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The Dirty Oil Business

[Editorial note: The continuing concern for environmental issues and energy supplies suggests that interest in the subject has not diminished since this article was published in 1974. Like other topics in the section, it is worth republishing.]

While senior representatives from the Western oil-consuming nations were in Washington last month (February 1974) at the invitation of the Nixon administration another international oil conference was in session. This was the Conference on Waste Oil Recovery and Re-Use, sponsored by the Association of Petroleum Re-Refiners, a U.S. body commonly known as the APR. Among the 350 delegates were representatives from various state and federal agencies, industrial users and most of the major oil companies.

The concern about waste oil, originally stemming from its effect as a major pollutant, has been boosted by the current energy shortage. To give some idea of the scale of the problem, the following figures and statistics emerged at the conference:

The U.S. generates [annually] some 2100 million (Imperial) gallons of waste oil from all sources.

Automotive 25%
Industrial and government 20%
Marine 8%
Other 47%

Waste oil is broken down as follows.

Environment 54%
Conversion to fuel oil 41%
Re-refined sales 3%
Other 2%

One consultant said that one ton of oil has the same biochemical effect as the daily domestic discharge of waste water from forty thousand people. In discussing the disposal of waste oil, governments have to consider the biochemical as well as the aesthetic problems, for what is critical to the modern society is the effect on water supplies and treatment of domestic effluent.

The keynote speaker from the Federal Energy Office, noting that "the American consumer's energy joyride is over" pointed out that the U.S. wastes more energy than Japan consumes and added that U.S. waste oil policy would be dealt with under three headings: the discouragement of dumping; the preparation of waste for disposal, and offering technological aid to schemes aimed at marketing re-cycled waste.

Paradoxically, the current shortage has contributed to the problems of the re-refiners. By reason of inadequate technology, marginal economics and their own contribution to pollution, the re-refiners found themselves in a declining industry. Now the rapid rise in value of fuel oil has led to diversion of the re-refiners feedstocks for use as fuel.

On the one hand one can say that the market is deciding for itself what is the right solution for disposal of waste oil: on the other, the re-refining industry, considered a backyard operation by the major oil companies, cannot survive without government subsidies. There are major obstacles, too, in the disposal or recycling of waste oils.

Waste crankcase oils, for example, contain metal compounds introduced as additives to enhance the performance of these oils and also significant amounts of lead which originate in the gasoline. There is concern that unless such material is burned under controlled conditions and in equipment which can filer out potential atmospheric pollutants, harmful amounts of metallic compounds will be emitted into the atmosphere.

Some specialists in the oil industry see waste oil as a valuable source of metal. For instance, if on average the used crankcase oil in the U.S. contains 1 percent of lead, the annual quantity from this source alone would amount to over 20,000 tons.

National attitudes to the re-refining industry vary greatly. Germany has always been concerned about conservation of resources and this has led to the existence of a strong re-refining industry. In the U.K. on the other hand, re-refining is a very small industry. France and Italy have thriving re-refining industries but these countries have state support. In Europe the attitude and support is therefore mixed.

In Canada the chief application for used crankcase oil is as a road surface binder. This carries with it a great risk of water pollution because this oil is unsuited to the application, being easily washed away from road surfaces and ending up as a contaminant.

While the major oil companies recognise the oil problem and are studying what can be done with the huge quantities of waste oil being generated their attitude to the re-refiners is rather equivocal. Re-refining is an activity with which the major oil companies have not concerned themselves, but feel it is one which, if expanded, would have a significant impact on the market for lubricants.

The first principle in the disposal equation includes the cost of collection, recovery and re-application. The cost of collection is the single factor which in the view of oil industry experts precludes a wholly private enterprise solution to the problem. The oil companies say that market forces should determine which waste oil is reclaimed and which waste oil is turned into fuel - many government authorities, although not refiners, would agree with them. The point remains that some oil will be too dirty or too remote to make collection and environmentally acceptable disposal economically attractive.

One can see a mixed private enterprise and public solution to the total problem. Somewhere in this the situation does vary tremendously from country to country. This is because the location and scope of refining and re-refining industries, the geographical and economic factors determine the viability of a disposal operation. So state and government intervention will be necessary in some countries and unnecessary in others.

The conservation argument is not automatically in favour of re-refining. One can say that if waste lubricating oil is burnt for heating purposes the oil is gone forever: but this, in effect, means saving the crude oil which would otherwise be run to make that fuel oil.

Survival of the re-refiners as we know them today will depend on their securing government subsistence, particularly as applied to U.S. re-refiners. Any solution will cost money. The money will be generated by taxation or through high prices to consumers. The relative proportions will depend on government attitudes.

At the very least, government will continue to legislate against pollution and unacceptable disposal practices. The degree to which they will involve themselves in the disposal operation will depend on the ability of private enterprise to propose and implement a solution which will satisfy economic, environmental and conservation requirements.

[First published in The Guardian March 3, 1974]


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