Under Directive 2005/69/EC, Rasco said, no extender oils can be placed on the market in Europe and used for production of tires or parts of tires if they contain polycyclic aromatic hydrocarbons – particularly benzo(a) pyrene, or BaP – in excess of specific limits. This means that distillate aromatic extracts traditionally used as extender oils are now banned from tires in Europe.

Big tire companies are global, so they have made universal changes, Rasco noted. Its a paradigm shift for the tire industry. A few companies will decide not to supply Europe, but most will find replacements for the oils that are banned as potential carcinogens.

Its difficult to get a firm handle on the volume of DAE being replaced in tires, Rasco said. One estimate is 120 million gallons in the U.S. alone; another estimate is 900,000 to 1.2 million metric tons globally. Whatever the number, however, the worlds tire manufacturers have sought replacements.

Oils found to be suitable as replacements include mildly extracted solvate, treated distillate aromatic extract and residual aromatic extract, said Rasco, but they are not produced in sufficient quantity to supply the volumes needed to replace DAE. A large portion of the DAE replacement will be heavy naphthenics.

Heavy naphthenics with viscosity of 120 to 400 centiStoke at 40 degrees C work well as tire process oil, Rasco continued. Blends of heavy naphthenics and bitumen also work well. But where will the additional volumes come from?

Traditional naphthenic crude deposits, said Rasco, include:
-Venezuelan heavy sour, which is diminishing and clouded by an unpredictable government;
-Western U.S. sour, which is still strong, but not used by larger naphthenic producers and not considered an international crude;
-Texas/Louisiana mid-viscosity, whose production is still good but is not seen as an international crude;
-Chinese heavy sour, which is primarily processed internally and not considered an international crude supply; and
-North Sea heavy sour, which has strong production and supply and is international.

New Crude to the Rescue
Newly discovered naphthenic crude fields include some very strong formations, said Rasco. Central and West Africa have strong formations where multiple fields are now producing. Australia has multiple naphthenic crudes currently in production. Brazil is the latest to reveal new highly naphthenic crudes that will have significant volumes. All these crudes can be supplied internationally, said Rasco, and the two largest producers have deep-water ports and can take advantage of these new sources.

Pale oil users should work with producers to evaluate products that might come from the crudes, said Rasco. It is our opinion that naphthenic crude supply will be good. The only change might be shifts in yields and properties of certain viscosity grades.

Traditional applications for light naphthenics, those of 9 to 60 cSt at 40 degrees C, include light weight polymers, metal cutting fluids and transformer oils. These applications have been severely impacted by the recession, Rasco said, but volumes should increase as the economy improves.

Rasco acknowledged the concern that there will be an excess of light vis pale oils. Its a significant concern, he said. You have to utilize the entire barrel.

Traditional applications for heavy naphthenics, 100 to 400 cSt at 40 degrees C, are greases, adhesives and sealants, printing inks, motor oils, carbon black and tires. The recession and changing times have greatly impacted these applications.

Ink demand has diminished significantly with the rise of computers and decline of newspapers, said Rasco. Motor oils have moved to higher refined stocks. Carbon blacks have found cheaper oils. Adhesives and sealants are very dependent on the housing and auto industry. And greases are still strong, but use less volume due to longer-lasting formulations. All this would spell grim news for the naphthenics industry, concluded Rasco, but tire production has offered new opportunity – so much that the surge in tire demand for pale oils could put pressure on lube applications.

Ergon, he noted, has completed its expansion at its Vicksburg, Miss., refinery, adding 9,000 barrels per day of capacity. All units are on line and running well.