Used oil: An often overlooked resource
by Mike Breslin
Long before it became widespread practice to recycle
paper, plastics and other waste stream commodities, used
oil was recycled to recover its innate heating value.
Even though it’s dirty and exhausted of lubricity, a
gallon of used oil contains 140,000 BTUs of energy, approximately
the same heating value of a new gallon of oil.
Used oil is a broad category that includes mixes of crankcase
oils, transmission and hydraulic fluids, and industrial
oils of many grades and qualities. EPA defines used oil
as any oil refined from crude or synthetic that has been
used and thereby contaminated by physical or chemical
impurities. It’s not publicly traded as a commodity.
Most transactions are private and most people involved
in the business are reluctant to talk about price or
the volume distributed. Therefore, there is scant and
conflicting data on this sector.
An EPA Material Characterization Paper published in December
2008 estimated the quantity of used oil generated annually
at 1.35 billion gallons with 784.4 million gallons used
as fuel, 160.7 million gallons re-refined and 200 million
gallons going to landfills or illegally dumped. A long-time
executive in the used oil business estimated that over
50 percent goes to industrial burning for energy, about
20 percent to re-refining into base lubricants and 15
to 18 percent to on-site heating.
Nobody knows how much is illegally dumped, but the consensus
is that illegal disposal has decreased substantially
over the past few decades. “Used oil is a big business
today and grows with each hike in the price of a barrel
of crude. Anyone foolish enough to dump it on the ground
or down a storm sewer is not only subject to criminal
penalties, but is also wasting a valuable commodity,”
said Rob Stevens, president and CEO of EnergyLogic, a
Nashville-based manufacturer of used oil furnaces and
A 2005 Department of Energy study estimated that 80 percent
of oil from do-it-yourself oil changes winds up being
illegally disposed. But this is thought to be improving
for several reasons. The bulk buying power of quickie-lube
shops and the resulting competitive pricing from auto
dealerships have reduced the number of home oil changes.
A growing number of state and local governments have
instituted regulations banning used oil and oil filters
from landfills and have imposed fines for illegal disposal.
And, there has been increased funding to raise public
awareness regarding recycling options and to establish
more collection facilities to make it convenient.
Used oil has also become substantively cleaner. “What
has occurred over the past ten years is the entire used
oil waste stream generated by salvage yards, repair shops,
dealerships and quick-change shops have cleaned up considerably
due to regulations. Also, engines run much cleaner now
as a result of technology improvements and due to better
waste stream management,” said Stevens.
Waste oil is not considered a hazardous material during
transport, but there remain serious liabilities to the
generator and the transporter. “Transporting it has many
environmental risks and potential consequences. The business
that generates the used oil is responsible and liable
for that used oil until it is properly disposed, which
could literally be for years if the oil is held in a
storage facility. I know I needn’t tell you about the
potential environmental damage that can occur if the
oil is spilled in transit. Not to mention the financial
damage that has put more than one business out of business,”
warned Kevin Ferrick of the engine oil licensing and
certification system at the American Petroleum Institute.
In view of the liability issue, the inherent energy value
in used oil, and the recent high prices for fuel oil,
many in the recycling business and businesses across
the spectrum of industries are taking a second look at
on-site burning for heat, or hauling it short distances
for burning to limit liability. As the recycling industry
knows, the expense of long distance trucking is often
the death of recycled commodities. That is why used oil
consolidation and processing is largely regional.
LKQ Corporation, one the largest providers of wholesale
recycled and new parts in North America, processed 441,000
vehicles for parts and scrap in 2008. “All of those would
have had the fluids, including motor oil, removed,” said
Sarah Lewensohn, LKQ’s director of investor relations.
Since the average vehicle yields approximately one gallon
of combustible fluids, that equates to nearly half a
million gallons of combustibles collected.
The United States Energy Information Administration reported
the national average price for diesel fuel in December
at $2.78 per gallon, $0.16 per gallon higher than last
year. A December quote from New Jersey fuel oil dealer
was $2.99 per gallon. “At least 15 locations are using
oil- burning high efficiency heaters for their plants.
In some cases, it is limited by state law. In others,
it is limited by climate,” said Lewensohn.
Large generators like LKQ cannot consume all they generate.
The excess is sold to consolidators, haulers and processors,
some positioning themselves as “environmental service
providers.” These companies provide a range of services
including on-site sampling, lab analysis, and transportation
and recycling services ranging from used oil marketing
to processing that involves dewatering, filtering and
demineralising for use in industrial burners. As best
could be determined at press time, used oil from a generator
to a dealer sells used oil at approximately $.25 per
Getting fluids out of vehicles used for scrap has also
become faster and more efficient. In the past scrap yards
extracted fluids manually, often assisted by homemade
Rube Goldberg contraptions of lifts, funnels, hoses and
tanks. Currently there are several manufacturers of self-contained
fluid removal systems. One such is Enviro-Rack, made
by Iron Ax, that meets EPA and state level regulations
for fluid removal. By using air operation it avoids the
sparking dangers posed by electric motors or gasoline
engines and sucks a vehicle dry in less than five minutes.
The system has a catch pan underneath to prevent ground
Although the majority of used oil is burned in asphalt
plants, steel mills, cement plants and industrial and
utility boilers, the Department of Energy estimates that
approximately 14 percent is consumed by space heaters.
According to Rob Stevens at EnergyLogic, “Our emissions
are approximately the equivalent of those associated
with diesel powered earth moving and yard equipment,”
Stevens claimed. That is emissions coming out of his
furnaces without additional pollution control equipment,
which is usually cost prohibitive for small installs.
With that in mind, it’s worth examining the economics
of space heating with used oil in context with pollution
ramifications. According to EnergyLogic, their entry
level furnace costs roughly $6,000 including installation,
tank and filtering between tank and furnace. Such a unit
can heat up to 3,000 square feet. In northern climes
with fuel oil costing approximately three dollars per
gallon, the investment can typically be recovered in
less than two seasons. Life expectancy depends on hours
of usage, but Stevens stated that ten years or more is
average. “Our pollution control is based upon combustion
efficiency and cleanliness. We take the raw fuel and
combust it at an extremely high temperature, which results
in flue stack emissions similar to a standard oil furnace
burning #2 fuel oil or diesel fuel, and a very fine,
non-hazardous fly ash,” Stevens said.
Compare burning used oil and its emissions with those
associated with heating oil refined from crude, or with
used oil that is re-refined into base lubricants. Think
of the emissions created in drilling and transportation
to the refinery, heavy emissions from refining and the
multi-step transport emissions to deliver fuel oil to
a business or home (trucks and locomotives burning diesel).
In addition, burning used oil on-site ensures destruction
of a potentially hazardous material and eliminates the
trucking emissions if it had to be hauled away.
While burning used oil for heating may seem onerous to
many environmentalists, it apparently has less universal
emissions and conversationalist benefits than newly refined
or re-refined lacks. Scrap yards, repair shops, oil change
centers, fleet maintenance facilities, heavy equipment
dealers, automotive and equipment dealers, or businesses
located near used oil sources should consider on-site
burning, particularly recycling facilities, as part of
their overall effort to clean up the planet and lower