Used Oil Re-refi ning Study to Address Energy Policy Act of ...

1 July Department of Energy Offi ce of Fossil EnergyUsed Oil Re-refi ning Study to AddressEnergy Policy Act of 2005 Section 1838 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Office of Oil and Natural Gas Office of Fossil Energy Department of Energy Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy i Table of Contents 1 Executive Summary .. 1-1 Methodology .. 1-1 Executive Summary Roadmap .. 1-1 Worldwide Lube Oil Demand Perspective and Used Oil Management 1-2 Stakeholders in the Used Oil Business .. 1-3 Energy and Environmental 1-4 Existing Federal and State Regulations Dealing with Used Oils .. 1-5 Reusing a Valuable Resource .. 1-6 Specific Steps That Could be Taken to Improve Collections and Increase Re- refining and Other Beneficial Re-use of Used Oils.

2 1-7 Utilize Information Exchange Processes to Encourage Progress on Used Oil Management and Recycling .. 1-7 Encourage States to Adopt Used Oil Management Standards .. 1-8 Space Heaters .. 1-8 Comments on Emerging 1-8 Impacts of Bio-Based Lube Products .. 1-8 Possible Limitations on the Re-use of Re-refined Oils in Motor Oil Blends .. 1-9 2 Worldwide Lube Oil 2-1 3 Worldwide Used Oil Management Practices .. 3-1 Observations on Worldwide Used Oil Programs .. 3-2 4 Used Oil Business Stakeholders .. 4-1 DIY and DIFM Consumers .. 4-1 Collectors / Transporters .. 4-2 Used Oil 4-2 Used Oil Re-refiners .. 4-2 Used Oil Burners .. 4-4 4-4 5 Analysis of Used Oil 5-1 DIY / DIFM Volume Trends 5-2 6 Government Role in Used Oil 6-1 Federal 6-1 Federal Environmental Regulations Dealing With Used Oil.

3 6-1 Executive Orders Applicable to Executive Branch 6-2 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy ii State Programs .. 6-3 Elements of State 6-3 State Legislation .. 6-4 Superfund Liability .. 6-4 7 Energy and Environmental Impacts of Re- refining Used 7-1 Supplemental References .. 7-1 Energy Impacts .. 7-2 Key Characteristics of Petroleum Base 7-2 System Analysis .. 7-4 Impact of Synthetics .. 7-5 Scoping Analysis of Current Market Value of Base 7-6 Environmental Impacts .. 7-7 2004 California EPA/University of California (Berkeley) 7-9 2001 Sofres Report .. 7-11 February 2005 IFEU Study .. 7-12 Caution in Translating Results from Europe to the United States.

4 7-13 1995 Entropy Study .. 7-14 Summary .. 7-14 Space 7-15 Vermont Used Oil Study .. 7-17 Source 7-17 8 Specific Steps That Could be Taken to Improve Collections and Increase Re- refining and Other Beneficial Re-use of Used Oils .. 8-1 9 Appendix .. 9-1 Key Stakeholders Involved with Used Oil Management in the United States .. 9-1 Generators .. 9-3 DIY Oil Change Group .. 9-3 DIFM Oil Change 9-3 Collectors / Transporters .. 9-5 Used Oil 9-6 Used Oil Re-refiners & Re- refining Economics .. 9-7 Used Oil Burners .. 9-11 Simplified Flow 9-11 Oil Consumed in Operation .. 9-13 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy iii Characteristics of Used Oils.

5 9-13 Processing Technology .. 9-14 Used Oils Re- refining and Processing 9-17 European Used Oil Management 9-18 Automotive Oil Change Association Green Recycler Program .. 9-21 Executive Orders Dealing with Used 9-22 RCRA 6002 .. 9-22 Executive Order 9-28 Executive Order 9-40 Example of State Used Oil Management Legislation .. 9-45 Highlights of Key Federal Statutes and Regulations that Relate to Management of Used 9-58 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy ivList of Tables Table 1: 2002 Total Lubricants Demand by Region .. 2-1 Table 2: Lube Oil Demand by 2-2 Table 3: Features of Used Oil Management Programs in Selected 3-2 Table 4: Used Oil Disposition (1995 Data) .. 5-1 Table 5: Used Oil Combustion Mechanisms .. 5-2 Table 6: Improperly Disposed of Used Oil 5-3 Table 7: Energy Savings for Re- refining vs.

6 Burning of Used Oils .. 7-5 Table 8: Market Value of Base Oils and Petroleum Products .. 7-6 Table 9: Listing of Common Additives in Used 7-8 Table 10: Environmental Impact Characteristics for Used Oil Re-use Options .. 7-9 Table 11: Ratios of Impact Characteristics for Used Oil Combustion Compared to Re- refining .. 7-10 Table 12: Energy Savings for Re- refining vs. Burning of Used Oils .. 7-16 Table 13: Used Oil / Re- refining Stakeholders Meeting Attendees/Participants .. 9-2 Table 14: Sales of Motor Oils: DIY vs. DIFM 9-4 Table 15: Re- refining Plant Investment Cost Range .. 9-9 Table 16: Re- refining Economics .. 9-10 Table 17: Used Oil Re- refining and Processing Plants .. 9-17 Table 18: European Waste Oil Collection Statistics by 9-18 Table 19: European Used Oil Re- refining /Processing Operational Name Plate 9-19 Table 20: European Standard Base Oil Qualities: Virgin vs.

7 Re-refined Stocks .. 9-20 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy vList of Figures Figure 1: Total Reported Sales of Lubricants 1997 2004 .. 2-2 Figure 2: Relationship Between Crude and Base Oil Prices .. 9-10 Figure 3: Used Oil Flow 9-12 Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy viUsed Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy 1-1 1 Executive Summary This report is a response to the Energy Policy Act of 2005 Section 1838, which required: The Secretary of Energy , in consultation with the Administrator of the Environmental Protection Agency, shall undertake a Study of the Energy and environmental benefits of the re- refining of used lubricating oil and report to Congress within 90 days after enactment of this Act including recommendations of specific steps that can be taken to improve collections of used lubricating oil and increase re- refining and other beneficial re-use of such oil.

8 Methodology To carry out this Study , the Department of Energy (DOE), in consultation with the Environmental Protection Agency (EPA), analyzed prior studies and consulted with industry stakeholders. The specific sources of information used in this Study to provide background information and to formulate conclusions and specific steps that could be taken are detailed in subsequent sections of the Study , but are summarized below: Prior comprehensive studies on the Energy and environmental impacts of re- refining used oils, Information gained from a meeting with industry stakeholders and subsequent followup discussions, Current federal legislation that deals with various aspects of used oil management, Used oil management programs utilized by various states, and Data on lube oil consumption in the and in the world. This report has been developed in consultation with the EPA and a draft report was reviewed with the original stakeholder meeting participants.

9 Executive Summary Roadmap The Executive Summary is organized as follows: Background information on worldwide and lubricating oil demand and used oil management practices, Discussion of the used oil stakeholders, Summary of the Energy and environmental benefits of used oil management practices, Existing legislation for used oil, Specific steps that could be taken, and Comments on emerging trends. More detailed information and analysis is provided in the subsequent sections of this report. Used Oil Re- refining Study to Address Energy Policy Act of 2005 Section 1838 Department of Energy Worldwide Lube Oil Demand Perspective and Used Oil Management Practices An overview of the worldwide lubricants (lube oil) market indicates that the United States consumes about 25 percent of the total worldwide demand for lube oils, which reflects the United States relatively large percentage ( percent) of the world Gross National Product (GNP) and widespread use of the automobile compared to other regions of the world.

10 However, compared to the United States, it appears that most European countries are more advanced in the area of used oil recycling, re-use and source reduction. For example, Europe has three times as much re- refining processing capacity as the United States. Re- refining is a process that can regenerate used oils into base oils that are of equivalent quality to fresh virgin base oils, which are the most fundamental building blocks of all lubricating oil products. Virgin base oils are derived from oil refineries that have special high severity processing equipment that allows them to produce the highly refined and stable base oil products. These base oils are then blended with various additive components to produce a product that is specifically designed to lubricate or serve other very specific conditions. This report refers to European lessons learned and hopes to avoid some of the pitfalls in dealing with used oil management issues.