Youre better off if you can find Group II solutions to Group III problems, said Doug Bea, global base oil project manager with Group II producer Chevron, based in San Ramon, Calif.

The posted price differential between Group II and Group III base oils in the United States is significant. This week, the lowestGroup II posting is $4.39 per gallon ($1,364 per metric ton), and the lowest Group II+ posting is $4.91 per gallon ($1,520 per ton). This compares to $5.61 per gallon (about $1,770 per ton) posted for 4 and 6 cSt Group III base oils.

The drive to reduce emissions, increase fuel economy and improve performance under severe operating conditions has resulted in sulfur limits in engine oils, Bea told the NPRA meeting. For example, under the API CJ-4 and ACEA E9 specifications, sulfur is limited to 0.4 percent weight, meaning formulators want no-sulfur base oils.

Group II and III base oils are superior to Group I in offering higher purity, better oxidation stability and very low aromatics, because Group I is made by the solvent extraction process that removes just 50 to 80 percent of impurities. By comparison, Group II and III base oils are made by hydroprocessing, converting 98 to 99.99 percent of the bad molecules to high quality base oils, and [Groups II and III] can use crude from many sources, Bea said. Stricter environmental regulations mean you cannot use Group I.

The formulators new choice, he continued, is between Group II and Group III, which offer similar purity and high oxidative stability. Viscosity index is the only difference. For many applications, Group II is the same as Group III, said Bea. And in some cases, for example in turbine oils, Group II can outperform Group III.

The market is moving to higher performing engine oils, Bea noted, as the market share of 5W-xx multigrades continues to grow at the expense of 10W oils. Groups II and II+ can meet the majority of automotive specifications.

In Europe, Bea said, Groups I and III have traditionally been blended, but Groups II and II+ work well, reducing the need for Group III base oils except in the lightest 0W grades. Bea cited the example of formulating an ACEA E9/API CJ-4 10W-30 oil. The formulator could blend 70 percent Group I with 30 percent Group III, or could use an all-Group II solution, blending 45 percent Group II with 55 percent Group II+. The benefits, Bea contended, include reduced costs.

Source: Doug Bea, Chevron

Going to an all-Group II formulation also gives ease of supply and qualification, Bea asserted, with major sources in both North America and Asia. Plus, he added, Group II is available globally from single sources ExxonMobil and Chevron, providing security of supply from multiple locations. Chevron currently supplies Group II from Richmond, Calif., and from its GS-Caltex joint venture in Korea. The company will have a third plant with the addition of Pascagoula, Miss., scheduled to open in 2011. ExxonMobil supplies Group II from the United States and Singapore.

How has Europe, a traditional Group III market, received Group IIs? The reception has been mixed to good, Bea said. Challenges include automotive qualifications. It takes time and money to get approvals. Group II is a good solution in Europe, but integration in the European qualification system takes time.