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GM: Tests Will Top $50M

Seven of todays engine oil sequence tests need replacing by 2014, says General Motors, requiring it to invest some $50 million. That cost is one of the key drivers behind its trademarked Dexos engine oil specifications and licensing program, Eric R. Johnson of GM Powertrain told the Independent Lubricant Manufacturers last month.

The advanced Dexos oil spec will boost fuel economy, reduce emissions and increase value for GM drivers, but additionally, he stated, by 2014, many current engine tests will be gone. OEMs cannot continue to fund the majority of oil specifications and engine test development without some reimbursement to offset a portion of the cost.

GM recently changed the fees for licensing the Dexos name. Lubricant marketers with oils meeting the spec will pay $1,000 per year per formulation, for a five-year term. In addition, licensees will pay a royalty based on their available Dexos market, as calculated by GM. As Dexos sales grow, the royalties will help pay for developing future specifications and tests, program monitoring, and end-user and installer education, Johnson said.

The Center for Quality Assurance, part of Midland, Mich.-based Savant Group, manages the Dexos licensing program for GM.

Older Fleet, Growing Aftermarket?

The number of cars and light trucks scrapped in the United States in the past 15 months substantially outnumbered new vehicle registrations, says current data from the automotive research firm R.L. Polk & Co. Meanwhile, owners held on to their vehicles much longer. Result: an aging fleet that will need to buy more aftermarket products and services.

More than 14.8 million cars and light trucks were retired from the fleet between July 1, 2008 and Sept. 30, 2009, while new registrations slightly topped 13.6 million, for an overall fleet scrappage rate of 6.1 percent. That included thousands of units scrapped during last years cash for clunkers program, and continued a trend Polk has seen over the past five years for consumers to keep their vehicles longer.

The average light vehicle on U.S. roads reached 10.2 years of age in the study period; thats 21 percent older than the average 14 years earlier. Owners also are holding on to their autos longer, keeping them for an average 49.9 months, versus 45 months a year earlier.

These trends suggest big opportunities for repair services and aftermarket parts, as older vehicles fall out of warranty, commented Polks Mark Seng. Polk expects these vehicle scrappage and ownership trends to continue for at least another year.

SN in Limbo

As this issue goes to press, the American Petroleum Institute is awaiting results of a revised ballot on its API SN and SN Resource Conserving engine oil categories. These are the companion categories for ILSAC GF-5, the new passenger car engine oil upgrades that officially begin licensing on Oct. 1. If approved, API SN will define performance for viscosity grades such as SAE 10W-40 and 15W-30, which are not covered in the ILSAC spec.

API folded its first SN ballot after it drew vocal opposition from auto company representatives, who deemed it too lax in areas such as phosphorus content, turbocharger deposits and elastomer compatibility. After rewriting and tightening the spec, the API Lubricants Committee issued a new ballot early last month. It hoped to have SN ready for first licensing on Oct. 1, the same as GF-5, but that timing could be in doubt if the current ballot fails.

Rerefinery Aims for 2012 Opening

Heritage-Crystal Clean says its planned new rerefinery in Indiana could begin production in 2012, and would have capacity for about 2,000 daily barrels of API Group II base oil. With a capital cost of $40 million, the plant would employ vacuum distillation followed by hydrotreating (considered the standard for modern rerefining), and be able to process 50 million gallons of used oil per year.

Headquartered in Elgin, Ill., Heritage-Crystal Clean currently provides parts cleaning and waste services, and also collects used oil, which it sells as fuel to electric utilities and asphalt plants. Its management team includes CEO Joe Chalhoub and other former Safety-Kleen executives and engineers, who would steer the design and construction of the rerefinery.

Chalhoub told Lube Report the most likely location for the plant is Heritage-Crystal Cleans hub in the Indianapolis area, where transportation, storage tanks and other infrastructure are already in place.

PQIA Unveils Quality Report

Industry consultant Thomas F. Glenn, president of Petroleum Trends International, has launched an independent oil-quality testing program called Petroleum Quality Institute of America. It vows to conduct random sampling of packaged motor oils, have the samples analyzed by an independent laboratory, and make public the test results at www.pqiamerica.com. Our mission is to serve the consumer of lubricants by reporting on the quality and integrity of lubricants in the marketplace, Glenn told Lube Report last month.

PQIA has posted at its web site the test results of its first 10 samples, all major oil companies products and all with passing results, Glenn said. PQIA was preparing to post its second batch of results as this issue went to press, and Glenn said it plans to continue with five to 10 samples per month.

Funding for the testing is provided by company sponsors, who also appear on the web site – a choice that sparked criticism from some lubricant manufacturers. We support 100 percent of the objective of improving oil quality, Anwer Hussain of Minnesota-based lubricant blender CHS. But we are concerned about the sponsorships, that sponsors may have influence.

Others expressed concerns about the fairness and appropriateness of the tests, wondered if results could be appealed, and worried that the testing program would undermine other watchdog efforts under way at API and ILMA. In response, Glenn said he is building a firewall between sponsors and testing, and will establish an industry advisory committee to assure independence and objectivity.

Editors note: Tom Glenn is paid to write the Need to Know column for this magazine. LNG Publishing has no other business ties to Glenn and/or his companies.

Base Oil Capacity Ticks Up

Total U.S. base oil manufacturing capacity at Jan. 1 was 219,900 barrels per day, up almost 6 percent from the start of 2009, according to the latest data from the National Petrochemical & Refiners Association. The 2010 NPRA Lube Oil & Wax Capacities Report, published in late March, summarizes locations, capacities, ownership and plant configurations for 19 base oil and wax facilities in the United States, five in Canada and two in Latin America. Rerefineries also are listed in the comprehensive 13-page report.

In the United States, API Group I base oil capacity on Jan. 1 stood at 63,600 b/d, compared to 62,700 b/d in 2009, the report shows. API Group II and III capacity was 105,800 b/d, up from 102,300 in 2009. And naphthenics reached 45,100 b/d this year, versus 37,400 before – a substantial gain due to expansions completed last year at Ergons refinery in Vicksburg, Miss.

The full report costs $35 (free to NPRA member companies). To order: http://www.npra.org/ publications/statistics/

Polish Your Grease Knowledge

NLGI offers three essential education courses on lubricating greases next month during its 77th Annual Meeting in Bonita Spring, Fla., June 13-15. This is a once-a-year opportunity to attend the industrys most acclaimed grease education courses, taught by leading experts. The curriculum is useful for newcomers as well as those needing to brush up their understanding of the field. Offerings include the Basic Grease course, which has more than 1,000 alumni; Advanced Grease; and Grease Applications & Maintenance. Each day-and-a-half course costs only $815 ($690 for NLGI members), with discounts before May 7. The fee includes course materials, several meals, attendance at NLGIs gala banquet, and entrance to all NLGI Annual Meeting sessions. Visit www.NLGI.org for details.

Monson Takes on Esters

Teknor Apex, of Pawtucket, R.I., has signed Monson Companies to be its U.S. distributor for the Tru Vis line of lubricant-grade esters. Monson, based in Leominster, Mass., also distributes BASF lubricant additives.

Growmark Buys Illinois Marketer

Growmark has bought the lubricants and fuels business and inventory of Pierron, Ill.-based Tri-County Petroleum, covering southern Illinois and metropolitan St. Louis, Mo. Growmark Lubricants now owns Tri-Countys Extreme Lubricants brand and will service all its lubricant accounts, handling heavy-duty and passenger car motor oils, hydraulic and transmission fluids, and greases. Terms of the deal were not disclosed.

Growmark, a regional agricultural cooperative, said it hopes to continue Tri-Countrys distribution of Mobil lubricants. Growmarks own lubricant brands include Archer, United and FS (for farm supplies), and it also owns the former McCollister & Co. lube blending plant in Council Bluffs, Iowa.

Sealub Comes Ashore in U.S.

Taking broad aim at North Americas marine lubes market, Sealub Alliance Americas is partnering with local, independent blenders and agents to establish a continent-wide manufacturing and delivery network. An affiliate of Hong Kongs Gulf Oil Marine, Sealub has partnerships in place to supply marine lubricants to more than 700 ports worldwide, and now will be able to support ships at more than 80 U.S. and Canadian ports as well as Panama.

Blender partners for the venture include Advanced Lubrication Specialties of Bensalem, Pa.; Martin Midstream Mega Lubricants (Houston); General Petroleum (Los Angeles); Pacific Functional Fluids (Tacoma, Wash.), and Maxums Panalube Division (Panama). Additional delivery agents are Marine Oil Service of Norfolk, Va., Belle Chasse Marine Transportation in Louisiana, and Ranier, Wash.-based Ranier Petroleum.

Faces in the News

KS Ryu has arrived from Seoul, Korea, to Houston to take the reins as president of SK Lubricants Americas. Ryu began his career with the companys lubricants business in 1988, and joined its base oils team in 2002. He takes over from YM Park, who took the Yubase base oils business global in 1993, and now returns to Seoul as general manager of its global base oil marketing team.

Mark Lexow is the new executive vice president, sales and marketing, at ZXP Technologies. Formerly with Pennzoil and Shell, he brings the Houston-area lubricant blender and packager more than 27 years experience in planning, lubricant plant management, branding and sales management.

Mike Burnett has joined the base oil team at Renkert Oil LLC as managing director, international sales. Based in the Jackson, Miss., area, he previously was with Ergon Inc. At Renkert, Burnett will be responsible for developing sales in Europe, South Africa and South America, and in particular for building and supporting international markets for Chevron process oils it distributes.

Industrial lubes and chemical services supplier Quaker Chemical has promoted Joseph A. Berquist to vice president, managing director of North American operations. A chemical engineer with an MBA from Case Western Reserve, Berquist has served Quakers steel, metalworking and fluid power businesses since 1997, and most recently was senior director, commercial.

Safety-Kleen has picked David A. Eckert as its new chief executive officer. He has broad industrial experience, including as CEO and in senior executive positions at Iron Age, Clean Harbors, Smith Valve and others. He holds a science degree from Northwestern and MBA from Harvard.

Petroleum Chemicals, the Sacramento, Calif.-based additive company, has tapped Mark Trotter as West Coast area manager, serving customers in states west of the Rockies and in Western Canada. Trotters background includes 14 years with Chevron Chemicals (primarily at Oronite), chemical industry consulting, and the startup and sale of two alternative energy businesses.

Solomon Associates U.K. office has added Stephen Wright as a senior consultant in its refinery performance consulting team. Wright moved to Solomon from another consulting firm, and has deep experi-ence including 15 years in management at Exxons Fawley, U.K., refinery and oversight of its lubes complex.

Petroleum additive distributor MidContinental Chemical Co. has hired Brad Craig and Russ Novosad as sales representatives. Craig, with more than 27 years in marketing, including with Unocal, ConocoPhillips and Tower Energy, will handle fuel and lube oil additive sales in southern California. Novosad, a 25-year industry veteran, joins MCC from Bel-Ray. He will manage growth in Indiana, northern Illinois, Wisconsin, Minnesota and North and South Dakota.

Scot King is the new Eastern regional sales manager for lube manufacturer Chemlube International, with focus on the Southeast and mid-Atlantic regions. Based in Mooresville, N.C., King has spent 19 years in oil sales and marketing.

Strongsville, Ohio, industrial lube manufacturer Wallover Oil Co. has appointed Jon Stansell as regional manager, responsible for growth in Texas and Louisiana. Stansell has extensive experience in sales and service of metalworking fluids and filtration, and previously was with Interactive Technology in Lebanon, Tenn.

Midwestern chemical distributor Walsh & Association named Benjamin Haddox its sales representative for the Great Lakes region. He most recently was a sales manager for Univar.

Steve Zirilli has joined Maxum Petroleum, the Greenwich, Conn.-based fuels and lubes distribution giant, as vice president and chief information officer. His background includes positions with business consultants Alvaraz and Marsal, the KBR unit of Halliburton, and Arthur Anderson.

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