COMPTROLLER GENERAL'S
REPORT TO THE CONGRESS

WAYS THE DEPARTMENT OF DEFENSE
CAN IMPROVE OIL RECYCLING

DIGEST

About 18 million gallons of used oil is
generated annually by Federal agencies.
This oil may be re-refined for lubricating
or reprocessed for fuel. However:

--There is no central point among the depart-
ments or agencies to provide guidance to
Federal installations on how to deal with
used oil conservation or disposal.

--There is no provision for management with
specific authority and responsibility to
see that this is done.

--No one knows the quantities of used oil
available or its ultimate disposition.

The Congress included a section in the Energy
Policy and Conservation Act promoting in-
creased use of recycled oil in order to
reduce consumption of new oil and to reduce
environmental hazards and wasteful practices
associated with disposal of used oil. (See
p. 3.)

Military and civilian installations were aware
of the economic value of this resource and its
potential for environmental damage. Their
practices, however, are not achieving the
greatest possible recovery, and some are con-
tributing to environmental pollution. (See
pp. 5 and 9.)

To help meet the aims of the Energy Policy and
Conservation Act affecting lubricating oil in
the entire Federal sector, GAO proposed that
the Director, Office of Management and Budget,
designate one Federal agency to oversee the
management of used oil.

The Office said that this action would be pre-
mature until the President's energy advisor
completes a plan for improving all Federal
energy activities. In a related action, the

Tear Sheet. Upon removal, the report cover date should be noted hereon.

i

LCD-77-307

Congress recently passed an act establishing a Department of Energy. Pending the decisions on the role the Department of Energy will have in overseeing management of used oil, the Department of Defense could start to structure a used oil management system. (See p. 11.)

Because the Department of Defense is responsible for the specifications and procurement of lubricating oil for all agencies and is the largest Government user, the Secretary of Defense should:

--Create a system to develop policies and procedures for recovering used oil.

--Classify used oil as an asset, rather than as scrap.

--Define requirements for segregating, collecting, or storing used oil by physical characteristics, when practicable.

--Determine the feasibility of entering into agreements with re-refiners to refine used lubricating oil back to reusable lubricants.

DOD agreed that it can improve management of used oil and that the first three recommendations are desirable. But it cannot use recycled oil as an automotive engine oil until evaluations of re-refining processes are completed. Although this deferment seems reasonable, it should not prevent the Department from investigating the feasibility of re-refining used oil into lubricants which have no prohibition against re-refined materials. (See pp. 11 to 15.)

I

II

Disposal methods at selected installations

Letter dated February 7, 1977, from the

Deputy Associate Director for National

Security, Office of Management and Budget

17

22

III

Letter dated May 5, 1977, from the Acting

Principal Deputy Assistant Secretary of

Defense (Logistics)

23

VI

Letter dated February 17, 1977, from the

Acting Assistant Secretary for Adminis-

tration, Department of Commerce

32

Page

APPENDIX

VII

Letter dated March 1, 1977, from the
Assistant Secretary of the Treasury

35

VIII

Principal officials responsible for activi-
ties discussed in this report

37

CHAPTER 1

INTRODUCTION

Federal agencies must dispose of about 18 million gallons of used lubricating oil annually, most of it from Defense installations. Lubricating oil is made from "lube fractions," which constitute only 3 to 6 percent of a barrel of crude oil. It is used primarily to reduce friction in engines and gear transfer or reduction boxes. The value of this recoverable resource can be viewed in terms of:

--Boiler fuel oil at 30 cents a gallon:

$5.4 million.

--Repeated reuses as lubricating oil, although a variable percentage of the product is lost in re-refining, depending on the process.

The Department of Defense (DOD) has recognized the value of recycling used oil and has had the lead role in the Government's procurement, use, and disposal of this resource. DOD's 1972 Waste Oil Recycling Study concluded that the Department should demonstrate leadership in reducing pollution by implementing an aggressive program to develop and encourage environmentally sound methods of waste oil disposal. The study indicated that:

--The vast quantities of used oil generated annually
(nearly a billion gallons nationwide) are a poten-
tially rich energy source.

--Used oil can be reprocessed and reused as a lubricating oil, or it can be used in other ways, such as conversion to a burner fuel, in order to extract its inherent energy.

--The crucial point is that this valuable resource is being wasted. What is even more unfortunate is that while wasting this resource, our environment is being seriously polluted.

NEW LEGISLATION

Since 1972, when the Federal Water Pollution Control Act amendments (Public Law 92-500) were passed, the Congress has shown a strong interest in conserving used oil and reducing pollution. Several agencies have sponsored studies on the problems and progress of used oil conservation. The Environmental Protection Agency (EPA), for example, was directed by