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Three

Electrifying
Tales
Pinnacle Oil
Thinks Big
MAY 2 0 1 3 V OL . 1 9 I S S UE 5
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3 LUBESNGREASES
LUBESNGREASES

The Magazine of Industry in Motion


LNG Publishing Company, Inc.
6105-G Arlington Blvd.
Falls Church, VA 22044 USA
Phone: (703) 536-0800
Fax: (703) 536-0803
Website: www.LNGpublishing.com
E-mail: info@LNGpublishing.com
Nancy J. DeMarco Publisher
Lisa Tocci Managing Editor
Richard Beercheck Senior Editor
Greg Whitlow Art Director
Sheryl Unangst Circulation Manager
Robert Green Circulation Assistant Manager
Laura Hughes Production Assistant
George Gill, Tom Glenn, Jack Goodhue,
Carolyn L. Green, Boris Kamchev,
David McFall, J. Berkshire Miller,
Tim Sullivan, Steve Swedberg Contributors
Gloria Steinberg Briskin
Managing Director/Vice President, Advertising
Phone: (703) 536-7676
(800) 474-8654
gloria@LNGpublishing.com
Megan Matchett Account Manager
megan@LNGpublishing.com
LubesnGreases (ISSN1080-9449), an independent
trade magazine, is published monthly by LNG
Publishing Company, Inc., 6105-G Arlington Blvd.,
Falls Church, VA 22044 USA. Copyright 2013,
LNG Publishing Company, Inc. Printed in USA.
Subscriptions to the print edition are free to qualied
subscribers in the United States and Canada who are
active in the lubricants industry as man ufacturers,
marketers, volume buyers and users, or as suppliers
who maintain close ties to the lubricants industry.
Qualication is subject to publishers approval.
Subscriptions to the print edition outside the
United States and Canada: $115 for 12 issues;
$215 for 24 issues.
Subscriptions to the digital edition are free to
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Periodicals postage paid at Falls Church, VA and
additional mailing ofces.
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Return undeliverable Canadian addresses to:
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Lubes n Greases

is a registered trademark of
LNG Publishing Company, Inc.
2002 Folio
Show Editorial
Excellence
Award
Gold Winner
lists companies by name, geo-
graphic location, principal prod-
ucts, and more. If you received
our 2013 e-mailed survey, please
reply today. The 2013-2014
Sourcebook will go live on July 1.
Only companies that provide cur-
rent information will be included.
Check it out at www.LNG
Sourcebook.com. If your compa-
ny isnt listed but should be,
please let me know. Listings are
free. The Sourcebook draws an
average of more than 11,000
monthly page views,
and attracts anywhere from 300
to 750 unique new visitors
every month.
I
ts a real pleasure to introduce
the newest member of our
editorial team, Joe Beeton. Joe
joined LNG Publishing in mid-
March as a staff writer, and hes
already applying his reporting
and writing talents to Lube
Report and LubesnGreases.
Joe is a 2011 graduate of George Mason
Univ. in Fairfax, Va., where he majored in
English and wrote extensively for student
media. Welcome, Joe.
Nancy J. DeMarco
nancy@LNGpublishing.com
PUBLISHERS LETTER
A
s Steve Swedberg writes, lubricant
companies that are tapping alterna-
tive energy sources are gaining
more than bragging rights. They are lower-
ing their energy costs or bringing in cold,
hard cash; theyre gaining favorable tax
treatment and incentives from local, state
and federal governments; customers are
paying favorable attention; and yes, they
do get to brag a little.
Ultrachem, in New Castle, Del., is meeting
all of its electricity requirements with a new
solar photovoltaic system on its roof, and
selling excess power to the local grid.
Crodas synthetic esters plant in
Atlas Point, Del., is tapping into
trash, burning landfill gas to run
its boiler system and generate
steam and will shortly begin pro-
ducing electricity as well.
Wilmington, N.C.s South Atlantic
Services has installed more than
2,000 solar panels on its ware-
house roof, generating electricity
to sell to the local utility.
For a look at what these
companies are doing, turn to
Energy: Intensive on page 16.
L
ast month we began surveying key con-
tacts in U.S. and Canadian companies:
Its time to update your listing in the online
Lubricants Industry Sourcebook. This valu-
able directory of the lubricants industry
More than bragging rights!
Lisa Tocci, Nancy DeMarco & Gloria Steinberg Briskin
Joe Beeton
4 MAY 2013
TABLE OF CONTENTS
F E AT UR E S :
16 Energy: Intensive. Homemade electricity is still a
relative rarity, and requires a big commitment. Three
lubricant companies tell us how and why they flipped
the switch.
22 Rerefinings Gold Rush. Rerefining in the United
States will grow by 50 percent to reach more than 1.2
million metric tons of capacity by 2017, a new report
predicts.
26 Oil and Water Dont Mix. As long as waterways
and machinery live side-by-side, oil leaks and hydraulic
blow-outs will occur. Use the right lubricant to lessen
the damage, and your liability.
32 A Fork in the Road for Small Engines. The market for
small-engine lubricants is split into two camps, with
Asia on one side, the U.S. and Europe on the other.
Can one oil serve both?
40 Big Ideas at Pinnacle Oil. Kimball Morris thought
convenience stores and gas stations might like to
have their own engine oil brands. Heres how that
hunch has paid off since 1987.
46 Too Many Choices? Twenty years ago motor oil
brands offered two tiers: good or best. Todays retail
shelves carry six tiers or more, says Larry Solomon,
and the message is sheer confusion.
Page 26
Page 32
Page 46
MAY 2 0 1 3 V OL . 1 9 I S S UE 5
DE PA R T ME NT S :
3 Publishers Letter
6 Automotive
14 Need to Know
54 Product News
60 PlacesnFaces
66 Advertiser Index
68 Base Oil Report
70 Your Business
On the cover: Pinnacle Oil
Theres no magic formula. The secret to success is still hard work, a healthy dose of
persistence and true partnership. Its how Oronite does things. The performance of
our high quality additives is unsurpassed. Our motivated, growth-oriented people are
dedicated to your business. Above all, we do things the right way, aiming to protect your
equipment and your business and reduce emissions that can harm our environment.
If youre looking for performance and protection, it all adds up. To learn how we can add
to your business, visit oroniteaddsup.com.
How will your product deliver
the performance and protection
your customers demand?
2013 Chevron Oronite Company LLC. All rights reserved. The Chevron hallmark and Oronite are registered trademarks and Adding Up is a trademark of Chevron Intellectual Property LLC.
Add Oronite

A case in point: In early


November, EPA announced
it had found discrepancies
in the fuel economy claims
for more than 900,000
Hyundais and Kias about
one-third of units sold in
the United States since
2010. The sister brands
had overstated their miles
per gallon by about 3 per-
cent, and had to relabel all
of their 2012 and 2013
MAY 2013
Your Mileage May Vary
AUTOMOTIVE
BY STEVE SWEDBERG
6
models. Hyundai knocked
down most by 1 or 2 mpg,
but took a 6 mpg whack at
the Kia Souls rating.
EPA said it had received
a number of consumer
complaints about the
Hyundai mileage esti-
mates, which led it to audit
the vehicles test results.
Hyundai and Kia acknowl-
edged making procedural
errors when running EPAs
fuel economy tests, apolo-
gized to customers, and
moved to reimburse them
for their added fuel costs
for as long as they own the
car. Ouch!
This costly mistake
reminds us why automak-
ers insist on getting and
documenting every ounce
of fuel economy improve-
ment they can. Engine oils
may deliver only 1 or 2 per-
cent better fuel economy
(which is invisible to indi-
vidual drivers), but thats
vital to an OEM.
Of course, you and I
know that your mileage
may vary. No two vehicles
will get the same mileage,
primarily because of the
person behind the wheel.
Its really amazing how
D
rivers, governmen-
tal agencies and
original equipment
manufacturers continue to
be frustrated by the differ-
ence between the mileage
figures shown on new-
vehicle window stickers,
which are based on U.S.
Environmental Protection
Agency testing protocols,
and the cars real-world
fuel consumption.
Continued on page 8
Certifying engines
to CAFE require-
ments is only
going to get
tougher, along
with demands on
lubricants.
(Photo: Hyundai
Motor America)
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much the driving habits of
each of us affects how
much fuel we burn. In fact,
the American Trucking
Association found that fuel
economy in big rigs can
vary by as much as 35 per-
cent, based on the drivers
technique.
It reminds me of a film
(thats right, a film not a
video) from my high school
drivers education class
many moons ago. In it,
Goofy (of Disney fame)
portrayed a mild-mannered
gentleman by the name of
Mr. Walker. However, when
he got behind the wheel of
his car he became Mr.
Wheeler, who was mania-
cal and drove with a lead
foot, one arm hanging out
of the window, and was
generally a menace. The
lesson for us young minds
was not to be aggressive
and reckless when driving.
But it wasnt to conserve
fuel, which only cost
around 25 cents per gallon.
Fast forward to today. We
still need to be courteous
on the road, but with
prices approaching $4 per
gallon the fuel economy
lesson is much more sig-
nificant.
A recent Wall Street
Journal article on the sub-
ject found that the variation
in fuel economy results
and consumer satisfaction
were enormous: Mike
Young, 24, says he gets
about 22 miles per gallon
in the city and as much as
30 to 31 mpg on the high-
way in his 2002 Nissan
Altima V6. That is consider-
ably better than the cars
17 city, 24 highway rating
based on the EPA testing
protocols. Mr. Young, who
works in public relations in
the Philadelphia area, says
he drives fairly fast on
the highway, but tries to
hold a constant speed.
Im not one of those peo-
ple whos on the gas and
off the gas.
However, there is always
an opposing view, the arti-
cle went on. On the other
end of the spectrum is
Brent Wardle of Meridian,
Idaho, who says hes plan-
ning to trade in his 2012
Hyundai Sonata hybrid
because hes only averag-
ing about 22 mpg in a car
that in 2012 was rated by
the EPA at 35 city, 40 mpg
highway.
Youve got to suspect
that some variation in dri-
ving style is at work here.
There are other factors too,
but its gotten to the point
that the feds and the
OEMs are working on mod-
ified test protocols to try to
minimize the differences.
The EPA protocols are
pretty dated, originally
going back to the mid-
1970s. In 2008 the EPA
added new tests which
simulated highway speeds
up to 80 mph, as well as
driving in hot and cold
weather. Its also consider-
ing tests using gasoline
cut with 10 percent
8 MAY 2013
Continued from page 6 ethanol, like most com-
mercially available fuel,
instead of the pure gaso-
line prescribed now. The
10 percent ethanol blends
tend to drop mileage by 3
to 4 percent, the agency
says.
So where does that
leave us? I think that its
important to review the
drivers for fuel economy,
the steps that have been
taken to date, and those
coming in the near future.
First, the drivers. The
original fuel economy man-
dates came at the time of
the first Arab oil embargo
in the 1970s, a time when
fuel economy was around
17 mpg. Long waiting lines
at the service station;
rationing (anybody remem-
ber odd/even days for fuel-
ing? Anybody?); and the
cost of gasoline rising from
25 cents a gallon to 65
cents were some of the
outcomes. There was
another oil crunch in the
early 1980s, and since then
gasoline has steadily risen
in price. The national aver-
age at the pump as I write
this is $3.68/gallon for
regular.
Congress reacted
almost reflexively in 1975
and dictated that 27.5
mpg would be the corpo-
rate average fuel economy
goal by the 1985 model
year. In the meantime, all
the technical details need-
ed to be developed,
including test procedures
Continued on page 10
AUTOMOTIVE
Fast forward to
today. We still need
to be courteous on
the road, but with
prices approaching
$4 per gallon
the fuel economy
lesson is much
more significant.
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9 M
ay 2013
in
D
etroit, M
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9
&
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1
picture of the fuel cost of
driving. There are advocates
for changing the EPA num-
bers to this configuration.
Recognize that the U.S.
light-duty vehicle fleet is
around 250 million units
strong and that their aver-
age age is about 11 years
now, the rate of replace-
ment of vehicles is probably
about 3 to 4 percent annual-
ly (barring a recession or
other impact on income).
That means many vehicles
on the road will still be con-
suming fuel at the 27.5
mpg rate in 2015. In fact,
there will still be significant
numbers of these gas
hogs on the road in 2025.
But if you carry my calcu-
lations out to their logical
conclusion, a compliant
2025 model would save
more than $6,000 worth of
gasoline over its life versus
its 2015 counterpart. And
even more if fuel prices go
up (as history says they will).
To give the devil his due,
without regulations I really
doubt that current engines
would have become so effi-
as well as how to calculate
CAFE. Since then, the
mantra has been to reduce
dependence on foreign oil,
even as the light-vehicle
fleet continued to grow.
Weve lived with CAFE of
27.5 mpg for the past 30
years but beginning in
2015 new cars sold must
meet a 35.5 mpg target,
with additional emissions
requirements. In 2025 the
mandate rises to a stagger-
ing 55 mpg. (Heavy-duty
trucks face their own
mileage hurdles, which Ill
save for another day.)
I did some basic math,
with an eye to getting a
handle on the impact of
these rules and regulations
on the average drivers fuel
costs. For simplicity, I used
$4 per gallon as the base
price for all years. Table 1,
above, shows the results.
In Europe, fuel economy
is reported as gallons per
100 miles (actually,
liters/100 km). While this
doesnt change as dramati-
cally as mpg, it gives a clear
cient so quickly; otherwise
we might still have large
numbers of big, carbureted
V-8s on our roads, instead
of sophisticated V-6s with
fuel injection controlled by
amazingly complex on-
board computers. I continue
to be awed by the design
improvements in engines
and transmissions that have
occurred in my time as an
industry participant.
Engine and transmission
lubricants have played their
small but significant part in
this evolution. Engine oils
have become much lighter
in viscosity and much more
advanced in additive tech-
nology. Whod have thought
that SAE 0W-20 would be
the oil viscosity rising star
today, when the oil of the
1980s was SAE 10W-30 and
SAE 5W-30 led in the 90s
and even into the early part
of this century? Now we
see Honda specifying SAE
0W-16. Obviously, the lower
the viscosity, the lower the
frictional drag and churning
effects of the oil.
When you look at the
impact on fuel economy
from the engine oil, you may
be tempted to say, so what?
The requirements for vari-
ous grades of current ILSAC
GF-5 or API SN engine oil to
be labeled as resource con-
serving (per the American
Petroleum Institutes fuel
economy standards) are
shown in Table 2.
Basically, the impact of an
SAE 0W-20 on fuel econo-
10 MAY 2013
Continued from page 8
AUTOMOTIVE
Continued on page 12
Table 2. Limits for Resource Conserving Engine Oils
Fuel Economy Gain vs. 25W-30 Reference Oil
SAE viscosity grade Fresh oil, % After 100 hours aging, %
XW-20 2.6 min. 1.2 min.
XW-30 1.9 min. 0.9 min.
10W-30 and other non-ILSAC grades 1.5 min. 0.6 min.
Table 1. Where CAFE Is Leading
Model year CAFE target Gal per 100 mi
Fuel cost per Savings v.
mi @$4 per gal 1985 (per 100 mi)
1985 27.5 mpg 3.64 $14.56
2015 35.5 mpg 2.82 $11.28 $3.28
2025 55.0 mpg 1.82 $7.28 $7.28
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Proven performance in water-dilutable formulae
used in machining and forming
which determine CAFE. This elimi-
nates the use of oils which might
give better fuel economy but which
would not be available to consumers.
Similarly, automatic transmission
fluids have undergone significant
advances in the same time frame.
They now have much more durable
viscosity retention and better friction-
al characteristics as well as some-
my at the current 27.5 mpg would be
0.7 mpg new and 0.3 mpg after 100
hours of aging. Not much, it seems
but it does improve the OEMs
opportunity to successfully certify
engines for the EPA rating. They also
are required to use widely available,
competitively price commercial
engine oils in the test programs
12 MAY 2013
Industry consultant Steve Swedberg
has over 40 years experience in lubri-
cants, most notably with Pennzoil
and Chevron Oronite. He is a long-
time member of the American
Chemical Society and SAE
International, where he was chair-
man of Technical Committee 1 on
automotive engine oils. He can be
reached at steveswedberg@cox.net.
what lower viscosity to capture every
bit of longevity and fuel saving in the
transmission. Drain intervals for ATF
are now of such duration 100,000
miles or longer that you might
change the fluid once or twice during
the average 11 years you own the
vehicle. New transmission designs
are counting on these durable lubri-
cants to protect them and to maxi-
mize their efficiency.
The base oil and additive technolo-
gies to achieve these impressive
results have been evolving right along
with the engines and transmissions.
In fact, the engineering changes have
driven the introduction of better base
stocks, new antioxidants, and
improved friction modifiers, antiwear
agents and dispersants.
For me, the bottom line is that the
OEMs and oil/additive industry have
worked together (sometimes con-
tentiously and sometimes coopera-
tively) to develop superior technolo-
gies to make our lives a little better
and more luxurious. The modern
automobile is a technological won-
der, so enjoy the ride.
Continued from page 10
I
f you have been in the lubricants
business for any length of time,
you have doubtless heard some
blenders or marketers say, but there
is a market for it. Right away, you
took note of the operative and sepa-
rating word but. This is because
they likely were justifying why they
sell obsolete, unlicensed and off-
spec motor oils.
As you were processing this state-
ment, the speaker twisted the lemon
further, adding, Although I dont
want to sell these products, my cus-
tomers ask for it, and I have to sell it
if I want to compete.
While an interesting argument and
one that could garner some sympa-
thy, it reminds me of what my moth-
er used to say when I made lame
excuses to explain my (rare) dubious
actions as a child: Two wrongs
dont make a right. Truth be told,
she was correct.
So lets get it right: Is there any-
thing wrong with knowingly selling
obsolete, off-spec unlicensed lubri-
cants, or ones with misleading
labels, to customers who want these
products? And if others are doing so,
does that make it right for us to do
the same?
Answering these questions starts
with defining who your customer is,
and what he or she is asking for.
Although you might assume a mar-
keter speaking about a motor oil cus-
tomer is referring to a vehicle owner,
in many cases they are not. This is
because lubricant marketers sell
most of their motor oil to retailers
and installers. The retailers and
installers in turn provide the products
to their customers, the motoring
public. So there are several defini-
tions of customer in the value
chain.
Whereas the wants and needs of
each layer of customers in the lubri-
cant value chain are often aligned, in
some cases they are not. When that
happens, its the motoring public
the ultimate customers who can
get burned by bad oil.
An example of this may be seen
with a retailer that asks for the low-
est priced product a lubricant mar-
keter can offer. To meet this cus-
tomers needs, the marketer puts a
competitive price on the table for its
fighting-grade, licensed ILSAC GF-
5/API SN engine oil, and says this
product will meet the requirements
of virtually all cars currently on the
road and its a great price. The
retailer quickly pushes back, saying
the price is much too high; what else
do you have? With reluctance, the
marketer pitches a lower price for an
unlicensed product labeled as suit-
able for use in applications requiring
API SN GF-5. The marketer might
add a sketchy story about the prod-
uct meeting the latest specs, but at
lower price point because the manu-
facturer doesnt have to pay a licens-
ing fee to the API.
Although the retailer asks a few
questions, its clear theres no inter-
est in the worth of this product or
anything to do with API, SN, GF-5 or
whatever. My customers are poor
But theres a market for it ...
NEED TO KNOW
BY THOMAS F. GLENN
MAY 2013 14
If others are selling
obsolete and off-
spec motor oils, does
that make it right for
us to do the same?
15 LUBESNGREASES
people who drive old cars that burn a
lot of oil and they dont need the lat-
est and greatest, the retailer
asserts, adding, They just need oil
so give me a better price.
Many reputable marketers would
have walked away from this opportu-
nity before getting pulled into discus-
sions about unlicensed motor oil, but
not the marketer in our example.
Instead, he or she puts a price on
the table for API SA or some other
obsolete motor oil category, and
makes the sale. Even knowing that
SA oil is unsuitable for cars built
since 1933 and can cause harm to
most engines currently on the road,
the marketer justifies the deal by say-
ing, I gave my customer what he
was asking for.
Sad to say, maybe he did.
But is this what the retailers cus-
tomers are asking for? Are they
demanding motor oils that will likely
cause damage to what might be
their only means of transportation
the vehicle they use to go to work,
drive their kids to school, go shop-
ping, and visit grandma? Likely not.
Instead, they probably trusted the
retailer the marketers customer
to provide a good price on a lubri-
cant that protects their engines from
damage.
This takes us to the second point
marketers sometimes make when
they sell swill: I dont want to sell
obsolete, unlicensed and off-spec
lubricant, but my customers ask for
it, and I have to offer it if I want to
compete.
Painfully true. Some with little else
to offer have to dance with the devil
by selling obsolete, off-spec, untest-
ed and unproven motor oils to com-
pete. Doing so, they knowingly put
consumers cars at risk, and of
course they try to explain away this
decision.
So lets get it right. Its wrong to
say but there is a market for it
when selling potentially harmful
motor oils. And marketers dont have
to do it to compete. Both state-
ments are lame excuses for dubious
activity.
If you think otherwise, listen to the
many good major and independent
lubricant manufacturers and mar-
keters who compete by producing
quality, on-spec motor oils. You wont
hear excuses from them.
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:
tom_glenn@petroleumtrends.com
Energy:
Intensive
A
lternative energy is a hot, hot topic. While the U.S.
energy mix still relies heavily on traditional sources
like coal, natural gas, petroleum, hydroelectric and
nuclear, renewables like solar, wind and biomass are
making inroads into electricity generation. The
countrys unofficial energy policy can easily be
referred to as all of the above.
Still, homemade electricity is a relative rarity in the commer-
cial or industrial landscape, and it is costly to get up and run-
ning. This leads many manufacturers to view the leap into alter-
native energies as risky. To overcome some of these objections,
various municipal, state and federal agencies have offered incen-
tives to encourage early adoption.
Three lubricant companies Ultrachem, Croda and South
Atlantic Services have found that extra push helped tip the
decision in favor of alternate energy. Each now boasts solar capa-
bility in their operations, and one is also completing an ambitious
project to generate its electricity from waste landfill gas.
LubesnGreases talked to each of these about why they took
the leap, the costs and the payback. The benefits, we heard,
include an attractive return on investment, financial incentives,
an easing of energy cost volatility and bragging rights for
themselves and their employees.
16 MAY 2013
U
ltrachem Inc. is an inde-
pendent specialty lubri-
cant compounder
approaching its 50th anniver-
sary. Privately held since 1984
by a group of key employees,
Ultrachem supplies OEMs and
the industrial maintenance
markets, and has been heavily
into synthetic lubricants since
opening its doors in 1965.
Major product lines include
synthetic compressor oils,
industrial hydraulic and gear
oils, lubricants for the food
processing industry, and pri-
vate-label products.
Last May, Ultrachem
announced that it would
install a 185 kilowatt solar pho-
tovoltaic system on the roof of
its manufacturing plant and
headquarters in New Castle,
Del. The now-complete sys-
tem generates enough elec-
tricity to serve its annual
needs with power to spare.
Robert Whiting, president,
and Glenn Krasley, director of
Sunny in Delaware
BY STEVE SWEDBERG
Ultrachems solar array in New Castle, Del.
sales and marketing, said they
had been thinking about
going green for two to three
years before making the
move. They found their
opportunity in a state pilot
program that promotes the
purchase, installation and use
of solar cells, the Delaware
Solar Renewable Energy
Certificate.
Ultrachem would have to
follow strict program guide-
lines, Krasley observed, but
the chance to create almost
200,000 kilowatt-hours a year
of green electric power was
tempting. The rooftop instal-
lations photovoltaic panels
would be manufactured by
Delaware-based Motec
Panels and guaranteed for 20
years. And weather patterns
for the past 15 to 20 years
conservatively showed that
solar is a good choice for
their location, said Whiting.
Beyond the green appeal
there were tax incentives,
too, which proved to be the
deciding factor.
Some 770 individual solar
panels now cover Ultrachems
plant roof, which is free of
interfering buildings that could
cast energy-robbing shadows.
Whiting noted that all of
Ultrachems electrical require-
ments are satisfied with the
solar array, and excess electrici-
ty is sold to the local grid at
retail rates. The project is
interconnected to the New
Castle Municipal Services
Commission utility system.
Krasley remains enthused
about the project. Whenever
industry can reduce environ-
mental impact, its contribut-
ing to the betterment of the
entire planet, he said proud-
ly. Sustainability should not
just be a buzz word that you
can tell your customers
about. It needs to have real
value and contribute to
reducing your overall carbon
footprint.
When you implement a
sustainability program, it
must start from the top and
your entire organization
needs to embrace the com-
mitment. It should also
include your supply chain.
Once your employees begin
to understand the impact
and value, youll be amazed
how the ideas start flowing
for additional ways to
reduce waste and conserve
energy. Thats why we feel
its so important to share
our success with anyone
who is considering an ener-
gy conservation or reduction
program.
A
tlas Point, Del., home to
Croda Inc.s synthetic
esters plant, is where
this company has chosen to
install a landfill gas-to-power
project. Croda, an interna-
tional chemicals company
headquartered in the United
Kingdom with operations in
34 countries, has been
aggressive in its pursuit of
sustainability, including the
use of renewable energies
such as solar, wind and now
biomass power.
Croda put a solar array atop
its U.S. headquarters in
Edison, N.J., in 2011, but the
landfill gas project would
prove far more complex and
ambitious. Robert Stewart,
Atlas Points site manager,
shared some information
about the project, which
broke ground last June and
was completed at year end.
17 LUBESNGREASES
Tapping into Trash
Landfill gas generates steam and electricity for Crodas Atlas Point esters plant, shown here.
The plant, he noted, is locat-
ed about three and a half
miles from the Cherry Island
landfill, which is owned by
the Delaware Solid Waste
Authority. This made it conve-
nient for Croda, since many
landfill sites are too far
removed to be practical. The
reclaimed landfill gas,
methane, is delivered to Atlas
Point via a pipeline, and
burned in a 2.2-megawatt
combined-heat-and-power
generator made by Cummins
Power Generation.
Croda put $5.5 million into
the project, and received a
$500,000 grant from the
Delaware Energy Efficiency
Investment Fund, for a total
investment of $6 million.
Crodas president, Kevin
Gallagher, estimated that the
project will pay for itself in
five to six years.
Already, the site is burning
methane to fuel its boiler sys-
tem and generate up to half
of Atlas Points steam require-
ment, and soon will begin
producing electricity as well.
At full load, the Cummins
engine will supply up to 75
percent of the plants electric-
ity, or the energy equivalent
of 3,500 homes. Croda is still
working through the process
of hooking up to the local
grid, and hopes to be com-
pletely on line next month.
Stewart cited a number of
benefits to the landfill gas sys-
tem. Its a renewable source
of energy for the site for the
next 20 years, which fits
Crodas corporate goal of gen-
18 MAY 2013
Continued on page 20
Atlas Points 2.2-megawatt combined-heat-and-power unit
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erating 25 percent of the com-
panys energy usage from
non-fossil fuels by 2015, he
explained. It provides a pre-
dictable and efficient source of
power both steam and
electricity at a lower cost.
The site also will earn produc-
tion tax credits equivalent to
1.1 cents per kWh generated.
Reduced emissions are
another benefit; previously the
methane gas was flared at the
landfill site but now its a valu-
able resource. The landfill will
be active for a long time,
Stewart added. Currently the
estimate is that theres about
35 years of usable methane gas
available. And as the areas
which are currently active are
covered, the gas generated
could last much longer.
20 MAY 2013
Continued from page 18
The Skys No Limit
South Atlantic Services turned its roof (an under-used asset) into a revenue stream.
(
P
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t
o

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o
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r
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o
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L
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)
F
ounded in 1971, South
Atlantic Services Inc. in
Wilmington, N.C., aims to
be one of the top contract
packagers in the country. In
addition to automotive and
commercial lubricants, it sup-
plies antifreeze, diesel exhaust
fluid, dry chemicals, cleaners
and agricultural products. SAS
services some very large cus-
tomers, and must meet their
diverse packaging require-
ments, delivery schedules and
quality specifications in a cost-
effective manner.
Frank Hamilton III, presi-
dent, and Jeff Grizzle, opera-
tions vice president, shared
some insights into their deci-
sion to go solar. For Hamilton,
the decision was prompted by
financial considerations, which
included incentives from the
state (North Carolina offers a
hefty tax credit) and the fed-
eral government. Plus, the
roof of SASs warehouse was
an under-utilized asset which
could be improved by the
addition of a solar array which
is essentially maintenance-
free.
Thirty-five thousand square
feet of that roof now sport a
500 kW solar energy system.
The 2,033 panels are clamped
directly to the standing-seam
metal roof, so as not to pene-
trate its surface. Local work-
ers installed the panels, and
the project was managed by
United Renewable Energy, a
contractor with offices in
Winston Salem, N.C.
Hamilton pegged the invest-
ment at roughly $1.4 million.
Hamilton and Grizzle noted
that SAS does not use the
electricity it generates but
sells it all to the local utility,
Duke Energy. This brings in
significant revenue, as the
solar array creates enough
power to supply the electrical
needs of 50 homes. If kept in-
house, the electricity would
meet one-third of the SASs
power needs.
There are some intangibles
associated with the installa-
tion as well, Hamilton point-
ed out. One is that the panels
may actually extend the life of
the roof. The project may also
be of interest to customers
who are supportive of green
initiatives. Retail giant Wal-
Mart, for example, is strongly
interested in reducing its car-
bon footprint and encourages
all its suppliers to follow suit.
E
ach of these companies
emphasized that the use
of green energy has
enabled them to gain favor-
able tax credits and incen-
tives from local, state and
federal governments. This
has given them early pay-
outs for their investment
and the promise of more
stable energy costs into the
future.
Each chose a different
path for the energy gained,
channeling it either to
reduce their costs or to gain
revenue. In addition they
have chosen different ener-
gy sources.
And happily, all three
point out, green energy is a
useful tool for their sales
force to gain favorable atten-
tion from their customers.
21 LUBESNGREASES
R
erefining capacity in the
United States is projected to
increase from less than
800,000 metric tons per year
(about 16,000 barrels a day)
in 2012 to more than 1.2 million metric
tons by 2017, according to Kline & Co.
Thats a 50 percent gain some of
which is due to gush very soon.
The U.S. rerefining industry is poised
to take off, with big growth expected in
the used oil business, said Anuj Kumar,
project lead for Klines Energy Practice,
during a March webinar based on
Klines first comprehensive analysis of
the used oil and rerefined lubricant
market in the United States. In 2011,
the studys base year, U.S. rerefining
capacity stood at about 485,000 tons
per year, according to Kline. The 2017
projection includes several announced
rerefineries, although not all will pan
out as base oil producers.
Recently there has been a gold rush
to occupy all the good spots for used
oil rerefining by good spots, we
mean those locations that have plenty
of used oil supply, with limited or no
competition, said Kumar. Once a rere-
fining plant is set up and used oil vol-
umes are tied, there will be increased
competition for feedstock if a new plant
comes up in vicinity of an existing plant.
Any plans to set up rerefineries in a
sparsely populated region where used
oil generation is quite low may not actu-
ally be genuine, he cautioned. We
believe this could maybe be merely a
means of discouraging others from
thinking about a particular region.
Not every project is a mirage, of
course, and several new players have
affirmed to LubesnGreases that they
are quite far along in their plans and/or
construction.
As this issue goes to press, Juan
Fritschy, CEO of Universal
22 MAY 2013
BY GEORGE GILL
Environmental Services (which is adopt-
ing the name Avista Oil USA), confirmed
the company is commissioning its rere-
finery in Peachtree City, Ga., from mid-
April to mid-May. The rerefinery is
expected to have capacity to process 30
million gallons of waste oil per year and
to produce nearly 1,300 b/d of Group I
and/or II base oil. We will start produc-
ing on May 2, and we expect to be in
full production by June 1, Fritschy said.
In Florida, NexLube Tampa contin-
ues to move towards commissioning its
rerefinery in the last quarter of 2013.
That facility is expected to process 24
million gallons of used oil annually and
produce 20 million gallons of Group II
base oil.
FCC Environmental began engineer-
ing and site preparation work early last
year for a rerefinery in Baltimore. The
start-up for the FCC refinery is currently
projected for late Q4 2014, FCC
Environmental Vice President Vincent
Glorioso told Lube Report. We are
going through the permitting and final
engineering process, and believe the
start-up date to be realistic.
Transformer oil collector and rere-
finer Hydrodec, which uses a catalytic
rerefining process to make naphthenic
process oil at a plant in Canton, Ohio,
now is working on a scheme for making
advanced paraffinic base stocks.
Hydrodec CEO Ian Smale in March told
shareholders that the technology will
soon move to the pilot plant stage, and
offers potential for new types of high-
quality base oils such as Group II, II+
and III. If the planned rerefinery is able
to stick with crankcase materials as
feedstock, the company anticipates
roughly 75 percent will be rerefined
into base oil, or about 30 million gallons
per year.
All of these schemes are aiming to
benefit from several key drivers which
23 LUBESNGREASES
oil quality more repeatable.
A second industrywide challenge is
consumer acceptance of finished
lubricants made from recycled base
oils. Global lubricant blenders and
[major] marketers would consider
rerefined base stock as a marketing
plan to portray an environmentally
friendly image, Kumar said.
However, the product does not really
align with their supply chain. They
have sourcing
Klines Kumar enumerated in his webi-
nar. These include significant improve-
ment in the used oil collection infra-
structure in recent years; a gradual
decrease in the share of do-it-yourself
oil change customers; greater collec-
tion volumes due to increasing aware-
ness of used oil collection services; and
advanced processing technologies that
result in better-quality rerefined base
stocks.
Moreover, theres more pressure now
to collect every last barrel of used oil,
Kumar said. As the price of finished
lubricants and base stocks increases,
the value that could potentially be
realized by rerefining
the used oil
increases.
The industry
does face chal-
lenges however.
First is access to
used oil supply,
he said. To run
a seamless used
oil rerefinery, its
critical to have an
uninterrupted feed-
stock supply. Lately we have
seen a trend where rerefiners are tak-
ing over collection companies or
spreading their geographical footprint
to secure used oil supply.
As well, some used oil collectors have
announced plans to set up rerefineries,
hoping to capture the same limited
used oil supply. That is an indication
the industry is attempting to mitigate
this risk, he said.
Kumar emphasized that volumes of
used oil supply have not been growing;
theyve at best been flat due to the
extension of recommended engine oil
drain intervals. Oil consumption has
decreased, as recommended oil inter-
vals have gone up due to use of syn-
thetic lubricants in recent years, he
said.
At this point, he added, the used oil
collection industry is ripe for some con-
solidation, as this would help reduce
costs and standardize collection prac-
tices, which in turn would make used
lubricants remains a big unknown.
Valvoline has launched its NextGen
series of products blended with rere-
fined base stocks, but its impact has yet
to be known, Kumar noted. However,
if more marketers follow suit, con-
sumers could be convinced of the use
of rerefined lubricants.
Industrial lube consumers also could
be potential customers for rerefined
lubricants because they practice on-site
recycling. So we think they should be
open to experimenting, he noted.
Rerefined base stocks produced in
the United States
represent less
than 5 per-
cent of
the fin-
ished
lubricant
consumption,
Kline found. The
company has esti-
mated U.S. fin-
ished lubricants
consumption at 8.4
million tons in 2011.
Of that, it estimated only about 60
percent was generated as a used oil
the rest was either lost or not classified
as used oil.
Klines study indicated about 80 per-
cent of used oil generated in the
United States in 2011 was collected.
That figure is higher in densely popu-
lated states like California, and lower
in less-populous states like Montana
and Wyoming. About 69 percent of
collected used oil is processed as
industrial fuel, whereas only 14 per-
cent is sent for rerefining, he said.
The remaining 17 percent includes
used oil that is exported, mainly from
the U.S. Gulf Coast to Europe, Latin
America and China.
Of the used oil directed to rerefining,
about 66 percent was converted to
rerefined base stock, while the rest was
converted into other products like
naphtha, diesel and asphalt.
Klines report is titled, Used Oils and
Re-refined Lubricants: U.S. Market
Analysis and Opportunities.
24 MAY 2013
arrangements both in-house and from
merchant markets. Use of rerefined
base stocks would mean realignment
of their supply chain, which becomes
difficult especially when a marketing
company has its own supply of virgin
base stocks.
By contrast, an independent or mid-
tier marketer would consider using
rerefined base stocks if the company is
convinced about the perceived cost
benefits. Among lubricant end users,
[original equipment manufacturers]
are not really worried about the source
of a base stock as long as it is high
quality and performance is delivered,
Kumar added.
Commercial fleets in particular have
potential as candidates to consider
rerefined base stocks, and would con-
sider setting up a closed-loop system as
a track record is established, he noted.
He said the reaction of installers and
do-it-yourself customers to rerefined
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26 MAY 2013
Oil and Water Dont Mix
T
he Deepwater
Horizon oil spill in
the Gulf of Mexico
renewed interest in
using environmentally accept-
able lubricants near, in or
over water to reduce environ-
mental impact and liabilities.
While the impact of a large
spill of lubricant such as
hydraulic fluid is much less
devastating than a blowout of
crude oil, there is still a nega-
tive effect on the environ-
the public to be proactive in
protecting the environment.
It is becoming good business
these days to go green.
Why Do This?
The main concern for any
business is, of course, the
bottom line. This means
avoiding the costs involved in
spills of oil or hazardous sub-
stances, including the costs
of cleanup, fines, litigation,
remediation and work stop-
Environmental Protection
Agency terminology pur-
chasers first should ask how
the product will benefit their
company, and whether it will
actually help reduce or elimi-
nate financial liabilities, fines
and cleanup costs.
EPA is revising the Vessel
General Permits for 2013 and
is including a new category
for vessels shorter than 79
feet, called small Vessel
General Permits. These regu-
By using an approved EAL,
the vessel operator earns an
exemption from the require-
ment to maintain comprehen-
sive daily logs, to monitor all
fluids and levels, and to report
them a strong incentive for
going green. Failure to com-
ply or falsifying data and
logged information can lead
to some very large fines.
Common Belief
When switching to an EAL,
27 LUBESNGREASES
Environmental
compliance
compels a
different choice
BY JAMES BURTON
ment that can have both
immediate and lasting conse-
quences.
In the immediate aftermath
of a spill, the oil itself is the
culprit, as wildlife, plants and
shorelines become coated in
oil, causing a series of serious
problems. Secondary and
long-term effects of a spill
result from the heavy metals
and toxins that bio-accumu-
late and impact the aquatic
food chain. Adding to the
problem is that some oils
may take a very long time to
decompose.
Businesses involving ves-
sels or equipment operating
in or around water are feeling
the pressure from federal,
state and provincial laws and
regulations, as well as from
environmental groups and
pages. The other major blow
to a company involved in a
major spill is the negative
public relations that can
affect everything from stock
prices to future projects.
Many articles have covered
converting to and using envi-
ronmentally acceptable lubri-
cants, the types of fluids avail-
able, and the pros and cons
of each. However, compli-
ance and regulatory issues in
the United States and Canada
generally have not been
addressed. The message that
seems to be lost is, Why are
we converting to these fluids
in the first place, and how
will it affect us in the event of
a spill?
In considering a move to
an environmentally accept-
able lubricant EAL in U.S.
lations are due to take effect
on Dec. 19 this year. Both
kinds of permits limit and
dictate what can be legally
discharged from a vessel,
including oily bilge water,
sewage, oil or other haz-
ardous substances. One
major change is to mandate
that approved EALs must be
used in any oil-to-sea applica-
tion such as stern tubes,
bow thrusters and cranes
that could leak oil directly
into the water in the event of
a seal or hose failure.
EPAs list of approved EALs
includes vegetable-based oils
(classified as HETG), syn-
thetic esters (HEES) and
polyalkylene glycols (HEPG).
The HEPG products can be
either oil soluble or water
soluble.
the common belief is that if
the label says biodegradable
or inherently biodegradable,
the only concern is how
much it costs and how sim-
ple it is to convert to it.
However, approved EALs do
not include inherently
biodegradable mineral oils,
defined as any type of miner-
al oil or lubricant with a
biodegradability rating of less
than 60 percent in 28 days.
This is the same standard
used by most European
countries and various state,
provincial and regulatory
agencies. At least 60 percent
degraded in 28 days is the
basic criterion for using the
term Readily Biodegradable.
Even so, this overlooks the
fact that spills of many EALs
are still a violation of the


g
d
v
c
o
m

-

F
o
t
o
l
i
a
Photo courtesy Bluewater West Ltd.
Canadas regulations. (See
www.tc.gc.ca/ for details.)
Fisheries and Oceans
Canada (DFO) is mainly con-
cerned about monitoring
aquatic toxicity. Its main con-
cern is fish health, not neces-
sarily the oil spill and pollu-
tion portion of the Canada
Shipping Act. Therefore, an
operator could meet the min-
imum standards set out by
DFO regarding the use of and
accidental discharge of
biodegradable lubricants
but still may violate the
Canada Shipping Act.
All Oil Pollutes
Environmentally friendly and
biodegradable oils were
developed for use in eco-sen-
sitive terrestrial areas. They
were meant to have a lesser
impact and to biodegrade in
Clean Water act of 1990, and
will result in fines regardless
of whether the oil is non-
toxic or biodegradable. While
EPA has established approved
EAL categories, users must
also abide by a second set of
regulations: The Discharge of
Oil Overview under the
Clean Water Act, commonly
known as the sheen rule.
(See www.
epa.gov/emergencies/content/
lawsregs/sheenovr.htm for
details.)
In Canada, maritime regula-
tions are monitored and
enforced by Transport Canada
and the Canadian Coast
Guard. This includes enforc-
ing the Canada Shipping Act,
which contains a section
referring to maritime pollu-
tion incidents, as well as
enforcing Environment
soil, not water. Even
biodegradable vegetable oils
spilled into water can have a
devastating impact on
wildlife. For an example, in
1999 a large canola spill in
Vancouvers harbor killed
thousands of seabirds.
Any oil spilled into water,
regardless of whether its veg-
etable or mineral based (or
ester), can seriously affect
marine birds or mammals. It
can coat the animal, get
under its fur or down and
interfere with the animals
ability to insulate itself. This
can and does lead to death
by hypothermia, and can
cause severe illness from
ingesting the oil that they try
to lick off themselves in the
process. This is one reason
why EPA also prohibits the
discharge of any type of oil
into any waterway in the
United States.
Using a biodegradable oil
basically avoids long-term,
lingering effects of the oil
itself and reduces or elimi-
nates bio-accumulation and
toxic effects on wildlife. The
only negative concern of a
rapidly biodegradable lubri-
cant is potential oxygen
depletion during biodegra-
dation.
In other words, while a
lubricant may be an approved
EAL, it may still be considered
a pollutant and violate the
Clean Water Act if discharged
into water. Because this regu-
lation classifies all vegetable
oils and synthetic esters as oil,
the only EALs that are compli-
ant under the regulation are
water-soluble polyalkylene
glycols, PAGs.
28 MAY 2013
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No Sheen or Slick
EPA, the U.S. Coast Guard and
Transport Canada have all
designated water-soluble
PAGs, such as Dow
Chemicals Ucon brand
Trident, as Not an Oil: They
are considered nonhazardous
chemicals. In fact, Transport
Canada does not classify PAGs
as marine pollutants and
views them as nontoxic.
Although water-soluble
PAGs are anhydrous water-
free they sink if spilled into
water and dissolve rapidly,
leaving no sheen or slick
behind. They also do not cre-
ate an emulsion beneath the
surface, and they dissipate to
avoid any bio-accumulation in
aquatic life. Water-soluble
PAGs designed for marine use
are considered Readily
Biodegradable in that they
are at least 60 percent
biodegradable in 28 days and
have the same rate of
biodegradability as vegetable
oils (over 80 percent in 28
days in the OECD 301 F test).
EPA classifies these fluids as
Practically Non-Toxic.
One major advantage of
water-soluble PAGs over
other EALs is that they are
exempt from the 1990 Oil
Pollution Acts spill cleanup
regulations because they pro-
duce no slick or sheen. In
addition, they require no
aquatic cleanup or remedia-
tion.
This can lead to enormous
savings in penalties, cleanup
and site remediation costs in
the case of a spill. Water-solu-
ble PAGs are the only type of
EAL that passes all five stages
of EPAs static sheen test
described in 40 CFR 435,
which is used to enforce the
Clean Water Act.
The other issue with an
aquatic oil spill is that water is
usually moving. Wind, waves,
river and tidal currents can
make cleanup dangerous for
crews as well as difficult and
ineffective. Quite often, this
results in an expensive exer-
cise in futility.
Many equipment and vessel
operators feel that if they use
a lubricant considered to be
environmentally friendly,
biodegradable or an approved
EAL, they are in full environ-
mental regulatory compli-
ance. This is not necessarily
the case if the operations are
in, on or around any body of
water. The United States still
considers any product classi-
fied as oil to be a pollutant if
spilled or released into water.
Hence, the only EALs that
should be considered accept-
able for marine environments
are products that are not clas-
sified as oil or as hazardous
substances.
Canadian pollution regula-
tions consider all petroleum
products to be pollutants, but
they also state that the term
pollution refers to any sub-
stance that has any detri-
mental effect on humans,
wildlife or plant life.
Vegetable oils and biodegrad-
able synthetic esters may fall
into this category and can be
considered pollutants in cer-
tain instances. In contrast,
water-soluble PAGs are not
oil, are not pollutants under
the Pollution from Ships Act,
and are viewed as nontoxic.
29 LUBESNGREASES
Continued on page 30
Making the Change
The best environmental prac-
tice is to prevent any sub-
stances from entering any
body of water, because some
jurisdictions consider any for-
eign material discharged into
any body of water as a poten-
tial pollutant. However, as
long as waterways are used
for commerce involving
machinery, problems such as
oil leaks and hydraulic
blowouts will occur. The best
alternative is to use the most
proactive and preventive mea-
sures available to minimize
any potential environmental
impact.
EALs generally cost two to
three times more than con-
ventional lubricants. These
costs are likely to drop as the
lubricants become more
widely used and sales vol-
umes increase. However,
because they are still consid-
ered specialty lubricants,
they tend to occupy a niche
market.
Companies considering a
switch to an EAL should also
reconsider their maintenance
budgets. Often, these budgets
are set to accommodate the
purchase of conventional
lubricants, and the additional
cost of an EAL can appear
prohibitive. This can result in
strong resistance from main-
tenance supervisors.
However, sizeable spills
generally lead to heavy
expenses from fines, litiga-
tion, cleanup/remediation and
work stoppages. While these
costs do not come out of the
maintenance budget, they
have a negative effect on the
company as a whole.
Any company considering
converting to an EAL must
involve all affected depart-
ments in the decision.
Beyond cost, factors to con-
sider include performance
and ease of conversion, but
more importantly the level of
compliance the product will
offer.
Questions to ask include: Is
it still going to violate any pol-
lution laws such as the Clean
Water Act (or 40 CFR 435) if
there is a spill? What is
involved in a cleanup or site
remediation? What costs are
involved, and will there still
be any pollution fines or
penalties?
When converting equip-
ment to biodegradable lubri-
cants, use an EPA approved
EAL designed specifically for
the purpose and working
environment intended. If you
are not going to receive full
benefits of using an EAL and
greatly reduce environmental
liabilities, dont invest the
time and money in the first
place. EALs are much like pur-
chasing insurance policies:
Know what the package cov-
ers and what you are still
liable for.
Jim Burton is the fuel and
marine lubricants executive
for Bluewater West Ltd. He
has been involved in the
petroleum and lubricants
industry for over 35 years,
with both Canadian and U.S,
companies. He can be
reached at (604) 358-9219 or
jamesburton@shaw.ca.
30 MAY 2013
Continued from page 29
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This fork in the market presents challenges for
both four-stroke small-engine builders and lubri-
cant marketers, she continued at the conference,
which was held in Moscow in November. In the
West, the economic downturn caused sales of
new machines to fall while sales of pre-owned
bikes grew. After the recession, growth of bike
sales in the United States is expected to get
stronger by 2015. Sales are flat at the moment,
with an increase in the scooter segment only.
Recent statistics from the Motorcycle Industry
Council support this appraisal. The trade group
said U.S. sales of new units reached 452,400 in
2012, around where demand has lingered since
2010. Thats a far cry from the hot-paced days of
2003, 2004 and 2005, when the industry was
moving more than a million units a year. U.S.
scooter sales rose at a faster clip than other
types, but still amounted to only 34,000 units in
2012. Europe is seeing a similar trend: The
European Association of Motorcycles recently
reported its fifth straight year of declining sales,
with only 1.3 million two-wheelers sold in 2012.
With demand for new units in a slump and
owners holding on to their bikes longer, these
motorcycle populations are increasing in age,
McTavish pointed out. There are around 10 mil-
lion bikes in the U.S. fleet and over half are more
than seven years old. In fact, almost a quarter of
them predate 1995, and roughly that number are
models from 2000 to 2004. Only 3 percent are
2010 or newer.
This shows that it is increasingly important for
these engines to be well maintained and their life
to be prolonged with a proper lubricant choice,
McTavish said.
Worldwide, the market for small-engine lubricants
is divided into two general camps, with Europe
and North America on one side, Asia on the other.
End users in each of these two regions have very
different approaches to how they use and main-
tain their small engines, and what they want from
the lubricants they buy, a market study found.
Generally, the small-engine automotive seg-
ment consists of gasoline-fueled motorcycles,
scooters and mopeds (plus popular three-
wheeled versions in Asia), while the leisure mar-
ket includes inboard and outboard marine
engines for fast boats, personal watercraft and
small yachts another market that demands
careful attention from lubricant sellers.
Global motorcycle production in 2010 amount-
ed to around 55 million units, according to the
additive manufacturer Infineum. A big share of
the world demand for motorcycles, 84 percent,
comes from Asia, Katie McTavish, the companys
sales manager for Europe, Middle East and Africa,
told the RPI Lubricants Russia conference. The
global motorcycle market is expected to grow
around 7 percent annually, driven by the huge
demand in Asia.
In Asia, however, small engines are basically
used for personal mobility, she explained. In Asia
consumers increasingly demand fuel-efficient
bikes [and] the oil required is fit-for-purpose,
with growing demand for higher quality oils.
In the West, by contrast, small engines are
mainly used for leisure, the motorcycle popula-
tion is older, and engines are expected to have a
longer working life with the use of a lubricant
that offers good protection, said McTavish, who
is based in Oxford, England.
32 MAY 2013
A Fork in the Road for Small Engines
By Boris Kamchev
P
h
o
t
o
:

H
o
n
d
a

M
o
t
o
r
33 LUBESNGREASES
An Infineum survey of U.S. motorbike
owners asked what they value most in
lubricants, and how it influences their
purchasing decision. The two most-
prized qualities, respondents said, were
engine protection and product quality.
Almost 75 percent believed that having
the correct viscosity grade is important
or very important, and 70 percent said
the oil should be formulated specifically
for motorcycle use. While still important
to half of bikers, price or fuel economy
are much further down the priority list,
she said.
The market action now has moved to
Asia. In 2012, almost 13 million motorcy-
cles were sold in Indonesia, Japan,
Malaysia, Philippines, Singapore, Thailand
and Taiwan, according to the Federation
of Asian Motorcycle Industries, and the
Chinese Association of Automobile
Manufacturers reported that countrys
sales of two- and three-wheelers topped
23.6 million units.
Three quarters of the bike owners in
Thailand, Vietnam, Indonesia and India
have machines that are under three years
old, McTavish said. Unlike in the West,
ownership of motorcycles in these
nations is driven by the fundamental
need for personal mobility and commut-
ing. Popular brands include Honda,
Yamaha and Honda Hero.
When it comes to lubricant selection,
Asia presents a different picture from
the West. In a survey of the four coun-
tries named by McTavish, Infineum
found that customers look for high
quality lubricants because their
machines are used day-to-day.
Overall, the highest demand from bike
owners is for products that offer good
heat protection. The second criteria is
good friction reduction, while the third is
that oils must provide smooth engine
startup, McTavish said. Motorcycle work-
shops are ubiquitous in these countries,
and many of their mechanics recommend
products that offer long drain intervals.
Asian motorcycle oil marketers are fac-
ing two big challenges. First, how to
position their products on the market
versus automobile oils. The second chal-
lenge is how to effectively communicate
34 MAY 2013
Continued on page 36
Source: Infineum
U.S. Motorcycle
Population by Age
Fleet size: 10 million units
2005-2009: 40% 2000-2004: 23%
1995-1999: 11%
1994 or older: 23%
2010 or newer: 3%
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36 MAY 2013
the product quality to their customers,
she said. Infineums survey found that
motorcycle owners have very little knowl-
edge of API oil specifications. Instead, it
appears that the strength of brand repu-
tation and explicit product quality claims
are the two key differentiators in this
market, McTavish observed.
A number of Asian OEMs are introduc-
ing fuel economy initiatives. Honda leads
the way with its new engine and stop/idle
technology, as well as with its dual-clutch
transmissions, an improved system that
reduces fuel [consumption] around 7 per-
cent with practically zero emissions, on
engines up to 125 cubic centimeters, she
said. The OEM is promoting a new high-
quality motorcycle engine oil concept
based on SAE 10W-30. Honda told
Infineum the oils can offer reduced vis-
cosity and greater operating efficiency
without sacrificing engine protection.
However, remarked McTavish, there
are some concerns that reducing viscosity
might introduce some challenges related
to engine oils, such as protection of gears
and transmissions. Equally, using an oil
with higher viscosity [such as 20W-40]
brings concerns about fuel consumption,
engine durability and low-temperature
performance. The ideal solution would
be a lubricant that bridges the gap
between these concerns and also address-
es fuel economy, but todays riders should
heed the viscosity recommendations of
their motorcycles manufacturer.
These OEMs are increasing the pace of
change, and introducing new machines
with higher operating temperatures and
greater power. An Infineum field trial in
Thailand last year concluded that four-
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Continued on page 38
Very Important
Important
JASO certified
Extended waranty
ILSAC certified
Synthetic blend
Full synthetic
Fuel economy
PRICE
API certified
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Viscosity grade
QUALITY
ENGINE PROTECTION 35% 50%
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32% 38%
40% 19%
19%
18%
18%
13%
10%
11%
10%
32%
33%
24%
29%
31%
28%
28%
U.S. Customers
Want Engine
Protection,
Quality
Importance of Oil
Selection Criteria
Source: Infineum
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38 MAY 2013
clutch simultaneously. In order to pro-
tect the engine from wear and deposits,
the gears from pitting and wear, and to
deliver clutch performance as bikers
expect, tailored bike lubes are becoming
increasingly essential, she stressed.
Passenger car engine oil is simply not
up to this job, as it is being optimized for
fuel economy through the use of friction
modifiers and lower viscosity grades.
Unfortunately, when used in motorcycles
stroke bike oils today need to deliver a
level of performance that passenger car
lubricants are not formulated to address.
For example, motorcycle oils run hotter,
and because of the small sump the oil
cycles through the engine much more fre-
quently, which means that a really robust
oil is needed, McTavish contended.
Furthermore, in many motorcycles the
oil must lubricate the engine, gear and
the former may affect clutch perfor-
mance, and the latter can increase gear
pitting, noise and oil consumption.
In her presentation, McTavish also
pointed to trends in the leisure
machines market; here too, automotive
oils are not suitable for the four-stroke
small engines used in boating and per-
sonal watercraft. These engines run
faster and with long periods of extreme
speed; they operate in a corrosive envi-
ronment, but spend long periods out of
use. They need oils that can increase the
bearing durability and provide wear and
rust protection, as well as shear stability
that passenger car oils are not designed
to provide.
Marine engine oils are not immune to
emission regulations, which could drive
more hardware changes. The National
Marine Manufacturers Association main-
tains a standard for four-stroke marine
engine oils, called FC-W, and certifies oils
that meet it. Only NMMA certified oils
could deliver required protection, and
CO
2
regulations will bring new chal-
lenges for OEMs in the future, McTavish
concluded.
Continued from page 36
Marine engines need shear-stable oils that
can increase bearing life and provide wear
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40 MAY 2013
BIG IDEAS AT
PINNACLE OIL
I
n 1987, Kimball Morris had an inspi-
ration. He saw that convenience
stores and gas stations were largely
limited to carrying major brands of
motor oil and other automotive
lubricants. Wouldnt they welcome
the opportunity to leverage their cus-
tomers loyalty by marketing their own brands,
and thus keep more of the profits for themselves?
So he founded Pinnacle Oil with a vision to pro-
vide quality passenger car motor oils under pri-
vate-label brands for the convenience store indus-
try in the Midwest. Prior to that, only the larger,
super-regional or national chains could afford to
have their own brands.
Through another business, I owned some
packaging machinery, the Indianapolis-based
businessman told a visitor from LubesnGreases.
So I opened up with about 12,500 square feet
and six tanks. We made an SAE 10W-30, a 10W-40
and a transmission product. We started with three
people and served a three-state area.
Morris hunch paid off. Today Pinnacles private-
label brands are marketed in nearly 50,000 C-
stores, groceries, retailers and gas stations across
North America, said Kent Morris, his son and
Pinnacle Oils president. While many of our cus-
tomers are located in a 500-mile radius around
Indianapolis, we serve a broad range of national
and even international customers. We make prod-
ucts for virtually every end-use market.
Having grown organically over 26 years,
Pinnacle today employs 75 people and operates
out of three facilities in Indianapolis. It occupies
more than 275,000 square feet of manufacturing
and warehousing space, and recently leased
125,000 sq.ft. more. The company has 1.5 million
41 LUBESNGREASES
BY RICHARD BEERCHECK
Pinnacle uses dedicated transfer lines for each
lubricant product family, to minimize cross-
contamination and quality problems.
P
h
o
t
o
s
:

P
i
n
n
a
c
l
e

O
i
l
utors in a 500-mile radius
around Indianapolis, Kent
Morris said.
Pinnacle is active in Indiana,
Ohio, Michigan, Illinois,
Wisconsin, Minnesota, Iowa,
Missouri, Kentucky and
Tennessee. And it has cus-
tomers as far east as Rhode
Island and Atlanta. Smaller
but growing volumes are
exported to customers in
countries ranging from the
Dominican Republic to
Russia, from Turkey to
Canada.
On the manufacturing side,
the company holds ISO
9001:2008 certification and is
audited annually. Our blend-
ing and manufacturing proce-
dures for each product are
documented and controlled
by a proprietary quality sys-
tem to eliminate errors, the
younger Morris said. No
product or component comes
into our plant or leaves our
facilities before going through
our quality control lab.
Pinnacles blending system
gallons of tank storage, with
an additional 250,000 gallons
under construction. It oper-
ates a rail siding with posi-
tions for 24 cars.
We are one of CSXs most
active users in Indianapolis,
Kent Morris noted. We have
rail service here every night,
switching out and spotting
cars. And we have substantial
rolling stock of base oils and
additives in a local railyard.
From day one, our focus
has been on quality, Kimball
Morris continued. All of our
products are produced to the
latest industry specifications.
We dont play in the low-cost,
non-licensed world.
Building from his early C-
store marketing successes,
Morris diversified by enter-
ing three more key seg-
ments: contract blending
and packaging for major oil
companies; contract blend-
ing and packaging for OEMs;
and the distributor market.
The company now services
most major lubricant distrib-
tomers. Its quality control lab-
oratory participates in the
ASTM Interlaboratory
Crosscheck Program to
ensure that its testing capabil-
ities meet industry standards.
And most lab equipment is
automated to ensure testing
accuracy and reproducibility.
Kent Morris continued, We
work hard to differentiate
ourselves from our competi-
tion. Our approach to quality
is one way we do this, and
an emphasis on customer ser-
vice is another. Our cus-
tomer service team has been
rated among the most
responsive and best in the
industry. Thats really impor-
tant to us.
The plant manufactures a
full range of engine oils,
including synthetics, that
meet the latest heavy-duty
and passenger car interna-
tional specifications. The
company also offers a full line
of automatic transmission flu-
ids, gear lubricants and two-
cycle oils. And it manufac-
tures industrial lubricants,
including hydraulic oil, tractor
hydraulic fluid, gear oil, cut-
ting fluids and other special-
ties. We literally can make all
lubricants outside of grease
and white oils, Kimball
Morris said proudly.
Pinnacle ships about 40 per-
cent of its product in bulk in
tank trucks, totes and railcars.
But packaged products are
the lions share of the busi-
ness, ranging from 3.2-ounce
bottles to 55-gallon drums.
42 MAY 2013
is designed to eliminate prod-
uct contamination and waste.
Were a little unique in that
we blend and store product
in every tank, Kent Morris
explained. We dont have a
common area, where we
blend in kettles and then
move product to storage
tanks. And we dont in-line
blend. Instead, a single prod-
uct is blended and stored in
each tank until it is packaged
or shipped out in bulk.
The Indianapolis plant has
eight dedicated tank farms for
various product families. We
believe this set-up allows us
to ensure better product
integrity and high product
quality, said Kent Morris. It
minimizes potential for conta-
mination, simplifies the clean-
ing of lines, and allows us to
have dedicated piping by
product family throughout
the plant.
Pinnacle has also invested
heavily in its laboratories,
with the aim of mimicking
those of its major oil cus- Continued on page 44
One of the plants six packaging lines
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invested in mass-flow filling
technology, which measures
the density, viscosity and
temperature of the product.
Then it corrects for these
conditions to control the
amount of oil put into each
bottle. The fill of a gallon
container, for example, is
accurate to plus-or-minus
2 grams.
The company works close-
ly with major additive com-
panies and customers to
develop product formula-
tions, Kent Morris said,
strictly following protocols
established by licensing
agencies such as API, as well
as requirements set forth by
the customers.
He explained, Were doing
more and more with our cus-
tomers to come up with cus-
The plant has six automated
filling lines, each a high-speed
operation:
Quarts (300-plus bottles
per minute).
Larger-format (90-plus gal-
lon bottles/minute).
Small-format for pints.
2.5-gallon line (40-
plus/minute).
Pails (20 or more/minute).
Drums, filled at rates of
more than 400 per shift.
To speed processing, the
plant uses robotic palletizing
and stretch-wrapping, and
on the pail line, robotic pail-
stacking equipment. These
robots are very accurate,
cost-effective and flexible in
their operation, Kimball
Morris added. And on its
larger-format line, Pinnacle
tom blended products. For
example, we might work
with a customer to develop a
heavy-duty engine oil that
helps differentiate their
product from that of a major
oil company. That might
include additive selection
and formulation work, fol-
lowed by running field tests,
documenting the results and
assisting with product
approvals and literature.
When they go to the mar-
ketplace, they have substanti-
ated, empirical data to sup-
port their claims, noted
Kent Morris.
Its also alert when cus-
tomers need other assistance.
For example, after Hurricane
Katrina, some major oil com-
panies lost their ability to sup-
ply SAE 5W-30 and 5W-20
motor oils. For months,
Pinnacle manufactured the
products on their behalf to
ensure continuity of supply.
Another customer, a major
C-store chain, wanted to sell
its branded motor oil outside
near the gasoline pumps, but
exposure to weather caused
the labels on their quart bot-
tles to deteriorate. Pinnacle
suggested a plastic label
material used by a shampoo
company which solved the
problem, and resulted in
increased sales.
Today, Kent Morris says
Pinnacles major challenge is
to continue to invest in our
business to provide cost-
effective solutions without
sacrificing quality. Were
doing that with our invest-
ments in the robotics and our
44 MAY 2013
Continued from page 42
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mass-fill technology.
Kimball Morris added, We
are going through the process
of installing a complete enter-
prise resource planning sys-
tem that will give us data on
everything from real-time
inventory numbers to 100
percent traceability of our
products throughout the
supply chain, including
incoming raw materials, fin-
ished products, transfers to
our warehouse, and ship-
ments out the door.
Our number one strategic
goal for 2013, Kent Morris
concluded, is to get that sys-
tem fully implemented. It will
give us high-quality data from
which we can make more
informed decisions.
The company expects to
see continued organic growth
in all its major segments.
Since 2008, its volume has
grown by over 40 percent,
the Morrises said, and they
are actively targeting and pur-
suing strategic accounts. The
two also see some opportuni-
ty to grow through mergers
and acquisitions and say
theyll jump when the right
one presents itself.
45 LUBESNGREASES
Tanks are dedicated to a specific family of products.
P
rior to 1994,
motor oil retail
categories
were quite
simple. There
were conven-
tional motor oils and syn-
thetic motor oils. Thats all.
From a technical standpoint,
conventional motor oils
were made mostly from API
Group I solvent-refined min-
eral base oils. Synthetics
were made from costly
man-made chemicals
such as polyalphaolefin.
Conventional oils were
about $1 a quart, synthetics
cost at least four times that
much.
With a clear technical sepa-
ration between the two
46 MAY 2013
types, and pricing that
underscored it, the con-
sumers choice was uncom-
plicated: Conventional
motor oils were Good and
expensive synthetics were
the Best motor oils. Mobil
1 synthetic dominated the
latter segment, and every-
one else on the shelves (led
by Castrol, Mobil, Pennzoil,
Quaker State and Valvoline)
was good. Simple.
Fast-forward to 2013. The
same five leading brands
have 30 product offerings at
auto parts stores and quart
prices range from $4.79 to
$9.59. The shelves are now
segmented into Good
($4.79-$5.49)/More Good
($5.99)/Better ($6.59)/More
Better ($7.99)/Best ($8.99)
and More Best ($9.57).
How did we get to this
multi-tiered pyramid of
prices? And more important,
does each tier have a clear
message to help consumers
distinguish one price posi-
tion from another? In some
cases, the answer may be no.
A Simpler Time
Lets go back to 1993, when
the first break-away tier was
born. At that time, Valvoline
was seeking a new class of
Too Many Choices?
Continued on page 48
With Six Motor Oil Tiers, Retail Appears Unruly
By Larry Solomon
Bertold Werkmann - Fotolia
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 Premier Base Oils
to put your industrial
lubricants in a leadership position. For more details
email: BaseStockTeam@hollyfrontier.com. Well help
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HollyFrontier, the secure choice to leverage tomorrows opportunities.
product to capture market
share and looking to Europe
for ideas. In Europe, it
noticed, full synthetic and
synthetic-blend motor oils
held solid market positions.
European oil change inter-
vals were longer, nearly dou-
Better segment to the
United States, Valvolines
marketing team launched
into a new product develop-
ment initiative. The team
conducted extensive qualita-
tive and quantitative market-
ing research (which this
author coordinated) which
Valvoline did not yet have
a notable full synthetic (its
SynPower brand came about
a year after DuraBlend), so
DuraBlend remained posi-
tioned as a less expensive
alternative to full synthetics
in general. Within a year
Quaker State had introduced
48 MAY 2013
Continued from page 46
Pre-1994: Two Motor Oil Tiers
Price Per
Top Five Motor Oil Brands
Price
Quart Segment
$3.99 Mobil 1 full synthetic BEST
$0.99 Castrol GTX conventional GOOD
Mobil conventional
Pennzoil conventional
Quaker State conventional
Valvoline conventional
1994: Three Tiers
Price Per
Top Five Motor Oil Brands
Price
Quart Segment
$3.99 Mobil 1 full synthetic BEST
$1.99 Valvoline DuraBlend synthetic blend BETTER
$0.99 Castrol GTX conventional GOOD
Mobil conventional
Pennzoil conventional
Quaker State conventional
Valvoline conventional
ble that of U.S. change inter-
vals. Further, in some coun-
tries (like England) oil
changes were a once-a-year
event, as part of annual
vehicle servicing.
Because European
blenders knew that a large
portion of vehicle maintain-
ers could not easily afford
regular oil changes with full
synthetics, they offered syn-
thetic-blend oils as an alter-
native, mixing mineral base
oils with PAO. That brought
many of the performance
benefits of a full synthetic
but at a less-expensive price.
This was the original reason
to have synthetic-blend
motor oils, and selling them
in tandem with full synthet-
ics offered a solid business
proposition for European
lube manufacturers.
Seizing the opportunity to
introduce a mid-tier,
led the company to intro-
duce Valvoline DuraBlend
motor oil in 1994 the first
synthetic-blend motor oil
from a leading brand for the
U.S. market.
Price positioning would be
critical for distinguishing
DuraBlend from its brethren
on retailers shelves.
Extensive price modeling
today would come up with
just the right price-tag for
DuraBlend, but at the time,
a quart of full synthetic aver-
aged $3.99 a quart at retail
and conventional motor oil
cost 99 cents. Neatly,
Valvoline cut the full-syn-
thetic price point in half,
making DuraBlends price
$1.99. And it worked; at that
price point, the margins
were good and consumers
accepted the value. Thus,
the U.S. mid-tier Better
segment was born.
synthetic-blend products,
followed by other leading
brands. The market posi-
tioning for these was based
on the European model: all
the benefits of a full synthet-
ic but at a less expensive
price. This was reinforced
when Castrol introduced its
Syntec full synthetic and
Syntec Blend brands in tan-
dem, hitting the Best and
Better price points respec-
tively.
Technical Advances
Time doesnt stand still, and
neither did the market after
1995. Until the late 90s,
PAO was the fluid of choice
for making lubricants
labeled as full synthetic and
for making synthetic blends
as well. But then API Group
III base stocks began to
become more widely avail-
able. Group III base oils are
49 LUBESNGREASES
Today: Six Tiers ,,, Or More?
Price Per
Top Five Motor Oil Brands
Price
Quart Segment*
$9.59 Castrol Edge with Titanium full synthetic MORE BEST
Mobil 1 Extended performance full synthetic
Mobil 1 High Mileage full synthetic
Pennzoil Ultra full synthetic
$8.99 Castrol Edge With Syntec full synthetic BEST
Mobil 1 full synthetic
Pennzoil Platinum full synthetic
Valvoline MaxLife Higher Mileage full synthetic
Valvoline NextGen SynPower full synthetic
Valvoline Racing full synthetic
Valvoline SynPower full synthetic
$7.99 Pennzoil Gold synthetic blend MORE BETTER
Quaker State Ultimate Durability full synthetic
$6.59 Castrol GTX Synblend BETTER
Castrol High Mileage
Mobil Super full synthetic
Pennzoil Next-Generation High Mileage conventional
Quaker State Enhanced Durability synthetic blend
Valvoline DuraBlend synthetic blend
Valvoline MaxLife Higher Mileage conventional
Valvoline MaxLife NextGen higher mileage
$5.59 Castrol GTX conventional MORE GOOD
Castrol GTX Diesel conventional
Mobil Super High Mileage conventional
Pennzoil conventional
Valvoline NextGen 50% recycled conventional
Valvoline Premium conventional
$5.49 Quaker State Defy synthetic blend GOOD
$4.99 Quaker State Advanced Durability conventional
$4.79 Mobil Super conventional
*2013 retail pricing (incl. AutoZone, Advance Auto, etc.) Source: Strategic Resources Inc.
hydrocracked and catalyti-
cally dewaxed, not simply
refined.
Group III had a lot to
offer the blender of the
1990s. They cost about half
as much as PAO; were light,
pure and free of sulfur; and
they had a much higher vis-
cosity index than solvent
refined Group I base oils. In
fact, some including Castrol
viewed them as equivalent
to full synthetics, perfor-
mance-wise, and marketed
them as such.
Castrols advertising cam-
paign for Syntec motor oil,
which was made with
Group III, provoked strong
objections from Mobil,
which had built its Mobil 1
brand on PAO. But in 1999,
the National Advertising
Division of the Council of
Better Business Bureaus
ruled in favor of Castrol.
NAD said products made
with Group III could be
labeled synthetic, and that
the word itself was just a
Continued on page 50
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marketing term signifying
a high level of performance.
This ruling changed the
industry. Afterward, full syn-
thetic motor oils could sell
at essentially the best
retail price but cost signifi-
cantly less to produce.
Whats more, it opened the
door for manufacturers to
blend some amount of
Group III base oil into their
formulations any amount
would do, the volume was
never officially defined
and offer a synthetic-blend
product for sale at a price
point higher than conven-
tional motor oil.
A Fractured Market
It has been 19 years since
the U.S. mid-tier segment
was born. If the first synthet-
ic-blend motor oil (Dura -
Blend) was a human, he or
she would be going to col-
lege by now. So, lets see
what the market looks like
today.
Of the 30 products cited
above, from the six leading
brands, 13 are full synthetics.
The Best segment (the
one-time full synthetic posi-
tioning) is now priced at
$8.99 a quart. Castrol Edge
With Syntec, Mobil 1,
Pennzoil Platinum and
Valvoline SynPower repre-
sent the traditional perfor-
mance positioning.
Additionally, Valvoline has
ventured into Racing
Synthetic, Higher Mileage
Synthetic and the just-intro-
duced NextGen SynPower
Full Synthetic, going after
the environmentally con-
scious top-tier buyer.
In addition to broadening
the Best segment, these
leading brands saw profit
potential in expanding the
market upward to offer
More Best synthetic motor
oils. Castrol Edge offers
Liquid Titanium Fluid
Strength Technology. Mobil 1
Extended Performance
claims to keep your engine
running like new. Mobil 1
High Mileage maximizes
engine performance to
extend engine life. And
Pennzoil Ultra offers Hyper
Cleansing Technology. Each
promises even greater
motor oil benefits and obvi-
ously commands a higher
$9.59 per quart shelf price.
Meanwhile, Quaker State
has edged downward into
the More Better price seg-
ment, with its Ultimate
Durability Full Synthetic
($7.99/qt.), and Mobil went
even deeper into the
Better bracket with Mobil
Super Full Synthetic ($6.59).
Better: A Mixed Bag
The Better segment now is
shelf-priced around $6.59 a
quart. The traditional home
of synthetic blends, this tier
is populated by Castrol GTX,
Quaker State Enhanced
Durability and Valvoline
DuraBlend. However one
brand, Pennzoil Gold
Synthetic Blend, expanded
upward into the More
Better to command another
50 MAY 2013
Continued from page 49
Continued on page 52
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Group II and Ultra-S

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Call 800.527.3236 or visit http://baseoil.phillips66.com
A STRONGER BASE.
FOR EVERY APPLICATION.
$1.40/quart. Then theres
Quaker State Defy Synthetic
Blend motor oil, priced at
$5.49 right in the Good
segment with conventional
motor oils.
Another change: In 2000,
the Better territory was
invaded by High Mileage
motor oils, with Valvoline
MaxLife leading the way and
hotly pursued by Castrol,
Pennzoil, ExxonMobil and
many others. More recently,
Valvoline MaxLife NextGen
Higher Mileage recycled
motor oil has elbowed into
this tier, too. So for the past
13 years, the Better tier
has seen very dissimilar
offerings occupying the
same price position.
Notably, ExxonMobil elimi-
nated synthetic blends from
its line-up. It still offers three
Mobil 1 full synthetic offer-
ings, Extended Performance,
High Mileage and Mobil 1.
As well, it offers Super brand
full synthetic, high mileage,
and conventional. But no
synthetic blends!
Conventional:
Fighting Grades
Conventional motor oils pri-
marily compete within the
More Good area, with a
premium paid for national
brand offerings like Castrol
GTX and Diesel GTX, Mobil
52 MAY 2013
Continued from page 50
When you put
all the leading
manufacturers
brand offerings
together, its
apparent how
fractious the
market has
become.
Super High Mileage, Pennzoil,
Valvoline and Valvoline
NextGen. Standard offerings
like Mobil Super and Quaker
State Advanced Durability
compete in the lowest lead-
ing brand tier, Good.
So what is the current state
of the motor oil market?
The answer to that question
is confusing! When you
put all the leading manufac-
turers brand offerings
together, its apparent how
fractious the market has
become. Full synthetics are
price competing in segments
upward and downward from
their traditional Best seg-
ment. Likewise, synthetic
blends are straying into seg-
ments upward and down-
ward from their traditional
Better berth. Moreover,
synthetic blends must share
price positioning with high-
er-mileage motor oils, mak-
ing the Better tier even
more blurry.
Since the introduction of
the ILSAC GF-5 specification
in 2010, most U.S. passen-
ger car motor oil has been
formulated with some
Group II+ or Group III base
oil, and Group Is have exit-
ed the scene. So where is
the line drawn now between
conventional motor oil and
synthetic blends? Some
would say there is not one,
53 LUBESNGREASES
Larry Solomon is president
of Strategic Resources Inc., a
marketing research and
consulting firm that special-
izes in the automotive after-
market. His experience
includes over 23 years in
automotive research with
Valvoline. E-mail him at
larry.solomon@get
strategicresources.com or
phone (859) 817-0301.
and point to the NAD ruling
that these are just market-
ing terms.
Meanwhile, brand man-
agers and oil marketers
must work harder to delin-
eate their offerings and con-
vince end users that their
brand is better than a com-
petitors.
It may be that synthetic
blends era is over, and its
position will be filled by
products such as High
Mileage, Green, Recycled
or other types. Especially
obvious is that that motor
oil marketers are seeing
synthetic both full and
blends as just a market-
ing term.
as well as photos of key
applications to help users
identify the right lubricant
or penetrant for the job.
The labels also include
quick-response barcodes
that enable consumers to
access information such as
videos, recommended
applications, safety data
sheets and bilingual label
translations. Lubricants and
penetrants available in the
new dressing include
Power Lube multipurpose
lubricant, heavy-duty sili-
cone, white lithium grease,
Ultra Screwloose penetrat-
ing oil and Freeze-Off
Super Penetrant. Web:
www.crcindustries.com
Gear Oil Nets OEM
Approval
B
el-Ray synthetic gear
oil, in ISO viscosity
grades 150 through 460,
has been approved by
Hansen Industrial
Gearboxes for use in its
gearboxes. The full-syn-
thetic hydrocarbon and
ester oil is intended for use
in a wide range of equip-
ment including grinding
mills, kilns and driers, aera-
tors, pumps, mixers, agita-
tors and hoists. The com-
pany says the oil prevents
wear, arrests existing wear
trends, prevents micropit-
ting on new gears and
extends service life. This
Boron-free
Multimetal Coolant
C
hemetall has intro-
duced Tech Cool
35048BF, a microemulsion
coolant that contains no
boron, chlorine, sulfur or
phosphorus. It is also free
of DCHA and formalde-
hyde-forming compounds.
The company says Tech
Cool 35048BF provides
long sump life, low odors
without the use of bacteri-
cides, reduced foam,
exceptional corrosion resis-
tance and high lubricity
even on aluminum. The
coolant can be used on
ferrous, aluminum, copper
and brass substrates. It is
said to be stable in hard
water and compatible with
recycling programs, and
can be used in central sys-
tems and stand-alone
machines. Tech Cool
35048BF is available in
pails, drums, totes
and bulk. Web: www.
chemetallamericas.com
Makeover for
CRCs Labels
C
RC Industries has
launched an enhanced
look for its professional
and do-it-yourself lubri-
cants and penetrants. The
labels display a product
description banner that
highlights the primary
advantage of the product,
54
PRODUCT NEWS
MAY 2013
oil also has approvals from
Bosch Rexroth, Caterpillar
Global Mining, GE,
Siemens, Joy Global
Mining and Liebherr. In
addition, Bel-Ray says, the
lubricant exceeds perfor-
mance requirements of
ANSI/AGMA 9005-E02 and
DIN 51517 Part 3. Web:
www.belray.com
A Hundred Points
of Lube
H
ydracision from Oil-
Rite Corp. distributes
oil to as few as 12 to as
many as hundreds of
points on automated
machinery. The company
says the system provides
frequent, small doses of
lubricant rather than large,
infrequent applications.
This allows the oil to
reach critical areas when
needed, with little or no
run-off or waste. The unit
consists of an electric
gear pump to distribute
lubricants and positive
displacement injectors to
complete the delivery
where its needed. The
user specifies lubrication
intervals using a program-
mable logic device.
Injectors are available
with dispensing volumes
of 0.20, 0.14, and 0.08
milliliters. Web: www.
oilrite.com
Chemetalls microemulsion
metalworking fluid
Label makeover includes quick-
response codes for added infor-
mation.
Bel-Rays synthetic gear oils
Oil-Rites Hydracision system
distributes oil automatically.
Continued on page 56
PRODUCT NEWS
Long-Life Gear Grinding Fluid
D
iaGrind 535-15 grinding fluid
from Oelheld U.S. is designed for
gear hobbing, gear grinding and gear
shaping applications such as trans-
mission components, on machines
like Reishauer, Gleason Pfauter,
Klingelnberg and Hoefler. Its blend of
high-quality additives and superior
base oils does not require regenera-
tion or complete exchange for many
years, says the company, adding that
DiaGrind 535-15s environmentally
conscious formulation keeps opera-
tors safe and equipment in top
shape. Web: www.oelheld.com
Fluid Endures Heavy-duty
Machining
B
laser Swisslube has introduced
Blasocut BC940 metalworking
fluid, which it says provides excel-
lent biochemical stability and long
sump life without the use of bacteri-
cides. The emulsion can be used in
heavy-duty machining applications
on a wide range of materials, includ-
ing exotic alloys. Blasocut BC940
has low misting properties and can
be used in hard or soft water. It also
is formulated to provide good foam
56 MAY 2013
Continued from page 54
Blasocut BC940 handles
exotic alloys.
DiaGrind fluid is for gear grind-
ing, hobbing and shaping.
STAYING
POWER

Tamincos Synergex

and
Synergex

T amine additives
s|gr|lcarl|y ooosl perlorrarce W|||e
exlerd|rg l|e ||le ol your rela|Wor||rg lu|ds.
w|er you lorru|ale W|l| l|e Synergex

producl
rarge ol ar|re add|l|ves, l|ey W||| oe l|ere lor l|e ||le
ol l|e lu|dl
3ore ar|res la|| oul ol eru|s|ors |r |ard Waler. 3ore ar|res
W||| |eave your sysler l|roug| vo|al|||zal|or. Synergex

amines
Wor'l. V03T add|l|ves regal|ve|y |rpacl pl slao|||ly. Synergex

and Synergex

T oller exce||erl cors|slercy lor l|e ||le ol your
rela|Wor||rg lu|d.
Key oerells ol Synergex

producls:
Corp|ele|y Waler so|uo|e
0ulslard|rg corros|or |r||o|l|or properl|es
LoW odor, |oW vo|al|||ly ard ||g| las| po|rl
Exce||erl lE3 prol|es
Er|arced eru|s|or slao|||ly
0ulslard|rg coup||rg agerl
2139 High Tech Road State College PA 16803
814-353-8000 800-676-6232 Fax 814-353-8007
cannon@cannoninstrument.com www.cannoninstrument.com
Small and
Affordable
Low
Solvent/
Sample
Volume
New Heated
Sample Options
Available!
control at moderate to high coolant
pressures. Web: www.blaser.com
Flow Monitors Transmit Data
U
niversal Flow Monitors
announced that its lubrication
flowmeters now include non-contact
magnetically coupled transmitters as
an alternative to alarm switches. The
meters provide local flow indication
to diagnose problems, and they can
be wired to trigger equipment shut-
down to protect machinery. SN vane
meters measure flows from 0.5 to
20 gallons per minute with a full-
scale accuracy plus-or-minus 5 per-
cent. MN vane meters measure
flows from 10 to 70 gpm at plus-or-
minus 2 percent accuracy. LL piston
meters measure flows from 0.25 to
20 gpm with accuracy of plus-or-
minus 5 percent. Web:
www.flowmeters.com
Hoover Adds Tank Cleaning
H
oover Container Solutions has
completed construction of a
new IBC tank cleaning facility at its
Houston location. The expansion
allows it to offer comprehensive ser-
vices to its customers, including
transportation, interior and exterior
tank cleaning, reconditioning and
recertification, rental and sales, as
well as GPS and remote tank level
monitoring. In the future, the compa-
ny plans to offer tank washing capa-
bilities and services at its other
service centers, domestically and
worldwide. Web: www.hoover
solutions.com
A First for Fire Resistance
Q
uaker Chemical has obtained
fire-resistance approval from
the German Steel Institute (VDEh) for
its Quintolubric 888-68 hydraulic
fluid. With this approval, it becomes
the first fire-resistant hydraulic fluid
manufacturer to meet the more
stringent standards for polyol ester
based fluids issued by VDEh. After
one year of data collection and labo-
ratory testing, the fluid successfully
passed the new SEB 181 224 speci-
fication, a spin-off of ISO 12922,
which was developed to increase
safety in steel mills. In addition to
VDEh approval, Quintolubric 888-68
holds FM Global approval. Web:
www.quakerchem.com
Latching Lids Allow Easy Access
N
ew Pigs latching drum lids
enable quick and easy drum
access and secure closure to help
meet closed container regulations.
57 LUBESNGREASES
Hydraulic fluid meets
fire-resistance standards.
Flowmeters enable remote
monitoring.
Hoover now washes IBCs, too.
Use colorful, latching drum lids
to segregate waste or identify
products.
Continued on page 59

















Synfluid

PAO 6
Synfluid

PAO 6 Blend




















































higher VI PAO base fluid?
world and how can one achieve a
index (VI) mean in the real
What does higher viscosity
Q:
with Rob Coffin, Ph.D.























world and how can one achieve a
index (VI) mean in the real
What does higher viscosity























to shift from a decene-based PAO to a dodecene-
One way to achieve a higher VI base fluid is
load, or save money at the fuel pump.
longevity of a vehicles moving parts, haul a heavier
formulators preference whether to increase the
horsepower and energy efficiency. It is really the
reduced viscous drag, which could lead to higher
temperature decreases, a higher VI fluid will have
film thickness, which could result in lower wear. As
increases, a higher VI fluid will give increased fluid
a high VI base fluid. As temperature
There can be many benefits from choosing
A:























to shift from a decene-based PAO to a dodecene-
One way to achieve a higher VI base fluid is
longevity of a vehicles moving parts, haul a heavier
formulators preference whether to increase the
horsepower and energy efficiency. It is really the
reduced viscous drag, which could lead to higher
temperature decreases, a higher VI fluid will have
film thickness, which could result in lower wear. As
increases, a higher VI fluid will give increased fluid
a high VI base fluid. As temperature
There can be many benefits from choosing























increase in VI.
a blend of PAO 5 and PAO 7) leads to a dramatic
iso-viscous dodecene-based fluid (resulting from
PAO 6 to an

moving from a decene-based Synfluid

based PAO. In the chart below, we highlight how


PAO
@ 100 C (cSt)
5.9 5.9
cosity Vis Kinematic
dodecene decene Feedstock
Synfluid
6 PAO

Synfluid























a blend of PAO 5 and PAO 7) leads to a dramatic
iso-viscous dodecene-based fluid (resulting from
PAO 6 to an
based PAO. In the chart below, we highlight how
d
5.9
dodecene
n e l B 6

Synfluid























@ 100 C (cSt)
137
Group IV means high VI! dont forget
Remember, when thinking about viscosity index,
our dodecene-based products, please give us a call.
To learn more about achieving higher VI with
x Inde Viscosity
29.5 30.5
@ 40 C (cSt)
cosity Vis Kinematic























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our dodecene-based products, please give us a call.
To learn more about achieving higher VI with
29.5























in the U.S. and other jurisdictions owned by Chevron Phillips Chemical Company LP.
is a registered trademark

Synfluid 2013 Chevron Phillips Chemical Company LP.


Toll Free: 800.231.3260
synfluid@cpchem.com www.synfluid.com






















in the U.S. and other jurisdictions owned by Chevron Phillips Chemical Company LP.
is a registered trademark
synfluid@cpchem.com
59 LUBESNGREASES
Multiple colors help users identify or
segregate the contents, too. The lids
are designed to open and close with
one hand to keep drum contents dry
and pure. They have Nitrile gaskets
and locking mechanisms for secure
sealing and reduced vapor emis-
sions. A removable hinge pin allows
the lids to be removed without loos-
ening the band, to facilitate contain-
er dumping, and the fast-latch drum
ring permits the lid to be moved
from one drum to another without
wrenches or other tools. Web:
www.newpig.com
Laser System Detects Dirt
P
arker Hannifin has introduced
icountBSplus, a portable sam-
pling system that detects contamina-
tion in hydraulic oils and hydrocar-
bon fuels. The portable system is
based on laser particle-counting
technology and can be used in the
oil and gas, aerospace, agriculture
and construction industries. The
company says the system can deliv-
er results in as little as 15 seconds.
The internal software is available in
12 languages, and data from more
than 500 tests can be stored in its
memory or printed with the integrat-
ed thermal printer. The icountBSplus
is accredited to all particle-counting
standards, including ISO, NAS, AS
and GOST, as well as ISO Medium
Test Dust standards. Web:
www.parker.com
Continued from page 57
Portable laser particle
counter can be used in
the lab or in the field.
High Performance
Lubricants &
Greases Have
Something
In Common...
www.kingindustries.com
NA-LUBE


KR-Series

Alkylated Naphthalene
Synthetic Base Oils
and
Base Oil Modifiers

Viscosities @ 40C
from 21 cSt to 193 cSt

Aniline Points
From 40C to 103C

Pour Points
from <-48C
December 2011, Swedens
Nynas said it would take a
25-year lease on Shell
Deutschlands naphthenic
and paraffinic base oil
plant in Harburg. The plant
has 3,000 barrels per day
of naphthenic capacity and
3,300 b/d of API Group I
paraffinic base oil capacity.
No other competitor
would remain to supply
naphthenic oils for use in
some end applications
such as insoluble sulphur,
industrial rubber, fertilizers,
additives, and defoamers,
the EC noted. And in mar-
kets such as industrial
greases, metalworking flu-
ids and transformer oils,
the few pale oil competi-
tors who import into the
European Economic Area
may not exercise a suffi-
cient competitive con-
straint, it added.
The commission has
until Aug. 8 to make its
final decision on the deal.
Chemtura: More
PAO Soon
C
hemtura is on track to
complete an expan-
sion of its high-viscosity
polyalphaolefin capacity in
Ankwerweg, Amsterdam,
Netherlands, in the years
second half, Chemtura
President, CEO and
Chairman Craig Rogerson
told investors in March.
Change (750 stores), Kwik
Kar (393, one store more),
and Valvoline Express Care
(336 stores). The biggest
gain was at New York-
based Grease Lightning,
which has 47 stores. It
grew by 161 percent and
expects to open 23 more
stores by year end.
EC Probes
Harburg Deal
T
he European
Commission is investi-
gating Nynas proposed
acquisition of Shells base
oil plant in Harburg,
Germany, after hearing
concerns that the deal
would eliminate naph-
thenic base oils competi-
tion in Europe. In
Fast Lubes a
$9.8B Market
T
he number of U.S. fast
lubes reached 17,063
up 1,058 stores from a year
ago according to the
2013 Tops in the Industry
Ranking by National Oil &
Lube News.
In March, the trade mag-
azine estimated industry
sales in the U.S. will reach
$9.8 billion this year, a $1.1
billion increase from 2012.
As of Feb. 28, Jiffy Lube
was still the leader with
1,962 stores, up 1 percent
from 2012. The next largest
quick-lube chains included
Valvoline Instant Oil
Change (896 stores, up 9
percent from 2012),
Pennzoil 10-Minute Oil
PLACES

FACES
60 MAY 2013
PLACES

FACES
Continued on page 62 Nynas still waits to take the reins at Shells Harburg, Germany, plant.
P
h
o
t
o
:

B
o
d
o

M
a
r
k
s
/
D
P
A
/
N
e
w
s
c
o
m
infineum.com/marine
Spend more time on the water
With Infineum additive protection.
The harsh conditions faced by marine engines can lead to lubrication problems
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Our extensive knowledge base and close collaborative work with OEMs
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To find out more visit us at CIMAC stand W4001
INFINEUM, and the corporate mark comprising the interlocking ripple device are trademarks
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Performance you can rely on.
lubricants, targeted to mar-
kets in the Middle East,
North Africa, Pakistan and
eastern Europe. Cost of the
project was not disclosed.
Frank Rutten, Gulfs inter-
national vice president, told
Lube Report that once fully
functioning, the 11-acre site
will have a staff of 114 and
make both automotive and
industrial lubricants and
greases including lithium,
lithium complex, aluminum
complex and bentonite. The
plant was designed with
expansion in mind, and
could grow to four times its
current size, he said.
The facility represents a
joint venture between Gulf
Oil, the government of Ras
Al-Khaimah, and Standard
Greases & Specialties Pvt.
Ltd., Indias largest private-
label grease manufacturer.
Hyderabad, India-based
Gulf Oil is part of conglom-
erate Hinduja Group.
Brenntag Buys Lube
Distributor
G
erman chemical dis-
tributor Brenntag has
bought U.S. lubricant dis-
tributor Lubrication
Services LLC for $42 mil-
lion. The acquired compa-
ny has a market position,
expertise and infrastructure
that will allow us to further
increase our participation
in the expected rapid
growth related to the shale
plays, said Anthony
Gerace, executive vice
president of Brenntag
North America.
Oklahoma City-based
Lubrication Services is a
multi-regional distributor of
lubricants and chemicals
serving the oil and gas
industry. It has facilities in
Wyoming, Oklahoma,
Atwood was defective
and had been made with
reconditioned, reclaimed,
used or secondhand base
oil ingredients. The suit
alleges that the fluid had
not been adequately test-
ed nor properly additized,
and was ultimately not
compatible with the type
of use for which it was
marketed and sold.
Smittys said the alleged
mechanical breakdown is
the result of misuse, not-
ing that 303 specification
fluids have not been rec-
ommended by equipment
manufacturers since the
mid 1970s. Smittys
alleged that Heisler admit-
ted to the company that
he used the fluid in a 2000
model year John Deere.
Gulf Oil Opens
UAE Lube Plant
G
ulf Oil recently fired
up production at a
new Ras Al-Khaimah plant
in the United Arab
Emirates. The operation is
slated to produce 10,800
metric tons a year of
grease and 20,000 t/y of
Kansas, New Mexico,
Colorado and Texas. It mar-
kets industrial, commercial
and automotive lubricants
for brands including
ExxonMobil, Phillips 66,
Citgo, Houghton, Summit
and Camco.
Lonza Picks Monson
L
onzas Materials
Protection business has
named Leominster, Mass.-
based Monson Cos. as its
distributor for the lubricants
and metalworking fluids
markets throughout the
United States. These Lonza
products and preservatives
include Densil and Triadine
antimicrobials; Omacide
and Sodium Omadine
fungicides; and Proxel
preservatives. Bill Perry,
Lonzas distributor channel
manager for industrial
applications in Atlanta,
said, We are delighted
to be working with the
Monson Companies across
the U.S. in these markets
and believe the combined
efforts of Lonza and
Monson will deliver a supe-
rior level of value for our
customers.
Oxiteno Surfactants
Flow in Texas
O
xiteno, part of the
Brazilian company
Ultrapar, confirmed it has
started up production of
specialty surfactants at a
plant it bought and retrofit-
ted in Pasadena, Texas.
The company said more
capacity will be added at
the site to further support
its surfactants business
and product portfolio for
the NAFTA region. The
Pasadena site, acquired in
April 2012, will reach its
62 MAY 2013
Continued on page 65
PAO is used to make syn-
thetic lubricants.
The company also will
benefit from synthetic
grease capacity coming on
line later in the year in our
Nantong, China facility, he
added. The Nantong facili-
ty, announced in 2011, will
be a multipurpose manu-
facturing plant serving
Chemturas petroleum
additives and urethanes
businesses. Its output will
include synthetic refrigera-
tion lubricants, air com-
pressor lubricants and
gear oils, and calcium sul-
fonate complex greases.
Smittys Sued over THF
A
small business owner
in Texas sued Smittys
Supply and its distributor
Atwood Distributing in
February, alleging they
sold defective, inadequate-
ly tested tractor hydraulic
fluid that destroyed a log-
ging tractor.
Truck owner-operator
Harvey Heisler claims the
hydraulic fluid made by
Smittys and sold by
Continued from page 60
UAE royal Sheikh Saud bin Saqr al Qasimi autographs the first batch of
grease at Gulf Oils new plant there.
Retooled
for
2013
Lubricants Industry Factbook
U.S. Marketplace
Engine Oil Trends
North American Base Oil Data
Mergers and Acquisitions
Global Lube Perspectives
Base Oils Worldwide
Additives: What, Where and How
Closing June 3 for August publication
Contact Gloria Steinberg Briskin
gloria@LNGpublishing.com
800-474-8654; +1 703-536-7676
ADVERTISE TODAY!
65 LUBESNGREASES
Committee D02 on
Petroleum Products and
Lubricants. Fire is a major
hazard in many industrial,
transportation and military
applications, requiring the
use of approved fire-resis-
tant fluids. But are industry
trends, such as higher per-
formance, lower system
fluid volumes and higher
operating temperatures,
increasing the potential for
fire in some applications?
This technical forum aims
to examine these trends,
and the development, clas-
sification, use and monitor-
ing of fire-resistant fluids.
Co-chairing the sympo-
sium are John Sherman of
BASF and Lubrizols Betsy
J. Butke. Registration is
free for ASTM members,
presenters and students.
Cost for non-ASTM mem-
bers is $50 online and $75
on site. Details: www.
astm.org/D02Jun2013Symp
Briefly Noted
M
ilacron LLC, the
Cincinnati-based par-
ent of Cimcool Fluid
Technology and a leading
provider of premium met-
alworking fluids, complet-
ed its acquisition of hot-
runner systems maker
Mold-Masters in late
March, paying $950 mil-
lion. The acquisition was
backed by affiliates of pri-
vate equity firm CCMP
Capital Advisors, and
boosted Milacrons offer-
ings for the plastics pro-
cessing industry.
Base stocks from Shell
and Qatar Petroleums
joint-venture gas-to-liquids
plant in Qatar are finding
an outlet as process oils.
Shell, which markets the
annual capacity of 32,000
tons of specialty surfac-
tants later this year.
Looking beyond the cur-
rent ethoxylates capacity,
Oxiteno aims to invest
another $100 million in the
NAFTA region over the
next 18 months to expand
capacity by 100,000 tons
in Pasadena and in
Coatzacoalcos, Mexico.
Soltex Taps Univar
for PIB Sales
S
oltex Inc. named Univar
USA, of Redmond,
Wash., as national distribu-
tor for its polybutenes,
effective March 1. The
products include PIBs in
molecular weights from
350 to 2600 which are
used in automotive and
industrial lubricants; as
tackifiers in lubricating
greases; to make deter-
gent additives; and also in
adhesives.
Univar USA and Soltex
Inc. have shared a busi-
ness relationship for the
past several years and are
eager to grow together fur-
ther, said Bill Wahl, distrib-
utor manager for Houston-
based Soltex. He added
that Univars extensive
knowledge and experience
with polybutene and deriv-
atives, and over 80 loca-
tions nationwide, enable
them to provide a high
level of technical and sales
support to customers.
Symposium to Explore
Fire-safe Fluids
A
symposium on fire-
resistant fluids will be
held June 24 in Montreal,
in conjunction with the
twice-yearly standards
meeting of ASTM
Continued from page 62
Continued on page 66
We dont simply sell products...we sell solutions.
Our Technical team has developed new high performance,
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MAXBASE Soluble Oil Additive Packages
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plants GTL base oils, has agreed to
supply Risella X process oils to
Kraiburg TPE, a German company that
will use them to make premium ther-
moplastic elastomers.
Israel-based chemical company ICL
acquired Thermphos Internationals
additive-component phosphorus penta-
sulfide business in Knapsack, Germany.
Advanced Refining Technologies
will sell Chevron Lummus Globals
lube catalysts to CLG licensees and
others for unit refills.
Faces in the News
J
yrki Maki-Kala has been named
Neste Oils chief financial officer
and a member of its executive board,
effective May 6. He joins Neste Oil
from Kemira, where he was CFO and
deputy CEO, and previously has
worked for Finnish Chemicals.
Following the retirements of Vice
President of Supply Sara Lefcourt and
Vice President of Technology Mark
Struglinski, additives maker Infineum
restructured its corporate leadership
team on April 1. It appointed Trevor
Russell as executive vice president,
sales and supply (two previously sep-
arate units), and moved the position
to Singapore, reflecting the growing
importance of Asia Pacific. Russell for-
merly was vice president for sales and
marketing. Also, Chris Locke, who
had managed Infineums crankcase
lubricants busi-
ness, became
executive vice pres-
ident for the newly
formed marketing
and technology
division. Philippe
Creteur continues
as CFO and execu-
tive vice president
for business ser-
vices, and Ross Baglin as executive
vice president for human resources.
The four executives report to CEO
Xavier le Mintier.
Christopher Deal has been hired as
product line manager at Dallas-based
Hydrotex Inc. With an MBA from
Texas State University, Deal has over
20 years of product marketing and
development experience with indus-
tries including telecom, semiconductor
manufacturing, wireless, health care
and consulting.
Des-Case Corp., which specializes in
industrial lubrication and contamina-
tion control, hired
Eddy Bock as direc-
tor of international
development. The
20-year veteran of
the automotive
industry, who has
an MBA from
Western Kentucky
University and
speaks fluent Japanese, will help Des-
Case develop strategic partnerships in
key markets outside the United States.
Gus Munoz is the new regional sales
manager for Palmer Hollands south-
western sales region, covering
Arkansas, Louisiana, Mississippi,
Missouri, New Mexico, Oklahoma and
Texas. Munoz worked for many years
in specialty chemical distribution, and
previously was president of NP Group
in Dallas.
Ray Kaligian
R
aymond Allen Kaligian III, 28, who
last summer was named director
of base oil sales at Phillips 66, died
tragically at his home in Houston on
Feb. 17, his dog Willie dying by his
side, after carbon monoxide gas was
released accidentally into the premis-
es. Kaligian, a gifted athlete, award-
winning scholar and graduate of Univ.
of Illinois, was quickly hired by Phillips
66 to participate in its Selective Leader
Development Program. Following work
in Houston and West Virginia, he was
promoted last summer to the base oil
sales position, making him the key liai-
son for global suppliers. I dont ever
recall a young man that has touched
the hearts of so many, wrote Jim
Gigante of Phillips 66. He was a rising
star of Phillips 66. An only child,
Kaligian is survived by his parents.
66 MAY 2013
Continued from page 65
Eddy Bock
Trevor Russell
I N D E X O F
A D V E R T I S E R S
I N D E X O F
A D V E R T I S E R S
Acme-Hardesty ... 50
Additives International ... 50
Afton Chemical ... 15, 67, Inside
Back Cover
Allegheny Petroleum Products
... 39
Alnor Oil Company ... 49
Amtecol ... 29
Analytical Services Inc. ... 49
Avista Re-Refining USA ... 53
Axel Christiernsson ... 44
BASF ... 9
Calumet Specialty Products
Partners ... 30
Cannon Instrument ... 56
Chevron ... 19
Chevron Oronite ... 5
Chevron Phillips Chemical ... 57
Daubert Chemical ... 21
Dover Chemical ... 11
Dow UCON ... 43
Elco Corporation ... 34
Ergon ... Inside Front Cover
ExxonMobil Chemical ... 7
Focus Chemical ... 12
Herguth Laboratories Inc. ... 59
HollyFrontier Refining &
Marketing ... 47
Infineum ... 61
IPAC ... 31
King Industries ... 59
LubesnGreases ... 65
Lubricants Industry Factbook
... 64
Lubrizol ... 25, 69
Mitsui Chemicals ... 36
Monson Companies ... 20
Motiva ... 35
Munzing ... Back Cover
Nexeo Solutions ... 55
NLGI 80th Annual Meeting ... 58
PCC Chemax ... 65
Petroleum Chemicals ... 18
Phillips 66 ... 51
Pilot Chemical ... 28
Qualice ... 38
Rhein Chemie ... 37
Sea-Land Chemical ... 45
SK Lubricants ... 13
Taminco ... 56
Tianhe Chemicals ... 63
Ultrachem Inc. ... 52
Some of the worlds 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 eciency. 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.
Our additives are designed to keep any
industrial machine up and running.
U.
S. base oil suppliers are prepared
for strong activity during May, as
customers continue to beef up
their requirements week to week, and out-
strip the orders placed in March and thus
far in April. Although producers overall
inventory positions appear to be well bal-
anced, they said orders over and above
already scheduled volumes can likely be
fulfilled. Sellers warned, however, that if
demand becomes much more brisk, then
not all customer requests may be satis-
fied as May gets under way.
Meantime, fresh export possibilities
have emerged in deep-sea destinations.
While Europe remains the quietest region,
U.S. sellers of both paraffinic and naph-
thenic grades have seen openings for
shipments to India, Middle East, and
South America.
It is understood from U.S. suppliers that
they will only entertain these possibilities
if firstly all their contract obligations
are covered. Furthermore, there seems to
be not much room to negotiate spot
prices lower, according to sources. Low-
ball offers heard only weeks ago have
since been taken off the table, buyers
bewailed. In fact, spot offers are now
68 MAY 2013
Looks Like a Busy May
BASE OIL REPORT
BY CAROLYN GREEN
Carolyn Green
Base Oil
and
Crude
Prices
Base oil prices are
lowest U.S. postings
of the month for
mid-vis grade before
applicable discounts.
Crude prices are
monthly averages.
Sources: LubesnGreases
research, U.S. Energy
Information Administration
pegged to be at or in some cases above
contract business, depending on product
and volume.
With regard to domestic pricing, API
Group I, II and some II+ postings had
increased by late March, but it wasnt until
April that additional Group II+ and Group III
moved. The hesitant producers finally
decided to jump on the band wagon, com-
pleting a round of price hikes that had
commenced in mid-February.
A handful of players had not expected
higher prices for Group III, since the
market appeared oversupplied with
these premium base oils. Oddly, once
the news about the price hikes reached
the market in early-to-mid April, the
same sources claimed to be not so sur-
prised. All producers have been dealing
with rising operating costs this year,
they elaborated, and vacuum gas oil a
key feedstock and pricing component
remains at a stiff premium over West
Texas Intermediate crude of around
$30/barrel.
The mood is set for a lively May, as both
sellers and buyers welcome the month
with open arms in anticipation of intensi-
fied activity.
1
2
3
4
5
West Texas
Intermediate
crude
Brent Crude
Group I
Base Oil
Group II
Base Oil
Jan
13
Dec. Nov. Oct. Sep. Aug. July June May Apr. Apr. Mar. Feb.
P
r
i
c
e

(
U
.
S
.

$
/
g
a
l
l
o
n
)
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121569
Where All the Pieces Fall Into Place
reserves with major capital
outlays, he would have
been able to gauge which
ideas would provide an
adequate return, and which
ones would not before
initiating a costly national
rollout.
When business execu-
tives try to retrain their
customers instead of sat-
isfying them, they are like-
ly to fail. Great ideas are of
no value if customers (and
employees!) dont under-
stand and embrace them.
JCPs recent 10-K filing,
required by the SEC, com-
ments on the 19,000
employees which have been
let go in an effort to stop the
bleeding from plummeting
sales by saying, These
workforce changes may
negatively impact commu-
nication, morale, manage-
ment cohesiveness and
effective decision-making,
which could have an
adverse impact on our
operating efficiency. No
kidding.
To Mr. Johnsons credit,
he became more flexible, if
somewhat slow, in recogniz-
ing his mistakes and moving
to correct them. Store signs
explained new low prices
and discount coupons reap-
peared. And some changes
were implemented well:
JCPs advertising improved
tremendously; in-store dis-
plays and vignettes rivaled
those of high-end depart-
T
heres a time and a
place for every great
idea. But the choice
of the when and where
which might lead to the
successful implementation
of such an idea can be
even more important than
the idea itself.
Ron Johnson a highly
regarded Apple senior VP of
retail, Target merchandising
VP and Harvard MBA
failed to fully understand the
importance of the when
and where when he accept-
ed the position of CEO at
JCPenney in 2011. He had
some great ideas, but he
hugely underestimated the
enormous difficulty and tim-
ing of a quick turnaround of
this century-old department
store behemoth.
An old saying advises
Go slow until you know.
This would have been good
advice for Mr. Johnson.
Instead of jumping feetfirst
into a radical and immense-
ly expensive makeover of
JCPs 1,000-plus stores, a
more cautious newly mint-
ed CEO would have set up
a test market to see how
Penneys traditional older
customers, as well as
potential younger cus-
tomers, would react to a
higher-style, lower-price,
but no-coupon and no-
markdown approach.
Instead of turning off tradi-
tional customers, and
quickly depleting cash
ment stores; and store per-
sonnel, no longer chained to
cash registers, moved about
with wireless devices. All
that was needed was for
customers to return. But
that didnt happen soon
enough for Ron Johnson,
and now he is gone.
Amazingly, JCPs board of
directors have chosen to
replace Mr. Johnson with
former CEO Mike Ullman,
who had been openly criti-
cized by industry analysts
and board members for
presiding over Penneys
previous seven-year deterio-
ration. Go figure.
Unfortunately, todays
investment gurus insist on
immediate results. Market
analysts are amazingly
shortsighted. They want
immediate gratification
long-term to them is next
quarter, not a few years
down the road. This makes
it tough for anyone who is
attempting to do something
new and difficult. As a
result, JCPs stock dropped
like a rock, and Ron John -
sons reputation along
with it.
What will happen next? If
it had been successful, this
would have been one of
the few times in retail his-
tory that anyone had suc-
ceeded in such a huge
turnaround. It would have
been a remarkable achieve-
ment, but the odds were
against it.
70 MAY 2013
YOUR BUSINESS
BY JACK GOODHUE
Jack Goodhue, manage-
ment coach, may be
contacted by e-mail at
goodhue@aol.com.
Go Slow Until You Know
HEROES OF PROTECTION
AND PERFORMANCE
COMING SOON
2013. Afton Chemical Corporation is a wholly owned subsidiary of NewMarket Corporation (NYSE:NEU)
At Munzing, we start with 180 years of experience and add in unmatched technical expertise.
We then craft the perfect defoamer for each customers industrial needs from metalworking
uIds and IndusIrIal cleaners Io anIIIreeze coolanIs and IndusIrIal lubrIcanIs.
Call us today for your foam control solution.
With Experience Comes Solutions
Defoamers
FOAM BAN

Metalworking Fluids
Non-Aqueous LubrIcanIs
Industrial Cleaners
Surface Treatment
To try our FOAM BAN defoamers and take advantage
of our unlimited technical service, call 973-279-1306.
www.munzing.com I info@munzing.us