Major base oil producers of all types are scattered throughout the Americas, said Irvine, while major Group II producers are limited to North America. Petro-Canada is the only major Group III producer in the region, and the company also produces III+ for internal use.

Petro-Canadas first base oil plant near Toronto has been operating since the late 1970s, Irvine continued. Its Group II unit uses severe hydrocracking and hydrotreating, and is currently the worlds largest producer of food- and pharmaceutical-grade white oil.

The companys second base oil plant was built in 1996, and its capacity was increased by 50 percent in 2006. Using hydrocracking and hydrotreating plus wax hydroisomerization, the plant produces Group II+ and Group III, and has the flexibility to make Group III+, said Irvine.

Total capacity at the two units is 13,600 barrels per day of Group II and 2,000 b/d of Group III.

Irvine pegged total global base oil capacity at around 50 million tons per year, and output at around 42 million tons. Looking forward, its more economical to build and operate a Group III plant, he said, but Group II plants are being built because of demand and feedstock constraints, and ongoing need for higher viscosity base oils. Petro-Canada, like others, expects to see Group I plant closures in Europe, with global finished lubricant demand flat, at about 36 million t/y.

Irvine offered insights into each base oil group in the Americas. Group I, he said, has seen some closures, such as Shell and Imperial Oil, but it still plays an important role in industrial lubricants, and bright stock and waxes are valued products. Group I will continue to be used in niche applications such as process oils and diluents oils. However, its future in engine oils is questionable.

In the Group II arena, Chevron is expanding its capacity with construction of its 25,000 b/d Pascagoula, Miss., plant, Irvine continued, and Motiva has narrowed its focus to Group II only. Group II stocks continue to find expanded use in industrial lubes and commercial engine oils.

Irvine grouped Group II+ and Group III base oils together; theres not much difference between a 119 VI Group II and a 121-122 VI Group III, he noted. ExxonMobil, Petro-Canada and Chevron are the regionsmajor Group II+ producers, while Petro-Canada is the lone Group III producer.

He noted that it is impossible to produce heavy products from Group II+/III operations, but the base stocks lower viscosity is ideally suited to automotive applications such as engine oils, transmission fluids and gear oils.

Its our perspective, said Irvine, that the long-term outlook is unclear, but what is clear is that change will be slow over the next five to seven years. There will be no radical changes in base oil requirements. Petro-Canada will continue to manufacture Groups II, II+ and III, he noted. We use Group III where top performance is critical, and we use Group II+ where cost effectiveness is key.

Luc Girard, who also chairs the American Petroleum Institutes Lubricants Group, and cochairs the Auto-Oil Advisory Panel, offered a look at engine oil and transmission fluid trends. For passenger car motor oils, he said, the GF-6 specifications now under development are expected to bring a range of challenges, including a new 0W-16 viscosity grade. Initially formulators believed a polyalphaolefin booster would be required to meet this new vis grade, but all Group III is possible, said Girard.

Group I base oils alone are no longer an option for passenger car engine oils, he continued. The challenge is oxidative stability and volatility. Industry is now tackling the API base oil design matrix for GF-6 and seeking base oil interchange rules for Group III. And API is reassessing the traditional API groups and looking at emerging base stocks.

For transmission fluids, said Girard, low viscosity Group II+ and III base stocks are a good fit. On the heavy-duty engine oil side, the new PC-11 specification is under development, looking for fuel economy, biodiesel compatibility, aeration, oxidation resistance, shear stability and wear protection. Are universal oils on the way out? Girard asked, pointing out to the audience that the auto makers involved in GF-6 development are deeply concerned about the impact that “C” category oils can have on catalytic converters, due to the higher sulfur content present in diesel engine oils.

Irvine and Girard shared their conclusions about base oils in the region. Group I will only be used in legacy products and niche applications. Group II and II+ will be viable in a range of applications, allowing blenders to balance cost and performance.

For Group III, supply is currently ahead of demand, but the industry will see increased use with the arrival of GF-6. And Group III+, Irvine and Girard noted, is still limited to specialized applications. Its currently not cost effective for broader use, but higher performance levels are continually mandated.