National Bureau of Standards Special Publication 556. Proceedings of EPA ACTIVITIES IN WASTE OIL MANAGEMENT Hugh B. Kaufman Hazardous Waste Management Division Resource recovery of waste products in general has been receiving greater attention because of the inherent resource and energy conservation benefits as well as the positive environmental effects. Each year our Nation produces, consumes, and throws away an increasing amount of waste. Multiple packaging, built-in obsolescence, and the convenience of disposable consumer items contribute to enormous resource losses. With only 7 percent of the world's population, we consume almost one-half of the earth's industrial raw material, yet we are recycling a lower percentage of our resources than ever before in history. Studies conducted by the Environmental Protection Agency (EPA) indicate that the failure to control the amounts of wastes produced and to recover waste resources have far-reaching environmental consequences. When two production systems are compared--one using virgin materials and the other secondary materials--the system using wastes typically causes less air and water pollution, generates less solid waste, and consumes less energy. Thus, resource recovery of any waste product, including used oil, is an important environmental concern. The conservation and recovery of petroleum products is not a new phenomenon in this country. In fact, waste oil reclamation in the United States dates back to about 1915. The lubricating oils in use at that time were recycled by first heating waste oil, then adding a coagulant to accelerate settling, and finally centrifuging. Following this treatment, the renewed oils were then ready to resume their lubricating functions. The Armed Forces made use of such systems to conserve lube oils at many Army depots during the first world war, and the military's use of recycled lube oils continued after that war. In 1932, commercial airlines first instituted similar oil recycling systems by segregating their oils and contracting with the re-refining industry to custom treat aircraft oils. These programs resulted in savings of 20 percent in lube oil costs to the airline industry and served to stimulate the use of re-refined oils by other industries. By 1939, the re-refining industry was processing 11 billion gallons per year of waste oil. During the second world war the need to conserve limited supplies of petroleum, reduce costs, and simplify logistics led to the wide scale use of re-refined lube oil products. Approximately 29 million hours of aircraft engine time were logged using re-refined lube oil without any evidence of deleterious effects on engine life. In fact, during that period average engine life was increased by almost 50 percent. Following the second world war, the Air Force continued to use re-refined products on an unrestricted basis. By 1949 almost one-fourth of all aircraft engine oil purchased by the Air Force was re-refined. However, with the advent of jet engines requiring synthetic-based lubricants, the need for re-refined oil products by the Air Force began to decline. The supply of waste oil feedstocks dwindled, and eventually the closed-loop arrangements between the Air Force and the re-refining industry were discontinued. However, other markets for re-refined lube oil products continued to grow steadily. Re-refiners, using plants constructed prior to and during World War II, were able to compete favorably on an economic basis with virgin lube oil suppliers. These products went to both motorists and industrial users. In 1960, the industry consisted of 150 companies producing over 300 million gallons of re-refined lube oils. Although this represented almost 18 percent of the Nation's lube oil consumption, there were already forces at work which were to reverse the dramatic growth of the industry up to this time. Increases in the number of motorists who change their own oil, longer periods between engine oil changes, and the increase in waste oil use in road oiling and as fuel have all served to reduce the flow of waste oil feedstock to the re-refining industry. Competition for waste oil suppliers resulted in increases in the cost of waste oil to the re-refiner. At the same time, low prices of competitive virgin lube oils prevented re-refiners from passing through increased re-refining costs to customers. This further limited the ability of re-refiners to outbid other users for limited waste oil supplies. This cost/price squeeze further reduced fe`dstocks available for re-refining, resulting in even more inefficient operation of plants. This condition continues to this day, when industry production averages from 30 to 50 percent of installed capacity. During this same period, lube oil formulation became more complex in order to satisfy specifications for higher-performance engines. The need for detergents, multiviscosity oils, and longer change intervals has made lubricating formulation increasingly stringent. As a result, the job of removing the new additive compounds became more difficult, requiring higher levels of pretreatment and careful supervision of the re-refining process. Users began to perceive re-refined products as inferior, a stigma that continues to complicate the industry's marketing problems today. Concern has also grown over residuals produced from the re-refining_process that make investments in costly pollution control equipment necessary. Those residuals are in the form of highly acidic oily sludges, which have traditionally been disposed of either by dumping or lagooning. Many re-refiners have been unable to meet new disposal requirements of State and local governments and either shifted to the less-demanding production of fuel oils or ceased operations entirely. Because of Congress's concern over these specific problems, the EPA was required under Public Law 92-500 to conduct a study of waste oil disposal problems and recycling opportunities. This report was completed and transmitted to the Congress in 1974. The report found that the major market for waste oil collectors consists of users of fuel. This market can be divided into two segments. The first includes fuel processing, which removes many of the contaminants present in waste oil before marketing as a fuel. Most waste oil, however, is distributed directly to users who blend the waste oil with conventional fuel without first removing contaminants. These contaminants will vary, depending on the source of the waste oil, and include lead, barium, copper, zinc, phosphorus, tin, and chromium. The most serious contaminant noted to date appears to be lead from automobile crankcase drainings. The lead, which averages 1 percent by weight in crankcase drainings, originates from lead-based gasoline additives. The uncontrolled combus tion of undiluted automobile crankcase drainings can result in the emission of unacceptable levels of lead into the air. Although dilution of waste crankcase drainings can reduce lead concentrations, the uncontrolled burning of this waste is not a desirable disposal option. It is unlikely, however, that facilities not already equipped with pollution control devices will make the substantial investments required to limit contaminants from the relatively small quantities of waste oil consumed. The electric power industry, for example, which is the largest consumer of fuel oils in this country, does not generally employ pollution control devices on oil-fired units which could remove the lead particles. The report also found that there was presently very little control over the use or final disposition of waste oil. Although a few States have enacted legislation regulating waste oil collection and disposal, efforts at enforcement have been limited. In the absence of such control, there was little incentive for fuel processors to remove the contaminants from waste oil prior to sale for use as a fuel. The report found that another use of waste oil was in road repair, either in asphalt manufacture or applied directly as a dust suppressant. Combined, these applications accounted for 200 million gallons of waste oil use in 1972. Tests of use on roads have indicated that as much as 70 percent of waste oil applied to road surfaces could migrate to the neighboring lands either as rainwater runoff or as airborne particles. In 1972, approximately 2.2 billion gallons of lubricating oil were sold in the United States. Approximately 50 percent of this lube oil was consumed in use, discarded with filter cartridges, or lost through leakages or in other ways, resulting in the generation of an estimated 1.1 billion gallons of waste lubricating oil. The major sources of waste oil are automotive operations, industrial and aviation operations, and other sources such as government uses and industrial process oils. The report also concluded that the major re-refining process in use was acid/ clay treatment. Another process identified and in limited use was vacuum distillation followed by clay treatment, which can include a caustic pretreatment. The acid/clay process does produce a high-quality lube stock; however, the residual sludge produced by this process presents a real disposal problem. Recent work in Canada, however, has demonstrated that these residuals can be burned in a properly operated cement kiln with virtually no adverse environmental effects. Although solvent extraction is old in the art of lube oil manufacturing, it has not been used by waste oil reprocessors. This is because high solvent-to-oil ratios require high operating costs and continuous operation by highly skilled operating personnel. Further, all solvent extraction processes still require some acid and clay treatment, resulting in the generation of residual sludges. The EPA has noted that new technologies for re-refining waste oil have been developed both in laboratories and in small commercial plants both in the United States and in Europe. These technologies include, but are not limited to, the following: (1) a laboratory plant at the Bartlesville Energy Research Center of the Department of Energy, (2) the Rhone-Poulenc plant in France, and (3) the Phillips Petroleum Company process. All of these plants, as well as other new technologies, appear to have higher yields of clean oil and do not generate as much waste as the existing acid/clay process used almost universally around the world today. Since the EPA's 1974 report to the Congress was completed, the EPA has continued to study the issue of waste oil resource recovery, particularly the environmental, energy, and resource conservation aspects of the problem. A recent EPA study showed that as much as 50,000 barrels of oil per day could be saved if waste oil were rerefined to its original use as a lubricant and approximately 25,000 barrels per day could be saved if the waste oil were reprocessed and burned as a fuel. As a result of this continued work we have found that many countries in the developed world and many States now have more active programs to promote the recycling of used oil than those of the Federal Government. We have also continued to find that present methods for managing used oils in the United States are unsatisfactory from an environmental and resource conservation viewpoint. The present methods do not reflect the inherent economic advantages that could be derived from proper resource recovery on a national scale. Before proceeding to a discussion of the EPA's program related to the recycling of waste oil, it seems useful to review an impediment to recycling which Federal regulatory authority does not affect. This impediment is the tax advantage which virgin oil enjoys over recycled oil. The tax law changes in the mid-1960's had a discouraging effect on resource recovery of lubricating oils. Before 1965, rerefining lubricating oil had a tax advantage which frequently made it more attractive as a substitute for virgin oil. This resource recovery incentive was particularly important in sales of re-refined oil to large users of industrial lubricants. The Federal Excise Tax Reduction Act of 1965 and a subsequent Treasury Department ruling rescind most of this tax advantage by creating a competitive tax exemption for virgin oil if bought by off-highway (e.g., industrial) users. Specifically, it provides for a Treasury refund of $0.06 per gallon to the ultimate purchaser of virgin oil carrying the $0.06 excise tax. In effect, the payment is a tax refund to offhighway users. In contrast, the act maintains the tax on lube oil used for automotive purposes and dedicates its revenues to the highway trust fund. Thus, virgin lube oil used for off-highway use now has the same tax-exempt status previously enjoyed only by recycled oil. The Treasury Department ruling also concluded that re-refiners do not qualify as off-highway users and therefore are ineligible for a tax rebate on the virgin oil they purchase for blending. Therefore, the oil re-refining industry not only lost its tax advantage, but also gained a tax disincentive because all opportunities to receive an excise tax refund were lost. Since 1974, the Congress has passed and the President has signed two important pieces of legislation that will affect waste oil recycling in the United States by providing the EPA and other agencies of the government with important mandates in the area of used oil re-refining. The first is the Energy Policy and Conservation Act, Public Law 94-163, which requires the EPA to promulgate labeling standards applicable to containers of new, used, and recycled oil to reduce to the maximum extent practicable environmental hazards and wasteful practices associated with the disposal of such oils after use. This act also requires the Federal Trade Commission (FTC) to promulgate labeling standards based on the quality of oil. Presently, the EPA is planning to promulgate one labeling standard for lubricating oil jointly with the FTC. As you know, one of the major impediments to the re-refining of used oils has been the question of relative performance quality of re-refined and virgin lubricating oils, and it will be our intention in this joint activity with the FTC to provide consumer protection as well as environmental protection and resource conservation. At this point I would like to add that the EPA has financially supported an analysis of the quality of rerefined lubricating oil. The results of this analysis and comparative testing with virgin lubricating oils have shown that re-refined oils can be as good as or better than virgin oil as an automotive lubricant. The second important piece of legislation affecting waste oil recycling in the United States is the Resource Conservation and Recovery Act (RCRA), Public Law 94-580. The RCRA requires the EPA to promulgate standards and regulations for hazardous waste management and land disposal. Under the authorities of subtitle C of the RCRA, the EPA is required to develop and promulgate regulations that will establish criteria for what is a hazardous waste; will require generators and transporters of hazardous wastes to report on the character of wastes generated and the manner in which they are transported from the point of generation to the next step in their management; and will develop and promulgate regulations for the storage, treatment, and disposal of hazardous wastes. Subtitle D requires the EPA to issue criteria for acceptable land disposal of all those wastes that do not fall within the control of subtitle C. Hence, whether waste oils are hazardous or nonhazardous, these regulations, when promulgated sometime in 1978, may not only impact on generators of waste oils, but also on all who have any role in the management of this vital resource, including its ultimate disposal on the land. There is one additional regulatory authority the EPA has which may affect the waste oil recycling industry. Next year the EPA will promulgate ambient air standards for lead. These standards will be required for use by the States in the mid-1980's to develop State air pollution control plans. Because lead is one of the major contaminants in waste oil and because the burning of raw waste oil is the largest end use of this product, we project a possible decrease in the amount of raw waste oil burned in certain localities to comply with these ambient standards. In conclusion, we believe the EPA's regulations, particularly the hazardous waste and land disposal provisions of the RCRA, will provide new opportunities for the oil industry, resulting in the recovery and reuse of more waste oil in the United States, and may stimulate new technologies to meet these opportunities. I would like to take this opportunity to state briefly what I see as the role of the Federal Trade Commission (FTC) in recycled oil labeling. I am sure you realize that staff remarks such as mine are not necessarily binding on the Commission. As you are aware, section 383 of the Energy Policy and Conservation Act directs the National Bureau of Standards (NBS) to develop test procedures for determining the substantial equivalency of recycled oil to new oil. When these data are compiled by the NBS and are submitted to the FTC, we are given 90 days within which to prescribe by rule (1) test procedures for the determination of substantial equivalency of recycled oil with new oil for a particular end use, and (2) labeling standards applicable to containers of recycled oil. The act itself raises certain unanswered questions. For example, the act is silent as to the establishment of standard specifications and classifications for the various types of oils. In our discussions with Mr. Becker and his staff, we have agreed that is is important for specifications to be developed in order that the Commission may require proper labeling for recycled oil as to a particular end use. In this connection, we are hopeful that the NBS, working with the American Society for Testing and Materials specifications committee and the Federal specifications people, will be successful in developing standard specifications and classifications for recycled oil so as to enable the Commission to more effectively deal with the labeling problem. The act also is silent as to whether recycled oil, which meets the substantial equivalency criterion, should be labeled "recycled" or whether no disclosure should be required. This is a problem we hope to resolve when we issue our proposed rule for comment. We understand from Mr. Becker that his staff expects to have the necessary test procedures and data for fuel oils ready for submission to the Commission by the spring of 1978. A threshold problem of labeling immediately emerges. How does one label fuel oil which is not sold in the customary retail container, but rather is delivered to the consumer in bulk? At this point, we believe that this potential problem can be solved by requiring labeling information on the invoice at the point of sale and in bids prior to sale. We intend to work closely with the National Bureau of Standards and the Environmental Protection Agency (EPA) in carrying out our responsibilities under the act. We must, of necessity, rely heavily on the NBS and the EPA for their scientific and technical expertise. I would also like to state that we have had a hard and tough road with the Commission's used oil rule. While we recognize that this rule may have tended to discourage the recycling of waste oil, in the absence of trustworthy scientifically based data as to the quality and performance of recycled oil we have had no viable alternative but to require that recycled oil be labeled "previously used." We will welcome test data and procedures from the NBS which will demonstrate that recycled oil can be equated with new oil from the standpoint of both quality and performance. Armed with such data, recycled oil should, indeed, gain a positive image which should result in an increase in the demand for such a product. This, in turn, should encourage the recycling of waste oil. Finally, when we reach the enforcement stages of our program, we will rely heavily on Mr. Becker's staff for the necessary technical expertise in resolving any issues which have to do with specifications, testing procedures, and other data. |