Market Topics

Back to Base Oil


COLUMBUS, Ohio – When a bottle of motor oil is poured into a cars engine, the streaming oil looks like liquid gold. After thousands of miles on the road, it drains out like thick black ink. For those who take their cars to their local mechanic or quick lube, this doesnt matter; they assume the used motor oil will be disposed of without any need for worry.

Rerefiners like Heartland Petroleum LLC give used lubricating oils a second life. For decades, the family-owned and operated oil recycler has collected up to 15 million gallons a year of used automotive and industrial oils and refined it to produce an industrial boiler fuel.

In August, the firm will shift gears when it opens a new $25 million hydrotreating facility here in Columbus that will have capacity to produce 1,500 barrels per day of API Group II base oil. The oil will be marketed through a network of distributors – led by Toledo, Ohio-based Lyden Oil Co. – that will serve customers throughout the Midwest and the East Coast.

The burning of used oil in unchecked boilers will some day cease, Heartland President and CEO Bill Snedegar told LubesnGreases during a visit in April. The state of California has already stopped the burning of used oil, and mandates that it must be recycled if it remains in the state. Thats one of the reasons why we saw the need to recycle used oil back to base oil.

Hard-hat Zone

On a section of the facilitys five acres, construction crews have dug up the earth and installed the towering skid-mounted sections that will serve as the main base oil production unit. Skid-mount means that the facility was built off-site – in this case Virginia – and will be shipped to the permanent site for erection.

About 30 percent of the construction was complete during the visit, including 18 white storage tanks that will hold 500,000 gallons of used oil to feed the rerefinery process, said Heartlands chief operating officer, Gene Gornall. When it begins operations, the company anticipates bringing in 20 million gallons a year of used oil (up from 15 million gallons now), mostly passenger car and light-truck crankcase oil.

Gornall explained that the first step in the process will be to remove any light distillates and water, which are then sent to a holding tank for natural separation and off-site disposal. The second phase will produce a 100 Neutral base oil that is sent to a segregated tank. The third phase will produce a 150 Neutral base oil that is also sent to a segregated tank. The final stage will produce a 225 Neutral base oil.

The three cuts will be blended back together, Gornall continued, and sent to the hydrotreating step of the process to produce a 150 to 175 Neutral base oil that can be marketed as a Group II+. The complete hydrotreating section is set to arrive in July.

For now, Heartland will produce base oil only here at its Columbus headquarters. Four other branch locations throughout Ohio, in Norwalk, Zanesville, Boston Heights and Cincinnati, as well as facilities in Mount Sterling, Ky., and Nitro, W. Va., will continue to make industrial fuel until they someday are converted over, Snedegar said.

The company also has constructed a new two-story building opposite the facility, where operators will sit in a mission control-style room that will give them two-way communication with plant technicians on the ground.

Rerefining 101

Motor oil is composed of roughly 80 percent base oil and 20 percent additives, and rerefining is the process that extracts the base oil portion from the depleted additives, dirt, metal and impurities found in used motor oil. Modern rerefiners dont simply separate or distill the oil, but also hydrotreat it, a needed step to make it acceptable for reuse in most lubricants.

Although it does not subsidize the cost of rerefining – unlike Great Britain, France, Spain, Italy, Austria and Korea – the U.S. federal government, including the military, Postal Service, General Services Administration, CIA and FBI, has moved toward the use of rerefined motor oil since 1998 when it was mandated by President Bill Clinton by executive order.

We dont see more rerefineries because of the cost, said Snedegar. Most oil recyclers are family-owned and operated, and there is no government support for it.

According to the National Petrochemical & Refiners Association, there are just four rerefineries that produce hydrotreated base oils in North America. They are Evergreen Oil in Newark, Calif., with a capacity of 800 b/d of Group II; Newalta Corp. in North Vancouver, Canada, with capacity of 500 b/d of Group I; and Safety-Kleens plants in East Chicago, Ind., and Breslau, Canada, with capacities of 3,500 and 1,500 b/d of Group I, respectively.

However, when virgin base oil prices rise, rerefining becomes more economically viable – which could lead to a more crowded field.

Mr. Clean

As Heartland gets ready to add its name to this small fraternity, Snedegar believes that his companys location is key. Columbus is a good distribution center. We have access to rail, an interstate system, utilities and sewer.

Each day rail cars or a fleet of oil collection trucks bring used oil to the facility from oil-change centers, car dealers and small used oil producers. The company also purchases it from other used oil collectors.

The industrial boiler fuel it currently produces is used to power shop furnaces and is marketed to steel mills, paper mills and asphalt plants. Before a customer receives the final product, an independent laboratory analysis is performed. The firm undergoes audits for regulatory compliance to EPA and OSHA standards, and prescreens oil clients to ensure they have appropriate EPA regulatory authority to receive and burn recycled oil.

As part of its operations, the firm also collects and recycles used oil filters, which are crushed into cubes, and the recovered oil is sold to steel foundries. Used antifreeze is also collected and disposed.

Heartlands other services include collecting and disposing drum waste and wastewater from businesses, and cleaning customers on-site oil-water separators. It manufactures and sells a virgin grade of antifreeze and a non-flammable windshield washer fluid.

Recycling means it is used over and over again and not depleted, said Snedegar. What weve been trying to do for over half a century is recycle and follow the green initiative. In fact, the company is on board with Columbus Mayor Michael B. Colemans Get Green Columbus initiative that offers tax incentives to encourage more green businesses in the community.

Past and Present

Heartland Petroleum was launched in Columbus by Bill Snedegar, who previously owned a petroleum and commodities marketing company named Intercoastal Trading, which moved used oil on barges into the Gulf Coast area. It was eventually sold to a Dallas-based corporation.

But the story of how the Snedegar family got started in the oil recycling business goes back to his father, Rex Snedegar Sr. In 1950, Snedegar Sr., an employee of Detroit-based Phillips Oil, left Michigan and came to the Buckeye state to start Columbus Oil. He owned and operated the business until he passed away in 1973, leaving the company at a crossroads. His 10 children were split about the future of the business; his six daughters wanted to sell off their fathers assets while the Snedegar brothers wanted to continue in the oil business.

For a time, all the brothers and their sons were spread out across the country in Florida, Indiana, South Carolina and Ohio with their own oil recycling companies.

Thats when we decided we wanted to bring the family back together again, said Snedegar. Ohio license plates used to read the Heart of It All and thats where we got our name.

In 2007, Snedegar formed the Heartland Refinery Group LLC, a separate entity from Heartland Petroleum that consists of a board made up of Snedegar family members and other minority investors.

The company says it will eventually blend lubricants to produce a line of eight to 10 finished products, most likely including motor oils and hydraulic fluids. The goal also is to expand in the future with more regional rerefineries.

But for now, with production of base oil fast approaching, Snedegar says that the company is looking forward to its new direction.

The main reason we are switching focus is because Heartland believes we are wasting valuable natural resources that can be used again.

Related Topics

Market Topics