MARCH 2013
VOL. 19 ISSUE 3
Motor Oil Packaging Trends OSHA Rule’s Cost: $110 Million
CONSISTENT PRODUCTS. FRESH NEW LOOK.
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hat? You don’t don’t get Lube Report!? That means you don’t have Carolyn Green’s priceless U.S U.S.. base oil price reports in your inbox every Wednesday morning — her pithy weekly roundup of base oil price moves, insights, trends and gossip. It means you’re missing Ray Masson’s mesmerizing tales of base oil pricing in Europe, the Middle East and Africa. You’re You’re missing Adrian Brown’s SSY base oil shipping report — unmatched information about the costs and challenges of moving the products we care about around the globe. And it means you’re missing our editorial team’s original reporting on breaking industry news, under the direction of Senior Editor George Gill. Lube Report is essential, it’s a fast read, and it’s free worldwide. Visit www. LubeReport.com to see the current issue, check out past issues in the archive, and start your own free subscription.
R
eaders have been quick to point out that February’s article “EPA to Require Green Lubes for Vessels” contained grave
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errors about polyalkylene glycols; it wrongly called them toxic, slow to biodegrade and poor in water tolerance. In fact, just the opposite is true. As our own past articles have shown, many PAGS, PA GS, particularly water-soluble types, are highly suited as Environmentally Environ mentally Acceptable Lubricants. They meet high standards for toxicity to xicity,, biodegradability and safety, as well as performance. Managing Editor Lisa Tocci agrees these errors should have raised a red flag. “Readers are right to be angry,” she told me. “We blew it. There’s no excuse for not catching such inaccuracies.” We apologize to our readers for Lisa Tocci, Nancy DeMarco & Gloria Steinberg Briskin not having been more alert and not using more editorial rigor. We look forward to setting the record straight in future issues. Meanwhile, please see the Letters to the Editor on page 62 of this issue.
Nancy J. DeMarco
[email protected]
Nancy J. DeMarco Publisher Lisa Tocci Managing Editor Richard Beercheck Senior Editor Greg Whitlow Art Director Sheryll Unangst Shery Unangst Circulation Manager Robert Green Circulation Assistant Manager Laura Hughes Production Assistant George Gill, Tom Glenn, Jack Goodhue, Carolyn L. Green, Green, Boris Kamchev, Kamchev, David McFall, J. Berkshire Miller, Tim Sullivan, Steve Swedberg Contributors
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Gloria Steinberg Briskin Managing Director/Vice President, Advertising Phone: (703) 536-7676 (800) 474-8654
[email protected] Megan Matchett Account M anager
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Subscriptions ons to the print edition are free to qualified subscribers in the United States and Canada who are active in the lubricants industry as manufacturers, man ufacturers, marketers, volume buyers and users, or as suppliers who maintain close ties to the lubricants industry. Qualification on is subject to publisher’s approval.
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LUBES’N’GREASES
3
MARCH 2013
VOL. 19
ISSUE 3
TABLE OF CONTENTS FEATURES:
14
The $110 Million Rule. That’s just the start of what U.S. lubricant and metalworking fluid manufacturers will have to shell out, to comply with OSHA’s new Hazard Communication Standard.
22
The Value of Due Diligence . Thinking of a merger, acquisition or sale of assets? Before you buy, sell or even ship, be sure that environmental liability won’t come back to haunt you.
Page 22
30
Boosting Baytown’s Base Oil . ExxonMobil plans to expand API Group II and II+ production capacity at its massive Texas refinery. Here’s a preview of what’s coming by early 2015.
34
Motor Oil Packaging Trends. Just because a package looks great doesn’t make it a great design, says an industry expert. If it slows your filling line or buckles during shipping, it’s a loser.
40
Drumming Up Business in Louisiana . IMTT’s bulk liquid terminal was established to store and transfer
Page 30
material — not package it. And then a big chemical company asked it to start filling drums.
DEPARTMENTS:
Page 40
3 6 46 48 54
Publisher’s Letter Automotive Need to Know Product News Places’n’Faces
Cover photo © olmarmar - Fotolia 4 MARCH 2013
62 63 64 66
Letters to the Editor Advertiser Index Base Oil Report Your Business
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AUTOMOTIVE
Owner’s Manuals: More Pages, Less Oil
T
he other day I spoke
with Scotti Lee and Patricia Wirth about recommendations for engine oil changes, as seen in vehicle owner’s manuals. For those of you who don’t know them, Scotti Lee is a longtime veteran of the fast-lube industry. Founder of Oil Changers in Wilmington, Del., he is a past president of the Automotive Oil Change Association and a guru for anyone trying to learn the ropes in the business.
BY STEVE S WEDBERG
Pat Wirth’s company, J&P Lube Inc., owns and operates a fast-lube store near Washington, D.C., and she is the current president of AOCA, the trade group representing owners of convenient oil change outlets. This organization has more than 1,200 members who together operate some 3,800 fast-lubes and auto maintenance centers in the United States, Canada, Mexico and elsewhere. Some of these are huge national chains, like Jiffy
Lube and Valvoline Instant Oil Change, but many are franchisees or independent one-shop retailers. Pat told me she is increasingly concerned about the oil change recommendations in vehicle owner’s manuals and their impact on her industry. Specifically, she recently purchased a 2013 Acura MDX, and on reading the owner’s manual found that she was supposed to change the oil only when the “change oil” light came on. There is no maximum mileage or time interval recommended for this service — just when the light comes on. She also shared with me a note from another colleague, who enclosed a page from a Mini Cooper owner’s manual. That manual states, “Only Mini dealers are to perform oil changes.” For someone who sells oil change services, that’s like the proverbial red flag in the bull’s face! The fact is that many
Santa Monica Mayor Richard Bloom, left, and CalRecycle’s Mark Oldfield, promoting California’s Check Your Number campaign, which urges drivers to rethink their oil drain intervals. (Photo: Barbara Gregson/PR Newswire) 6
MARCH 2013
established oil change stores are seeing declines in car counts, the numbers coming into their bays Continued on page 8
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AUTOMOTIVE
Continued from page 6
each day for service, and have for the last five years. To keep the business going, many operators are
I started my quest by trying to latch on to an owner’s manual for a 1957 Chevy Bel Air, which was the first car I owned
Recommended Engine Oil Viscosity: ‘57 Chevy Bel Air Lowe Lo west st An Anti tici cipa pate ted d Tem empe pera ratu ture re Du Duri ring ng Time Oil Will Be in Crankcase
Recomm Reco mmen ende ded d SAE Viscosity Oil
Recomm Reco mmen ende ded d SAE Multi-Viscosity Oil
32 degrees F
SAE 20W or SAE 20
SAE 10W-30
0 degrees F
SAE 10W
SAE 10W-30
Below 0 degrees F
SAE 5W
SAE 5W-20
NOTE: For sustained high-speed driving where daytime temperatures are above 90º F, SAE 30 oil may be used.
branching out into light maintenance work or adding carwashes. Some are even offering owner’s manual classes, teaching their customers about the important information and safety practices they’ll find in there, such as regularly checking tire pressure. As Scotti Lee pointed out, waiting to change the oil until the light comes on means fewer chances to inspect the other vehicle systems. He urged fastlube operators to provide customers with a written checklist that explains how regular checkups help to assure vehicle safety and reliability; why the engine oil needs changing; what other fluids need to be checked and topped off; and the value of investing in vehicle maintenance. All this led me to thinking about owner’s manuals and how they have changed over the years. I decided to track down some older manuals and compare what was in them back in the day versus now. 8 MARCH 2013
(second-hand, of course). It’s not easy to find such things. Finally, I got in touch with Jim Linden. Retired now from General Motors, he chairs the SAE Fuels & Lubricants Division and also works as a consultant. Linden is more Internet savvy than I am, and soon came back with an electronic version of the book — a grand total of 33 pages long. When I commented that the owner’s manual for my 2001 GMC pickup has 446 pages, he quipped that the section on how to set up the GMC’s radio probably ran more than 33 pages. (Actually, it’s only 18 pages.) The GMC manual has 70 pages of advice on seat belts; my ‘57 Chevy didn’t even have seat belts until I installed them. At any rate, the directions on oil maintenance in the ‘57 book are quite interesting. The primary recommendation for engine oil reads, “In the selection of the gasoline
and engine oil to be used, it is best to consider the reputation of the refiner or marketer. marketer. He is responsible for the quality of his product and his reputation will be your best indication of quality quality.” .” The ‘57 manual goes on to define oil quality as MS or DG, under the classification system which preceded our current API Service (S) and CommerCommercial (C) categories. the manual is very ambiguous and leaves a lot of room for interpretation. Finally, it offers viscosity-grade recommendations, shown in the table at left. GM’s recommended oil change interval for the Bel Air was 2,000 miles under normal driving conditions, with adverse driving requiring more frequent changes; however “adverse” wasn’t defined. Quite frankly, I don’t know what viscosity grade was actually used in the ‘57, since I had the oil changed by my friendly local Mobil service station. I think it cost about $3.95 to do the job, which included servicing all of the grease fittings and the other items covered by the oil maintenance guide. We’ve owned many other cars along the way, but tracking down owner’s manuals for any of these has been a challenge. So for comparison, I turned to my manual for the 2001 GMC Sierra pickup which I am still driving (93,000 Continued on page 10
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AUTOMOTIVE
Continued from page 8
miles and going strong). The oil change information here is quite a bit different than for that old ‘57. Gone are the days when a reputable brand is sufficient. The 2001 manual tells me that the sole indicator of acceptability is the API starburst trademark, signifying an engine oil that meets the ILSAC GF specification.
The other API trademark seen on engine oil containers, the donut, was introduced in 1983 to identify performance level and viscosity grade; later, fuel economy performance was added too. The donut is still found on most oil containers and is one way to identify performance. However, the starburst was introduced in the early 1990s to satisfy OEMs that only oil with the proper performance credentials — including fuel economy — was being used. There are viscosity recommendations here, too. However, they now emphasize fuel economy, rather than lowest operating temperature, and the preferred grade for ensuring that is SAE 5W-30. To answer the big question of when to change the oil, my truck has the GM Oil Life System, with its dash light indicating when to change. As I’ve pointed out before, this works on the basis of an algorithm (a set of rules for solving a problem), using the number of crankshaft revolutions and the range of oil temperatures to determine when the oil has had enough. The algorithm’s rules were estab-
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lished by a large number of ongoing field tests on oils of known quality. In fact, as higher quality oils come into use, GM has modified the algorithm to account for such things as better oxidation resistance and deposit control. Thanks to this system, the 2001 manual indicates that the change interval light will likely blink on somewhere between 3,000 and 10,000 miles, and warns me not to push beyond 10,000 miles or one year between oil changes. (No worry! Here in hot, dusty Arizona, I typically see the light come on around 4,500 to 5,500 miles.) Fast-forward another decade, to the current crop of 2013 vehicles, and I might not need to consult an owner’s Continued on page 12
10 MARCH 2013
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AUTOMOTIVE
Continued from page 10
org, whose online calcula-
manual at all. Many OEM maintenance recommendations are on the Internet. At www.fleet.ford.com, for example, you can enter the
tor almost always tells visitors to stretch their oil drain intervals to 5,000 miles or more. Many other consumer sites, such as
year and make of your car, pickup or SUV, and instantly
Edmonds.com, loudly trumpet the wastefulness of too-frequent oil changes. As you can see, Pat Wirth, Scotti Lee and their AOCA colleagues are holding the shrinking end of this stick. More and more, they are going to see cars less and less frequently. Besides General Motors and Ford, OEMs including Chrysler, Honda, Acura, Mercedes-Benz, BMW and Audi now have oil life monitors. Fifty percent of drivers may still feel 3,000 miles is a good, safe interval, but these systems are
1957 Bel Air As this page from the owner ’s manual shows, oil changes were expected every 2,000 miles.
12 MARCH 2013
often. The OEMs are satisfied that oil quality is such that they can go far longer — 7,500 or 8,000 or 10,000 miles in many cases — and their oil life monitors are covering the field. Pat and Scotti are facing some really tough decisions. There are probably many oil change stores that won’t survive this change in owner habits, and they will need to develop a new business model. Some have already done so with the addition of other maintenance activities and services, and there may be other ways to go. I wish them the best since I am a customer and don’t want to lose my convenient, fast and cost-effective oil change partner.
rapidly supplanting the need to change at a recommended mileage; and therein lies the rub. For the oil change business, there is waning certainty about when the customer will return. There is also a
obtain Ford’s oil change recommendation. Click 2013, Ford and Mustang, and you learn that this car is equipped with an “Intelligent Oil Life Monitor,” and its oil (“syn-
worry that car owners will not pay attention to the light, and view it as a reminder rather than a requirement. The question of how long an oil can successfully
thetic recommended”) need only be changed
lubricate has been batted around for some time now.
when the display light goes on. Same thing with the Lincoln Navigator, and many other models. Likewise, last year brought California’s “Check Your Number” website,
There are those who state that they have seen significant oil degradation after 3,000 miles; depending on the duty cycle, I’m sure that there are indeed some situations where the oil
www.CheckYourNumber.
should be changed that
Industry consultant Steve Swedberg has over 40 i years expe rie nce in lubr cants, mo st notably w ith ron Pen n zoil and Chev O ronite. He is a longtime ica n member of the Amer Chem i cal Society and SAE Inte rnational, w here he was chairm a n of Techn ica l Comm itt ee 1 on auto motive e ngine oils. He can be reached at steve swedbe
[email protected].
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B Y JOHN HOWELL AND R ICH K RASKA
Sticker Shock
a i l o t o F s u j i r a M ©
Lubricant manufacturers are quickly learning that there is a substantial cost to complying with the U.S. Occupational Safety and Health Administration’s revised Hazard Communication Standard, published March 26, 2012, as 29 CFR 1910.1200. More commonly known as HCS 2012, the standard aims to bring U.S. workplaces and products into conformance with the internationally adopted Globally Harmonized System of Classification and Labeling of Chemicals (GHS). Overall, the cost for all U.S. industry to comply with the new standard was estimated to be $2.1 billion dollars, to be spent over the estimated four-year implementation period. Of that total, $408 million was associated with those companies which manufacture chemical products and therefore author Safety Data Sheets or SDSs. The balance was associated with the many, many users of chemical products, and includes their costs for employee training and management familiarization. Perhaps most astonishingly, OSHA estimated that the costs for the lubricant industry — specifically, NAICS code 324191, “Petroleum and Lubricating Oil and Grease Manufacturing” — to convert its Material Safety Data Sheets and labels to the new GHS format were going to be over $110 million. That’s almost 27 percent of the total to be spent
14 MARCH 2013
closely-related-but-untested mixture. Lastly, if test data are not available and bridging principles cannot be used, classifications of mixtures are then determined by using the classifications of included raw materials and reaction products. As a result, absent complete test data on all of their formulations, lubricant manufacturers must understand the formulation details and classifications of all of the raw materials they include in their formulations. That includes purchased mixtures — which additive suppliers are reluctant to disclose for some formulations. The result: hours and hours of analysis of information, including that publicly available in data bases
by all chemical manufacturing industries, and the highest of the 44 industry groups analyzed.
Deeper into the Data These are not the total costs of the lubricants industry’s Hazard Communications Standard programs, just the additional costs of compliance with the new provisions of HCS 2012. As the table on page 16 illustrates, the vast majority of that amount was estimated to be associated with the cost of reclassification of chemical hazards and revision of SDSs and labels. Why is this cost so high? In part, it is because the entire process we use to determine the hazards of products we produce has changed, from hazard determination to hazard classification. This gamechanger fundamentally alters the way chemists understand the raw materials and reaction products in the lubricants they formulate, and the way hazard communicators author SDSs and communicate the products’ hazards. Another reason is that in total our industry manufactures thousands and thousands of unique formulations. In fact, the initial estimate OSHA first made of the volume of products for which new SDSs would need to be authored was seen to be too low. Speaking before the agency on March 2010, Cathy Novak, who was then president of the Independent Lubricant Manufacturers Association, testified that OSHA had underestimated the number
of SDSs produced per firm in the lubricating oils industry. She said the average firm in the industry produced approximately 1,700 lubricating products requiring an SDS. OSHA accepted the estimate of 1,700 SDSs produced per firm in NAICS 324191 and, with 329 affected establishments in this industry, increased the number of affected SDSs by approximately 400,000 SDSs. That’s a lot of SDSs! Let’s look at this more closely so we can understand just why lubricants need so many.
Classification of Mixtures Under HCS 2012, there has been a fundamental change in how the hazards of “mixtures,” the kind of product lubricant manufacturers produce, are estimated. In Appendix A to 1910.1200, Health Hazard Criteria, OSHA describes the “tiered approach” to hazards of mixtures and their classification. OSHA assumes that many firms will have actual test data for the many hazards a formulated product might have, such as for acute toxicity, eye and skin irritation, mutagenicity, reproductive toxicity and target organ toxicity. Essentially, in the tiered approach OSHA prescribes, test data on the complete mixture are considered as the first tier in the evaluation, followed by the application of so-called “bridging principles” to classify formulations whose formulas are so similar to the tested formulations that the test data may be used to classify the LUBES’N’GREASES 15
such as that maintained by the European Chemicals Agency, so that the lubricant manufacturer can classify its products using the cut-off and concentration limit criteria described in detail in Appendix A.
Doing the Math Here’s an example of why such detailed information is needed. Let’s say you produce a synthetic metalworking fluid formulation which contains 10 different chemical ingredients, one of which is a reaction product between an alkanolamine and an organic fatty acid you blend yourself. You don’t have any test data yourself. In order to determine the skin irritation classification of the mixture, you
have to have available the skin irritation classifications for all of the raw materials. Your formulation may be a Category 1 skin irritant if it contains 5 percent or more of skin “Cat 1” ingredients. Even if not a Cat 1 skin irritant, it may be Category 2 skin irritant if: a) the formulation contains more than 1 percent but less than 5 percent Cat 1 ingredients, or b) 10 percent or more skin Cat 2 ingredients, or c) if the sum of 10 times the concentration of skin Cat 1 ingredients plus the sum of skin Cat 2 ingredients is 10 percent or more. Sound complicated? It is. But that is just one of 10 different hazards for which all
Total Implementation Costs by Industry Segment, per OSHA Costs of
Cost of
available data for each of the included raw materials must be analyzed. The algorithm for eye irritation using the additivity approach requires calculation of five different combinations of included Cat 1 and Cat 2 skin or eye irritants. And that alkanolamineorganic fatty acid reaction product that you manufacture? You’ll need to understand the hazard classification of that material as well. If you don’t have acute toxicity test data for your formulation, you will need to have available acute toxicity information for all of the included ingredients. Until raw material manufacturers complete the classification process for their Continued on page 18
closely-related-but-untested mixture. Lastly, if test data are not available and bridging principles cannot be used, classifications of mixtures are then determined by using the classifications of included raw materials and reaction products. As a result, absent complete test data on all of their formulations, lubricant manufacturers must understand the formulation details and classifications of all of the raw materials they include in their formulations. That includes purchased mixtures — which additive suppliers are reluctant to disclose for some formulations. The result: hours and hours of analysis of information, including that publicly available in data bases
such as that maintained by the European Chemicals Agency, so that the lubricant manufacturer can classify its products using the cut-off and concentration limit criteria described in detail in Appendix A.
Doing the Math Here’s an example of why such detailed information is needed. Let’s say you produce a synthetic metalworking fluid formulation which contains 10 different chemical ingredients, one of which is a reaction product between an alkanolamine and an organic fatty acid you blend yourself. You don’t have any test data yourself. In order to determine the skin irritation classification of the mixture, you
have to have available the skin irritation classifications for all of the raw materials. Your formulation may be a Category 1 skin irritant if it contains 5 percent or more of skin “Cat 1” ingredients. Even if not a Cat 1 skin irritant, it may be Category 2 skin irritant if: a) the formulation contains more than 1 percent but less than 5 percent Cat 1 ingredients, or b) 10 percent or more skin Cat 2 ingredients, or c) if the sum of 10 times the concentration of skin Cat 1 ingredients plus the sum of skin Cat 2 ingredients is 10 percent or more. Sound complicated? It is. But that is just one of 10 different hazards for which all
available data for each of the included raw materials must be analyzed. The algorithm for eye irritation using the additivity approach requires calculation of five different combinations of included Cat 1 and Cat 2 skin or eye irritants. And that alkanolamineorganic fatty acid reaction product that you manufacture? You’ll need to understand the hazard classification of that material as well. If you don’t have acute toxicity test data for your formulation, you will need to have available acute toxicity information for all of the included ingredients. Until raw material manufacturers complete the classification process for their Continued on page 18
Total Implementation Costs by Industry Segment, per OSHA
NAICS Code
Industry
324191 Petroleum lubricating oil & grease mfg.
Cost of Training Employees
Cost of Management Familiarization & Other Costs
One-time Printer Costs
Total Costs
$109,394,737
$166,018
$176,282
$46,950
$109,783,987
324121 Asphalt paving mixture & black mfg.
$19,507,491
$349,431
$497,823
$499,510
$20,854,256
211111 Crude petroleum & natural gas extraction
$19,372,038
$2,651,234
$3,623,590
$0
$25,646,863
$17,119,063
$13,316,596
$16,370,063
$1,729,520
$48,535,243
$14,252,071
$545,201
$776,347
$181,900
$15,755,519
339 Miscellaneous Manufacturing 325510 Paint & coating mfg. 325211 Plastics material & resin mfg. 327 Nonmetallic Mineral Product Mfg. 326 Plastics & Rubber Products Mfg. 325998 All other miscellaneous chemical prod. mfg.
$11,786,608
$1,105,863
$399,367
$210,110
$13,501,948
$11,255,479
$11,014,675
$7,696,463
$3,466,920
$33,433,536
$9,918,393
$19,293,692
$6,996,994
$2,393,990
$38,603,069
$9,735,649
$632,012
$727,691
$171,790
$11,267,143
325920 Printing ink mfg.
$7,111,319
$196,206
$245,528
$117,620
$7,670,673
325520 Adhesive mfg.
$5,185,730
$391,262
$324,138
$118,460
$6,019,591
325199 All other basic organic chemical mfg.
$4,202,772
$1,127,684
$354,429
$188,220
$5,873,105
325413 In-vitro diagnostic substance mfg.
$4,028,692
$294,582
$131,150
$48,440
$4,502,864
324110 Petroleum refineries
$3,950,224
$1,105,201
$170,923
$104,110
$5,330,458
325620 Toilet preparation mfg.
$3,916,910
$1,070,277
$511,173
$93,070
$5,591,430
331 Primary Metal Manufacturing
$3,587,506
$9,809,003
$2,711,738
$895,140
$17,003,386
325611 Soap & other detergent mfg.
$3,386,775
$431,109
$439,460
$64,270
$4,321,613
325412 Pharmaceutical preparation mfg.
$2,945,309
$1,946,506
$532,750
$218,940
$5,643,505
324122 Asphalt shingle & coating materials mfg.
$2,928,198
$245,560
$95,128
$68,250
$3,337,136
325188 All other basic inorganic chemical mfg.
$2,740,735
$745,601
$290,336
$177,240
$3,953,912
325612 Polish & other sanitation good mfg.
$2,245,744
$280,726
$359,492
$47,370
$2,933,332
325320 Pesticide & other agricultural chemical mfg.
$1,154,461
$171,100
$124,788
$54,030
$1,504,379
325991 Custom compounding of purchased resin
$1,060,665
$402,427
$346,392
$93,080
$1,902,564
325411 Medicinal & botanical mfg.
$1,058,085
$334,287
$207,015
$47,960
$1,647,347
324199 All other petroleum & coal products mfg.
$1,039,991
$69,844
$44,007
$16,140
$1,169,982
325613 Surface active agent mfg.
$1,000,438
$80,842
$82,686
$32,030
$1,195,995
$7,190,166
$1,789,110
$1,617,145
$722,720
$11,319,147
All Other Source: Table VI-8, Federal Register Vol. 77, No. 58, p. 17628
16
Costs of Reclassification and Revision of SDSs & Labels
MARCH 2013
Continued from page 16
products, lubricant formulators are obligated to research available information from other sources such as the European Chemical Agency’s Classification and Labeling database (http://echa.eruopa. eu/information-on-chemicals). There, lubricant manufacturers will find that European manufacturers and users don’t always agree on classifications of even such basic chemicals as triethanolamine. It is up to you to choose which classification to use, the consensus classification or, perhaps, the most conservative. And once you’ve established the classification for that 10-ingredient synthetic metalworking fluid, there are 1,699 more products waiting.
18 MARCH 2013
Summary of Cost Estimates Per Product Task
Large Company (>500 formulations)
Medium Company (100-499 formulations)
Small Company (<100 formulations)
Classifying chemicals and modifying SDSs and labels
Avg. of 3 hours per SDS and, for 95% of establishments, $208 per SDS for software modifications
Avg. of 5 hours per SDS and, for 25% of establishments, $208 per SDS for software modifications
Avg. of 7 hours per SDS
Management familiarization
8 hours for health & safety managers in manufacturing sector; 2 hours for each Hazcom manager
Employee training
1 hour per production employee; 30 minutes in occupations exposed to few chemicals
One-time printer costs
2 cents per label
1 cent per label
13 cents per label
Estimated cost per SDS
$406
$538
$670
OSHA estimated the cost of hourly compensation for a professional for this purpose to be $66. Source: Federal Register, Vol. 77, No. 58, Monday, March 26, 2012; Rules and Regulations pp. 17635, 17643
An Economic Litmus Test
OSHA, in its analysis of any new rule, needs to determine whether the rule is “economically feasible.” Part of that test is whether the cost of compliance exceeds 1 percent of revenues or exceeds 5 percent of an affected industry’s profits.
OSHA concluded that “in no industry size class — including the lubricant industry — do the annualized costs exceed 0.28 percent of revenues or 3.3 percent of profits.” (Federal Register Vol. 77, No. 58, p. 17661.) OSHA examined the impact of HCS 2012 on all
small petroleum, lubricating oil and grease manufacturers with respect to their costs as a percentage of revenues and profits. Its analysis of an estimated 261 small firms showed total annualized costs of hazard communication (costs over 20 years with a discount factor added)
were almost $6 million a year. While the cost of HCS 2012 as a percentage of profits was very high — 3.28 percent — it did not exceed 5 percent. While that may not exceed OSHA’s statutory limit, that’s a lot of money lubricant manufacturers might have put to good use somewhere else! OSHA then went further and looked at very small entities in our industry, firms with 20 or fewer employees. OSHA estimated there are 176 such entities. Each, OSHA said, would have to produce more than 310 chemical products, each with its own SDS and label, to get to the agency’s level of significance. OSHA suggests even the very smallest firms in our business would not produce SDSs and labels without the
assistance of specialized computer software, which OSHA assumes most small firms do not now use. OSHA believes even these very small firms would instead invest in appropriate soft ware to lower their costs, as most larger firms do. (Federal Register Vol. 77, No. 58, p. 17668.) What else did OSHA suggest companies in our industry might do? OSHA said firms producing large numbers of chemical products commonly do so because they sell a variety of different mixtures with similar ingredients. Once appropriate test data for the ingredients of these mixtures has been developed, using the bridging principles outlined in Appendix A, OSHA says
small firms developing SDSs and labels for each mixture would take far less than the seven hours per chemical product it had estimated for small firms to convert to the GHS system. However, OSHA did not include the costs of product testing in these estimates of cost of compliance. Product testing, as many manufacturers know, can be very costly. OSHA concluded that there are not a substantial number of small entities or very small entities that would have significant economic impacts from this rule as a result of producing a very large number of distinct chemical products (p. 17668). As a result, OSHA concluded, the rule met the “economically feasible” bar the law imposed.
What Will It Really Cost Me? OSHA estimates that the time a very small entity might spend to reclassify a product and modify an SDS is seven hours. The table on page 18 summarizes the estimates and the amount of time and associated costs for large, medium and small sized firms to classify a single lubricant mixture. Large firms with more staff, OSHA acknowledges, are going to enjoy some economies of scale: Those firms will spend on average three hours per SDS and an additional $208 for software modifications. (That’s a number OSHA has used to estimate the cost — per SDS — of buying or leasing or hiring the software to get this job done). Continued on page 20
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LUBES’N’GREASES
19
Continued from page 19
If you calculate the cost of the people who do the job of actually reviewing your product formulas and reclassifying them as described above, and add to that the cost of purchasing, leasing or hiring the software, and also to train your employees, OSHA estimates you’ll find your costs will range from a low of $406 per product for a large firm, to $538 per product for a mid-size firm, to up to perhaps $670 for a small firm, per product . A larger company that manufactures 500 unique lubricant formulations might be facing over $200,000 of additional compliance costs. A smaller firm, say one which produces just 100 products, could well be looking at close to $70,000 in compliance costs over that four-year HCS implementation period. Now you can see why the numbers in our industry are so high. By OSHA’s own calculations, the steps of reviewing ingredient raw materials and then, from the ingredient classification data developed, clas-
John Howell
Rich Kraska 20 MARCH 2013
sifying each product, are not going to be inexpensive. Many lubricant manufacturers will be looking at six-figure HCS 2012 implementation costs when everything is added up. What Do I Do Next?
If you’re a lubricant manufacturer and have not already done so, develop a written HCS 2012 implementation plan right now. Include an estimate of costs for purchasing or leasing SDS database software, or for hiring an authoring service. Your plan needs to address employee training, too. The first compliance date for training your staff on label elements and the globally harmonized SDS format is Dec. 1, 2013 — barely nine months away. OSHA’s Hazard Communication web page (www.osha.gov/dsg/hazcom/ index.html) contains a wealth of information, including several OSHA “Quick Cards” which you can use right away to begin your training. The sooner you begin, the sooner you will be done and the less costly this will be.
John K. Howell, Ph.D., is vice president and Richard Kraska, Ph.D., is president of the specialized consulting firm GHS Resources (www.GHSresouces.com). Howell, a recognized author, spokesman and advocate for the lubricants industry, has 30-plus years of experience in safety, health, hazard communication and regulatory compliance. Kraska, a Board certified toxicologist, has 30 years of chemical and lubricant industry experience focusing on regulatory affairs and industrial toxicology. For more information about this article, e-mail
[email protected], or phone (877) 544-7776.
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Environmental Due Diligence 012 showed a sustained rate of merger and acquisition activity that was nearly equal to the annualized $200 billion in transactions seen yearly before the 2009 recession. This year will likely experience a similar level of buy-sell activity, given estimates that between $2 trillion and $5 trillion dollars of private equity is sitting on the sidelines in the form of cash reserves. As market uncertainty and depressed interest rates keep this capital on the sidelines, pri vate equity investors are left to search for more lucrative ventures. In our increasingly litigious climate, financing for mergers and acquisitions requires substantial demonstration that the deal will yield solid returns. Investors won’t give up their dollars without comprehensive due diligence being performed on the proposed deal. The 30-day deal is a thing of the past for all but the simplest of transactions. Transactional due diligence comes in many different forms, including legal, financial and environmental, and is akin to letting a certified mechanic evaluate a used car before you buy it. This article focuses primarily on the environmental aspects of due diligence, but also touches on how it integrates into other disciplines.
2
Rooted in Regulations Environmental due diligence has been around since at least the early 1980s, when it began humbly as a brief site audit with the goal of looking for obvious signs of environmental contamination and mismanagement. Under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 (CERCLA), commonly known as Superfund, financial responsibility for environmental liabilities is placed with the current site owner and operator. CERCLA also pro vides a mechanism to assign liability to historic property owners in the event that the most current owner becomes insolvent. The due diligence process took shape as a possible way to avoid CERCLA liability via an “innocent
B Y GEORGE M ATHES, G ARY RISSE
AND HEATHER B ARBARE
What to Know Before You Buy, Sell or Ship
22 MARCH 2013
LUBES’N’GREASES 23
land owner defense,” if unknown, preexisting environmental liabilities were discovered post-transaction. The due diligence process became more formalized by ASTM through its procedural guidance E-1527 in 1990. Thanks to this guidance doc-
that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into the structures on the property or into the ground, ground water, or surface water of the property.”
How will this information be used?
and public perception. Therefore, it is not surprising that environmental due diligence is becoming an increasingly predominant aspect of acquisitions, mergers, divestitures and closures. In addition — and prior to waste shipment —
scope of an ASTM Phase I ESA, but should not be overlooked when weighing profit and growth potential against risk and liability, or when making other vital business decisions. These decisions may include acquisitions and mergers, divestiture and closure of a facility, selection of a nonowned treatment and disposal facility, refinancing and compliance. A well qualified, third-party environmental consultant can help determine and quantify transactional risks. This places you in a position of well informed strength when entering into pivotal negotiations. Case Studies: What Can Happen? In a number of cases, Potentially Responsible Party
land owner defense,” if unknown, preexisting environmental liabilities were discovered post-transaction. The due diligence process became more formalized by ASTM through its procedural guidance E-1527 in 1990. Thanks to this guidance doc-
that indicate an existing release, a past release, or a material threat of a release of any hazardous substances or petroleum products into the structures on the property or into the ground, ground water, or surface water of the property.”
and public perception. Therefore, it is not surprising that environmental due diligence is becoming an increasingly predominant aspect of acquisitions, mergers, divestitures and closures. In addition — and prior to waste shipment —
How will this information be used?
ument, there is a standardized environmental due diligence process involving interviews, records searches, and historical site information. These steps are known generally as a Phase I Environmental Site Assessment (ESA). Under the ASTM standard, environmental liabilities involving past, current or potential releases to the environment are typically identified as either Recognized Environmental Conditions (RECs) or suspect RECs. Per E-1527, a REC refers to “the presence or likely presence of hazardous substances or petroleum products on a property under conditions 24 MARCH 2013
Some Phase I ESAs also take into consideration items that may represent a Business Environmental Risk (BER), including compliance with environmental and safety regulations. However, since the publication of the ASTM guidance, the environmental due diligence process has evolved to meet the needs, objectives and end-goals of the industry. Today, Phase I ESAs are only the beginning of what is typically necessary to secure financial backing. The cost of addressing environmental issues can be quite significant; not only in terms of dollars, but also in terms of time, resources,
companies routinely perform due diligence on nonowned disposal facilities such as landfills, incinerators and recyclers, to protect against potential future CERCLA claims. Acquiring businesses may also conduct due diligence to determine accurate cash flows, to assess risk associated with disposal facilities, and to make informed and responsible business decisions. A wide-ranging due diligence effort identifies and quantifies financial liability, environmental liability and the potential for thirdparty claims. This type of due diligence may be well beyond the
scope of an ASTM Phase I ESA, but should not be overlooked when weighing profit and growth potential against risk and liability, or when making other vital business decisions. These decisions may include acquisitions and mergers, divestiture and closure of a facility, selection of a nonowned treatment and disposal facility, refinancing and compliance. A well qualified, third-party environmental consultant can help determine and quantify transactional risks. This places you in a position of well informed strength when entering into pivotal negotiations. Case Studies: What Can Happen? In a number of cases, Potentially Responsible Party groups (PRPs) were required by the U.S. Environmental Protection Agency to retain contractors to perform CERCLA removal and decontamination actions at several abandoned industrial facilities and centralized watertreatment operations. These parties were identified as having shipped varying amounts of waste to the facilities; some aggregate totals were as small as single 55-gallon drums of waste material. Typically, the PRPs entered into an Administrative Order on Consent with the EPA, which is a voluntary agreement stipulating required activities for proper site cleanup and decommissioning. These remedial and environmental actions included: • Evacuation of millions of Continued on page 26
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ExxonMobil Basestocks Availability Proprietary site Third-party manufacturing site
©2012 Exxon Mobil Corporation. The ExxonMobil logotype is a trademark of Exxon Mobil Corporation or one of its subsidiaries.
Continued from page 24
gallons of waste contained in concrete structures. • Removal/disposal of thousands of gallons of oily sludges impacted by polychlorinated biphenyls (PCBs). • Transport and disposal of hundreds of drums and totes of unused product and hazardous waste. • Stormwater treatment and management. • On-site hazardous waste treatment and stabilization. • Follow-on intrusive environmental investigations at the facilities. Although removal and investigation actions resulted in timely and successful termination of the Administrative Order of Consent, implementation costs to the PRPs were significant.
26
MARCH 2013
Thinking Ahead How can exposure to these types of removal action costs and possible remediation costs be minimized and managed? The answer is evaluating sites from the outset. Trihydro was recently approached by a company preparing to consummate a $100-million-plus acquisition of numerous production facilities located in multiple states. The client was seeking a combination of due diligence, insurance and engineering support services to facilitate the transaction. Trihydro recognized that the likelihood of identifying liabilities was high, but also understood that the goal of our effort was not to scuttle the deal. Rather, it was to quantify the environmental
risk such that it could be properly factored into the transaction. By identifying this goal up front, we were able to review site data, visit each site, complete a compliance evaluation, provide insurance support, and generate environmental defect cost estimates that were then used in reducing the purchase price — all in a matter of weeks. While there are no absolutes or guarantees, well-orchestrated and implemented due diligence activities bring to reality the concept of managed risk. What’s Right for My Situation? Due diligence should not be thought of as a one-size-fits all approach. Types of due
diligence can include ASTM Phase I ESAs, or Phase II assessments which involve invasive testing. There are also compliance audits, safety audits, non-owned disposal facility audits, or an approach tailored to a specific need. A few common-sense best practices can help ensure the success of environmental due diligence endeavors: 1. Define the Objective. The due diligence process should begin with the end in mind. Setting clear goals can ensure expectations are met. When defining the goals of the due diligence, all disciplines (e.g., financial, legal, business, environmental) and stakeholders should be consulted to assure each team member’s concerns are addressed.
2. Share and Summarize Information. Legally require all environmental information to be shared. If possible, establish a data repository and systematically review and capture highlights of the data so that it can quickly be summarized and shared with the entire team. Establishment of an online or electronic “war room” is one suggested approach. 3. Regulatory and Records Review. During the first stages of due diligence, review of historical Phase I and Phase II ESAs is clearly the most logical starting place and may eliminate some duplicative effort. State and federal databases, and internet and publication searches can be used to expand the regulatory and records review
stage of due diligence. When evaluating historical site documentation, be aware of the possible data gaps that may be present. For instance, vapor intrusion issues have become prevalent only in recent years, and certain environmental media may not have even been previously considered. Additionally, new and pending regulations may create a liability that formerly was nonexistent. 4. Ask the Right Questions. Do the legwork and prepare for site assessments and interviews to ensure proper focus on objectives and goals that were defined at the project outset. A carefully developed checklist or audit form is a simple and valuable tool that can preclude oversights
and omissions. Facility health and safety programs and compliance history can provide valuable insight to legacy concerns, and possibly steer future actions. A
ed/interviewed during the due diligence effort. 5. Collect Data with Purpose. If intrusive assessments and sampling are necessary, carefully consider how
Key Acronyms in Environmental Due Diligence AOC.
Administrative Order on Consent
BER.
Business Environmental Risk
CERCLA .
Comprehensive Environmental Response, Compensation and Liability Act of 1980 (Superfund)
ESA .
Environmental Site Assessment
PRP.
Potentially Responsible Party
REC.
Recognized Environmental Conditions
jaded enforcement history may be the tale-tell sign of costly underlying environmental issues. Lastly, the stakeholders should develop and agree upon a list of personnel who will be consult-
the end data will be evaluated and for what purpose. Make multi-media data gathering efficient, and sufficient to allow relevant comparisons with published screening criteria, while minimizing the
LUBES’N’GREASES
27
Castor Oil Products Unsaturated Oils Fatty Acids
TRADITION
KNOWLEDGE
EXPERIENCE
need for supplemental mobilizations. Prior to collection, consider how a dollar value can be assigned to liabilities resulting from unfavorable data. Avoid seeking just the “smoking-gun,” but rather focus on quantifying whatever future liability it could possibly create. If the “worst-case” results of the data are not going to be a cost driver, consider focusing due diligence dollars elsewhere. 6. Quantify All Information. Information gathered during environmental due diligence must be concisely summarized, and quantified, and reduced to its simplest defensible terms. The due diligence report may end up in a room full of lenders, attorneys and business interests who are not environmental experts. Properly quantifying and tabulating liabilities is a powerful negotiating tool.
gence, in all its forms, is a versatile and powerful tool to use during transactions. Properly executed, it can assist in facilitating nearly any deal, and can allow stakeholders to make informed business decisions that will enhance their bottom line.
George Mathes
Gary Risse
Don’t Let Environmental Kill the Deal
Environmental due diligence has advanced to the point where it is now more of a tool to help structure a deal than a way of killing a deal outright. Gone are the days where a minor soil stain scuttles a multi-million dollar deal. Use the information gathered in the due diligence process to your advantage. Consider that quantified liability can be managed through a variety of mechanisms: escrow, remediation agreements, liability agreements, and/or adjustments in the purchase price. Environmental insurance is also a vehicle available to mitigate the risk in these transactions. Environmental due dili28 MARCH 2013
Heather Barbare
George Mathes and Gerhard “Gary” Risse are profession al engineers with Trihydro and Heather Barbare is an environmental chemist there. Trihydro serves many Fortune 100 corporations, especially in the petrochemical and related industries, and has specialized environmental due diligence expertise in complex, multi facility mergers and acqui sitions. Founded as a two person firm in 1984 in Laramie, Wyo., Trihydro now has 15 offices nationwide and more than 360 employees. For information, e-mail
[email protected] or visit www.trihydro.com.
ExMo Boosting Baytown’s Base Oil
The Baytown, Texas, refinery
B Y G EORGE G ILL
xxonMobil E plans to expand API Group II and II+ production capacity at its Baytown, Texas, base oil plant by early 2015. The project will add a new Group II base stock designed for blending heavyduty engine oils, and an improved Group II+ offering with enhanced low-temperature properties for optimizing engine oil formulations. Construction could begin late this year, subject to funding and regulatory approval, and startup is targeted for early 2015.
“About 300 people will be employed during the yearand-a-half-long construction project,” George Arndt Jr., general manager of global base stock and specialties for ExxonMobil Fuels, Lubricants and Specialties Marketing Co., told Lubes’n’Greases. “We expect to meet contractual commitments to customers throughout the construction period.” In its February announcement, the company said the expansion will “significantly” increase output of Group II
and Group II+ base stocks and will employ ExxonMobil proprietary technologies, including MSDW dewaxing catalyst, for improved lowtemperature performance. It declined however to disclose the size or cost of the increased capacity. According to Arndt, the project will make a 4.5 centiStoke Group II+ and a 6.5 cSt Group II grade, branded respectively as EHC 45 and EHC 65. His company plans to issue the Group II+ product specifications in
late 2013, he added. Baytown will continue to make its Group I Core 600 grade, as well as Core 2500 bright stock. “This project does not have a material impact on Group I production capabilities at Baytown,” ExxonMobil spokeswoman Rachael Moore said. According to the American Fuel & Petrochemical Manufacturers’ 2012 Lubricating Oil & Wax Capacities Report, the Baytown plant now has 9,800 barrels per day of Group I
and 11,700 b/d of Group II capacity. The Group II output already includes some Group II+, which Baytown has produced for more than 13 years, Charles Baker, distinguished engineering associate with ExxonMobil Research and Engineering, reminded Lubes’n’Greases. “To be clear, there is no formal definition of Group II+ given by API or ATIEL,” he acknowledged. “Group II+ is a term that has been used by the industry to differentiate between lower performing
and higher performing Group II base stocks.” Viscosity Index (V.I.) is most often used to differentiate Group II and Group II+. “Bas e stocks with a V.I. in the higher range of 110 to 119 are typically considered Group II+,” Baker pointed out. “However, the real distinction is that a Group II+ base stock has a superior Noack volatility/ Cold Cranking Simulator relationship, which enables blending lower viscosity grade engine oils with limit-
30 MARCH 2013
Primary automotive grades targeted are 5W PCMO and 15W-40 heavy-duty engine oils. North American demand for these automotive engine oils will
ed or no Group III corrector stocks,” he explained. William Downey Jr., a partner in Roland Berger’s Oil and Chemical Competencies Center, told Lubes’n’Greases that ExxonMobil has optimized its Group II+ base oil for multigrade passenger car motor oils like SAE 5W-XX, focusing on getting the tradeoff correct between Noack volatility and low-temperature properties. He noted that Group II base oils may range from 80 to 119 V.I., ac cording to the
American Petroleum Institute, but a V.I. of 120 and higher is what distinguishes Group III base oils. “If you talk to people who are expert in formulating these 5W engine oils, the difference between 119 and a 120 V.I. is not really particularly significant,” Downey said. “The Group II+ suppliers — ExxonMobil is one of them — have really tried to advance that the line of 120 is an arbitrary line, given the performance requirements today.” LUBES’N’GREASES 31
Downey said the 120 V.I. demarcation between Group II and III might have made sense at one time, but “given the refining technology, that line is a bit more arbitrary now. What you have seen is people talking about the requirements of the products as formulated.” Many Group II+ properties — such as volatility, low-temperature capabilities, high temperature/high shear viscosity and others — have been optimized to meet PCMO requirements, he explained. “So that’s certainly why they would be talking about adding Group II+ capacity, recognizing that it costs more for a Group II refiner to make Group II+ than Group II. If you look across the other Group II suppliers, you’ll see the amount of Group II+ or
He also noted that because EHC 45 is part of ExxonMobil’s global Group II slate, blenders who formulate worldwide can take advantage of API Base Oil Interchange and Viscosity Grade Read-Across guidelines to extend their product formulations to higher viscosity engine oils with little or no additional engine testing required. Baker explained that the company has designed the EHC product slate for blending the “heart” of the finished lubricants market. “In North America, primary automotive grades targeted are 5W PCMO and 15W-40 heavyduty engine oils,” he said. “ExxonMobil’s analysis of publicly available data has shown that North American demand for these automotive engine oils will remain robust
ExxonMobil today is the largest U.S. base oil refiner, with total capacity of 47,500 b/d. ExxonMobil’s other U.S. plants are in Baton Rouge, La. (14,500 b/d Group I and 1,500 b/d Group II capacity) and Beaumont, Texas (10,000 b/d Group I). Looking at the project’s outline, one industry source surmised, “the installation of an MSDW (hydroisomerisation) unit implies they see value in upgrading their slack wax to Group II base oil.” Another industry source suggested the Baytown expansion likely reflects the difficulty in selling light-to-mid-vis Group I base stocks. “The demand for bright stock and heavy Group I neutrals is still there, but with excess Group I capacity in Europe and the lack of demand for
Primary automotive grades targeted are 5W PCMO and 15W-40 heavy-duty engine oils. North American demand for these automotive engine oils will remain robust for many years to come.
32 MARCH 2013
Downey said the 120 V.I. demarcation between Group II and III might have made sense at one time, but “given the refining technology, that line is a bit more arbitrary now. What you have seen is people talking about the requirements of the products as formulated.” Many Group II+ properties — such as volatility, low-temperature capabilities, high temperature/high shear viscosity and others — have been optimized to meet PCMO requirements, he explained. “So that’s certainly why they would be talking about adding Group II+ capacity, recognizing that it costs more for a Group II refiner to make Group II+ than Group II. If you look across the other Group II suppliers, you’ll see the amount of Group II+ or Group III they make available is actually pretty small.” As industry standards continue to become more demanding, Baker said, ExxonMobil expects that Group II+ base stock properties also will need to be adjusted, to meet new product requirements. “Our planned Baytown project will not only increase our Group II+ capacity, but it will also yield an improved EHC 45, which has been designed with this outstanding Noack volatility/CCS relationship,” he stated. “Our technical analysis has shown that our new EHC 45 Group II+ base stock can be used in many cases in place of Group III, such as when blending 5W SAE viscosity grade PCMOs. We believe that over time, EHC 45 will reduce cost and operational complexity for our customers.”
He also noted that because EHC 45 is part of ExxonMobil’s global Group II slate, blenders who formulate worldwide can take advantage of API Base Oil Interchange and Viscosity Grade Read-Across guidelines to extend their product formulations to higher viscosity engine oils with little or no additional engine testing required. Baker explained that the company has designed the EHC product slate for blending the “heart” of the finished lubricants market. “In North America, primary automotive grades targeted are 5W PCMO and 15W-40 heavyduty engine oils,” he said. “ExxonMobil’s analysis of publicly available data has shown that North American demand for these automotive engine oils will remain robust for many years to come.” The new Group II+ EHC 45 has been designed with improved low-temperature properties, as well. “In fact, our technical analysis has shown that our new EHC 45 can be used in many cases in place of more expensive Group III corrector stocks,” said Baker. Also coming is EHC 65, a new product that will replace EHC 60. “It is a superior Group II base stock targeting heavy-duty engine oils,” Baker said. “Designed with a slightly heavier viscosity than our current EHC 60, it optimizes 15W-40 HDEO blending by eliminating the need for an additional higher viscosity component. And, when EHC 65 is blended with the new EHC 45, it enables 10W-30 HDEO, helping to meet future generation needs.”
ExxonMobil today is the largest U.S. base oil refiner, with total capacity of 47,500 b/d. ExxonMobil’s other U.S. plants are in Baton Rouge, La. (14,500 b/d Group I and 1,500 b/d Group II capacity) and Beaumont, Texas (10,000 b/d Group I). Looking at the project’s outline, one industry source surmised, “the installation of an MSDW (hydroisomerisation) unit implies they see value in upgrading their slack wax to Group II base oil.” Another industry source suggested the Baytown expansion likely reflects the difficulty in selling light-to-mid-vis Group I base stocks. “The demand for bright stock and heavy Group I neutrals is still there, but with excess Group I capacity in Europe and the lack of demand for Group I light-to-mid-vis products in North America, it is possible upgrading to Group II/II+ was the only way for ExxonMobil to sell these stocks,” this source told Lubes’n’Greases’ sister publication, Lube Report. “It also helps fulfill a need internally for ExxonMobil. They have a very robust demand for 6 cSt product internally for their heavyduty business, so this helps supply that demand. I suspect a good portion of whatever their capacity is will be used internally.” This source considered the Group II+ expansion an “oddity,” pointing out that, “with all the new Group III plants being built now and in the future, many industry experts are projecting Group II+ will eventually wither away to nothing.”
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MOTOR OIL Packaging Trends Packaging design is as much science as art. The process requires close interaction between the design team and production experts — because a package that looks great but causes hangups on the filling line or buckles during shipping is a poor design. John Manderfield, design director for Consolidated Container Co. in Atlanta, Ga., described current trends in motor oil package design at the fall meeting of the Petroleum Packaging Council. He also outlined the process he goes through to design a package that is not only aesthetically pleasing but can survive the rigors of shipping and handling. “A number of market trends are affecting the types and sizes of packaging being developed for motor oil,” Manderfield told the gathering in Charleston, S.C. “For example, we’re seeing a move away from single-quart bottles to larger containers.” This shift is small right now, but he sees the trend continuing to favor multi-quart packages. Pointing to data from Nielsen, he noted that one-quart containers are still popular. And sales of quarts did inch up in total units sold from June 2011 to June 2012 — but sales of five-quart jugs grew even faster over that time, posting a 9.2 percent gain in the number of units moved. Beyond size, other factors are at work, too. “Suppliers are also using different aesthetic elements to attract attention in the marketplace,” Manderfield said, “including transparent bottles, metallic colors, brighter colors, textures and gradients.” International suppliers are also influencing bottle design. “I’ve found that international companies are leading the trends. One trend in Europe is a larger cap,” he added. Creative bottle designs provide opportunities for different label designs, all to differentiate products on the shelf.
Design Variables
Manderfield then described the key factors that go into designing motor oil packaging. “There are many different layers to consider,” he said. “We have to consider the consumer, the retail environment, the filling process, and how the container gets into the supply chain.” Tools used in this analysis include conventional laboratory testing and finite element analysis (FEA) on the computer. The variables to consider in any bottle design are what resin to use, the types of molding machines that will be employed, and the capabilities expected of the bottle, Manderfield said. “We use a variety of resins in our bottles, including high-density polyethylene (HDPE), polypropylene (PP), polycarbonate (PC), polyethylene terephthalate (PET), low-density polyethylene (LDPE), and co-polyester, as well as custom and multilayer materials.” Types of bottle-molding equipment include rotary wheel, conventional and long-stroke shuttle, reciprocating, accumulating head (for polycarbonate), single-stage (for polyethylene terephthalate), and two-stage blowmolding machines (injection and stretch). Finally, the expected capabilities of a bottle can encompass decoration, the amount of postconsumer recycled material, high environmental stress-cracking resistance, oxygen barriers, chemical barriers, and creative design and development. Manderfield reminded the attendees, “One thing you have to think about when designing a bottle is not to handle the empty container. You
BY RICHARD BEERCHECK
34 MARCH 2013
LUBES’N’GREASES
U.S. Packaged Motor Oil Sales Mix Less than 32 oz. 6% 640 oz. 1% 300+ oz. 2%
160 oz. 39%
have to fill it with liquid because that gives you the true nature of what the bottle will feel like.” Handling the Consumer
“What we’re seeing in the last several years is packaging with more than one handling point if it’s a multi-quart bottle,” Manderfield said. Twoand even three-handle packages are becoming more common, especially as containers go up in scale. “We have to
how they are arranged and how products are displayed.” 32 oz. 25% All these things add up, and constrain what a package can look like and its foot32 to 128 oz. 0.5% print and size. One important consideration is that retail store shelving is set in place and not easily changed in height or 128 oz. 30% depth. “So we can’t arbitrarily change bottle design, because it may not conform to existing shelf constraints,” he added. Source: Nielsen Scantrak, 52 weeks ending 8/4/1 2 Manderfield explained that his team is constantly visiting stores to see what’s might slow down bottle production. Another issue to guard against is thinning new. “For example, endcaps [shelving units at the ends of the aisles] are being of the wall, which might create a weak set up, and gravity racks are being used in spot in the bottle. Another popular convenience on many many places. This helps us to see if there are any issues, such as bending of the botbottles today is a view stripe that lets users know how much fluid they are putting in tles in the rack.” Consolidated Container also considers the crankcase or have remaining in the the cases that the bottles are shipped in, bottle. There are many ways to incorpousing package design software which can rate this element. “Our approach is to make the mold and do some trial runs. reverse-engineer the bottle footprint based on the desired shipping carton. Then go back and add the engraving and “Any time we’re doing a redesign, we units to the package,” said Manderfield. have the opportunity to tweak the footThen there is the so-called no-glug feaprint,” Manderfield added. “This is espeture. “Many years ago, we were working on the problem of pouring bleach without cially true in the redesign of older stock
35
U.S. Packaged Motor Oil Sales Mix Less than 32 oz. 6% 640 oz. 1% 300+ oz. 2%
160 oz. 39%
have to fill it with liquid because that gives you the true nature of what the bottle will feel like.” Handling the Consumer
“What we’re seeing in the last several years is packaging with more than one handling point if it’s a multi-quart bottle,” Manderfield said. Twoand even three-handle packages are becoming more common, especially as containers go up in scale. “We have to remember multiquart packages can contain up to five liters of oil, and that can be heavy.” Designers must consider who might be handling the bottle when determining the number of handling points. Should the handle be at the top, or slant along the side, for ease and control? Besides adding handles, Manderfield noted, “another thing you can do is add a crevice in the base of the bottle to assist the user in pouring the oil.” The prime design consideration with this element is to avoid a mold equipment hangup that
how they are arranged and how products are displayed.” 32 oz. 25% All these things add up, and constrain what a package can look like and its foot32 to 128 oz. 0.5% print and size. One important consideration is that retail store shelving is set in place and not easily changed in height or 128 oz. 30% depth. “So we can’t arbitrarily change bottle design, because it may not conform to existing shelf constraints,” he added. Source: Nielsen Scantrak, 52 weeks ending 8/4/1 2 Manderfield explained that his team is constantly visiting stores to see what’s might slow down bottle production. Another issue to guard against is thinning new. “For example, endcaps [shelving units at the ends of the aisles] are being of the wall, which might create a weak set up, and gravity racks are being used in spot in the bottle. Another popular convenience on many many places. This helps us to see if there are any issues, such as bending of the botbottles today is a view stripe that lets users know how much fluid they are putting in tles in the rack.” Consolidated Container also considers the crankcase or have remaining in the the cases that the bottles are shipped in, bottle. There are many ways to incorpousing package design software which can rate this element. “Our approach is to make the mold and do some trial runs. reverse-engineer the bottle footprint based on the desired shipping carton. Then go back and add the engraving and “Any time we’re doing a redesign, we units to the package,” said Manderfield. have the opportunity to tweak the footThen there is the so-called no-glug feaprint,” Manderfield added. “This is espeture. “Many years ago, we were working on the problem of pouring bleach without cially true in the redesign of older stock bottles.” Thirty years ago, companies were splashing it all over,” he recalled. The problem was solved by adding a pinched-off not considering packing efficiencies like they are now. “We have software that can neck area that lets liquid pass out while letting air in. “This feature has been heavily help us optimize bottle and case size, palborrowed and transformed over the years let load and trailer load to ship product most efficiently.” for various types of bottles and products.” In general, round packages do not pack efficiently. Even square bottles provide Is It Shelf-friendly? The next thing to consider is what retailers some packing inefficiency, so engine oil want. “We go shopping a lot in different bottles (and many others) tend to be an types of stores to see what the retail envi- oblong shape. “We’ve found that every package has a ‘sweet spot’ that allows the ronment is like,” said Manderfield. “It most efficient packing in a case and on the could be a small convenience store, pharmacy, automotive parts store, or big-box shelf,” Manderfield stated. store. We check how the shelves look, Don’t Slow the Filler
Shifts in U.S. Motor Oil Package Sizes
Percent change in units sold 9.2%
10% 8% 6% 4%
2.5%
2%
0.7%
0.5%
0% -2% -4%
-0.5%
-0.5% -2.2%
< 32 oz.
32 oz.
32-128 oz. 128 oz.
160 oz.
300+ oz.
640 oz.
Source: Nielsen Scantrak, 52 weeks ending 8/4/ 12
36
MARCH 2013
“Simply put, filler efficiency is king. If we do a pretty design and it only fits in the filler at 50 percent efficiency, that doesn’t solve anyone’s problems,” he continued. “So we have to go back and look at the footprint again.” Typically, the filling equipment’s only adjustment factor may be bottle height — and rather than slowing down the filler, it may be better to retool the bottle. “One trick we have for adjusting volume Continued on page 38
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Finite Element Analysis of Bottle Designs
one of the most severe tests. Here the prototype carton, full of filled containers, is held at an angle and dropped on a corner. The UN protocol allows for some crushed areas, but the bottles cannot leak. Help from the Computer
Starting Mesh
First pass: Bottle Second pass: Bottle buckles under neck. buckles at sidewall. Resolution: Move Resolution: Move more material to more material to neck area. sidewall.
Continued from page 36
without harming filler efficiency involves making what’s known as a shim height adjustment. Here, the heel of the bottle can come off the mold and a segment be inserted or removed from between the heel and the rest of the bottle,” Manderfield said. The new bottle can be either shorter or taller, but the footprint has not changed. These are relatively minor changes in terms of time and expense.
Third pass: Bottle bulges outward slightly; stress more evenly distributed. Acceptable.
A vertical adjustment may not be the only needed adjustment to the bottle. Designers can also put in a different type of heel. This is common because when redesigning to reduce bottle weight, the bottom might flex too much. So the heel has to be redesigned to strengthen it. A final consideration is to look at the types of testing the bottle must pass. For example, the UN drop test is required for United Nations certified packaging, and is
One tool package designers use, as mentioned above, is FEA, finite element analysis. “In this analysis, we import the bottle design into a three-dimensional computer aided design program, which converts the design to a mesh pattern,” Manderfield related. “Then we assign material properties to the design, related to the exact grade of the resin used.” Resin properties can change as the material is heated, runs through an extruder and is blown into shape. So designers test bottle prototypes and samples, and use that test data for the material properties loaded into the CAD software. “Then, we add wall thicknesses and boundary conditions,” Manderfield said. “Finally, we apply a load to the top of the bottle, watch it deform, and analyze the results.” The illustration at left shows some typical FEA results, and the steps taken to improve the design.
e? The Next Wav
Eco Ultra’s Fle xPak container
38 MARCH 2013
In Wichita, Kan., Universal Lubricants partnered Universal Lubricants has introduced a fle xible standup pouch for Eco Ultra that it boasts is sustainable with tw o companies to develop its FlexPak. Star and environmentally responsible. “Pouch- Packaging Corp. produces the three-la yer plastic packed engine oil products already have pouch, and Innovative Packaging Network engiearned consumer acceptance in many coun- neered the pour spout that prevents glugs and bubtries around the world,” said John Wesley , chief bles that cause splatters and spills. “The 1-quart executive officer of Univ ersal Lubricants. “The FlexPak is constructed using a polyethylene barrier one-quart FlexPak offers consumers a faster, that pro vides superior burst and seal strengths easier and cleaner way to change their oil.” required for the rigors of oil,” said Wesley. A larger, Once drained and flattened, flexible pouches 5.1-quart FlexPak will be a vailable in this quarter. The Flex Pak requires 68 percent less raw material to can significantly reduce landfill waste and require make compared to HDPE bottles. The package also much less raw material to make, he added. Victor Franco-Paredes, operations director of weighs less, providing freight cost reductions. “One Commercial Roshfrans in Mexico City, agrees. His truckload of unfilled Fle xPaks is equivalent to 26 truckcompany has been using flexible pouches in a 950 loads of unfilled rigid plastic containers,” Wesle y said. Franco-Paredes echoed that comment. Roshml size for its premium Roshfr ans HD+ and AK+ engine oils for more than five years, he told frans’ flexible pouches arrive flat at the compan y’s plant, rolled in a coil. Thus, the inbound shipping Lubes’n’Greases. Strong and puncture-resistant, the “R oshPack” has great shelf appeal. It permits costs are far less than for empty rigid quarts, and all-over decoration, he noted, unlike bottles with they also sav e on warehouse space prior to filling. — Dick Beerc heck paper labels.
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IMTT selected fully enclosed Haver Type 86 automatic drum filling machines, each able to handle 100 drums per hour.
Drumming Up Business in Geismar How a Bulk Terminal Delivered for its Customer 40 MARCH 2013
F
or generations, paddlewheels and propellers have churned the muddy waters near Geismar, La., moving riverboats and other vessels up and down the Mississippi. During this time, International-Matex Tank Terminals has been one of the largest players in the bulk liquid storage industry and has been expanding its capacities in the tiny town on the riverbank between Baton Rouge and New Orleans. Geismar is one of 12 North American facilities operated by International-Matex Tank Terminals, which is headquartered in Bayonne, N.J. In 2008, the company began storing product for a major manufacturer of industrial chemicals. This manufacturer had issued a
challenge to IMTT several years before: not only to manage its products’ bulk storage but also to take on responsibility for drumming these products at the facility. This was a first for IMTT, which is well known in bulk liquid storage but had never before incorporated a container filling system into one of its terminals. While just a small segment of a massive years-long project, this service was crucial to IMTT’s customer — and that made it crucial for IMTT. To get the job done, IMTT would need an expert with deep experience, both in designing filling machines and in facility layout. IMTT is the fourth-largest provider of bulk liquid storage in the United States. The company primarily stores chemicals, mineral oils and vegetable oils at capacities of up to 500,000 drums
Totes are filled on the Type 26 semi automatic pallet filler.
in 10 facilities in the United States and two more in Canada. In its 70 years in business, it has worked with some of the biggest oil and chemical companies in the world. Manufacturers contract with IMTT to store their chemicals and oils, both hazardous and non-hazardous. They ship their products to IMTT facilities via pipeline, ship, barge, rail or truck, and the products are transferred to bulk storage tanks. There they stay until they need to be sent to end users. The challenge for Geismar was to customize an on-site drum filling facility for this chemical manufacturer, whom it cannot name for reasons of confidentiality. “Most of the products come into our storage tanks via pipeline from the production facility, and IMTT is able to handle all of the remaining logistics from there,” said Jos Wolke, who was IMTT’s project manager for what would become the Geismar Logistics Center. “The win for our customer is that they do not have to transport their products to the facilities of other terminal companies that they used to rely on for their storage and logistics. Now they’re able to place it
all with one company and primarily all in one facility. Those transportation costs are eliminated, and that is a significant savings.”
Fundamentals for Filling Wolke and his team needed to manage the construction of an entirely new facility and step outside their comfort zone into container filling technology and systems. “We’re experts in bulk liquid storage,” he said. “Although drum filling wasn’t our core business, we were all confident we could deliver on our customer’s needs and expectations for the new facility.” To get there, IMTT needed a manufacturing partner capable of providing a complete turnkey system that included everything from empty drum feeding conveyors, liquid filling machines, container labeling and container palletizing. To help ensure safety standards were met, IMTT required a vapor extraction system and thermal oxidizer to eliminate all hazardous vapors. In addition, the entire system needed to be highly automated and able to handle high volumes. Perhaps most crucial of all, due to the hazardous
By Martin Fredricks
LUBES’N’GREASES 41
IMTT’s complete system includes drum feeding conveyors, liquid filling machines, container labeling and container palletizing.
nature of some of the chemicals, the system also had to meet strict safety requirements specified by the customer. Wolke and his team began at the most logical starting point, past experience. Fortunately, they had a bit of a head start in their research. IMTT’s customer already had a relationship with Feige Filling Technology, a division of Haver Filling Systems Inc., which provides the majority of container filling equipment for the customer’s chemical production facilities in Europe. “This particular customer of IMTT’s is one of our biggest in Germany,” points out Gudrun Gibson, Haver’s marketing manager. “In one facility alone, Haver has supplied more than 100 machines, so we were already very familiar with this company and the types of hazardous and non-hazardous chemicals it manufactures.” Haver, based in Conyers, Ga., has supplied customers with turnkey liquid filling systems for more than 37 years. Not only could it supply the systems and meet the strict requirements for safety, but it also would need to customize everything to the new facility’s requirements. IMTT also wanted Haver’s engineers to ensure the filling systems would take into consideration the rest 42 MARCH 2013
of Geismar’s equipment and operating needs. These services, combined with the fact that Haver is one of the few suppliers of fully automated liquid filling equipment in the United States, pointed to using the Feige brand. IMTT and Haver formed a team in 2003 to answer the complex needs presented by this chemical manufacturer. More than Drumming After identifying all of IMTT’s customer’s needs, the solution began to take shape. The core of the system would include six machines: four Type 86 automatic drum fillers, and two Type 26 semi-automatic pallet filling machines. The Type 86 automatic drum fillers — the most advanced Haver offers — are capable of filling up to 100 drums per hour, with six integrated stations inside the machines. The functions of the stations are drum positioning and cap removal; nitrogen purging; coarse filling; fine filling; cap placement; and cap sealing. With these highly automated processes, the IMTT operator simply selects the product to fill from the filler’s control panel and the machine takes care of the rest. The filling systems are fully
enclosed, so all of these processes are completed without exposing the operator to any potentially harmful chemicals. The system ensures harmful vapors are removed during the filling of the 55-gallon drums — a crucial requirement for flammable, toxic and hazardous liquids. “It’s very important we don’t mix hazardous and non-hazardous,” Wolke said. “We keep the hazardous product family separate from all the others and dedicate two full systems to it. Then we have two additional full systems specifically for our other product families.” The Type 26 pallet filling systems can fill palletized drums or palletized intermediate bulk containers (IBCs), which have volumes equal to five drums. These fillers can handle the same products as the Type 86 system, but give IMTT more flexibility to handle customer requests to fill totes. The semi-automatic Type 26 machines have a balanced boom arm, which allows the IMTT operator to easily maneuver the filling nozzle to reach any drum on a pallet or the opening of an IBC. The filling system also has a pneumatic base height adjustment to allow for quick height change of the filling lance when the container type is Continued on page 44
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ExxonMobil’s product line i ncludes Parvan™ full y refined waxes, Waxrex™ semi-refined and specialty fully refined waxes, and Prowax™ slack waxes. Parvan waxes are produced in compliance with FDA requirements for use in food and cosmetics. ExxonMobil waxes are used in a wide variety of applications, including candles, corrugating, board sizing, crayons, and adhesives. Its products help promote sustainability through the use of fewer materials and the re-use of existing materials, thereby enhancing conservation of resources. For instance, ExxonMobil’s Prowax slack waxes are used as sizing agents in the manufacture of oriented strand boards, a viable alternative to plywood as a building material. Since long sheets of wood are not required, oriented strand board enables the preservation of old-growth forests and supports socially responsible forestry practices. ExxonMobil’s waxes also waterproof the wood, preventing water wicking and warping of the board and enabling longer life, thereby preserving resources. ExxonMobil is a leader in technology and pursues initiatives to enable innovation in the petroleum wax market. This work is made possible by a strong focus on research and technical services and has led to technologies such as ExxonMobil’s patented DILCHILL™ process, providing enhanced efficiency to conventional solvent dewaxing processes. ExxonMobil capitalizes on an integrated team with unparalleled expertise in support of its wax business. ExxonMobil’s market and product research and development efforts are championed by a team of industry experts with more than 150 years of collective experience and leading-edge knowledge, supported by world-class analytical and testing laboratories. Leveraging its robust processes around product development, manufacturing, testing, and change management experienced team, ExxonMobil reliably supplies customers with consistent quality products and reliable supply, enabling solutions that help the company remain at the forefront of its customers’ needs. To learn more about our full range of wax products, please visit www.exxonmobil.com/lubes .
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Products are shipped to IMTT facilities via pipeline, ship, barge, rails or truck, and then transferred to bulk storage tanks. Continued from page 42
changed. Changeover of an entire filling lance is extremely simple and fast — one IMTT operator can handle the task — and it takes less than three minutes to complete. (Changing the lance ensures there is no cross-contamination among the different products.) The liquid filling systems also needed to overcome one of the primary logistical challenges that Wolke had foreseen early on: the great distance from Geismar’s storage tanks to the filling systems. “After experimenting with a few settings for the pumps, pressure and flow rates, we found our optimized production point of approximately 80 drums per hour, per system,” Wolke said. “We’re very pleased with that output as well as the accuracy we receive at that setting.” To optimize the equipment’s productivity, the Geismar facility follows an operational schedule that includes planned system shutdowns for preventive maintenance. When a system reaches a specified number of drums filled, a full machine shutdown takes place for just that filler. The four Type 86 automatic filling systems are scheduled so only one system at a time is fully shut down for maintenance, leaving the other three in operation. Furthermore, because there are two systems dedicated to both hazardous and non-hazardous materials, one system is always fully operational for each of these two product streams. 44 MARCH 2013
Room to Grow
After several years of engineering and design preparation, as well as four months of dedicated equipment installation, the Geismar Logistics Center went into full operation mode in 2008 with 30 storage tanks and six fully optimized Haver liquid filling systems. Currently the terminal employs 35 people, including managers, operations and maintenance teams, and customer service staff. And while production is presently meeting the customer’s needs, Wolke’s team designed the facility to accommodate two more liquid filling systems should drumming needs expand. “For complete systems, it only makes sense to keep consistency, and we’ve been extremely satisfied with Haver,” Wolke said. “The group spent several years working with us to be sure the systems would meet our needs and, most of all, exceed our customer’s expectations. Haver Filling Systems was great to work with throughout the entire process.” Martin Fredricks, a communications professional with Ironclad Marketing, is part of the marketing team for Haver Filling Systems Inc. For more information about the Conyers, Ga.based company, e-mail Haver’s mar keting manager, Gudrun Gibson, at
[email protected], or visit www.haverusa.com.
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NEED TO KNOW
Changing Times, Changing Minds
B Y THOMAS F. GLENN
B
ack in the early 1970s, it was not hard to find brand-name motor oil selling for 27 cents a quart on retail shelves. By the end of the decade it had skyrocketed to 69 cents. While certainly a big move, this didn’t get much attention because people had bigger concerns in those tumultuous days: a deep recession, Watergate, Kent State, Roe v. Wade, gasoline lines, unrest in the Middle East, Ebola, Three Mile Island and terrorism, to name but a few. Needless to say, with all that and more going on, few consumers were losing sleep over the price of motor oil. Even if they had, who would have guessed that some 30 years later conventional motor oils would retail for an average $4.55 a quart and synRetail Motor Oil Prices Don’t Track Crude $7
Synthetic ($/qt) 6
5
Mid-tier ($/qt) 4
Conventional ($/qt)
3
Base Oil ($/gal) 2
1
Crude Oil ($/gal)
0 4 0 0 2 i . u g A
46
MARCH 2013
Source: Petroleum Trends International, Inc.
3 1 0 2 i l i r p A
thetics nearly $7? How and when did that happen? Interestingly, most of the upward movement in prices is relatively recent. After that sharp lift in the 1970s, passenger car motor oil leveled off at about 99 cents a quart in the ‘80s and cruised along at that altitude for nearly two decades. Hence, many concluded there was a 99-cent ceiling on what consumers were willing to pay. Then, late in the 1990s, the ceiling started to give way. This was due in part to the emergence of API Group II and Group III base stocks. These base stocks offered measurable and meaningful performance advantages over Group I, such as the reduced Noack volatility and cold-temperature properties that were becoming requisite for engine oils. But Group II and III also required significant capital outlays by refiners, and commanded a premium to Group I. Blenders had little choice but to pass along these higher costs in the form of price increases. With this, cracks developed quickly in the price ceiling. By 2003, the price of conventional motor oil at the leading retail chain ranged from 74 cents to $1.68 a quart, with an average of $1.30. Change was also coming to the upper tier, synthetics. Though Amsoil, Mobil and a few other suppliers had been marketing synthetic motor oil since the early 70s, demand was limited to a comparatively small group of car enthusiasts. In addition, other majors and marketers were not eager to develop and market synthetics since they were historically based on polyalphaolefin chemistry, and Mobil
controlled a significant share of PAO supply. As a result, synthetics remained a niche market, with only about 3 percent of U.S. demand volume when we entered the new millennium. This changed, however, when Group III won acceptance into the synthetic elite in 1998. This provided blenders with a lower-cost alternative to PAO and a more palatable and diverse supply pool. Within the first few years of the 2000s, every major and many independents were offering synthetic motor oils; by 2005, sales reached close to 105 million gallons or 12 percent of the total passenger car motor oil demand. And while the average price for a quart of synthetic motor oil at the leading retailer was roughly $4 in 2000, today it’s $6.50. If that doesn’t shatter one’s perception of a price ceiling, consider that the average price for a quart of synthetic motor oil at an auto-parts store is currently $8.62 and brand leaders are usually just under $10. A mid-tier space also developed over the past two decades, and this too moved prices up. The mid-tier arguably found its legs with Valvoline’s introduction of MaxLife in 2001. Specifically formulated for the large population of higher-mileage vehicles, MaxLife proved to be a winner that enjoyed a price premium over conventional motor oil. Me-too products quickly proliferated, as did a number of others targeting such niches as new cars, SUVs and minivans, and others. In addition, the growing need to use Group III as a “correction fluid” when blending conventional motor oils moved many of these products into the mid-tier space as “synthetic blends.” Although variety in the mid-tier has collapsed to include primarily highmileage motor oils and synthetic blends (jury’s still out on green oils),
prices in this tier have done anything but collapse. In fact, where the average price of mid-tier oils at the leading retailer in 2003 was $2.05 a quart, at the start of this year it was $4.46. It’s clear consumer motor oil prices have moved a long way over the past decades at both the retail and wholesale levels. Technology changes were one driver; another was a change in how the business is managed. Whereas back in the ‘70s engine oil was a refined product with pricing driven predominantly by crude, today it is managed and marketed as a consumer product — and prices are distancing themselves from crude. But before we break out the bubbly, it’s important to note that consumer automotive motor oils represent only about 30 percent of the U.S. lubricants pie, and retail’s but a small bite of that. And unfortunately, the commercial and industrial slices of the market are not as sweet. Yet, who knows? Maybe in 30 years someone will be writing about today’s tumultuous times, and how pricing perceptions changed in the commercial and industrial segments, when our approach to the market shifted from volume to value and from lubricants to lubrication services.
with Rob Coffin, Ph.D.
Q:
What does higher viscosity index (VI) mean in the real world and how can one achieve a higher VI PAO base fluid?
A:a high VI base fluid. As temperature
There can be many benefits from choosing
increases, a higher VI fluid will give increased fluid film thickness, which could result in lower wear. As temperature decreases, a higher VI fluid will have reduced viscous drag, which could lead to higher horsepower and energy efficiency. It is really the formulator’s preference whether to increase the longevity of a vehicle’s moving parts, haul a heavier load, or save money at the fuel pump. One way to achieve a higher VI base fluid is to shift from a decene-based PAO to a dodecenebased PAO. In the chart below, we highlight how moving rom a ecene- ase Syn ui ® PAO 6 to an iso-viscous dodecene-based fluid (resulting from a blend of PAO 5 and PAO 7) leads to a dramatic increase in VI.
Feedstock Kinematic Viscosity @ 100 °C (cSt) Kinematic Viscosity @ 40 °C (cSt) Viscosity Index
Synfluid ® PAO 6
Synfluid ® PAO 6 BBlend lend
decene
dodecene
5.9
5.9
30.5
29.5
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To learn more about achieving higher VI with our dodecene-based products, please give us a call. Remember, when thinking about viscosity index, don’t forget Group IV means high VI!
Tom Glenn is president of the consulting firm Petroleum Trends International, the Petroleum Quality Institute of America and Jobbers World newsletter. Phone: (732) 494-0405. E-mail:
[email protected]
www.synfluid.com
[email protected]
Toll Free: 800.231.3260 ©2013 Chevron Phillips Chemical Company LP. Synfluid ® is a registered trademark in the U.S. and other jurisdictions owned by Chevron Phillips Chemical Company LP.
LUBES’N’GREASES
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PRODUCT NEWS
PRODUCT NEWS RelaDyne’s Own elaDyne has introduced its own line of automotive engine oils and automatic transmission fluids, under the DuraMax brand name. The far-reaching lubricant distributor’s packaged and bulk products consist of synthetic blend, high-mileage and full-synthetic engine oils — including one licensed to GM’s Dexos1 specification. There’s also a DuraMax full-synthetic ATF. The company is supporting these products with installer profitability and retention tools, such as a service certificate program to drive consumers back to the installer and increase sales and profitability. Another benefit is the company’s Liquid Armor Engine Warranty Program, which offers a 10-year, 300,000mile engine warranty at no cost to the installer or consumer. Web: www. reladyne.com
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RelaDyne’s new line includes a Dexos1 oil.
Castrol’s new Iloform lube can handle fine-blanking.
Form Metal Without Chlorine astrol Industrial is launching a range of chlorine-free metalforming lubricants that it says will help users meet environmental requirements, improve performance and potentially cut costs. The first product to launch,
C The Adam 12 filling system is fully enclosed.
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Iloform CFX 25, is a lowviscosity, neat oil that aims to provide high lubricity, high load carrying capacity and extreme pressure performance. It can be used as a metal deformation lubricant for ferrous materials, and is recommended for drawing high-alloy and stainless steel wire to fine to medium wire thicknesses. Iloform CFX 25 also is suitable for punching, stamping, stamp-bending and threading of alloyed and carbon steel parts, such as expansion anchors, compression fittings and springs. Web: www.castrol.com/industrial
System Fills Bags Quickly he Adams 12 bag filler from Haver Filling Systems can load up to 33 plastic bags per minute. The machine is equipped with 12 filling spouts that synchronize bag operations with the specified filling speed to provide continuous high-speed production. Each spout fills an empty bag to the specified capacity, and a weighing system confirms that bags are filled to a specified weight between 10 and 94 pounds. A vibrating unit then compacts the product for a tight fit. The equipment produces brickshaped packages that are
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easier to stack and more stable when palletized. Web: www.haverusa.com
Can-do Lube f or Making Cans uakerol PCL-FG from Quaker Chemical Corp. has received H1 registration as a lubricant for use in and around food processing areas. The synthetic lubricant is intended for use on pin chains in the can-manufacturing process. The company says it keeps chains deposit-free by minimizing carbon buildup, and it also provides excellent lubricity, resulting in increased efficiency and reduced wear. Other Quaker incidental food contact lubricants for the can market include low-VOC tab lubricants for can-end conversion presses; pre-lubricants for tab stock; and necker lubricants for aluminum bottle cans. Web: www.quakerchem.com
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Track Heavy-duty Issues t can be difficult to stay abreast of lubricant specifications and categories, especially when technology is changing and lubricant upgrades are under way. So a new “Expert Knowledge” section on Chevron Products’ Delo
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Continued on page 50
motors and 5- and 55gallon rams. Web: www. ingersollrandproducts.com
Continued from page 48
website addresses key market issues for on- and off-highway customers, including fuel economy, emissions and the next diesel engine oil upgrade, PC-11. The site will be updated regularly and will include insights from Chevron experts regarding best practices and important topics. The Delo product family includes heavyduty engine oils, extended life coolant, grease and gear lubricants. Web: www.ChevronDelo.com
Piston Pump Will Move You ngersoll Rand has launched a line of airoperated piston pumps and systems. These pumps can be used to
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Fluids Earn BioPreferred Label laser Swisslube Inc. announced that 11 of its metalworking fluids have earned the USDA Certified Biobased Product label, which gives them preferential status for federal procurement. Seeing the USDA “BioPreferred” label gives buyers assurance that the amount of renewable biobased ingredients in a product meets or exceeds prescribed standards. And these Vasco and Vascomill fluids, which are formulated from esters and vegetable oils, can help users satisfy the mandate to adopt products
B Transfer fluids with the AFX pump.
transfer shear-sensitive, viscous, corrosive and abrasive fluids in a broad range of process and industrial applications. Part of the ARO product family, these new AFX products feature air motors in five sizes, with the company’s Progressive Exhaust, True Link Valve and integrated regulator technology. AFX pumps come with 4.25-, 6-, 8-, 10- and 12-inch air
Vascomill 22 is now BioPreferred.
made from plants and other renewable agricultural materials. Web: www.blaser.com
Spray Lube for Food Processors el-Ray’s No-Tox dry PTFE spray has received NSF-H1 approval for use in food processing, food preparation, pharmaceutical processing, and personal care product processing applications, in applications where inciden-
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tal food contact may occur. The company says the lubricant does not affect plastic or painted surfaces, and is nontoxic, noncorrosive and nonirritating. It can be used to lubricate bearings, slide ways, conveyors, cams and hinges. No-Tox complies with the VOC criteria of California’s Consumer Products Regulation and the Bel-Ray’s H1 dryproposed spray lube VOC limits of the Ozone Transport Commission for lubricants classified as “dry lubricant.” Web: www. belray.com
ASTM Manual 62
ASTM Issues Lube & Testing Handbook anual 62, the ASTM Handbook of Automotive Lubricants and Testing, comprehensively addresses major issues and current development status of automotive lubricant test methods. This newly published edition contains 30 chapters that provide an overview of lubrication for engines, transmissions, drivelines,
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chassis and other components. Topics include advanced lubrication and tribochemistry of the powertrain system, diesel fuel lubrication, automotive lubricant test development, filtration testing of automotive lubricants, lubrication of constant velocity joints, biodegradable automotive lubricants and more. Cost is $140, in print or as an e-book. Web: www.astm.org
fleet. Users can apply this information to help extend their machinery’s life, by monitoring trending, imaging, numerical and textual data, Spectro explains. Lab and maintenance personnel can spot trends and conduct maintenance routines before mechanical problems arise. Benefits include better machinery uptime, less unscheduled maintenance due to machine failures, and the potential to lengthen the
How’s Your Lube Doing? pectro has issued SpectroTrack Version 2.0, the latest update to this information management system that provides a comprehensive, historical view of fluid conditions for a single piece of equipment — or for an entire
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Browser-based software tracks lube condition and trends.
LUBES’N’GREASES
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PRODUCT NEWS
time between oil changes. The database keeps records of equipment information relating to service intervals, maintenance actions, locations and status. Web: www.spectroinc.com
Racing Gear Lube hampion Oil has introduced a synthetic SAE 75W-140 gear lube aimed at high-performance and
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52 MARCH 2013
racing applications. The lube can be used in both gasoline and diesel vehicles, and in severe-duty applications such as towing, off-road driving Gear oil targets highand commercial performance and racing use. The comneeds. pany says the gear lubricant offers excellent antiwear characteristics, cold-flow properties, oxidation resistance and viscosity retention at elevated temperatures. Champion Oil 75W-140 racing gear lube is available in 5-gallon pails and is recommended for use in conventional and limited-slip differentials, and transfer cases in both performance and racing applications. Web: www.ChampionsUseChampion.com
Hose Reel Improves Handling annay Reels’ N500 Series highpressure spring-rewind reel handles hoses used to carry hydraulic fluids, chassis grease and other materials. The reel’s compact frame and narrow base are said to allow easy installation in almost any location. The N500 features a heavy-duty spring motor with self-contained rewind Compact reel holds power, four-way hoses. roller assembly and a declutching arbor to prevent damage from reverse winding. A non-sparking ratchet assembly locks the reel at the desired length of hose payout; a pull on the hose unlocks the reel for the spring motor to retract it. Web: www.hannay.com
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The future arrives fast. Are you ready? The Passenger Car Motor Oil (PCMO) industry moves at lightning speed. You need an additive partner that can keep up. The industry knowledge and research expertise Infineum brings means we are constantly thinking ahead and ready for the future. To find out more, visit www.infineum.com.
For more information on our PCMO products and services visit www.infineum.com
Performance you can rely on. “Infineum”, and the corporate mark comprising the interlocking ripple device are trademarks of Infineum International Limited. © Copyright INFINEUM INTERNATIONAL LIMITED 2013. All rights reserved.
PLACES ’ N ’ FACES
PLACES ’ N ’ FACES CNOOC to Add Group II/III
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hina National Offshore Oil Co. has signed a contract to license Chevron Lummus Global’s technology for a new 400,000 metric tons per year API Group II and III base oil plant in Taizhou, China. Chevron Lummus Global said it will provide the process design, catalysts and technical services for the plant, which will use CLG’s Isocracking, Isodewaxing and Isofinishing technologies and startup around 2016. CNOOC now has a 450,000 t/y naphthenic
India will soon be fourth in light-duty vehicle production. (Photo: Mercedes-Benz) 54 MARCH 2013
plant in Binzhou and a 400,000 t/y of Group II/III plant in Huizhou, which also uses CLG technology.
China Tops Vehicle Production
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hina will remain the primary driver of lightduty vehicle growth over the next four years, says a joint forecast by WardsAuto and Automotive Compass, while the U.S. remains the world’s number two producer. The two research firms also said automakers will ramp up their output of cars and trucks that rely on smaller engines.
The WardsAuto/AutomotiveCompass report projects growth in all global regions through 2018, as vehicle output increases 23 percent worldwide over the next six years. The Asia-Pacific region will increasingly dominate, especially through 2016, when yearly production in China will climb to a stunning 26 million units — 7.5 million more than in 2012. By comparison, U.S. vehicle output is projected to grow by 1.3 million units by 2016, while production in the third-highest producing country, Japan, is forecast to decline by 875,000 units a year in that time. India will surge ahead of South Korea and Germany to rank fourth among vehicle producing countries, the report adds. In the powertrain area, the report sees an accelerating shift to smaller engines, as production of vehicles with engines of four cylinders or fewer rises from 82 percent of the total in 2012 to 85 percent in 2018. Even North America (a bastion for larger engines) will be affected, as engines of four cylinders or fewer increases from 47 percent of the region’s total output in 2012 to 55 percent in 2018. Continued on page 56
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HollyFrontier industrial base oils are so rich in core strength they provide you with a peerless opportunity to increase your penetration of both existing and emerging markets. With a perfect balance of value and security, they are The Best Oils on the Planet ™* to put your industrial lubricants in a leadership position. Learn more. Please email:
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TM
* As measured by saturates and sulfur levels. © 2012 Hollymarks, LLC used with permission by HollyFrontier Refning & Marketing, LLC
Continued from page 54
Information about the WardsAuto/Automotive Compass Global Light Vehicle and Powertrain Forecast, which is updated monthly for clients, is available at www.wardsauto.com.
Korean Plant to Make Group II
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hell Petroleum Co. Ltd. and Hyundai Oilbank recently confirmed that their new 650,000 metric tons per year base oil plant in Daesan, South Korea, will make API Group II material. Groundbreaking was in late January, and the facility will be fully operational in the second half of 2014. Hyundai Oilbank announced the project in February 2012. A joint ven-
ture between the two companies — Hyundai and Shell Base Oil Co. Ltd. — will commission, startup and operate the plant. Hyundai Oilbank has a 60 percent share and Shell a 40 percent share in the joint venture. Daesan is southwest of Seoul and close to key lubricants markets. “Commercial agreements have been put in place, with Shell using a majority of the base oil from the future plant in its businesses,” a Shell spokesperson told Lube Report. Any balance could be sold to third parties, but with Shell having 19 lube plants in Asia, industry sources doubt much will be left after its own needs are filled.
LSC Opens 4th Plant
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ubricating Specialties Co., of Pico Rivera, Calif., has started up its fourth blending and packaging facility in the state. The former Wynn’s facility in Azusa is now ready to serve customers in the western U.S. and Asia-Pacific, after almost a year of construction and startup testing, CEO Stephen Milam said. The Azusa plant has 20 storage tanks, bulk truck loading and unloading capabilities, four freight docks, three small packaging lines, and a full-service laboratory on site. Owned by LSC (the operating partner and majority owner) and an unnamed partner in China, the plant is producing aftermarket fuel and lubricant additives, and may expand into other products, Milam said. He also announced that Sydney Thwaites, who has been with LSC for 15 years, has been named president and chief operating officer. Thwaites is credited with completing the partnership that developed the Azusa venture. Additionally, Rob Kress has rejoined the company after a short time with base oil trader Chemlube. Kress is now senior vice president of LSC, responsible for technology activities and new business development.
IFH Expands
I Ironsides Installs Ironsides Lubricants, in Cheshire, U.K., has installed and commissioned this new autoclave, with 4,000 kg capacity. The new pressure vessel increases the company’s grease capacity — and also enables Ironsides to make calcium sulfonate grease, a much-sought-after grease for demanding industrial applications, it says. 56 MARCH 2013
FH Group, the Rock Falls, Ill., maker of hydraulic oil reservoirs and custom tanks, completed a major expansion that boosted it to over 121,000 square feet under one roof. The addition stepped up IFH’s ability to
produce aluminum sheet for its reservoirs, tanks and other custom fabrications. “This also enables us to expand our ferrous manufacturing by creating additional capacity for steel, stainless steel and aluminized steel — increasing our capability for supplying large fabrications and tanks,” said company President Keith Ellefsen. More improvements are planned for the second quarter, he added.
Kluber Bags Fomblin
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unich-based Kluber Lubrication has acquired the PFPE grease business of Solvay Specialty Polymers Italy. “The PFPE greases from Solvay are well known under the brand name Fomblin. They ideally complement our existing high-quality PFPE lubricants, which are known in many industries under the brand names Barrierta, Klubertemp and Kluberalfa,” said Claus Langgartner of the German company’s managing board. Terms of the deal were not disclosed.
Norway Buy for Hoover
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oover Container Solutions, supplier of tote bins to the lubes industry, acquired Consult Supply AS, an offshore container provider in Norway. The expansion into the Norwegian market provides Hoover an additional channel to offer its range of intermediate bulk containers (IBCs), offshore containers, cargo carrying units, container workshops and ISO tank container products. Consult Supply, established Continued on page 59
A LUBES’N’GREASES PROFILE Philippe Creteur CFO AND VP BUSINESS SERVICES, INFINEUM USA L.P. FAVORITE HOBBIES - “My sport skills are going downhill with time but I still enjoy a lot of golf, tennis and skiing. I quit playing volleyball and squash 15 years ago though.”
FAVORITE FOODS - French, Italian — veal blanquette and bruschetta with truffles FAVORITE BOOKS - French novels (Michel Houellebecq, Antoine Senanque and Philippe Djian), American thrillers, South American writers. “Luis Sepulveda is my all-time favorite.”
FAVORITE MAGAZINES - “Lubes’n’Greases and Infineum Insight of course, and Time magazine to keep up with what’s happening in the world.”
FAVORITE PLACE TO ADVERTISE - “Lubes’n’Greases of course.” FAVORITE PLACES TO TRAVEL - “I really enjoy visiting the U.S. national parks with my family (we have visited so many of them) but where I really ‘disconnect’ from work and feel at home is on the Atlantic Coast in France, from Brittany to Basque country, and in the Swiss mountains.”
FAVORITE QUOTE - “If you think education is expensive, try ignorance.” — Abraham Lincoln MORE ABOUT PHIL - Competitive volleyball player in Belgium for 15 years but barred by his short height…Only 6’3’’…
For advertising information contact Gloria Steinberg Briskin (800)474-8654 or (703)536-7676 e-mail:
[email protected] www.LNGpublishing.com
Shell Opens Grease Plant in China
glycol, contaminated groundwater, and other non-regulated wastes. Valicor recycles more than 1 million gallons of off-spec used oil per month, processing it into on-spec fuel.
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O’Rourke Expands in Texas
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in 1989, currently serves the European and Asian offshore markets.
hell in mid-January celebrated the official opening of its new 30,000 metric tons per year grease plant in Zhuhai, in China’s Guangdong province. The company’s 18th and largest grease plant, Zhuhai can make a range of lithium, lithium calcium and lithium complex greases used mainly in passenger cars and industrial bearings, and has room to expand to 40,000 tons a year. According to Shell, the plant boasts four production lines, grease processing equipment, a plant control system, package filling lines, laboratory equipment and other associated facilities. It also has a warehouse, bulk additive and base oil tanks, bulk finished product tanks and truck unloading facilities. Commercial production began in the fourth quarter of 2012, a Shell spokesperson told Lube Report.
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’Rourke Petroleum has acquired fellow Shell lubricant distributor Penco Oil, of Tyler, Texas. Mush Khan, president of O’Rourke, said his
company is specifically interested in growing its lubricants business. “Penco is a highly lubricants-focused company, so they added to our portfolio of lubricants, and allowed us to accelerate our existing organic growth in that business line,” Khan told Lube Report. Privately owned O’Rourke plans to continue seeking expansion opportunities in Texas and along the Gulf Coast, he added. Continued on page 60
Recycler Rebrands
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alicor is the new name of sister companies Solution Recovery Services and United Waste Water Services, as well as their parent, United Solutions Inc. The three adopted the common identity to strengthen their presence in industrial fluid recycling and wastewater management. Operating as one, under the same management team and employee ownership, Valicor will include Valicor Environmental Services (formerly United) and Valicor Separation Technologies (the erstwhile Solution Recovery unit). It will also offer new product lines through Valicor Renewables, a startup. According to Tom Czartoski, CEO, the Sharonville, Ohio, companies will continue to offer many of the same services as in the past, and to handle fluids including non-regulated petroleum-contaminated liquids such as oil, machining coolant, diesel fuel, LUBES’N’GREASES
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Your Single Source for Specialty Product Solutions. Naphthenics Base Oils && Process Process Oils Oils
Paraffinics Base Oils & Process Oils
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© 2012 Calumet Specialty Products Partners, L.P.. Allll rights i reserved. reserve .
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Burnham, IL Cotton Valley, Valley, LA Dickinson, TX Great Falls, MT Karns City, City, PA PA Louisiana, MO Princeton, LA Shreveport, LA Superior,, WI Superior
Continued from page 59
Briefly Noted
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hevron Phillips Chemical is mulling a 20 percent expansion of normal alpha olefins capacity at its Cedar Bayou chemical complex in Baytown, Texas. A final decision is expected in the third quarter, with construction possibly starting early next year... Oxea will increase production capacity for trimethylolpropane (TMP), which is used in making synthetic lubricants, at its Bishop, Texas, site... Western Marketing, a multi-branded distributor based in Abilene, Texas, has earned Chevron Lubricants’ 2012 Eagle Award, its highest honor for lubricant distributors. The award is based on objective factors including sales of premium products and coolants, value-based selling, and year-over-year volume growth. South America has its first Group II base oil plant, as Lwart has successfully started up its used oil rerefinery in Lencois Paulista, Brazil. Chemical Engineering Partners, which designed and supplied the rerefining technology, confirmed that the 150,000 ton/year plant began operating in October...
Faces in the News
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ack L. Teat Jr. on Feb. 1 was appointed to the new position of chief operating officer at Dover Chemical Corp., reporting to President Dwain Colvin and holding overall responsibility for operations including sales, R&D, and environmental, health and safety. Teat, who has over 30 years of chemical industry experience, has been general manager of Dover’s Hammond, Ind., facility and Jack Teat Jr. executive v.p. of sales and marketing. Taking over from Teat as sales and marketing vice president is Chuck Fletcher, who joined Dover in 2002. Fletcher will continue to directly manage the alkylphenols and stearates business, as well. Marc Nolen was promoted to business manager, polyolefins, and will manage both Dover’s global TNPP business and new product introductions. Damon Stevenson was named global sales manager, adding responsibility for the sales team and management of the customer service group; he’ll also continue to manage Dover’s domestic sales team and distributors. Raj Shah, Ph.D., a director at Koehler Instrument Co., was honored with the ASTM Award of Excellence during the group’s December meeting. Shah is one of very few to have received this award twice from ASTM Committee D02 on Petroleum Products and Lubricants. This latest award recognizes his many years of dedicated contributions and outstanding service to Subcommittee D2.09, Oxidation of Raj Shah Lubricants.
Where All the Pieces Fall Into Place Let’s face it; driveline design can be a real brainteaser. Reduced emissions. Improved fuel economy. Enhanced vehicle performance. Getting all the pieces to fit is challenging—especially when you can’t see the whole picture. That’s why you need one more piece to solve the driveline puzzle. Introducing DrivelineNEWS.com—a single, all-encompassing website exclusively dedicated to driveline topics for both on- and off-road vehicles. Log on for the latest news, market intelligence, technical innovations and hardware animations to help you find solutions and move your business forward. It takes ingenuity and persistence to succeed in today’s driveline market. Test your skills at DrivelineNEWS.com/Puzzle . Put all of the puzzle pieces together to enter to win a Kindle Fire © 2012 The Lubrizol Corporation. All rights reserved. 121569
LETTERS TO THE EDITOR
LETTERS All Wet about PAG Dear Lubes’n’Greases, would like to comment on February’s article “Green Lubes for Vessels,” by Mark Miller of Terresolve Technologies. There are some outright fallacies in the statement about polyalkylene glycol fluids. He states that they can take years to biodegrade, can be very toxic and have poor water tolerance. Actually, the exact opposite is true. Water soluble PAG fluids such as Dow Chemicals’ Ucon Trident AW 32 are very readily biodegradable (up to 81 percent biodegradable in 28 days per OECD 301F); are rated by the U.S. EPA as “Practically NonToxic”; and have no chemical reaction to water, as do vegetable oils and vegetable esters. In fact, chemical reactions with water to form acids that attack seals, hoses and sensors are the Achilles’ heel of natural and synthesized triglycerides, along with poor oxidation and thermal stability. Water soluble PAGs and products such as Ucon Trident or BASF Plurasafe TC can handle about 100 times the water contamination of any other oil and still provide excellent lubrication. Since these fluids are water soluble, there is no saturation point, but the viscosity and performance will diminish gradually as water content increases. Transport Canada, which polices the Canada Shipping Act in Canadian waters, considers PAG lubricants as “nonpollutants and non-toxic” due to the fact they will not adversely affect aquatic birds and mammals, as will even vegetable oil. This became very evident when a large Canola oil spill in Vancouver, B.C., harbor resulted in over 2,000 seabird fatalities. There is a reason why the U.S. EPA included PAG fluids as one of three types of Environmentally Acceptable Lubricants or EALs, the others being vegetable oils and synthetic esters. The criteria were that the fluid had to be readily biodegradable,
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meaning biodegradability of 60 percent or greater in 28 days, and very low aquatic toxicity. These PAG fluids pass with flying colors and are also the only lubricants to pass all five stages of the non-sheening test in 40 CFR 435. They are not a violation of the Clean Water Act, not subject to oil spill regulations under the Oil Pollution Act of 1990, and not classified by the U.S. Coast Guard as “oil” (as are ALL mineral or vegetable oils and esters). This restates the truth as to the real environmental benefits of PAG fluids. Jim Burton, Coast Lubricants Ltd., Nanaimo, B.C.
Bragging Rights on Recycled Oil Dear Lubes’n’Greases, anuary’s Publisher’s Letter has a quote from Thom Smith stating that NexGen engine oil is “the first branded rerefined oil by a major marketer.” I don’t know who was first, or how Valvoline defines “major marketer,” but I do know that 76 Products Co., then owned by Unocal, first introduced its Firebird line of rerefined lubricants (PCMO, HDEO and industrial hydraulic oils) in late 1994 under the 76 Lubricants brand. That brand today is owned by Phillips 66 Co., and we continue to offer rerefined lubricants today. I also know that Chevron and Arco also offered rerefined lubricants in the 1990s. And others have certainly introduced them prior to 2011.
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Allan Perry, Phillips 66, Ponca City, OK
Where Rerefined Oil Belongs Dear Lubes’n’Greases, noticed that your chart on API Base Oil Groups on page 14 of the January issue contained an error. Rerefined base oil is definitely not in API Group V. Most rerefined base oil in North America is Group II, as you know. (Not even sure about whether naphthenics belong in Group V.)
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Steve Haffner, Infineum LLC, Linden, NJ
SAE 16 a Puzzle Dear Lubes’n’Greases, et me see if I have this straight. Steve Swedberg’s Automotive column in January shows the following high-temperature high-shear (HTHS) limits for the new SAE 16 viscosity grade: • SAE 16 will be 6.1 to <8.2 cSt at 100º C and ≥ 2.3 HTHS. • SAE 20 will be 6.9 to <9.3 cSt @100º C and ≥ 2.6 HTHS. It appears there is overlap. Will some products currently labeled SAE 20W or 20W-20 have to be relabeled as 20W16? Will the marketer be able to choose the grade he prefers, if he meets the requirements for both?
L
Blaine Ballentine, Central Petroleum Co., Walcott, IA
Steve Swedberg responds: I know that the SAE 16 grade is confusing. Here is what the footnote says regarding when to use SAE 16: “Since there is overlap between the kinematic viscosity ranges of SAE 20 and SAE 16, an additional labeling requirement was included in SAE J300. For oils falling in the overlap region, the high temperature viscosity grade is determined by the HTHS viscosity, where only the highest grade satisfied shall be referred to on the label. For example, if the kinematic viscosity of an engine oil is 7.80 mm2/s at 100º C and the HTHS viscosity at 150º C is 2.64 mPa •s, it must be labeled SAE 20.” Basically only the highest grade is reported. This is like the low-temperature viscosity, where only the lowest grade attained is shown. So an SAE 5W will also meet SAE 10W but only SAE 5W is shown. As for what marketers will do, most are saying that they will stay with current designations. The volumes for SAE 16 are projected to be very small for some time. Only Honda is going to use it now. Other OEMs might think about it, but engine designs are usually locked in years before they appear on the market. Bottom line: Don’t be looking soon for a flood of SAE XW-16 oils on your bigbox shelves.
INDEX
OF
ADVERTISERS
Acme-Hardesty ... 20 Afton Chemical ... 44, Inside Back Cover Alnor Oil Company ... 28 Amtecol ... 50 Avista Re-Refining, USA ... 51 Axel Christiernsson ... 19 BASF ... 13 Biederman Enterprises ... 17 Calumet Specialty Products Partners ... 60 Chevron ... 37 Chevron Lummus Global ... 45 Chevron Oronite ... 5 Chevron Phillips Chemical ... 47 Delfin Group USA ... 27 Dover Chemical ... 39 Elco Corporation ... 10 Ergon ... Inside Front Cover ExxonMobil Basestocks ... 25, 43 ExxonMobil Chemical ... 7
Focus Chemical ... 59 Heritage-Crystal Clean ... 29 HollyFrontier Refining & Marketing ... 55 Infineum ... 53 Lubes’n’Greases ... 58 Lubricants Industry Sourcebook ... 52 Lubrizol ... 9, 61 Monson Companies ... 26 Motiva ... Back Cover Neste Oil ... 21 Nexeo Solutions ... 49 Onkens Inc. ... 63 Petro-Canada ... 11 Phillips 66 ... 65 Pulsair Systems ... 20 Rhein Chemie ... 33 Sea-Land Chemical ... 18 SK Lubricants ... 57 Wolf Lake Terminals ... 28
LUBES’N’GREASES 63
BASE OIL REPORT
Up for the Spring Fling
T
Carolyn Green
hings are looking up for U.S. base oils. And the trend is expected to continue as the market heads into the “spring fling,” which begins in earnest during March. Business dipped late last year, suppliers reported, but activity has picked up each week since this year started. January sales were better than expected, and customers’ requirements for February were also quite promising. On a down note, suppliers warned not to expect a “blow out” this spring. Demand is still somewhat off compared to more buoyant or even normal years, although not as depressed as in 2009 and 2010. It’s not a secret that the past four to five months have seen a significant drop-off in export activity. Without those shipments leaving the United States, the domestic market faces a buildup and subsequent oversupply situation for API Group II. Were exports at normal levels, Europe and Asia would be soaking up much of the excess, but the economic downturn in these regions has halted a considerable amount of trade. Fortunately, there has been some relief as the Mexican market has been off-tak-
B Y C AROLYN GREEN
ing a good portion of surplus material from U.S. sellers. Even better, according to market sources, export spot prices into Mexico bottomed out and are now more in line with current U.S. postings. Base oil plants are heard to be running to scheme, although perhaps not at top rates, to keep supply/demand fundamentals in good balance. As seasonal activity unfolds, and if demand continues to improve weekto-week, sources believe that producers will likely crank up production to fulfill all customer requirements. A big concern for producers is whether operating costs will continue to rise. Crude values are up some 10 percent since the start of the year, while base oil prices have fallen, thus squeezing margins. In some cases, as a few sources pointed out, it is cheaper for a refiner to divert feedstock to other units rather than make base oils. Amid present variables, if demand spikes but less feed is available for base oil production, circumstances in this arena could change dramatically. Market fundamentals will become clearer over the coming month, but for now players’ hopes are high for a “not-so-bad season after all!”
5
Base Oil and Crude Prices
Group II Base Oil Group I Base Oil
) 4 n o l l a g / $ . 3 S . U ( e c i r P
Brent Crude West Texas Intermediate crude
2
1
64
MARCH 2013
Feb. Mar. Apr. May June July Aug.Sep. Oct.Nov.Dec. Jan Feb. 13
Base oil prices are lowest U.S. postings of the month for mid-vis grade before applicable discounts. Crude prices are monthly averages. Sources: Lubes’n’Greases research, U.S. Energy Information Administration
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YOUR BUSINESS
Reliable Internet Information?
S In the parochial world of the web, accuracy may be the last thing on a reviewer’s mind.
66
MARCH 2013
everal years ago, a wise person cautioned me that one should view information made available in free Internet encyclopedias as “no more creditable than that received from an informed neighbor.” I recently submitted an article on a subject which I knew well to just such an online encyclopedia. While serious about the article, it also seemed like a great opportunity to experience their system. Unfortunately, that old advice was right on target. The volunteer “editors” were obsessed with ensuring that everything conformed strictly to their arcane format, while accuracy of content seemed to be of secondary concern. To enter their system, I signed up as an editor. Then, curious about security, I went to one of their articles and corrected a minor error. It was easy, and no one seemed to care. Emboldened, I went back and made more extensive corrections. Still no response; apparently nobody was minding the store. To make my article acceptable, I patterned it closely after similar ones on their site. References seemed especially important, so the endnotes were almost as long as the article itself.
When the piece was submitted, I was informed that there was a large backlog to be reviewed, but that someone would respond in a few days. Much later, I received word from an editor in Ireland that it had been rejected because it was not “original” — an identical article had been published elsewhere on the Internet. Strangely, the link which was shown as proof led to my preliminary version on their own site which they had asked me to submit in advance. When this was pointed out, another editor entered the scene and overruled the first one, but then said that he blocked the article anyway because it read too much like an “essay.” When I responded that it had been modeled after similar articles already in their system, he shifted to an objection that the endnotes didn’t include certain editing marks. Soon other editors were chiming in with comments. Several suggested links to the organization’s very detailed formatting requirements, which I found to be harder reading than the Federal Register. Others pointed out that their review searches must show that information in the article came only from other
B Y J ACK GOODHUE
previously published sources — even, apparently, if their facts were incorrect. Finally, in a belated burst of intuition, I remembered that I had accidentally run across details of a contest among editors to reduce the large number of backlogged articles. Each submitted article which was blocked gave a reviewer one point. When I mentioned this, one highly insulted editor responded that they “never receive points for doing that!” But then another editor came on to admit that there actually was such a program. Now, at last, I understood what was really happening in the Kafkaesque underworld of Internet information. My conclusions from this ongoing experience: While accessing information on the Internet is certainly easy, it cannot ever, ever be assumed to be reliable. What a shock.
Jack Goodhue, management coach, may be contacted at
[email protected].
Our additives are designed to keep any industrial machine up and running. Some of the world’s most important machinery is hard at work in challenging conditions on a daily basis. And Afton is focused on keeping that equipment productive. By providing industrial lubricant additives for these increasingly-complex machines, Afton helps you preserve their reliability and efficiency. And our Passion for Solutions and collaboration with you will keep those machines lifting, rolling, generating and moving for years to come. © 2013 Afton Chemical Corporation is a wholly-owned subsidiary of NewMarket Corporation (NYSE:NEU). www.aftonchemical.com.
