Oil Recycling Gains Momentum

September/October 1991

Linda C. Brown is the assistant to the director of commodities for the Institute of Scrap Recycling Industries (Washington, D.C.).


Consider this: Most households in the United States have, at some point, changed, stored, and/or disposed of used motor oil. Unfortunately, much of that used oil does not enter the recycling system; instead, it gets poured into sewers, dumped onto the ground, sprayed onto roads to control dust, or discarded in household solid waste that ends up in landfills. Millions of gallons of used oil from commercial and industrial sources also often bypass the recycling system. Of the more than 1.3 billion gallons of used oil generated in the United States annually, approximately 901 million gallons--or 67 percent--are recycled and reused, according to a 1988 study by Temple, Barker & Sloane Inc. (Washington, D.C.). The remaining 33 percent stays outside the used oil recovery system and represents a potentially significant environmental danger.

Recently, industry groups, environmental organizations, and government regulators such as the Environmental Protection Agency (EPA) have been focusing on ways to better manage the disposition and recycling of used oil. Still, a national policy regulating used oil has not yet been released, so states and the used oil recycling industry have forged ahead on their own, mapping out strategies to increase the oil recycling rate while dealing with the uncertainties created by that lack of national guidance.

The types of participants in the used oil management system are the same basic categories of players involved in recovering any other commodity--generators, intermediaries, and end users--with the number of participants reportedly decreasing in recent years.

Low prices for used crankcase oil in many areas of the United States have forced many small, independent oil recyclers out of business. As one former collector states: "Pricing was too unpredictable and my transportation costs were eating too deeply into my profits to survive."

Generators are classified as either automotive or industrial. Service stations, repair shops, car dealers, fleet shops, airports, and "do-it-yourselfers" who change their own oil are among the U.S. automotive generators, which produce approximately 386 million gallons of used oil per year, according to the Temple, Barker & Sloane study. On the industrial side, agricultural and construction machinery operators, as well as industrial plants such as fabricated metal shops and electronics manufacturers generate another 384 million gallons. In total, 770 million gallons of used oil enters the U.S. processing system annually. Independent collectors divert about 74 million gallons from the system, leaving 696 million gallons for intermediaries to process.

The intermediate level of the used oil recycling system is also divided into three distinct categories, encompassing minor processors, major processors, and rerefiners.

Minor processors collect used oil from generators, then separate water and solids from the oil using simple settling technology with or without adding heat. The processed oil is then sold for use as road oil or to fuel-oil dealers and burners, with some sales going to major processors and rerefiners. Minor processors handle approximately 70 million gallons annually, or approximately 10 percent of the 696 million gallons earmarked for the intermediaries.

Major processors handle an estimated 559 million gallons of used oil, or 80 percent of the market. They collect used oil from generators and buy it from independent collectors. Like minor processors, they remove water and solid contaminants, but they use more sophisticated processing technologies such as screen filtration, heat settling, centrifugation, light-fraction distillation, and blending. The processed oil is sold to fuel-oil firms, burners, construction companies, asphalt manufacturers, and other users.

Rerefiners, which handle about 67 million gallons per year, or approximately 10 percent of the market, are the most sophisticated members of the used oil management system in ten-ns of processing technology. They, too, collect used oil from generators and purchase it from independent collectors. The oil is usually processed or rerefined into a lube oil; a light hydrocarbon fuel is generated as a coproduct.

According to the Association of Petroleum Rerefiners (Buffalo, N.Y.), there are only eight active rerefiners in North America: BresLube division of SafetyKleen Canada (Breslau, Ontario); the East Chicago, Ind., plant of Safety-Kleen Corp.; Consolidated Recycling (Troy, Ind.); Demenno/Kerdoon (Compton, Calif.); Evergreen Oil (Irvine, Calif.); Mohawk Lubricants Ltd. (Vancouver, British Columbia); Motor Oils Refining Co. (McCook, Ill.); and Mid America Distillations Inc. (Hot Springs, Ark.). The industry trend is toward larger and better-managed facilities, industry sources say.

In general, used oil processors sell the majority of their recycled oil--87 percent--for burning purposes. This oil is used primarily as "off-specification" fuel in boilers, furnaces, cement kilns, space heaters, and diesel engines. Another 9 percent is sold as lube oil, as well as for other nonfuel industrial uses, while the remaining 4 percent is sold as road oil.

Despite used oil's recovery potential, both government and industry face a major obstacle: how to promote greater participation by the public, especially "do-it-yourselfers." Millions of Americans change their own oil, generating approximately 193 million gallons of used oil per year, according to Temple, Barker & Sloane.

Since used oil can reportedly contain contaminants such as polychlorinated biphenyls, dioxins, and ethylene chloride, federal and state agencies are concerned about the potential environmental damage that can result if even small quantities of used oil are disposed improperly. Studies have shown that 1 gallon of used oil can ruin a million gallons of fresh water-a year's supply for 50 people.

Dumped oil also represents a lost energy resource. As the EPA states, "If all improperly disposed oil by do-it-yourselfers was recycled, it could produce enough energy to power 360,000 homes each year or could provide 96 million quarts of high quality motor oil."

Some assert that more publicity about used oil recycling is what's needed. But before publicity can work, reliable, statewide used oil recycling systems must exist.

Fortunately, most states have taken steps to establish such systems. A 1989 study by the American Petroleum Institute (Washington, D.C.) showed that almost half the states either have a used oil recycling program or are planning to start one.

Michigan, for example, started a used oil recycling pilot program in 1979 and expanded it in 1982 to cover the entire state, using funds from both state and private sources. The program is based on a volunteer collection network of service stations, quick-change auto centers, and private organizations. Currently, most collection sites pay a hauler to remove the oil at a cost of up to 25 cents per gallon.

In 1990, approximately 1.6 million gallons of used oil were collected in the state. Today, Michigan has approximately 550 collection sites, but that number is dwindling due to reduced profit margins, liability concerns, and concern over whether the EPA will label used oil as a "hazardous waste." Nevertheless, the Michigan legislature has recognizedthe environmental gravity of the situation and mandated, through Act 114, that the state must support a permanent used oil recycling program. The mandate reportedly became effective July 1, 1991.

Florida's used oil recycling program encompasses 25 local businesses that have volunteered to act as used oil collection sites. The state has recovered more than 5,700 gallons of used oil in just six months, according to the EPA. Florida uses incentives to generate interest in the program, giving a 5-percent price preference on purchases of rerefined oil by state and local governments. This program ties in to Florida's 1988 Solid Waste Management Act, which "requires a 30-percent reduction in solid waste"--including used oil--through recycling by 1994.

Improper disposal of used oil continues to be a problem, with 450 million gallons still being landfilled, incinerated, or dumped. Progress is being made, however. Today, states, federal regulators, and the public are realizing that used oil is a valuable recyclable resource, and many companies are increasing their investments to improve oil-recycling technology. With stepped-up efforts by government, heightened commitment from private industry, and increased participation from the public, used motor oil may soon become a more valued--and more commonplace-material in the recycling system.  •

Used oil recycling is receiving more attention from government, private industry, environmental groups, and the public. Here’s a look at how the oil recycling system works.