal sanctions and equitable relief must be available to remedv t.hp
violations. Some jurisdictions have provisions that holders of licenses
will lose them for serious or repeated violations.
8. Many people do not know how to dispose of their used oils properly,
nor why it is important to do so. A public information program to explain
the reasons for proper disposal and the means for doing so is vital.
- 351 -
-------
IV. ALTERNATIVE APPROACHES FOR IMPLEMENTATION
There are several alternative approaches which could implement the means
discussed above for assuring comprehensive waste oil collection and disposal.
A. Interstate compacts
B. Public corporations
C. Grants-in-aid for government programs
D. Permits to sell, collect and dispose of oil products
E. Regulations requiring the oil industry to collect
and dispose of their used products
F. Positive economic incentives for private entrepreneurs
A. INTERSTATE COMPACTS
Article I, section 10 of the U.S. Constitution provides that no state may
enter into any agreement or compact with another state without the consent
of Congress. With such consent, of course, states can and have entered into
agreements designed to facilitate regional solutions to various kinds of
problems. These agreements may also include the federal government as a
party: the compact creating the Delaware River Basin Commission does this.
Bills containing the language of the proposed agreement and authorizing
the governor to enter into the agreement must be enacted by each prospective
state party. If the agreement also affects the political balance of the
federal system, as many do, then it must likewise gain the formal consent
of Congress before becoming effective. Examples of well-known and relatively
effective agencies created by interstate compacts, in addition to the
Delaware River Basin Commission, are the New York Port Authority and the
Ohio River Valley Sanitary Commission (ORSANCO).
There are several issues which must be considered in working out a compact
which will be effective. Should the powers of the agency created be
research and advisory only, or should they include rule-making and enforce-
ment powers? Should the federal government be represented as a party, an
observer, or not at all? What should the membership of the agency be and
what kind of political consistency should it have? Should the agency's
staff implement decisions or State personnel? How are jurisdictional
conflicts to be resolved? How can adequate financing of the agency's
programs to be assured? To what extent can the agency modify existing
legal obligations?
The advantages and disadvantages of interstate compacts depend in large
measure on the decisions reached on these issues in the process of
negotiating the terms of the compact. One obvious advantage of compacts is
that they allow for regional approaches to regional problems. Since the
generation of waste oils is heaviest in conurbations like those along the
- 352 -
-------
eastern coast of the United States, compacts creating waste oil collection
and disposal agencies to carry out the functions discussed above might be
effective approaches in those areas. A disadvantage of compacts is that
they normally take several years to enact: first there are elaborate
preparations and negotiations of a draft compact, then as many state legis-
latures as there are prospective state parties must enact bills authorizing
the state to participate, then the Congress, too, must approve the compact"
B. PUBLIC CORPORATIONS
States have inherent power to create corporations which may operate within
their terriotries. The Congress has the power to create corporations when
they are necessary proper means for carrying out any of the powers of the
federal government enumerated in the Constitution, e.g., the power to
regulate commerce among the states.
A public corporation is one created by and subject to the control of a
legislature to carry out purposes connected with the public good in the
administration of government. Public support or revenues and properties and
public control are the distinguishing marks of a public corporation. The
whole interests must belong to the government. Towns, cities and counties
are familiar public corporations on the state level. The Federal Deposit
Insurance Corporation, the U.S. Postal Service, and the Tennessee Valley
Authority are well-known federal corporations. So are AMTRAK and Comsat.
Public corporations may be organized to accomplish much more limited tasks,
however. In Germany, for example, the "bilge water drainage association"
(Bilgenentwaesserungsverband) has more than half a dozen boats equipped to
pump out Rhine-going vessels, separate the water from the oils and store the
oils on board until they are pumped out to a re-refinery in Duisburg, Germany.
90% of the difference between the revenues for the products the re-refinery
makes from these bilge water oils and the expenses of collection and re-refin-
ing is borne by the German states riparian to the Rhine in proportion to
their population, and 10% is borne by the association of Rhine shippers, the
water works on the Rhine and the government of the Netherlands (since Dutch
boats are also serviced).
Public corporations could be created to carry out the collection and
disposal purposes described above by either state legislatures or by the
Congress. Public corporations created by Congress could be made responsible
for regions crossing state boundaries. The advangtages of creating new
institutions to carry out specific missions are the enthusiasm and energy
which characterize the beginnings of a new project. But his enthusiasm can
lead to zealoushess at the beginning and after a time the institution
can become more interested in building its empire or defending its preroga-
tives. Public corporations also tend to limit the entrance of private
- 353 -
-------
entrepreneurs Into the activity for which the corporation is responsible.
There are potential jurisdlctional conflicts between federal public
corporations and related state programs in the area, and vice versa.
C. GRANTS-IN-AID
Grants-in-aid from one level of government to another in support of national
or state programs are quite common. Title II of the Federal Water Pollution
Control Act Amendments of 1972 provides for federal grants to any state,
municipality, or inter-municipal or interstate agency for the construction
of publicly owned sewage treatment works, and there are state laws providing
for grants to municipalities which supplement the federal share (75%).
Similarly, section 105(a) (1) (A) of the Clean Air Act authorizes grants
to air pollution control agencies of up to two-thirds of the cost of
developing (or of up to one-half of the cost of maintaining) programs for
the prevention and control of air pollution. Higher fractions of cost
support are authorized for programs to control air pollution in areas
containing two or more municipalities (section 105(a) (1)(B)).
These examples indicate the choices to be made in designing a project grant
program: 1) what levels of government the granting government should deal
with (federal, state, local, regional, interstate); 2) whether and to what
extent the grants should be matching; 3) how the resources should be allocated
among potential recipients; and 4) what the administrative relationships
should be between grantor and grantee governments. Grants from one level
of government to support programs of another level are also often conditioned
on the fulfillment of specified criteria. Whether grants supporting waste
oil collection and disposal programs should be conditioned upon compliance
with criteria would be decided on the basis of the relationship between
the governments involved and the scope of the program proposed.
Grants-in-aid can encourage grantee governments to undertake program they
would not have felt able to do alone. On the other hand they can seduce a
government into choosing to spend money for something for which a supplementary
grant is available rather than for something more needed. Grants often have
conditions which cause difficulties for the organization of state governments
(e.g., the requirement that a single state agency control the program). On
the other hand, these conditions often make the difference between effective
and efficient use of the grant money and largesse. Indeed, it may be said
that the more conditions Imposed to assure the grant money is properly used,
the less attractive the grant becomes. The intergovernmental relations
between grantor and grantee depend almost entirely on the conditions which
are specified and the means agreed upon for measuring performance under the
grants. Too often the goals of giving and getting grants are lost sight of
in the process of building up records of giving them out and getting them.
- 354 -
-------
H.R.5902 introduced by Representative Vanik proposes a grant program of
$25,000,000 a year from the federal government to assist states in fulfill ing
the purposes of that bill.
D. PERMIT PROGRAMS
A common way of regulating behaviour is to require those engaged in it to
obtain permits and to impose conditions requiring the desired behaviour.
Maryland, for example, has instituted a system of oil handlers permits which
must be obtained by drivers of oil tanker trucks, owners of oil terminal
facilities, and service station operators. A bill recently introduced into
the Parliament in Holland would require that used oils only be collected
and disposed of by licensed persons. In this way the government hopes to
weed out unreliable operators. Record-keeping requirements could be imposed
as conditions to permits, as could requirements for providing facilities for
the collection and storage of used oils.
Permit programs could be established by state or federal legislation.
Strictly federal permits are normally limited to fields pre-empted by the
federal government, e.g., regulation of nuclear power plants, or placing
materials in navigable waters. A recent trend, evident in the Federal Water
Pollution Control Amendments of 1972, is to establish federal permit programs
which can be administered by states which comply with the substantive and
procedural aspects of the program. Such a system has been proposed for the
regulation of hazardous wastes in S.2753 and could be applied to used oils.
Since disposal of used oils is largely a problem in urban areas, however,
permit programs would seem more appropriately enacted by the states affected.
Permit programs offer great flexibility, but this flexibility itself has
been criticized as leaving too much discretion with functionaries often
willing to compromise in order to avoid conflict. This discretion can be
limited by careful drafting of the statute delegating authority to administer
permits, but legislative supervision of the administration of the program is
advisable. One possible means of exercising this supervision is to require
the submission of periodic reports to the legislature by those responsible
for administering the program.
Another difficulty with permit programs is that enforcement of their
provisions is usually separated from those who prepared them. In Maryland,
for example, the oil handlers permits are granted by the water quality permit
division and are enforced by the general enforcement section. This presents
several potential difficulties. Permits are often prepared by persons ignorant
of what is necessary to have a readily enforceable document. The enforce-
ment staff is often ignorant of the background of the provisions of the
permit's conditions and may not appreciate the reasons supporting particular
provisions.
- 355 -
-------
As a parctical matter, a comprehensive permit program for all those who
generate, collect and dispose of used oils would involve a great deal of
time and personnel to administer and enforce.
E. OIL INDUSTRY COLLECTION AND DISPOSAL
Since the oil industry has the means for distributing its products, by
pipeline, rail, and tanker trucks, the industry could supplement these
means with equipment to collect used oil products and return them to
facilities at their refineries for reprocessing.
The oil industry itself takes care of collecting and disposing of used
oils in several European countries. In France the large oil firms and the
re-refiners have created a private company to collect waste oils from all
over the country. 50,000 tons of what is collected by this company are
delivered to re-refiners, the rest is delivered to the firms' refineries
where it is burned. The Belgian petroleum association, too, has created
an autonomous organization to collect used oils from garages, industries
and other large users. This organization is also responsible for disposing
of these oils, either by incineration or re-refining, in installations
approved by government health officials. In Denmark the refineries and
the association of oil companies have entered into an agreement whereby
the companies' contractors collect used oils form garages and deliver them
to the refineries.
Each of these arrangements has been worked out in conjunction with
government officials to coordinate with their programs and policies.
Comparable arrangements in the United States would likewise have to take
into account local circumstances and local, state and federal waste
disposal programs. The feasibility of cooperative arrangements between
governments and the industry need consideration, e.g., establishing
municipal collection points for oil companies to collect from.
An advantage of requiring the oil industry to manage the collection and
disposal of its used products is that it would enable taking advantage
of an existing system of distribution. Since this system is not by any
means entirely integrated, however, there would have to be adjustments made to
"reverse" the flow of oil products. A disadvantage of such a requirement
is that it would conflict with the present system of collecting used oils
to the extent it exists, unless arrangements could be made for collaboration,
perhaps on a contract basis. It would also make less used oils available
to re-refiners. Oil industry representatives have raised the possibility that
such a requirement would have to be accompanied by legislation providing a
special exception to the antitrust laws for these activities. If so, this,
and the structure of the industry itself indicate that this alternative would
most appropriately be accomplished by special federal legislation. In
considering this legislation Congress could determine whether or not federal
pre-emption was advisable to avoid potential conflicts with subsequent
state enactments.
- 356 -
-------
F. POSITIVE ECONOMIC INCENTIVES TO PRIVATE ENTREPRENEURS
The catalogue of positive incentive mechanisms adopted by the fed-
eral government to encourage private enterprise to engage in de-
sired activity includes favorable tax treatment, preferential pro-
curement treatment, and credit subsidies. These are discussed be-
low.
1. Federal Taxation Policies
a. The Excise Tax Reduction Act of 1965
A return to the pre-1965 lube oil excise tax structure would re-
store the tax differential re-refiners enjoyed in the off-highway
market prior to enactment of ETRA. The excise tax would no longer
be the highway user fee it is at present, but would be a device
for keeping the re-refining industry alive.
Excise taxes are regressive in nature. In recent years they have
been reduced or eliminated except when their receipts have been
earmarked for special purposes. In these latter cases they have
come to be considered user fees. Excise taxes functioning as user
fees include those taxes whose receipts are funneled into the High-
way Trust Fund, Land and Water Conservation Fund, and the Airport
and Airways Development Fund.
Return to the pre-ETRA lube oil excise tax structure and payment
of the proceeds of the tax into the general fund would thus be
contrary to this policy trend. However such a return might be
justified if it would be an effective means of improving economic
efficiency.
Restoration of the pre-ETRA tax system would hopefully both entice
new capital into the waste oil reprocessing market and provide
existing re-refiners with sufficient profits to invest in new equip-
ment and processes. However, uncertainties in the petroleum market-
place make it difficult to predict with any assurance that return
to the pre-ETRA tax structure would achieve these goals. However,
since the administrative adjustments required would not be of great
magnitude, entailing principally a minor change in exemption procedures,
and since there would be a net revenue benefit to the United States
treasury, EPA is recommending reexamination of the pre-1965 lube oil excise
tax structure. Such a recommendation would be consonant with the
Senate's 1965 position in defense of this system. As noted previously,
the Senate abandoned its opposition to ETRA's revision of the lube
oil excise tax system not so much because it believed ETRA's provisions
to be superior, but because it was willing to accede to them in
exchange for the House's acceding to provision of the Senate version
of ETRA.
- 357 -
-------
b. Congressional Proposals for Lube Oil Excise Tax Reform
Several bills introduced into the 93rd Congress seek to modify the
existing lubricating oil excise tax system as a means of providing
assistance to the re-refining industry.
H.R. 5902, the National Oil Recycling Act, was introduced by Con-
gressman Vanik on March 20, 1973. Identical to H.R. 5902 and
with a total of 31 co-sponsors are Congressman Vanik's H.R. 9338
and H.R. 9339 (both introduced July 17, 1973), and H.R. 9860 (in-
troduced August 2, 1973). Taxation provisions are only a small
portion of the bill. They amend sections 4091 and 4093 of the
Internal Revenue Code and repeal section 6424 and cross-references
to it. (See The Appendix to this section for discussion of these
sections.) The lubricating oil excise tax is extended to cutting
and hydraulic oils and the off-highway use credit is eliminated.
Recycled oils may be sold tax-free.
H.R. 10888, introduced by Congressman Fulton on October 12, 1973,
and Senator Thurmond's S. 409, introduced January 16, 1973, con-
tain provisions similar to those of Congressman Vanik's H.R. 5902.
H.R. 4421, introduced by Congressman Vigorito on February 20,
1973, revises section 4091 so as to exclude re-refined oils from
the definition of the lubricating oils subject to taxation. This
provision, as similar provisions in the bills described above,
would make statutory the existing regulatory provisions providing
for the tax-free sale of reprocessed oil or blends of reprocessed
and virgin oil. H.R. 4421 also amends section 6424 to override
IRS's decision in Revenue Ruling 68-108; it provides that the use
of virgin oil in re-refined oil is to be considered as a use of
oil otherwise than in a highway motor vehicle, thereby providing
for rebate of the tax paid on the oil.
- 358 -
-------
2. Federal Procurement Action
An additional means of preventing potential environmental pollution might be
government procurement of re-refining products. While government
lubricating oil purchases comprise but a very small percentage of
the lubricating oil market, establishment of closed loop re-refin-
ing systems could provide a boost to the re-refining industry and
might provide an incentive for entry into the market of new entre-
preneurs with new technologies. The mechanics of developing a
closed loop system for procurement of re-refined oil products have
been described in the Teknekron report to EPA.
Ample precedent exists for government procurement action to assist
technologies that promote environmental protection goals. Section
212 of the Clean Air Act of 1970 provides for government procure-
ment of low-emission vehicles, even if they cost up to 200% more
than higher emission vehicles for which they have been substituted.
A federal Low-Emission Vehicle Certification Board certifies low-
emission vehicles including among its certification criteria safety,
performance, reliability, serviceability, noise level, maintenance
costs, and fuel availability. For the purpose of permitting agen-
cies to pay premium prices for low-emission vehicles, $5,000,000
is authorized for the extra payments for fiscal year 1971 and
$25,000,000 for each of the two succeeding fiscal years.
Similar procurement provisions are found in section 15 of the Noise
Control Act of 1972. A Low-Noise Emission Product Advisory Com-
mittee can be established by the EPA Administrator to assist him
in the certification of low-noise-emission products. Low-noise
emission products are to be given preference in procurement. To
fund the premium price procurement policy, $1,000,000 is author-
ized for expenditure in fiscal year 1973 and $2,000,000 for each
of the succeeding fiscal years.
Were the federal government to participate in closed loop systems,
it might realize a net savings in the form of decreased lube oil
purchase and waste oil disposal costs. Of course, the federal gov-
ernment would want to be sure that it was obtaining oil that met
its chemical and performance specifications. Although chemical
and engine tests would be required to assure that specifications
are met, it is desirable to conduct such tests in any case so that
oils can be labeled as to quality in conformance with new FTC guide-
lines regarding the labeling of recycled goods.
- 359 -
-------
3. Credit
If a policy decision, based upon economic criteria, is made to expand
the capacity of or to encourage new technological inneration within
the re-refining industry then government credit subsidies might
prove useful to accomplish this end. One form of credit extension could
be low interest loans, by means of which existing or prospective re-
refiners could obtain capital at an interest rate below prevailing
market interest rates. A second form of credit extension would be a
government loan guarantee, in which the federal government guarantees
a private sector creditor that if a re-refiner defaults on payments
of interest or principal, then the government will make good the loan.
Federal credit subsidies can be found in many sectors of the econ-
omy. In the area of commerce and economic development, one can
identify small business loans, small business investment company
loans and economic opportunity loans. Re-refiners or those seeking
entry to the re-refining business could be encourage to seek loans
through existing programs, or the federal government could estab-
list a special loan fund to encourage re-refining. Capital for the
fund could be derived from the lubricating oil excise tax.
The principal problem associated with such credit subsidies is
that there is no assurance that they will be effective. One can-
not predict whether private entrepreneurs will respond to the loan
opportunity, and there is no way of knowing what the default rate
on such loans might be.
- 360 -
-------
APPENDIX: FEDERAL MANUFACTURERS' EXCISE TAXES ON
LUBRICATING OILS
PROCEDURES
Provisions of the Internal Revenue Code provide for payment of an
excise tax of 6 cents per gallon by manufacturers or producers of
lubricating oil. Ho such tax is payable on imports of lubricating
oil.
Lubricating oils are exempt from taxation if they are cutting oils,
reclaimed oils, or oils seldom used for lubricating purposes. Also
exempt from the tax are certain sales from one manufacturer to an-
other, sales to state and local governments, sales for export, sales
for use on some vessels and aircraft, and sales to certain educational
organizations. Tax-exempt sales can usually be made when exemption
certificates are provided to a manufacturer by a lubricating oil
purchaser. These certificates may be printed by the concerned par-
ties following a format provided by the Internal Revenue Service
in its regulations.
Refunds of taxes paid may be obtained by purchasers of lubricating
oils used otherwise than in a highway vehicle. Refunds may take
the form either of direct payments or credits against income taxes
owed.
A summary of the principal sections of the Internal Revenue Code
and regulations pertaining to lubricating oils follows:
Section 4091 of the Code imposes a 6 cents per gallon tax on lub-
ricating oils to be paid by the manufacturer or the producer.
Under section 48.4091-6 of the IRS regulations, sale of lubricating
oil seldom used for lube purposes, or sale of lube oil for resale
for non-lube oil purposes, may be tax-free. For a sale to be tax-
free, a manufacturer must obtain an exemption certificate from the
purchaser, and a purchaser purchasing lube oil for resale must ob-
tain such a certificate from the second purchaser of the oil.
The exemption certificates which are filed are retained by the man-
ufacturers. When sales are frequent of lube oil seldom used for
lube purposes, one certificate covering an entire year's orders will
be acceptable. Otherwise, one must be completed for each order.
Manufacturers have a duty to ascertain the validity of a certificate.
- 361 -
-------
Oils sold tax-free under the provisions of regulation 48.4091-6 do
not qualify for tax refunds or credits against income tax available
under sections 39(a)(3) and 6424 of the Internal Revenue Code. How-
ever, if oil on which tax has been paid is used for non-lube purposes,
the ultimate purchaser may file a claim for credit under section
39(a)(3) for refund under section 6424.
Cutting oils may be sold tax-free. This may be done following any
of the three procedures described in T.I.R. 784 (December 8, 1965)
and Revenue Procedure 66-52, 1966-2 Cu. Bull. 1263. First, when
oil is sold in containers smaller than five gallons which bear lab-
els indicating that their contents are for use only in cutting and
machining operations, when advertising for the oil indicates this,
and when the oil is sold for such use or for resale for such use.
Second, oil may be sold in bulk tax-free when the IRS Commissioner
has determined that an oil is suitable only for cutting uses. Third,
a purchaser may obtain a cutting oil exemption certificate, specify-
ing that his oil purchase is to be used for cutting purposes. The
cutting oil certification procedure is similar to the certification
procedure of section 48.4091-6 for sales of lubricants seldom used
for lubricating purposes.
Section 48.4093-1 of the regulations provides that sales of lubri-
cating oil by one manufacturer to another manufacturer for resale
may be on a tax-free basis, provided that both manufacturer and
purchaser have registered with the District Director of Internal
Revenue. For subsequent tax-collection purposes, the purchaser of
oil made tax-free under the provisions of this section is consid-
ered to be the manufacturer of the oil so purchased.
Section 6424 of the Internal Revenue Code provides that the ulti-
mate purchaser of lubricating oil (other than cutting or previously
used oils) used otherwise than in a highway vehicle, may obtain a
6 cents per gallon payment from the government. Under the provi-
sions of section 39(a)(3) of the Code, this ultimate purchaser may
claim this as a credit against his income tax. Alternatively, if
the amount claimed exceeds $1000 for the first, second or third
quarter of the year, he may file a claim for the amount prior to
the last day of the quarter following the quarter in which the
claimed refund exceeds $1000.
- 362 -
-------
IRS form 843 is used to make a quarterly claim. For a yearly claim,
IRS form 4136 is attached to the income tax form filed by the clai-
ment -- form 1040, 1120, 1120-S or 1065. The individual seeking
a refund indicates the number of gallons of lube oil purchased, and
multiplies this by 6 cents to obtain the total for the credit sought.
The taxpayer must also list the general purposes for which the oil
has been used. Section 6424(d)(2) of the Code provides that witnesses
and books may be examined to determine the validity of credit claims.
Those exempt from income tax do not claim a credit against their
income tax, but obtain direct refunds. Mo amount is payable under
section 6424 for oils which have been used off the highway but which
have been sold tax-free.
Section 4218 of the Code provides that if an individual manufacturer
produces lubricating oil and uses it otherwise than in a taxable item,
then he pays tax on'it equivalent to the tax payable were he to sell
it. However, if sale of the oil to another purchaser for a particu-
lar (e.g., non-lubricating) use would be tax-exempt, when the manu-
facturer uses the oil in such a non-taxable manner himself, he is
not liable for tax.
Section 4221 of the Code provides that sales of lube oil are tax-
exempt if the lube oil:
1. is for use by a purchaser for further manufacture, or for resale
by the purchaser to a second purchaser for use by the second purchaser
in manufacture;
2. is for export, or for resale by a purchaser to a second purchaser
for export;
3, is for use by a purchaser as a supply for vessels or aircraft
(though the definition of vessels and aircraft is restrictive);
4. is to a state or local government for its exclusive use;
5. is to a non-profit educational organization holding a Code sec-
tion 501(a) exemption.
Generally speaking, exemption certificates are required for tax-ex-
empt sales in categories 1, 3 and 4 above. For export sales, proof
of export must be shown to obtain exemption. For sales to section
501(a) tax exempt educations organizations, the organizations and
the manufacturers must be registered with the Internal Revenue Ser-
vice.
- 363 -
-------
V. FEDERAL FUNDING OPTIONS FOR WASTE OIL PROGRAMS — SOURCES OF REVENUE
Revenue for funding collection and disposal of waste oil may be
derived from existing federal or state or local tax revenue or from the
collection of special disposal fees. A funding system should be easy
to administer and require users of oil to pay the cost of its dispo-
sal. Among the possible funding options are the following:
A. DISBURSEMENTS FROM GENERAL REVENUES
Under this option, the federal government could devote a share of
general revenues to a waste oil program. The principal argument
against this particular option is that it imposes the cost of waste
oil collection and disposal on all taxpayers, rather than on the
users of lubricating oil. Since it is fairer to impose these costs
on those who cause them and there are feasible means to do so, these
means will be the focus of this discussion.
B. IMPOSE A DISPOSAL FEE AT THE POINT OF FINAL PURCHASE OR DISPOSAL
Under this option, a disposal charge would be imposed at the point
of ultimate purchase or at the point of ultimate disposal. Imposing
a charge at the point of ultimate disposal would tend to encourage
clandestine means of disposal in order to avoid the charge and would
necessitate a highly developed regulatory system in which all dispo-
sal is controlled and in which all or most oil transactions are re-
corded. Imposing a charge at the point of ultimate purchase might
be a preferable alternative, but because so many outlets sell lubri-
cating oils, the administrative requirements of such a system would
be considerable. While on the basis of equity these options are
superior to the funding of a waste oil program through general rev-
enues, their attendant administrative problems do not recommend them.
C. DEVOTE PROCEEDS FROM THE EXISTING EXCISE TAX OR A VARIANT OF IT
TO A WASTE OIL DISPOSAL FUND
It could be argued that proceeds from the existing lubricating oil
excise tax or from a pre-ETRA lube oil excise tax system or some
variant of it should be credited to a waste oil disposal fund in-
stead of the Highway Trust Fund. This would convert the excise tax
- 364 -
-------
from a highway user fee to a lubricating oil user fee. While the
fee would be assessed on the manufacturer or producer, it is assumed
that the cost of the fee would be passed on to the ultimate user of
the oil.
The following Table summarizes key lubricating oil excise tax data
for the last five fiscal years. The data indicate that while gross
receipts from the lubricating oil excise tax are now 25% higher than
they were five years ago, receipts for each year have constantly re-
presented less than 2% of the gross revenues provided the Highway
Trust Fund by automotive excise taxes. Cash refunds of the lubrica-
ting oil tax have remained at a constant $2,000,000 while income tax
credits granted have ranged from $15,000,000 to $19,000,000. The re-
funds and credits granted each year have represented from 16% to 23%
of the gross lubricating oil excise tax receipts. Should it be de-
cided that the approximately $80,000,000 in net receipts is too large
a sum to devote to abating the problems associated with existing waste
oil collection and disposal practices, then it might be desirable to
earmark only a portion of these receipts for a waste oil disposal
fund.
The appendix to the previous section outlines the procedures for ad-
ministering the lubricating oil excise tax and describes the large
numbers of exemptions and credits that are available under the ex-
isting lubricating oil excise tax system. Using the existing sys-
tem for waste oil disposal purposes would be a simple administra-
tive matter involving a minor bookkeeping change. However, because
of the various exemptions and credits the present system provides,
some generators of waste oil would bear an undue share of the waste
oil disposal cost while others would not bear their share of the
costs of disposal. For example, a business enterprise purchasing
lubricating oil and using it in highway vehicles would pay the lub-
ricating oil tax while a state purchasing oil for its own use in
highway vehicles would be exempt from it. However, the state, like
the business enterprise, would be generating waste oils having dis-
posal costs. If some waste oil disposal program funded by the ex-
cise tax was established which provided free pick-up of waste oils,
the excise taxes paid by the business enterprise would be used to
provide free pick-up for the state's waste oils. In a similar vein,
since cutting oils are exempt from the present lubricating oil tax,
- 365 -
-------
the business enterprise would also be subsidizing the collection
of waste cutting oils from industrial operations of others.
One might reduce the inequities somewhat by modifying the existing
system of exemptions and credits thereby providing a closer rela-
tionship between generation of waste oils and payment of disposal
fees. One means of doing this would be by eliminating the distinc-
tion between on and off-highway uses and basing exemptions on whe-
ther particular uses of lubricating oils result in generation of
waste oils. This would require a moderate overhaul of the exist-
ing lubricating oil excise tax system and would be achieved in large
measure by a number of congressional proposals which in effect call
for a return, in somewhat modified form, to the pre-ETRA excise tax
system. These proposals however, do not assign the tax proceeds to
a special waste oil fund, but merely extend the tax's application
and eliminate the credit for off-highway use.
It does not seem that it would be especially burdensome to make
administrative judgements on the "waste-potential" of lubricating
oils. Revenue Ruling 70-55, I.R.B. 1970-5, 17, lists four cate-
gories of oils which are seldom used as lubricants (within the
meaning of section 48.4091-6 of the IRS regulations) and which may
therefore be sold tax-free. Category 1 consists of 32 "non-recov-
ered process aids." These oils do not become part of finished
products, are not reused and are lost or discarded as a function
of the process. Category 2 consists of 13 surface coating oils
that are applied to the surface of other substances, are not reused
or recovered, but remain on the surface of the substances to which
they are applied. Category 3 consists of 45 oils that become an
integral part of finished products that are not lubricants and are
not used for lubricating purposes. Category 4 consists of 17 oils
performing physical or mechanical functions other than lubrication
that are not included in any of the preceding groups.
Under a revised tax system in which taxation (i.e. assessment of
a user fee) was based on waste generation, the oils in categories
2 and 3 would clearly remain tax-exempt, while administrative de-
cisions would have to be made concerning continuation of the ex-
emptions for oils in categories 1 and 4.
- 366 -
-------
LUBRICATING OIL EXCISE TAX RECEIPTS AND REBATES
AND THEIR RELATIONSHIP TO THE HIGHWAY TRUST FUND
FISCAL
YEAR
73
72
, 71
CO
CT>
•^1
, 70
69
(1)
GROSS LUBE
OIL EXCISE
TAX RECEIPTS
$103,000,000
95,474,000
88,185,000
94,521,000
82,842,000
(2)
CASH REFUNDS
OF LUBE OIL
EXCISE TAX
$2,000,000
2,000,000
2,000,000
2,000,000
2,000,000
(3)
INCOME TAX
CREDITS FOR
LUBE OIL
EXCISE TAX
$17,000,000
16,000,000
19,000,000
13,000,000
13,000,000
(4)
TOTAL LUBE
OIL EXCISE
TAX REFUNDS
AND CREDITS
$19,000,000
18,000,000
**
20,000,000
15,000,000
15,000,000
(5)
REFUNDS & CREDITS:
GROSS LUBE TAX
RECIPTS
(X)
18
19
23
16
18
(6)
GROSS RECIPTS
TO HTF FROM
AUTOMOTIVE EXCISE
TAXES
$5,695,000,000*
5,635,000,000
5,664,000,000
5,353,627,000
4,637,176,000
(7)
GROSS LUBE TAX
RECEIPTS: GROSS
HTF RECEIPTS
(%)
1.8
1.7
1.6
1.8
1.8
* Figure for 1973 Highway Trust Fund receipts is a net sum.
** Sum represents total of original figures added and rounded to nearest million dollars.
Sources: Annual Report of Commissioner of Internal Revenue for 1972, 1971; Internal Revenue
Service, "Internal Revenue Collections of Excise Taxes." Telephone conversations
with personnel of Treasury Department, Public Affairs Office and IRS Excise Tax
Branch. Highway Trust Fund figures for Fiscal Years 1973, 1972, and 1971 were
furnished by the Highway Users Federation Public Affairs Office.
-------
An alternative proposal would be to tax all sales of lubricating
oils providing no exemptions whatsoever. This would simplify ad-
ministration of the excise tax, for IRS auditors would nc lonoer
have to check exemption certificates and rebate claims. This would
also mean imposing a fee on state governments to which constitu-
tional objections would be raised. However, the courts may be will-
ing to hold that an imposition of a user fee on a state by the federal
government does not constitute federal taxation of a state. States
presently pay aviation-related excise taxes into the Airport and
Airway Development Fund and their obligation to make such payments
has thus far been upheld in the courts. I/
A principal objection to removing all exemptions would be that users
of oil which do not create disposal problems would be paying a user
fee to underwrite disposal of other oil users' waste oil. For exam-
ple, certain oils (such as those used in paper processing) are con-
sumed in use. These are presently exempt from taxation because they
are lubricating oils seldom used for lubricating purposes. Under a
lubricating oil disposal fee system allowing no exemptions, users
of paper processing oils would begin to pay a fee which they formerly
did not pay, and the proceeds would be used to dispose of waste oils
from operations other than their own,
D. DISCARD THE EXISTING EXCISE TAX AND ESTABLISH A DISPOSAL FEE
Under this option, the existing excise tax system would be repealed
and a disposal fee would be established. The principal difference
between this proposal and some of the proposals described above is
that under this option, the disposal fee would be set at a level
where the proceeds from it would suffice to "solve" the waste oil
collection and disposal "problem," whereas under the preceding pro-
posals, the disposal fee would be at the level of the existing ex-
cise tax, 6 cents per gallon.
Establishment of an oil disposal fee in lieu of the existing lub-
ricating oil excise tax system shares many of the administrative
problems of some of the options previously discussed. But more im-
portantly, it requires an estimation of an appropriate fee level.
The precedent for establishing a lubricating oil disposal fee conies
from Germany, but there, because of previous experience with
- 368 -
-------
re-refining industry subsidies, the German government had some idea
when the disposal fee was initiated of what its approximate level
should be. In the United States, we have no such subsidy experi-
ence behind us and no one really knows at what level a disposal
fee should be set.
E. SUMMARY
A variety of options have been reviewed and none has been found
to be simultaneously simple to administer and completely equitable.
It would appear though that minimal administrative costs would be
incurred and the greatest equity would be achieved by devoting all
or part of the proceeds of a revised lubricating oil excise tax to
a disposal fund while at the same time eliminating certain of the
existing rebate and exemption provisions (e.g. credits and rebates
for off-highway use and exemptions for sales to state and local
government for their own use and sales to certain nonprofit educa-
tional organizations).
- 369 -
-------
FOOTNOTE
The Airport and Airway Revenue Act of 1970 is Title II of Pub-
fc Law 91-258, the Airport and Airway Development Act of 1970. The
Development Act establishes an airport and airway development fund,
analogous to the Highway Trust Fund, whose revenues would be devoted
to airport and airway development. The Airport and Airway Revenue
Act amends the Internal Revenue Code so as to earmark revenue from
airline transportation and fuel excise taxes for the new established
trust fund. Simultaneously, the Revenue Act eliminates a wide range
of excise tax exemptions. Among these are the exemptions which the
federal government and state and local governments had enjoyed pur-
suant to sections 4292 and 4293 of the Internal Revenue Code.
The Committee on Ways and Means, 1n its report on the Revenue Act,
stated:
Present law provides a series of exemptions from the tax
on transportation of persons by air. These include exemp-
tions: . . . (5)for transportation furnished to the United
States (at the discretion of the Secretary of the treasury)
and to State and local governments; ....
The exemptions for transportation furnished to State and
local governments, the United States, and nonprofit organ-
izations are terminated .... It did not seem appropriate
to continue special exemptions to these governmental and
educational organizations since this tax is now generally
viewed as a user charge. In this situation there would ap-
pear to be no reason why these governmental and educational
organizations should not pay for their share of the use of
the airway facilities. (H. Rpt. 91-601 at 45-46. See also
S. Rep. 91-706 at 18).
The Committee had noted earlier:
Under this legislation a better future is promised because
a trust fund will be established and there will be a direct
relationship between the use of the system and the money
generated to meet the needs required by the users. It
- 370 -
-------
is fitting that the primary financial burden will be assumed
by the direct users. (H. Rpt. 91-601 at 3).
The state of Texas challenged the new law, alleging on constitu-
tional grounds that it should continue to be exempt from the air-
port transportation excise tax. However, the federal government's
right to levy this user charge on Texas was upheld by the U.S.
District Court for the Western District of Texas and by the 5th
Circuit Court of Appeals (State of Texas v. U.S., 73 USTC 16,085,
30 AFTR 2d 72-5930). The pertinent portions of the district court
decision follow:
The airway user charge is not a tax in the traditional
sense, but instead is a charge for services rendered and
represents a quid pro quo, and as such, is outside the
scope of the doctrine of Implied intergovernmental tax
immunity. New York v. United States, 326 U.S. 572 (1946);
Head Money Cases 112 U.S. 581 (1884); Packet v. Keokuk,
95 U.S. 80 (1877).
Nothing in the historical basis of dual sovereignty under-
lying the principle of State immunity from federal taxa-
tion requires that the States continue to receive the ben-
efit of airway facilities and services actually used by
the States but furnished by the federal government without
bearing their equitable share of the costs incurred in pro-
viding those particular benefits. Even employees of the
federal government must pay the air transportation charge.
No logical reason exists why all users of the air trans-
portation system should not pay their fair share of such
costs.
- 371 -
-------
C. Need to Consider Establishing a National Program to Inspect Petroleum
Product Quality
As indicated in the preceding sections, some products — both r
and virgin — do not conform to a number of accepted standards of quality
and most existing state petroleum product inspection programs are able
only to check randomly for compliance with a few of the less telling
indices of quality.
Petroleum products, e.g. lubricating oils can be tested for performance
(in laboratory engines, for example) or subjected to so-called laboratory
bench tests. Performance tests are expensive, however, ($15,000 - $20,000
for a series of eight basic tests on a sample) so neither states nor
most producers can affort to conduct them. Bench tests alone, however,
are not a sufficient means for determining the quality of lubricating
oils. The parameters they check, e.g., viscosity, are important to
but inadequate for a full analysis of the quality characteristics of a
sample of oil.
Currently lubricating oils are performance and bench-tested by indepen-
dent laboratories. This is done to insure a credibility of results
which would be absent if the oils were tested either by their manu-
facturers or the producers of the additives which are vital constituents.
Often oils are put in cans without testing for compliance with the levels
of quality stated on the labels.
Because the quality of many petroleum products is erratic, because
most state inspection programs and producers of oil products cannot
afford to regularly perform the tests necessary to determine quality,
and in order to assure that petroleum products conform to the speci-
fications on their labels, consideration should be given to establishing
a national program for periodic and random testing of those petroleum
products, e.g., lubricating oils, where deviation from standards would
potentially cause serious private or public damage. Such a program could
be financed from excise taxes imposed on oil products and could be con-
ducted by the existing independent laboratories or a group of specially
created public or private laboratories. It could also help reduce and
spread the costs of quality control in addition to filling a national
need to assure that oils meet the requisite standards of quality.
- 372 -
-------
STATE WASTE OIL DISPOSAL CONTROLS
This section reports the results of an Environmental Law Institute
survey of state programs that have been designed or may be used for
elimination of waste oil as an environmental pollutant. The survey
revealed that only three states have initiated waste oil management
programs. A few additional states advised that they either are en-
couraging the reclaiming of waste oil or that they are studying the
problem. A large number of states have developed procedures for
regulating some element of the waste oil stream — storage, trans-
portation, or disposal on land — but these procedures are generally
applied to all hazardous or industrial wastes or to all petroleum
products, and have not been designed with waste oil specifically
in mind. A large number of states have also enacted highly detailed
oil pollution control statutes, but all these are coastal states
whose primary concern appears to be spills of oil from ships and
from harbor facilities.
Many of the programs which have been specifically designed for waste
oil management are of recent origin. So too are many of the regu-
latory mechanisms which may be directed at one element of the waste
oil stream. While operating experience with them may therefore be
limited, they nevertheless represent regulatory initiatives which
might be copied by other states.
STATE CONCERN WITH WASTE OIL
For analytical purposes, states have been grouped into the following
categories:
1. States having "waste oil management programs";
2. States expressing concern for waste oil management;
3. States having legal mechanisms which may be used to moni-
tor or control waste oil streams;
4. States having comprehensive oil pollution control statutes
which provide evidence of state concern with oil pollution
but which may or may not be useful in regulating waste oil;
5. States whose statutes contain few provisions explicitly
concerned with oil pollution.
STATES WITH WASTE OIL MANAGEMENT PROGRAMS
Maryland, Massachusetts and Vermont have begun planning waste oil
management programs. The three states differ in the legal basis
they provide for their efforts. The Maryland and Massachusetts pro-
grams have an elaborate statutory and regulatory basis. Vermont,
in contrast has not elaborated an extensive set of either statutes
or regulations for the control of oil pollution or waste oil, but
it has begun planning a waste oil collection system. Efforts to
- 373 -
-------
provide for the collection and disposal of waste oil are common to
the three state programs, but they differ from one another in the
extent to which they monitor sources of waste oil. The states also
differ in their reporting requirements. Maryland, for example,
though it licenses sources of waste oil and waste oil transporta-
tion, does not provide for detailed record-keeping in its regula-
tions. Massachusetts, in contrast, does not license service sta-
tions, but it does require waste oil haulers to maintain detailed
records of their pick-ups and discharges. Vermont, as noted, has
not elaborated a regulatory basis for controlling waste oil.
Maryland
Maryland has enacted laws and promulgated regulations governing a
broad range of oil handling activities, including storage, trans-
portation and disposal. Areas covered include shipping, trucking,
port facilities, transfer facilities and facilities generating waste
oils.
Article 96A, Sec. 26A. of the Annotated Code of Maryland permits the
Department of Natural Resources to prescribe regulations for transfer,
storage, separation, removal, treatment, and disposal of oil and
other unctuous substances. No one engaged in any commercial or in-
dustrial operation may conduct such activities without a Department
of Natural Resources permit.
Sec. 29. of state law governs oil pollution from ships. Sec. 29(a)
makes it unlawful to discharge oil from ships into state waters,
except in case of accident, collision, stranding, or in case of
emergency imperiling life or property. Sec. 29(a-l) requires the
immediate reporting of discharges by those responsible for them.
Sec. 29(b) provides that discharges and their nonreporting are
misdemeanors punishable by specified penalties.
Sec. 29A. gives responsibility for developing an oil spill emergency
program to the Maryland Port Authority and the Department of Natural
Resources.
Sec. 29AB. requires a bond of $100.00 per gross ton for all vessels
entering Maryland waters to discharge bulk oil cargos. Bond is
forfeited to the extent it must be used to cover clean-up costs and pay
state penalties if a ship has discharged oil into state waters.
Where financial responsibility has been demonstrated to the federal
government, a vessel is exempt from Maryland provisions requiring
posting of bond. Non-posting of a required bond is punishable by
a $5,000 fine.
- 374 -
-------
Sec. 29B. provides that the state may charge and collect a com-
pensatory fee from an oil discharger to cover clean-up and en-
vironmental restoration costs.
Sec. 29F. provides that oil terminal facilities operated within
the state must be licensed, and license fees are payable in pro-
portion to the storage capacity of the licensed facility. To
obtain a license, a facility operator must demonstrate capability
for complying with state and federal pollution control and abate-
ment laws.
Sec. 29G. establishes an Oil Disaster Containment, Clean-Up and
Contingency Fund. Penalties and fees assessed under the above
provisions are credited to the fund, and expenses entailed in
state implementation of the above provisions are to be charged
against it.
Water Resources Administration Regulations 08.05.04.07 et seq.
govern oil pollution control. These implement the statutory
requirements for oil handling permits described above.
Sec. I(c) (1). provides that to obtain permits, applicants must
submit information describing comprehensive spill contingency plans.
Sec. I(E)(1). prohibits discharge of oil into state waters that will
cause pollution or violation of water quality standards. Sec. I(E)(2)
similarly forbids discharge of bilge or ballast water.
Sec. (6)(1) requires immediate reporting of oil discharges.
Sec. II. elaborates on the statutory vessel bonding requirements
described above.
Sec. III. describes permit requirements for marine oil transfer
facilities, providing an elaboration on permit application informa-
tion requirements, and specifying operating procedures for oil trans-
fer operations.
Sec. IV. reiterates the permit requirements of Section I as they
apply to oil storage facilities, and provides a detailed description
of material requirements for such facilities.
Sec. V. pertains to oil deliveries by truck tank. It requires oil
vehicle operators to be licensed by the state, after having been
trained in pollution prevention and containment operations, and it
describes operating procedures and equipment requirements for oil
deliveries.
- 375 -
-------
Sec. VI. elaborates on requirements for oil transfer facilities.
Sec. VII. describes requirements for facilities handling used oil.
Sec. VII(C) requires that waste oil shall be disposed in such a
manner as to avoid water pollution. Road oiling is permitted.
Sec. VIII. elaborates on permit requirements for gas stations
and vehicle maintenance shops. Oil separating systems and separate
drainage must be maintained, and waste oil must be disposed of in
a non-polluting way, i.e. used as a fuel, given or sold to a
salvager, or used for dust abatement.
Maryland has been concerned with pollution attributable to waste
oil for at least two years, and in conjunction with the United
States Environmental Protection Agency has sponsored a study by
Environmental Quality Systems, Inc. to produce a comprehensive waste
oil management program for the state. The recently completed (Nov-
ember 1973) draft report suggests that the regulations described
above be rewritten to include provisions for waste oil collectors'
reporting to the state and maintaining detailed collection records.
The report also suggests reworking the application for oil handling
permits so as to more effectively*meet state waste oil data needs.
Also recommended are controls on out-of-state shipments of waste
oils and development of a series of financial incentives for fund-
ing the proposed program. I/
Administration of Maryland's waste oil management program began on
October 20, 1972. As of December 31, 1973, 333 oil handler permits
had been issued and 848 oil tanker drivers had been certified. In
addition, 126 licenses for oil transfer facilities had been issued
pursuant to the oil storage licensing provisions of the Annotated
Code of Maryland.
No fee is attached to permits for oil handlers or certificates for
tanker drivers, but statutorily established fees are collected for
oil terminal facility licenses.
The regulatory program is administered by the Department of Natural
Resources' Water Quality Permit Programs office. Three individuals
assisted by one secretary process applications and conduct inspec-
tions prior to the issuance of permits. The budget for FY74 for
this regulatory program is $200,000. Enforcement of permit and
license requirements is one of the responsibilities of the twenty
members of the Department of Natural Resources' enforcement divi-
sion.
- 376 -
-------
To date, Maryland's regulatory effort has focused on oil terminals
and distributors, the major potential sources of polluting oil.
600 applications for permits are presently pending. It is esti-
mated that 2000-3000 permits should suffice for the 4000-5000 ser-
vice station operations within the state (since only one permit is
required of a single party owning many stations), but the state
has not yet formally notified service stations of the permit re-
quirement.^/
Massachusetts
Section 52 of the Massachusetts Clean Water Act provides for the
licensing of waste oil haulers. Section 52A, added to the Massa-
chusetts General Laws on December 7, 1973 requires service stations,
marinas and retail outlets selling automotive lubricating oil to in-
stall waste oil retention facilities and to accept at no charge waste
oil in quantities not exceeding two gallons per day from any indivi-
dual showing proof of purchase from the retailer.
Control of waste oil is vested within the state Water Resources
Commission and Hazardous Waste Board. In early 1973, hazardous
waste regulations were adopted which exnlicitly include within their
scope the collection and disposal of waste oil. The regulations
declare that the recovery or recycling of wastes to useful products,
with minimum production of by-product wastes, is the oreferred method
of disposal.
The regulations are intended to cover handling and disposal methods
involving conveyance of hazardous wastes by truck, rail or vessel
from a point of origin to an offsite disposal area. Permits for
on-site accumulation of hazardous wastes by originators of such
wastes (i.e. service stations, industrial companies, etc.) are not
required. 3/
Reaulation 1.0 states that collection and disposal of waste oil is
deemed to fall within the hazardous waste regulation provisions.
Regulation 3.1 provides that collection, conveyance and disposal
of hazardous wastes may only be conducted under state license.
Regulation 3.4 forbids the dumping of waste oil and other speci-
fied hazardous wastes into offshore state waters without state
permission.
- 377 -
-------
Regulation 3.5 requires segregation of wastes by classes and
requires that they be stored and maintained in such a manner so
that container ruptures will not cause or contribute to a
condition in contravention of state water quality standards.
Regulation 4.0 identifies the several classes of hazardous
materials, one of which 1s waste oil.
Regulation 5.1 declares that insofar as feasible or practical,
waste oils should be reprocessed for use, or used directly in
original or secondary markets where such use meets all applicable
environmental standards. Alternative disposal methods such as
incineration or land spreading will be permitted only if it is
shown by an applicant that reprocessing or direct use is not
feasible or practical and if such methods meet all applicable
environmental standards. Collection of waste oil intended for
disposal outside the state 1s prohibited unless the ultimate
disposal facility 1s approved by the U. S. Environmental
Protection Agency or the appropriate state pollution control.
agency.
Regulation 6.0 details licensing requirements. Section 6.2
declares that licenses must be renewed annually. Section 6.3
Indicates the types of information which must be provided on the
license application form, including classes and approximate
quantities of wastes handled, disposal methods used or to be used,
and location and plan of disposal sites. Section 6.6 provides
that state representatives may enter premises at reasonable times
and on reasonsble notice to inspect facilities, inventory, and
records.
Section 6.9 provides that operators of vessels, trucks or other
vehicles transporting hazardous wastes shall keep records of mat-
erials handled, origin, quantity and destination. Detailed logs
are to be retained for one year, and monthly summaries which are
not of public record are to be submitted to the state.
Regulation 7.0 provides for fines and jail terms for violators
of the rules and regulations.
Massachusetts' concern with waste oil dates at least to 1968, when
it funded an A. D. Little study of waste oil in Massachusetts ._4/
It has since contracted for additional studies, one of biological
degradation of waste oil sludge, and one of waste oil reprocessing. 5/
- 378 -
-------
The state legislature denied the Water Resources Commission's FY74
request for funds for administration of the hazardous waste manage-
ment program. The request was for one full-time person for admin-
istration of the hazardous waste program and for nine additional
regional engineers to conduct Inspections in conjunction with this
and other licensing programs. The nine additional engineers would
have devoted approximately two man-years to hazardous waste-related
inspections. A funding request has been made for the FY75 budget.
At present, the program is administered on a quarter-time basis
by one person in the Water Resources Commission. Field inspections
are conducted by fifteen regional Commission engineers who devote
an estimated two-man years to hazardous waste-related inspections.
Massachusetts issues permits on an annual basis. 45 permits were
issued last year and 35 were issued or renewed this year. A ma-
jority of these were to collectors but several were also issued to
landfill operators. Massachusetts estimates that it has licensed
approximately 9Q% of the major collectors operating in the state.
However, 1t believes that perhaps 25 septic tank pumpers having in-
cidental industrial waste hauling operations are not yet being re-
gulated.
At one time the commonwealth had hoped to establish a storage fa-
cility and laboratory at the site of an old lubricating oil plant
in Braintree, Massachusetts with state and federal funds. It had
been hoped that some of the necessary funds could be derived from
proceeds from state motor vehicle excise taxes, but attempts to
obtain such funds were defeated in the legislature.
Senate Bill No. 1659 was introduced into the Massachusetts Senate
in 1973. It was not enacted into law. 6/ It would have allocated
one-fifth of one per cent of the staters motor vehicle related ex-
cise tax receipts for waste oil disposal programs. The funds would
be used to pay administrative costs, including inspectors' salaries,
costs of construction and operation of waste oil collection and dis-
posal facilities, and payments for collection and transportation
costs to licensed waste oil collectors.
Vermont
Vermont has begun planning a waste oil program which it hopes to
have operating by Spring, 1974. The program entails the establish-
ment of collection points around the state to which waste oil would
be brought. The oil would then be trucked from these regional
- 379 -
-------
collection centers to larger, central collection facilities. The oil
would then be shipped to a company in Palmer, Massachusetts for
reprocessing into fuel oil. Vermont industries would be provided
with the first purchase rights on the reprocessed oil.
The state has purchased ten 20,000 gallon collection tanks at a
cost of one dollar per tank from the Mobil Oil Comnany. The tanks
are in temporary storage at a Vermont National Guard camp. The
state estimates that with transportation furnished by the Vermont
National Guard, it will cost approximately $20,000 to set up the
tanks around the state. It hopes to obtain an outside grant for
the funding of this portion of the project. 7/
STATES EXPRESSING CONCERN FOR WASTE OIL
Four states have indicated through correspondence or reports that
they have some concern for waste oil. This section briefly relates
the information received to date.
Colorado
The Health Department's Division of Water Quality Control has a
policy of encouraging reclamation of waste oil, and claims this
is working fairly well in metropolitan areas where quantities of
waste oil are sufficient to encourage economic re-refining of used
oils. In rural areas, the state encourages sewage treatment plant
operators to monitor possible sources of waste oil, to prevent dis-
charges to the sewer system. Disposal of small quantities of waste
oil in sanitary landfills is encouraged when there is no danger to
ground water. Colorado has no specific regulations regarding dis-
posal of residual oils or hazardous or toxic wastes, except in the
case of subsurface disposal. 8/
Minnesota
Minnesota encourages recycling wherever possible. A Minneapolis
re-refiner accepts waste crankcase oil. Disposal of v/aste oils is
accomplished also by incineration, with a state-permitted incin-
erator functioning in the Twin Cities area. 9/
- 380 -
-------
New Jersey
New Jersey is currently engaged in programs to determine efficient
methods of waste oil recovery and recycling. For this purpose, it
has a member on the steering committee of a waste oil study being
conducted by the Council on the Environment of the City of New York.W
Wisconsin
In 1971, petroleum inspectors of the Wisconsin Department of Revenue
surveyed service stations' waste oil disposal practices. The survey
did not describe the disposal of oil sold over-the-counter, nor did
it describe industrial lubricating oil disposal practices. The study
revealed that one-third of lubricating oil drained is re-refined to
lubricating oil, one-third is reused as fuel oil, one-fifth is used
on farms for lubricating barn cleaners and controlling dust and weeds,
and the remainder is used for road oiling or is dumped onto the ground.
Waste oil use patterns were shown to be different for high population
density and low population density areas. The study did not clearly
describe the percentage of the waste oil reprocessed prior to its
use as fuel.ll/
STATES HAVING LEGAL MECHANISMS FOR WASTE OIL MANAGEMENT
Several states have legal mechanisms which can be used to regulate
one portion of the waste oil stream. These procedures include
scavenger licensing systems, hazardous waste or solid waste disposal
regulations, and surface storage regulations.
Scavenger Licensing Systems
Eight states, in addition to Maryland and Massachusetts, have some
form of liquid waste scavenger licensing system proposed or in
existence. 1_2_/ The licensing systems vary considerably in their
component parts. For example, Massachusetts requires monthly and
Connecticut quarterly reporting of hauling data, while Maryland
has no such reporting requirements. Furthermore, while California
Michigan and Massachusetts require maintenance of individual trip
logs, New York and Maryland do not. Permit periods and fees also
vary among the states; $25 provides a permit of indefinite length in
- 381 -
-------
Oklahoma while $100 plus a per-truck fee provides a license of only
one year's duration in Michigan. While many of the states require
waste oil generators to consign their waste only to licensed haulers,
no such requirement exists in New York. Finally, of all the states
examined in detail, only California has a double-signature waste re-
cord and only Michigan requires performance bonds of waste haulers.
Michigan
In the provisions of Act 136, Public Acts of 1969, Michigan has one
of the most statutorily well-defined scavenger licensing systems.
Sec,5 requires posting of a $15,000-$30,000 surety bond with all
license applications, the bond serving to indemnify the state for
elimination of pollution resulting from improper disposal of
industrial waste by the licensee.
Sec. 7.(1) provides for inspection of all trucks engaged in liquid
waste hauling.
Sec. 8.(3) describes record keeping requirements. Records must
be kept of all trips made, stating the date, source of waste, quantity,
type, the location and method of disposal, and total mileage of
trip. Trip records for the preceding two months are to be carried
on each vehicle and trip records must be preserved for two years.
Sec. 8.(4) states that licensees are not to dispose of wastes
onto the ground except at state approved sites, though waste oil
may be used for dust control. No waste is to be placed in a
location where it could enter any surface or ground water.
Sec. 10 provides that violations of the Act's provisions are
punishable by fine, jail and license revocation.
Enactment of Act 136 was prompted by approximately a dozen serious
industrial waste dumping incidents in Detroit in a short period in
1969. Most of the industrial waste dumped was oil.
Industrial waste haulers must apply for annual licenses. The annual
licensing fee is $100 and their waste hauling vehicles must be
licensed annually at a fee of $10 apiece.
Approximately 100 industrial waste haulers and 350 vehicles have
been licensed to date. Approximately 15-20% of those licensed
haul waste oil exclusively and 50-60% haul waste oil along with
other industrial wastes.
- 382 -
-------
To date, one hauling license has been revoked. It is expected
that the bond of the licensee whose license has been revoked will
be forfeited to cover the costs to the state of disposing of the
100,000 gallons of industrial waste gathered by the collector. It
is anticipated that the collector's $15,000 bond will not be suffi-
cient to cover the entire cost to the state. Otherwise, the state
has not claimed any performance bonds, though it has threatened to
do so "on a couple of occasions." The threat of seizure has usually
been sufficient to convince waste haulers to abate their pollution.
The licensing program is the responsibility of the Oil and Hazar-
dous Materials Control Section of the Michigan Department of Natural
Resources. The industrial waste program is one of several programs
administered by the section. In the program's first year, oversight
was by one individual on a part-time basis. One person had a full-
time responsibility during the program's second year. At the pre-
sent time, oversight is divided among the nine members of the sec-
tion on a geographic basis. The staff commitment is equivalent
approximately to two full-time administrative positions (at $15,000
each) and one secretarial position.
Record-keeping is required on the part of both industrial waste
generators and industrial waste collectors. To date, review of
records has been on a "spot-check" basis, though this year each
of the nine staff members will begin to tabulate the records for
his district as part of a comprehensive record review program.
Road oiling is one of the permitted uses of waste oil. There have
been about a half-dozen complaints received each summer of exces-
sive road oiling (reports of oil in ditches and watercourses), but
these are not regarded as significant. Plans are apparently under-
way to initiate new re-refininq operations. There apparently is a
trend away from road oiling towards other uses of waste oil.
Service stations have begun to sell their waste oil.
The program is felt to be successful. Since its inception, random
dumping has "totally ceased."1_3/
California
Division 7.5, Chapter 1 of the State Water Code governs transpor-
tation and disposal of waste. This section was added to Califor-
nia's statutes in 1970 and regulations implementing it were issued
in March 1972.
Liquid waste haulers must register with the state Water Resources
Control Board and must provide information on planned disposal
- 383 -
-------
sites. The state board passes the application on to regional water
quality control boards, which assure that the wastes being hauled
are acceptable at the disposal sites sought for use. When the re-
gional board approves the disposal sites, the forms are returned
to the state board, which then issues stickers for applicants'
vehicles. Registrants are subject to conditions, directions and
orders established by the state board. Haulers must dispose of
liquid waste in accordance with regional water quality control
board regulations and at board-approved sites.
Registration is annual. The basic registration fee is $10, and
a fee Is assessed for each vehicle -- $15 for the first vehicle,
$10 for the second through sixth vehicles and $5 for each remaining
vehicle.
Liquid waste producers may only consign waste to registered liquid
waste haulers. Hauling by non-registrants does not appear to be a
problem. Registered haulers will usually report activity by non-
registrants, and the non-registrants, who are generally just ignor-
ant of the registration requirement, are then provided registration
information by the state.
Haulers are required to keep trip records for each load of waste
hauled, starting July 1, 1973. These forms are to be retained
for one year and are to be available for state inspection. They
must be signed by both the generator and hauler of the waste, and
when the waste is disposed, the disposal site operator must also
sign the form. The state spot-checks these records.
The state could not provide exact cost figures for administration
of this program. At the state level, one-quarter of a professional
person-year is required to administer this program, with secretar-
ial assistance. Because the administrative burden for this program
varies among regional boards, some boards may devote more time to
it than others. For example, Los Angeles has over one-half of all
the registered waste haulers. There are nine regional boards, and
if we assume one professional administers the program in each on a
quarter-time basis, assisted by a quarter-time secretary, then the
total cost to the state for the program (assuming engineers' sal-
aries of $18,000 and secretarial salaries of $8,000) is $65,000.
Those responsible for administering the program also conduct
inspections incident to it.
375 companies and over 1000 vehicles have been registered to date.
No permits have as yet been revoked, though the state has threatened
revocation on several occasions to assure compliance with registra-
tion conditions. The state could not provide any information
on the proportion of the 375 registrants hauling waste oil.
- 384 -
-------
The state reports that it receives few reports of illegal dumping.
Since the licensing program functions to inform individuals of
legal disposal sites, it is felt that dumping has likely decreased
because of wider knowledge of legal disposal site availability.
These provisions do not apply to persons hauling waste oil from
service stations to industrial facilities for reuse. Liquid waste
haulers are only required to obtain registration if liquid waste
is hauled by a vehicle and is to be discarded.14/
New York
Section 27-0301 of New York's Environmental Conservation Law,
effective January 1, 1972, provides for the registration of septic
tank cleaners and industrial waste scavengers. Subpart 75-5 of
the Department of Environmental Conservation's rules and regulations
has been promulgated pursuant to rule-making authority granted
in section 27-0301.
Permit applications must be submitted to regional departmental
offices having jurisdiction over waste disposal areas to be used by
applicants. Applicants must pay a $25 registration fee and must
furnish information of their equipment and selected disposal sites.
Each vehicle must carry a copy of the registration certificate,
which must be presented to a state law enforcement officer upon
demand. Registration numbers must be displayed on vehicle exteriors
Registration duties at the nine regional offices are estimated to
require one-quarter professional person-year and one-eighth secre-
tarial person-year per office. Using a salary base of $17,000 (plus
25% benefits) for professional staff and $8,000 for secretarial
assistance, the total administrative cost of the program is
approximately $57,000.
The program was established principally to control septic tank
pumpers. Industrial waste management was only a secondary con-
cern. Approximately 700 permits have been issued -- 600 to septic
tank pumpers and 100 to industrial waste haulers. The state has
been very successful in licensing septic tank pumpers and somewhat
less successful in assuring that all industrial waste haulers are
licensed. The state has found it easier to identify unlicensed
septic tank pumpers than to identify unlicensed industrial waste
haulers. The state believes, however, that it has succeeded in
licensing the larger industrial waste haulers, those accounting
for perhaps 90% of all industrial waste hauled.
- 385 -
-------
Registrants are required to report annually Indicating the number
and types of Installations emptied, the volume and nature of waste
products disposed of, the place and manner 1n which waste was dis-
posed, and any other information the state may require. Individual
trip records are not required and the state generally does not audit
the annual reports to assure their veracity.
Companies hauling their own waste for off-site disposal are not
required to register under New York law, and industrial waste
generators are not required to give their wastes only to licensed
haulers.
Enforcement of the regulations is the responsibility of the Depart-
ment's approximately 500 conservation officers, who have full police
powers. The enforcement process 1s felt to be effective. The state
has obtained "substantial" fines against unregistered septic tank
cleaners and 1t is presently In the process of rescinding two regis-
trations because of non-compliance with registration conditions.
Governor Malcolm Wilson, 1n his recent "State of the State" message,
made mention of waste oil management. The Department of Environmen-
tal Conservation 1s presently examining alternative management for-
mulas which will be submitted for legislative consideration.IS/
Connecticut
Section 25-54th of Connecticut General Statutes Annotated requires
those engaged in the waste oil collection business to obtain per-
mits from the state. Permits are issued annually and a fee of $5
is payable. The Commissioner of Environmental Protection must con-
sult with those in the waste oil disposal business concerning the
most appropriate and best method of disposal. He must also conduct
a research program relating to new and improved methods of waste
oil disposal.
Section 25-54th was enacted in 1969 following development of serious
leaching problems from landfills where waste oils had been
disposed. At the present time, no landfill ing of waste oil is
permitted. If waste oil generated cannot be recycled in state,
then it 1s shipped out of state for disposal.
Permit applicants must Indicate the firms from which they plan
to collect wastes, indicate the process generating the waste, the
anticipated volume of waste, and the anticipated disposal method.
Permittees are required to report similar information to the state
on a quarterly basis.
- 386 -
-------
At present, 35 waste haulers are licensed, The state could not
provide administrative cost figures, but 1t does not appear to
devote much effort to this program. The state nevertheless believes
that the landfill leaching problem has been reduced 1n scope by
over 50%.
Consignment of industrial wastes to unlicensed waste haulers is
forbidden. Department of Environmental Protection field personnel
periodically monitor landfill records to assure that oily waste is
not being landfilled. Road oiling is permitted under certain cir-
c urns tan ces.Hj/
Connecticut has not devoted any special effort to waste oil dis-
posal research and development. However, waste oils are mentioned
1n the General Electric study for the state that provides the basis
for a statewide refuse recycling program. In its report entitled
"A Proposed Plan of Solid Waste Management for Connecticut," GE
comments:
Technology exists for reprocessing many waste oil types.
License collectors and force generators to use licensed
collectors through permit regulations. Collectors would
be required to account for all collections and disposals
Identifying type and location of disposal utilized.VT/
In effect, GE recommends continuation of the existing program.
Oklahoma
Section 505.l(b) of the Rules and Regulations of the Oklahoma
Water Resources Board provides that any person hauling industrial
waste for disposal purposes must secure a permit from the Board
prior to undertaking such activity. Oklahoma law also makes it
illegal for an industry to consign wastes to non-permitted waste
haulers.
The permit program has been functioning for eighteen months. Seven
haulers have been licensed to date and two applications are pending.
The state was unable to provide cost figures for administration of
this very small program.
A $25 filing fee must accompany permit applications. Permits are
provided for an Indefinite period. Licensees are required to
report monthly sources of waste, amounts of waste collected, and
disposal sites.TJ/
- 387 -
-------
Other States' Licensing Systems
Section 34A10-1.106 of South Dakota's solid waste regulations
provides that hazardous and toxic wastes (those wastes that re-
quire special handling to avoid illness or injury to persons or
damage to property) shall not be placed in any container for col-
lection, transport, processing or disposal until the Department
has approved the method of storage, transport, processing or dis-
posal. Waste oil is defined as a hazardous substance in South
Dakota. The state has not indicated what form regulation will
take, though guidelines for the disposal of hazardous and toxic
wastes are presently being developed.]^/
The Indiana Stream Pollution Control Board proposes to draft a
regulation in the near future which will deal with waste haulers
within the state. The regulations will include a permit program.20/
The Environmental Protection Agency has been advised that Delaware
has a scavenger-licensing system. Detailed information has yet
to be obtained.
Surface Storage Regulations
Waste oil is stored in both tanks and open settling lagoons.
Any person seeking to conduct a waste oil reprocessing opera-
tion in eleven states would have to receive state approval for
its lagoon or tank operations. Among the states requiring permits
for the operation of surface storage facilities are Idaho, Kansas,
Maine, Massachusetts, Michigan, Minnesota, Missouri, Nebraska,
New Jersey, Oklahoma, and Rhode Island.21/
Solid Waste Disposal Regulations
Twenty-four states have developed solid waste disposal laws and
regulations. These are quite diverse but usually provide that
liquid or hazardous wastes may not be disposed of in solid waste
landfills except when special permission is granted by the state.
Among the states having such requirements are Alabama, Arkansas,
Connecticut, Georgia, Idaho, Illinois, Kentucky, Louisiana,
Maryland, Massachusetts, Michigan, Nevada, North Carolina, North
Dakota, Ohio, Oklahoma, Oregon, South Carolina, South Dakota,
Tennessee, Texas, Virginia, West Virginia, and Wisconsin.22/
STATES HAVING COMPREHENSIVE OIL POLLUTION CONTROL STATUTES
Ten states (in addition to Maryland) have developed wide-ranging
oil pollution control programs. All are coastal states and the
prime motivation for the development of oil pollution control laws
- 388 -
-------
1s the prevention of oil pollution from ships and port facilities.
The principal components of many laws include prohibition of oil
discharges on land or in water except where such discharges have
been approved by the state, controls on marine port facilities,
the immediate reporting of spills, and the assessment of strict
liability in the event of discharges. The laws described here are
not directed specifically at waste oil, but they reflect state
interest in oil pollution.
Alaska
Sec. 46.03.740 is titled "oil pollution." It bans the discharge of
oil into or onto lands and water of the state except in quantities
allowed and at the times and locations permitted by the Department
of Environmental Conservation or as permitted in the 1954 Interna-
tional Convention for Prevention of Pollution of the Sea by Oil.
Sec. 46.03.750 forbids the discharging of ballast water, tank clean-
ing waste water, or other waste containing petroleum in excess of
the maximum permitted by the state water quality standards or in
excess of 50 ppm of oil residue. Subject to certain exceptions,
no ship may discharge a petroleum cargo to the state if it has
discharged its ballast at sea.
Sec. 46.03.760 provides that violation of Sees. 740 and 750 is a mis-
demeanor punishable by a maximum fine of $35,000 and one year in jail.
The violator is also subject to a maximum of $100,000 in civil pen-
alties payable to the state. In addition, the individual who vio-
lates the ballast discharge provision is liable for civil damages
to a maximum of $100 per gross ton, or $14,000,000 whichever is
less, for his vessel. If the state proves willful negligence or
misconduct, there is no ceiling on the amount of damages assessed;
these damages would include costs associated with the abatement,
containment or removal of a pollutant and reasonable restoration
of the environment to its former condition. The damage provisions
above do not affect an individual's right to recover damages under
other applicable statutes or common law.
Sec. 46.03.770 provides that a vessel used in violating the above
sections may be held by the state as security for damages assessed.
Sec. 46.0826(6) defines oil as being a hazardous substance.
Sec. 46.03.822 provides for strict liability for the discharge of
hazardous substances, but liability is limited in instances of
oil pollution to that specified in section 760 above. If an action
to recover damages is brought by the state, a person is relieved
from strict liability if he can prove that a hazardous substance
- 389 -
-------
discharge was due to an act of war or God, an intentional or neg-
ligent act of a third unrelated party, or state or federal negli-
gence, and that in relation to these instances, he acted promptly
to contain and clean up the substance.
Connecticut
Sec. 25-44bb et seq., Connecticut General Statutes Annotated, govern
oil pollution control.
Sec. 25-44cc(a) gives the Commissioner of Environmental Protection
responsibility for oil discharge clean-up.
Sec. 25-44cc(b) provides for annual licensing of oil terminal facili-
ties and inspection of facility equipment. Rules and regulations
for these purposes can be adopted and fees can be assessed to
cover enforcement costs.
Sec. 25-54dd requires immediate reporting of polluting discharges.
Sec. 25-54ee provides for polluter reimbursement to the state of costs
incurred in abating pollution or contamination resulting from
petroleum or chemical liquid discharges.
Sec. 25-5ii provides for bonding of vessels carrying petroleum
cargoes to assure payment to the state of all costs arising from
abatement of polluting discharges from such vessels. Sec. 25-54JJ
provides that the state may accept other evidence of financial
responsibility in lieu of such bond.
Florida
Section 403.088 states that no person may discharge waste into
Florida waters which will cause their quality to drop below appli-
cable standards. Those discharging pollutants into state waters
must apply to the state for a permit. Waste discharges to inland
waters are governed by this chapter.
Chapter 376 of the Florida Statutes governs oil spill prevention
and pollution control. It prohibits the discharge of spillage
of oil or other pollutants into coastal waters, and provides for
unlimited liability for the shipper without regard to negligence.
Spills in inland waters are subject to several discharge prohibi-
tions found in Chapter 403 of Florida Law.
- 390 -
-------
Sec. 376.06 provides for the licensing of oil terminal facilities.
Facilities must demonstrate discharge clean-up capabilities, and
licenses are renewable on a yearly basis.
Sec. 376.17 provides for development of procedures for clean-up of
oil spills.
Sec. 376.09(2) requires prompt removal of pollutants by polluters,
and permits the state to arrange for removal if there is a fail-
ure by a polluter to act.
Sec. 376.11 establishes a Florida coastal protection fund. It is
limited to $5 million, and credited to it are license fees and
penalties collected under the provisions of chapter 376. Money
from the fund is to be used to carry out the purposes of chapter
376.
Sec. 376.12 allows for unlimited strict liability for all licensees
of terminal facilities and shippers for damage due to oil spills.
Sec. 376.14 requires terminal facility operators and vessels docking
in Florida to file performance bonds.
Sec. 376.16 levies civil penalties for violations of this chapter
and rules made under it. These penalty provisions do not apply
to discharges promptly reported and removed by licensees.
Maine
Title 38, subchapter 11-A, Maine Revised Statutes Annotated, is
titled "Oil Discharge Prevention and Pollution Control."
Sec. 543 prohibits pollution of state waters by petroleum except
when permitted by the board of Environmental Protection.
Sec. 545 provides for annual oil terminal facility licensing. Oil
terminal facilities are defined to include facilities used for
the purpose of transferring, processing, refining or storing
petroleum products.
Sec. 548 provides for the immediate removal of polluting discharges
by polluters. Payment of state clean-up costs is to be provided
from the Maine Coastal Protection Fund.
Sec. 551 establishes the Maine.Coastal Protection Fund. To the fund
are credited license fees and penalties arising from enforcement
of these oil pollution provisions. An applicant's license fee
is set at a rate of one half cent for each barrel of petroleum
- 391 -
-------
products transferred annually. The fund 1s to be used to cover
administrative, clean-up, and other costs associated with the
oil pollution control provisions.
Sec.552 provides that licensees are strictly liable to the state
for clean-up costs resulting from acts and omissions not only
of their own employees, but for such actions of carriers destined
for their facilities when such carriers are within state waters.
Massachusetts
The Massachusetts Clean Water Act is codified in Chapter 21 of
the General Laws of the Comnonwealth of Massachusetts, Sec 26 et seq.
Sec 27(10) generally provides for state clean-up of oil spills and
provides for recovery of clean-up and environmental restoration
costs from those responsible for discharges. Discharges must be
reported immediately to the state.
Sec. 50 provides for licensing of marine oil terminals.
Sec. 50A requires oil terminal operators to have pollution control
equipment and teams available for pollution prevention.
Sec. 508 provides for posting of bonds for vessels carrying petroleum
cargoes and seeking to discharge cargoes to the state.
Sec. 52 provides for licensing of waste oil collectors and Sec. 58
provides for licensing of hazardous waste disposal.
Sec. 59A provides for recovery of double damages by individuals suf-
fering damage from negligent discharges of petroleum in certain
inland and tidal waters.
The Division of Water Pollution Control of the state Water Re-
sources Commission, pursuant to these statutory provisions, has
issued rules for the prevention and control of oil pollution.
North Carolina
Chapter 143, Article 53 of the General Statutes of North Caro-
lina is titled "Oil Pollution Control."
Sec. 143-479 forbids the discharge of oil into or onto state lands
or waters, or into sewer systems, regardless of whether the dis-
charge was accidental or intentional. This prohibition does not
apply to mosquito or dust abatement programs or to discharges
approved by the Board of Water and Air Resources. Discharges
- 392 -
-------
are not unlawful when attributable to acts of God, war, or acts
or omissions at the direction of a law enforcement officer or
fireman.
Sec. 143-480 provides that any person having control over a discharge
should undertake to remove it as soon as possible. Oil discharges
must be reported to the state immediately by those responsible for
them. The Water and Air Resources Board is empowered to take action
to remove oil discharges.
Sec. 143-483 establishes an oil pollution protection fund, comprised of
legislation appropriations and funds from fees, charges, and penal-
ties paid under provisions of this article. Money from the fund
may be used in oil spill clean-up operations. Those responsible
for oil discharges are liable to the state for clean-up costs. They
are also liable (Sec. 143-486) for costs incurred by the state in re-
storing environmental resources to their pre-discharge condition.
Civil penalties can be assessed for violation of provisions of
this oil pollution article. Intentional discharges of oil are
punishable by criminal penalties (Sec. 143-487).
The state may place a lien on non-bonded oil-discharging vessels,
to ensure payment of clean-up and other costs (Sec. 143-488).
Section 143-489 declares that oil discharges are strictly liable for
damages to public and private property resulting from oil dis-
charges.
Sec. 143-491 provides for the registration of oil terminal facili-
ties in the state. Certificates of operation are only to be issued
to applicants who have furnished, inter alia, summaries of proce-
dures for prevention of oil spills. Sec. 143-493 requires the Secre-
tary of Natural and Economic Resources to report to the state le-
gislature, by February 1, 1974, recommendations for additional
legislation pertaining to oil terminal facilities.
Sec. 143-495 requires a permit from the state for refineries initiated
or constructed prior to July 1, 1974. Permits will be denied if
the state Board of Water and Air Resources finds the refinery will
have substantial adverse effects on wildlife or fisheries, that
its operation will violate air or water quality standards, that it
will have substantially, adversely impact public park or recreation
or forest areas, or that the installation will have substantial ad-
verse effects on public health, safety or welfare that are not out-
weighed by the installations benefits.
- 393 -
-------
Oregon
Sections 449.155 to 449.175 and 449.993 of the Oregon Revised Statutes
pertain to discharge and spillage of oil.
Sec. 449.155 declares it unlawful for oil to enter state waters from
any ship or any fixed or mobile facility onshore or offshore, re-
gardless of whether the entry is the result of intentional or neg-
ligent conduct, or accident. Such discharge is not unlawful when
it is conducted pursuant to permit, or when it is due to act of
God, act of war or sabotage, United States or Oregon negligence
or third party act or omission.
Sec. 449.159 provides for strict liability for oil spill damages on
the part of the person having control over the oil.
Sec. 449.161 requires the person in control of oil which has entered
state water to collect and remove the oil immediately.
Sec. 449.163 provides that the Department of Environmental Quality may
remove the oil if the individual responsible for the entry fails
to act Immediately to remove 1t. The individual is responsible
for expenses incurred by the state in so cleaning up the oil.
Sec. 449.167 provides that penalties recovered under subsection (3)
of ORS S449.993 (described below) are payable to an Oil Spillage
Control fund, to be administered solely for carrying out environ-
mental rehabilitation.
Sec. 449.993(3) provides for civil penalties of up to $20,000 for
each day of violation of the above described provisions in addition
to any other penalties provided by law.
Sec. 47-030 of the Department of Environmental Quality regulations
promulgated under the law (S47-005 through 47-030 of Oregon Adminis-
trative Rules Compilation) provides that timeliness of notice of
discharge and clean-up efforts may be taken into consideration in
determining the level of civil penalty incurred by dischargers.
Rhode Island
Title 46, Sec. 46-12-15 of Rhode Island General Laws gives the Health
Department authority to Inspect and promulgate rules and regula-
tions governing means and methods and devices for handling petro-
leum employed on marine vessel- engaged in handling or discharging
petroleum, in order to prevent discharge of petroleum into state
waters.
- 394 -
-------
The state Department of Health has adopted rules and regulations
governing discharges of petroleum and other substances into state
waters. These were promulgated August 12, 1957.
Sees. 4-9 of the rules and regulations forbid a series of activities
which may result in oil discharges. Bilge and ballast discharges
are forbidden.
Shore to vessel and vessel to vessel transfers of oil are for-
bidden under tlO et seq. of the regulations unless specified pre-
cautionary measures against oil spillage have been taken.
Sees. 19-21 provides that operators of oil terminals should clean up
spills as soon as possible, using equipment approved by the Health
Department.
Virginia
Sec. 62.1-44.34:2 of the Code of Virginia provides that boat or
refinery operators discharging oil into state waters are liable to
the state and to private parties for the costs of clean-up or pro-
perty damage Incurred. State and private parties, 1n seeking dam-
ages do not have to prove negligence and the only defense against
suit is that the discharge was caused by an act of God, an act of
war, or third party action.
Sec. 62.1-195 makes it unlawful to discharge oil from a boat into
navigable tidal waters of the state. Violation is a misdemeanor
punishable by a fine and jail term, and a lien can be placed on
the vessel involved to recover the penalty. The vessel involved
will also be liable to the county or city in which oil is dischar-
ged for damages at the rate of $1 per gallon discharged, not to
exceed $15,000 per violation.
Washington
Sees. 90.48.315 et seq. of the Revised Code of Washington pertain to
oil pollution.
Sec. 90.48.320 makes it unlawful for oil to enter state waters from
any ship or fixed or mobile on or offshore facility, regardless
of whether 1t be intentional or by accident. This does not apply
to discharges authorized by the pollution control commission, or
when discharge can be shown to be the result of an act of war or
sabotage, or negligence on the part of the United States or
Washington.
- 395 -
-------
Sec. 90.48.325 requires a person having control over discharged oil
to immediately collect and remove it. S90.48.335 provides that a
person failing to immediately collect discharged oil shall be liable
to the state water pollution control commission for the expenses it
incurs in carrying out collection and clean-up activity.
Sec. 90.48.336 provides for strict liability for oil discharges.
Sec. 90.48.343 provides that any person proposing to discharge oil
into state waters must obtain prior permission from the director
of the Water Pollution Control Commission. Such discharges are
permitted when consonant with effluent and receiving water and
treatment standards.
Sec. 90.48.350 provides for a civil penalty of up to $20,000 for
illegal discharges, in addition to the other penalties described
above.
Sec. 90.48.355 gives the commission right of entry and access to
records for investigatory purposes.
Sec. 90.48.360 requires the immediate reporting of illegal discharges.
Sec. 90.48.390 establishes a coastal protection fund, to consist of
penalties, fees and charges received pursuant to the above des-
cribed provisions. Sec. 90.48.400 describes the various pollution
control and research efforts to which fund resources can be put.
STATES WITH FEW STATUTORY PROVISIONS CONCERNED EXPLICITLY WITH
OIL POLLUTION
The states whose laws were just outlined are those which have
devoted the greatest statutory concern to oil pollution. Other
states have brief statutes or regulations pertaining to oil pollu-
tion, but they are not of sufficient detail to merit extended
summary. Also omitted from the preceding section were state laws
governing pollution control in oil fields.
All states have general prohibitions within their statutes against
the discharge of polluting wastes into state waters, and all make
mention of oil in their water quality standards. Many have developed
oil spill contingency plans. These actions are not of sufficient
importance in the waste oil context to merit discussion.
- 396 -
-------
FOOTNOTES
]_/ "State of Maryland Waste Oil Recovery and Reuse Program," (Prepared
for Maryland Environmental Service and the Environmental Protection
Agency by Environmental Quality Systems, Inc. (November 1973) at 81.
2/ Conversation with representative of Water Resources Administration,
Maryland Department of Natural Resources, January 1974.
3/ Massachusetts Water Resources Commission Division of Water Pollution
Control and Hazardous Waste Board Hazardous Waste Regulations at 1
(7 pp. mimeographed, 1973).
4/ "Study of Waste Oil Disposal Practices in Massachusetts - Report to
Commonwealth of Massachusetts Division of Water Pollution Control,"
(Arthur D. Little Co., Report # C-70698, January 1969).
5/ "Biological Degradation of Waste Oil Sludge," (Tyco Laboratories for
Massachusetts Water Resources Commission, 1971); Gilford A. Chappell,
"Waste Oil Reprocessing," (Esso Research and Engineering Company for
Division of Water Pollution Control, Massachusetts Water Resources
Commission, Project No. 72-5, January 1973).
6/ Conversation and correspondence with representative, Water Pollution
Control Division, Massachusetts Water Resources Commission, September
1973; February 1974.
7/ Telephone Conversation and correspondence with represenative, Vermont
Agency of Environmental Conservation, December 21, 1973.
- 397 -
-------
8/ Letter to Environmental Law Institute from Colorado Department of
Health, September 14, 1973.
9_/ Letter to Environmental Law Institute from Minnesota Pollution
Control Agency, October 19, 1973.
TO/ Letter to Environmental Law Institute from New Jersey Department
of Environmental Protection, November 2, 1973.
V[/ Ronald 0. Ostrander and Station J. Kleinert, "Drain Oil Disposal
in Wisconsin," (Madison, Wisconsin Department of Natural Resources,
Technical Bulletin No. 63, 1973).
]2J Several states have the authority to establish licensing systems
should they so desire. For example, Rule 300.4 of the Texas Water
Quality Board indicates that the Board, from time to time and as
circumtances may dictate, will establish regulations to govern the
collection, handling, transportation, storage, treatment and disposal
of particular types of wastes.
13/ Conversation and correspondence with representative, Oil and Hazardous
Materials Control Section, Michigan Department of Natural Resources,
September 1973; February 1974.
14/ Conversation and correspondence with representative, California State
Water Resources Control Board, September 1973; February 1974.
15/ Conversation with representative, Solid Waste Division, New York
Department of Environmental Conservation, February 1974.
- 398 -
-------
16/ Conversation with representative, Water Compliance and Hazardous
Substances Division, Connecticut Department of Environmental
Protection, February 1974.
IT/ General Electric Company Corporate Research and Development, "A
Proposed Plan of Solid Waste Management for Connecticut," (1973) at 65,
187 Conversation and correspondence with representative, Oklahoma Water
Resources Board, September 1973, February 1974.
T9/ Letter to Environmental Law Institute from South Dakota Department
of Environmental Protection, September 21, 1973.
20/ Letter to Environmental Law Institute from Indiana State Board
of Health, October 16, 1973.
2V Idaho; Rule X, Section F, Idaho Rules and Regulations for the
Establishment of...Wastewater Treatment Requirements (Adopted
by Board of Environmental and Community Services, June 28, 1973);
Kansas: Sec. 65-171d, Kansas Revised Statutes;
Maine: Sec. 545, et seq, Maine Revised Statutes Annotated;
Massachusetts; Regulation 3.5 of Massachusetts Water Resources
Commission Division of Water Pollution Control and Hazardous Waste
Board Hazardous Waste Regulations;
Michigan: Sec. 323.1151 et seq. Michigan Administrative Code;
Minnesota: Water Pollution Control Commission Regulation WPC Y,
Relating to Storage or Keeping of Oil and Other Liquid Substances.
(Adopted June 26, 1964);
- 399 -
-------
Missouri; Sec. 2.01 of Hazardous Materials Storage Regulations
adopted by the Missouri Clean Water Commission;
Nebraska; Water Quality Standards Applicable to Nebraska Waters at 3.
(Adopted by Nebraska Department of Environmental Control effective
June 11. 1973);
New Jersey; The state review projects connected with the storage
of petroleum and hazardous materials. Letter to Environmental Law
Institute from New Jersey Department of Environmental Protection,
November 2, 1973;
Oklahoma; Sec. 6 of Water Resources Board's Technical Release
100-1 (adopted July 25, 1972);
Rhode Island; Sec. 4, Rhose Island Department of Health Oil Pollution
Control Rules and Regulations (Adopted August 12, 1957).
22J Alabama; Sec. Ill, Alabama Rules and Regulations for Solid Waste
Management (adopted by State Board of Health July 19, 1972);
Arkansas; Sec. 6(f)(cc)(8), Arkansas Solid Waste Disposal Code;
Connecticut; Title 19, Sec 19-524(n), Connecticut General Statutes
Annotated (1973 supp.);
Georgia; Chapter 391-1-1, Sec 391-1-1-.04, Rules of the Deparment
of Natural Resources, Environmental Protection Division (effective
December 12, 1972);
Idaho; Part II, Sec. 2.19, Idaho State Board of Environmental and
Community Services, Solid Waste Management Regulations and Standards
(adopted June 28, 1973);
Illinois; Chapter 7, Part III, Rule 310(6), Illinois Pollution
Control Board Solid Waste Rules and Regulations (effective July 27, 1973)
- 400 -
-------
Kentucky: Department of Health Regulation SW 2, Part 7(8) (effective
July 1, 1968);
Louisiana: Chapter X, Sec. 1052.1, 10.53.1, Louisiana State Board
of Health Sanitary Code (adopted January 26, 1963);
Maryland: See description in text above.
Massachusetts: See description in text above.
Michigan: See description in text above. Also see R325.ll05, Sec. 10,
Michigan Administrative Code.
Nevada: Article 2, Sec. 2.6.3 Nevada Board of Health Regulations
Governing Solid Waste Management (adopted January 17, 1973);
North Carolina: Sec. XI-H, North Carolina State Board of Health
Rules and Regulations Providing Standards for Solid Waste Disposal
(adopted March 11, 1971);
North Dakota: Sec. 5.2.3, North Dakota State Department of Health
Regulation No. 86;
Ohio: Chapter HE-24, Sec. HE-24 - 09(H), Ohio Sanitary Code;
Oklahoma: Regulation 4, Sec. 4.1.15, Rules and Regulations for the
Collection and Disposal of Solid Waste and Setting Standards for
Sanitary Landfills (adopted by State Board of Health, June 13, 1971);
Regulation 5.0, Sec. 5.2 (adopted May 1973);
Oregon: Chapter 340, Sec. 62-015, Oregon Administrative Rules
Compilation;
South Carolina; PC-SW Regulation 2, Sec. VIII, Department of
Health and Environmental Control, (adopted March 8, 1972);
South Dakota: Chapter 34A10-1, Sec 34A10.1.115, State Department
of Environmental Protection Solid Waste Rules (proposed);
- 401 -
-------
Tennessee: Regulation 6, Sec 6(c)(l)(j), Department of Public Health
Regulations Governing...Sol id Waste Processing and Disposal...
(filed with Secretary of State January 20, 1971);
Texas: Sec E-24, Department of Health Municipal Solid Waste Rules,
Standards and Regulations (effective November 5, 1970);
Virginia: Chapter XXVIII, Part VI, Rules and Regulations of the
Virginia Department of Health (effective April 1, 1971);
Wisconsin: Chapter 51, Sec. 51.07, Sec. 51-10(3), Wisconsin Solid
Waste Disposal Standards (adopted by the Wisconsin Natural Resources
Board March 12, 1969).
- 402 - fVS. GOVERNMENT PRINTING OFFICE:1974 546-319/451 1-3
------- |