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Oil Purification Still A Secret To Many Manufacturers

Bruce Tallerman, |Special to CNBC.com
Friday, 15 Apr 2011 | 2:55 PM ET

The next time you have the oil changed in your car, you might want to ask what happens to it.

Petrotech Oil Purification Unit Onsite
Source: AARPetroTech
Petrotech Oil Purification Unit Onsite

In many cases, it's burned as fuel after being hauled away.

Old oil never dies. It just gets contaminated — and contaminates.

“If there’s a leak or spill on the ground, oil just doesn’t stay in one place. Rain infiltrates the soil, and contaminated oil can make its way into aquifers that supply people with drinking water,” says David Weindorf, professor of Soil Conservation and Land Use at Louisiana State University’s Agricultural Center.

A single oil change produces enough toxic waste to contaminate one million gallons of fresh water, according to the Environmental Protection Agency.

Americans consume about 19 million barrels of oil a day, and waste oil from industrial plants—industry accounts for half of America’s oil consumption — may be handled as hazardous waste, depending on its chemical additives.

The solution is oil purification, a three-decade-old technology for industrial systems, that’s not only affordable, but also generates revenue for the companies that use it.

Oil purification is a green technology that, paradoxically, is still trying to get itself noticed. The Petroleum Conservation Research Association’s website, for instance, does not mention it in its “Tips for Conserving Energy in Industries.”

So why isn’t every plant operator jumping all over this?

“Most people just aren’t aware of it,” says Haig Hachadoorian, founder ofAARPetroTech, a leading manufacturer of on-site oil purification systems. “And if they are, they’re not aware of its tremendous benefits.”

For the most part, he says, plant managers have their waste oil hauled away. Then it’s burned as fuel or sold to a re-refiner.

“I think it’s a matter of education,” says Dennis Santare, Director of Business Development, AAR Aircraft Component Services , which recently joined forces with PetroTech. “If the manufacturers don’t understand the savings involved, they don’t see the need for purification.”

The implications of real-time oil recycling, on both the consumption and environmental fronts, are enormous. Yet, according to Hachadoorian, who patented a vacuum-distillation oil purification system in 1978, a scant 5 percent of all industrial plants in the U.S. are restoring and reusing their oil.

One reason, says a spokesman at the American Petroleum Institute is that “a plant would have to have a large amount of oil to process,” as well as technically skilled employees, to justify on-site purification.

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Santare disputes that. “Even small to mid-size plants will break even in a matter of months on new oil costs alone," he says, adding that operating the unit requires no special training.

One industrial manufacturer that has seen the green in oil reclamation is Weber Metals , a company that forges aluminum and titanium for the aerospace industry.

Weber’s plant currently uses two PetroTech units full-time to purify hydraulic oil from its presses. According to Bob Naumann, VP of facilities, the units recover up to 95 percent of the oil his equipment uses.

“I went from 1,000 gallons of waste oil a month to 1,000 gallons every year,” says Naumann.

You don’t have to be a math whiz to figure out how much Naumann is saving in oil purchases. New oil costs him $8-12 per gallon. Instead, he says, he pays 30 to 70 cents per gallon to recycle it.

A typical oil purification unit runs about $40,000. Naumann says his unit paid for itself in a matter of months.

FordMotor was one of the first major manufacturers to make Hachadoorian’s system a regular part of its production line. By its own estimation, Ford used to go through more than a million gallons of oil a day in one of its plants. With on-site recycling, that dropped to 80,000 gallons.

“Savings on new oil purchases is just the beginning,” says Hachadoorian, whose clients also include Toyota,Caterpillar and the U.S. Air Force.

CNBC Investing In Green Tech 2011
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“Oil purification has a chain effect on cost savings right down the production line. For instance, companies pay certified haulers a lot of money to dispose of their waste oil—a considerable expense in itself.”

Naumann’s plant is a case in point. He says he pays $2 for every gallon of oil he throws out. His annual cost of disposal used to be $24,000. With recycling, that figure dropped to $2,000.

Consider another way oil purification impacts the bottom line: downtime. Companies lose thousands of dollars in revenue per hour when equipment goes down for repairs. Contaminated oil is the chief culprit, according to Hachadoorian; contaminants cause erosion, and eventually failure, of critical systems and parts.

“Purification not only reduces lost revenue from downtime,” he says, “but all the costs associated with replacement parts. It’s preventative maintenance.”

How it Works

Purification units such as PetroTech’s are like dialysis machines for industrial equipment. They’re wheeled in and hooked up to systems that use oil, such as turbines and hydraulic pumps. A process of ultra-fine filtration and vacuum distillation scrubs the oil of contaminants, restoring it to its near-original condition.

Other companies manufacture oil reclamation equipment, including The Pall Corporation and Hydraulics International, but the vacuum distillation process is exclusive to PetroTech. Otherwise, the industry is fragmented, with companies offering different equipment for different purposes.

Petroleum (mineral-based oil) is only one untapped resource for purification. Hachadoorian envisions another in synthetic fluids like Skydrol, used in the hydraulic systems of airplanes. PetroTech’s partnership with AAR Corporation, a provider of products and services for the aerospace industry, will focus on the commercial airline market.

“Grounded planes mean cancellations—a big liability for airlines,” says Santare. He estimates the cost of downtime for a wide-body jet to be as much as $14,000 per scheduled flight. Purifying Skydrol (which is more expensive than petroleum) can significantly reduce a plane’s ground hours, he says.

The case for industrial oil reclamation grows stronger as oil prices climb and supplies grow scarce. And, with corporations becoming more accountable for their “carbon footprint,” there’s no better time to go green with contaminated waste oil.

“Today, it’s no longer the oil that needs changing,” says Hachadoorian. “It’s the thinking.”

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