Opponents Bash Biolube Bill


A coalition that includes ILMA, the American Chemistry Council and rerefiner Safety-Kleen opposes a bill to mandate that motor oils sold in California after Jan. 1, 2017, have at least 25 percent biosynthetic content.

Sen. Lou Correa (D-Santa Ana) introduced California Senate Bill SB 916, now titled, Lubricating oil: biosynthetic lubricants: procurement: sale, on Jan. 27. It defines a biosynthetic lubricant as a lubricating oil that contains a biobased product. The California Senate Committee on Governmental Organization, chaired by Sen. Correa, yesterday decided to carry the bill over for two weeks, according to ILMA General Counsel Jeff Leiter.

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The bill specifies that the biosynthetic motor oil must meet minimal standards for biodegradability, stipulating the amount of biobased content within the lubricating oil is not less than 25 percent and that the biobased content is biodegradable. The bill would require the use of biobased motor oil in all state vehicles and state contractors vehicles by January 2016.

More than 20 groups – including ILMA, Safety Kleen and its parent company Clean Harbors – signed a letter sent March 18 to Sen. Correa outlining opposition to the bill. Clean Harbors acquired rerefiner Evergreen Oil out of bankruptcy in September 2013, including its Newark, Calif., rerefinery. The organizations letter claimed the bill would undermine implementation of California used oil recycling program.

SB 916 would reduce if not eliminate the use of rerefined oil, much of which is purchased for state and local agency fleets, because it does not meet the proposed biodegradability requirements, they stated in the letter. Safety Kleen, the states leading rerefiner of used oil reports that it is concerned about the compatibility of biosynthetic used oil with the rerefining process and currently does not accept this material as a feedstock. If subsequent research shows that this material can indeed be rerefined, then existing facilities such as Safety Kleens Newark, California, rerefinery, will likely require significant modifications to produce blended lubricating oil stocks that can be sold in todays marketplace. The capital costs to accomplish such retrofits would have to be passed along to consumers.

The opponents also expect the legislation would result in supply disruptions. On a basic level, SB 916 seeks to abruptly place an existing market into the hands of a few companies within an extraordinary aggressive timeframe, thus causing supply disruptions at the expenses of both consumers and existing companies who currently supply non-biosynthetic based lubricants, they said in the letter. Disrupting an existing marketplace in such an aggressive manner could have serious implications, many of which will be borne by consumers.

The groups suggest the bill, if enacted, would necessitate production of more than 30 million gallons of biosynthetic motor oil annually to meet current California demand. They noted in the letter that the required product – a 25 percent biosynthetic blend – doesnt currently exist in the marketplace nor is it likely to exist by the Jan. 1, 2017 deadline. The biosynthetic lubricants industry does not appear capable of supplying the demand this bill would create, they said.

The environmental benefit claims of the legislation wouldnt be achieved under real world conditions, the organizations asserted, noting that fully-formulated lubricants include additives designed to stabilize the lubricant under extreme operating conditions. The additives will inhibit biodegradation of the base oil fraction and eco-toxicity impacts will remain essentially the same for both biosynthetics and petroleum-based motor oils.

The Independent Lubricant Manufacturers Association, based in Alexandria, Va., sent its own letter in opposition of the legislation on March 19, asserting that if enacted, it would create distortions and dislocations in the market for motor oils in and outside of California while not providing claimed environmental benefits.

The association noted that its supplier members include leading rerefiners across the country and in California. ILMA General Counsel Leiter said the association has talked to several rerefiners. Theyre telling us to the extent you have used oil that is co-blended with at least 25 percent biosynthetic material, that the rerefineries cant use that material to rerefine the base oil, he told Lube Report.

The question becomes what is the fate of used biosynthetic motor oils if they are not acceptable feedstocks for existing rerefineries, and no alternative recycling processes or systems are in place at the time the mandates in SB 916 become effective? ILMA asked in its letter. The likely fate is that significant amounts of used biosynthetic motor oils will be improperly disposed across California, especially if consumers are improperly informed about the toxic nature of the used product, and proper disposal costs are higher than for todays used oils.

Leiter pointed out that the Environmental Protection Agency regulates vegetable oils and animal fats the same way they regulate petroleum oils as far as spills are concerned, and has determined they produce similar environmental effects. A biosynthetic product is no less harmful to the environment, from EPAs perspective, he said.

ILMA acknowledged that association member companies and others are developing and commercializing biobased motor oils. However, their penetration into the market, including California, should be based on performance, price and other factors including environmental benefit. If biosynthetic motor oils perform as advertised by the supporters of SB 916, then the legislation should not be needed.

Leiter said another concern is that the bills supporters dont make the proper distinction between biosynthetic and synthetic products. Federal and California definitions of used oil dont include biosynthetic used oil in their definition of used oil, he noted. The definition is from petroleum-based products or products made from rerefined used oils. Synthetic motor oils that are made from PAO come from petroleum feedstocks, so they would fit within the state and federal definitions of used oil.

ILMA in its letter noted that automakers warranties generally state they are not responsible for engine repairs or replacements if a non-recommended motor oil is used and caused the harm. SB 916 thus jeopardizes the warranties for California consumers automobiles if the biosynthetic motor oils mandated by the legislation cannot meet the current [American Petroleum Institute] and ILSAC standards recommended by the automakers for their vehicles.

The California Council for Environmental and Economic Balance also sent a letter to the senator March 19. The nonprofit coalition said while it has worked on a comprehensive plan for addressing water quality and storm water issues in California, the group believes there are a number of practices that can be implemented for significantly lower costs to the state, municipalities and the public than mandating a new and untested lubricant.

The council said it doesnt believe a mandated lubricant would address the issue of illegal dumping in California. If the focus is illegal dumping, than the effort and direction of this bill should examine public awareness, collection and recycling.

View bill SB 916 at the California governments legislative information web site.

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