Demand for synthetic motor oils continues to grow, as do concerns about the use of the term synthetic. Once considered boutique, high-priced products favored by car enthusiasts and hobbyists whose appetite for synthetics amounted to less than 1 percent of U.S. passenger car motor oil demand, synthetics today are mainstream products that account for close to 15 percent of PCMO volume. And they are on a trajectory to dominate the segment in about 15 years.
But while many are singing the praises of the growth, performance and margins enjoyed by synthetics, our industry is faced with some important questions. What is synthetic motor oil? How do consumers know if the motor oil theyre paying a premium for is in fact synthetic? Does the product deliver the additional performance implied by the term?
The answer to the first question is relatively easy. Whereas synthetic motor oils 40 years ago were those primarily made from polyalphaolefin (API Group IV base oil) and esters (API Group V), that changed in 1999 when Mobil challenged Castrols use of API Group III as a basis for synthetic motor oil. Castrol prevailed in that argument, which played out before the National Advertising Division of the Better Business Bureaus. And although the ruling was for a single product, lubricant marketers immediately interpreted it to allow all Group III base oils to be included under the synthetic umbrella. With a significantly lower cost and higher profit incentive, it didnt take more than a few years before Group IIIs displaced most of the PAO in synthetic PCMO.
Group III base oils are manufactured by processing schemes utilizing hydrocracking and catalytic dewaxing of crude oil fractions. In addition, they now include gas-to-liquid base oils produced from the waxy output of Fischer-Tropsch natural gas reactions. But, its important to note, whereas GTL base oils are in the API Group III bucket, their properties more closely resemble PAO than they do crude-oil-derived Group III. To highlight this, some point to GTL base oils higher viscosity index, lower cold-cranking performance and lower Noack volatility. In addition, they compare alkanes, mono- and poly-cycloparaffins, and other properties to demonstrate that GTL is chemically more like PAO than like catalytically isomerized and dewaxed Group III.
But rather than getting mired in API base oil class envy and a technical tug-of-war about the advantages of one type of Group III vs. another, its critical for us as an industry to address the second question: How does a consumer know that the motor oil they are paying a premium for is in fact synthetic?
One answer is they know because it says so on the label. Further, the price on the products labeled synthetic leave little reason to believe theyre anything but. What more proof does one need?
Facts are, consumers may need more, because the word synthetic is no more than a marketing term. Whereas the lines to separate synthetic base oils from conventional are established, they are muddied and muddled when it comes to defining finished synthetic motor oils. Because of this, the barn door has been left wide open for cheaters to run free and graze in the rich fields of synthetics, with products that may have no business being there.
At the risk of showing how easy it is to game the system, whats to stop a blender from heavily diluting its detergent-inhibitor and viscosity modifier additives with a Group II 100N diluent oil, to the point where the DI/VM treat is greater than half the blend – and then call the finished product synthetic, even though it contains less than 50 percent Group III?
Even more concerning, whats to stop a marketer from labeling as synthetic a run-of-the-mill conventional PCMO containing Group I or II base oils?
Unfortunately there is very little to stop it, since no tests exist to verify that the finished product is made entirely from Group III vs. Group I or II or a blend of these. Whats more, even if one could prove the product was not made with synthetic base oils, there are no legal or regulatory penalties to stop the practice since no official/legal definitions exist for the category.
With Group II base oils costing about 35 percent less than Group III and finished synthetic oils selling for roughly 50 percent more than conventional, a strong incentive for cheating certainly exists – and sources say it is taking place.
But then again, considering that synthetic is no more than a marketing term, does it really matter if a motor oil is labeled synthetic? It sure does, since consumers are paying more for what they believe is a measurable and meaningful reason the word is on the label.
Now is the time to take a closer look at the term synthetic and officially define what constitutes synthetic motor oil, based on measureable and meaningful attributes and clearcut rules. In doing so, we can protect consumers from cheaters and level the playing field for those that play by the rules.
If we dont do it now, it may be too late to do it when synthetics dominate the PCMO segment.
Tom Glenn is president of the consulting firm Petroleum Trends International, and of the Petroleum Quality Institute of America. He currently is updating the multi-client study Lubricant Supplier-Distributor Relations. Phone: (732) 494-0405. E-mail: tom_glenn
@petroleumtrends.com