Only 82 refineries worldwide produce bright stocks, which are high-viscosity base oils refined from paraffinic crude, said Agashe, who is based in Little Falls, N.J. The10 largest producers account for over 50 percent of the worlds 65,000 barrels per day of production. ExxonMobil is the leading supplier, producing 15 percent of the worlds total in seven refineries. Shell is second, with 9 percent of global bright stock production.

Over 8,000 b/d of bright stocks have gone out of the system from 1995 to 2005 due to closures of Group I refineries and upgrades such as Motivasconversion to Group II production. Asia-Pacific now produces more bright stock than any other region; Western Europe is second.

As engine oil standards become stricter, Agashe continued, pressure will increase to shut Group I plants. Capacity creep, expansions and improved plant operations have resulted in some modest bright stock supply increases, primarily outside North America and Western Europe. Nonetheless, Agashe said, supply is expected to shrink about 11 percent from 2005 to 2015.

Demand, precariously balanced at 65,000 b/d in 2005, comes from gear oils (28 percent of total demand), heavy duty motor oils (13 percent), passenger car motor oils (12 percent), process oils (11 percent), greases (9 percent), marine oils (8 percent), hydraulic fluids (7 percent), and other applications (12 percent). Automotive and industrial gear oils, monograde motor oils and marine oils will be most impacted by the growing shortfall, Agashe said.

Bright stock demand will grow, she said, but at a lower rate than overall lube demand. Use in automotive oils will decline, while fill-for-life and extended drains will reduce bright stock use in gear oil applications. At the same time, bright stock demand will see modest increases in the industrial oil sector, for greases and for process oils. However, aggregate gains in the industrial sector will not offset declining bright stock demand in the automotive sector.

The Asia-Pacific region and North America will have significant bright stock undersupply by 2015, Agashe noted.

There will be no new Group I refineries, but as bright stock prices have increased, supply will increase from existing refiners. Refiners in Latin America, Russia and Eastern Europe have low capacity utilization rates, said Agashe. They can become much more efficient and make more bright stocks.

However, PIB, polyalphaolefins, naphthenics and other products will try to fill the growing gap.

PIB is cheaper to manufacture than other synthetic options, and there are no formulation or blending constraints except heating, noted Agashe. Four companies have almost two-thirds of the PIB lubricants market: Ineos, Infineum, Lubrizol and BASF. PIB is a straight-chain polymer based on butane, and much less expensive to produce than PAO, Agashe pointed out.

PIBs are also commercially produced in very heavy grades, Agashe continued. PIBs suitable for bright stock replacement comprise almost half of the PIBs produced. That compares to just 15 percent of PAOs being suitable.

You need less PIB [than PAO] in reformulating. Kline assumes a four-to-one ratio of a heavy neutral plus PIB as a bright stock replacement. And the PIB industry is poised for growth.

Looking at other possible bright stock substitutes, Agashe noted that PAOs are slightly disadvantaged. Only ExxonMobil and Chemtura make PAO that is heavy enough to use as a bright stock substitute. Plus PAOs are more expensive to produce, and similar amounts of PAOs are needed to replace bright stocks. That is, they are not only more expensive, but much larger volumes are required than of PIB.

Polyalkylene glycol is more expensive than PAOs and not compatible with mineral oils, PAOs and PIBs, said Agashe. Naphthenics are tight, too,but these are tradionally not preferred due to their lowerviscosity indexand oxidative stability characteristics. However, some markets are not looking for a premium product (for example, for monograde engine oils, marine oils, or process oils) and won’t pay extra.

So PIB will be the synthetic of choice to replace bright stocks, Agashe concluded, followed by naphthenics, PAOs, PAGs and others. PIB will fill 80 percent of the shortfall, heavy naphthenics 8 percent. PAO is expected to fill 6 percent of the need, and PAG 5 percent.

There is no one silver bullet, Agashe concluded. There will be undersupply, and with increasing prices we may see some increase in supply but also decreasing demand. Consumers are moving away from using bright stock because of price, and because that’s what people do when prices go up.