MA R CH 2 0 1 3 VO L . 1 9 I S S U E 3

Motor OilPackaging

Trends

OSHA RulesCost: $110

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3LUBESNGREASES

LUBESNGREASESThe Magazine of Industry in MotionLNG Publishing Company, Inc.6105-G Arlington Blvd.Falls Church, VA 22044 USAPhone: (703) 536-0800Fax: (703) 536-0803Website: www.LNGpublishing.comE-mail: info@LNGpublishing.com

Nancy J. DeMarco Publisher Lisa Tocci Managing EditorRichard Beercheck Senior EditorGreg Whitlow Art DirectorSheryl Unangst Circulation ManagerRobert Green Circulation Assistant ManagerLaura Hughes Production Assistant

George Gill, Tom Glenn, Jack Goodhue,Carolyn L. Green, Boris Kamchev, David McFall, J. Berkshire Miller, Tim Sullivan, Steve Swedberg Contributors

Gloria Steinberg BriskinManaging Director/Vice President, AdvertisingPhone: (703) 536-7676

(800) 474-8654gloria@LNGpublishing.com

Megan Matchett Account Managermegan@LNGpublishing.com

LubesnGreases (ISSN1080-9449), an independenttrade magazine, is published monthly by LNGPublishing Company, Inc., 6105-G Arlington Blvd.,Falls Church, VA 22044 USA. Copyright 2013, LNG Publishing Company, Inc. Printed in USA.

Subscriptions to the print edition are free to qualifiedsubscribers in the United States and Canada who areactive in the lubricants industry as man ufacturers, marketers, volume buyers and users, or as supplierswho maintain close ties to the lubricants industry.Qualification is subject to publishers approval.

Subscriptions to the print edition outside theUnited States and Canada: $115 for 12 issues;$215 for 24 issues.

Subscriptions to the digital edition are free to qualified subscribers worldwide.

Periodicals postage paid at Falls Church, VA andadditional mailing offices.

POSTMASTER: Send address corrections to LubesnGreases, LNG Publishing Company, Inc.,6105-G Arlington Blvd., Falls Church, VA 22044 USA.

CANADA POST Agreement 40064709. Return undeliverable Canadian addresses to: IMS, P.O. Box 122, Niagara Falls, ON L2E 6S8

Lubes nGreases is a registered trademark of LNG Publishing Company, Inc.2002 FolioShow Editorial

ExcellenceAwardGold Winner

errors about polyalkylene glycols; it wrong-ly called them toxic, slow to biodegradeand poor in water tolerance. In fact, justthe opposite is true. As our ownpast articles have shown, manyPAGS, particularly water-solubletypes, are highly suited asEnviron mentally AcceptableLubricants. They meet high standards for toxicity, biodegrad-ability and safety, as well as performance.Managing Editor Lisa Tocci

agrees these errors should haveraised a red flag. Readers areright to be angry, she told me.We blew it. Theres no excuse fornot catching such inaccuracies.We apologize to our readers for

not having been more alert andnot using more editorial rigor. We look for-ward to setting the record straight in futureissues. Meanwhile, please see the Lettersto the Editor on page 62 of this issue.

Nancy J. DeMarconancy@LNGpublishing.com

PUBLISHERS LETTER

What? You dont get Lube Report!?That means you dont haveCarolyn Greens priceless U.S.base oil price reports in your inbox everyWednesday morning her pithy weeklyroundup of base oil price moves, insights,trends and gossip. It means youre missingRay Massons mesmerizing tales of baseoil pricing in Europe, the Middle East andAfrica. Youre missing Adrian Browns SSYbase oil shipping report unmatchedinformation about the costs and challengesof moving the products we care aboutaround the globe.And it means youre missing our editorial

teams original reporting on breaking indus-try news, under the direction of SeniorEditor George Gill.Lube Report is essential, its a fast read,

and its free worldwide. Visit www.LubeReport.com to see the current issue,check out past issues in the archive, andstart your own free subscription.

Readers have been quick to point outthat Februarys article EPA to RequireGreen Lubes for Vessels contained grave

Get Hip to Lube Report

Lisa Tocci, Nancy DeMarco & Gloria Steinberg Briskin

4 MARCH 2013

TABLE OF CONTENTSF E AT U R E S :

14 The $110 Million Rule. Thats just the start of whatU.S. lubricant and metalworking fluid manufacturers

will have to shell out, to comply with OSHAs new

Hazard Communication Standard.

22 The Value of Due Diligence. Thinking of a merger,acquisition or sale of assets? Before you buy, sell or

even ship, be sure that environmental liability wont

come back to haunt you.

30 Boosting Baytowns Base Oil. ExxonMobil plans toexpand API Group II and II+ production capacity at its

massive Texas refinery. Heres a preview of whats

coming by early 2015.

34 Motor Oil Packaging Trends. Just because a packagelooks great doesnt make it a great design, says an

industry expert. If it slows your filling line or buckles

during shipping, its a loser.

40 Drumming Up Business in Louisiana. IMTTs bulkliquid terminal was established to store and transfer

material not package it. And then a big chemical

company asked it to start filling drums.

Page 22

Page 30

Page 40

MA R CH 2 0 1 3 V O L . 1 9 I S S U E 3

D E PA R TM EN T S :

3 Publishers Letter6 Automotive46 Need to Know48 Product News54 PlacesnFaces

62 Letters to the Editor63 Advertiser Index64 Base Oil Report66 Your Business

Cover photo olmarmar - Fotolia

> New technology goes to additive.

> OLOA 21030 goes to equipment.

> Morning shift goes to work.

> Heavy load goes without a glitch.

> Job well done goes noted.

2013 Chevron Oronite Company LLC. All rights reserved. The Chevron hallmark, Oronite, OLOA and Making the things that go, go better are registered trademarks of Chevron Intellectual Property LLC.

When you work with heavy loads in extreme conditions, you need to know your machines can meet the high demands. That is why Chevron Oronite has created OLOA 21030 for power-shift transmissions, final drives, and hydraulic systems in heavy-duty off-highway equipment. Built from more than 20 years of experience with

OLOA 9790 technology, OLOA 21030 offers the required lubricant performance of the TO-4 specification at an efficient treat rate. For more information about how

OLOA 21030 can be utilized in a wide range of equipment across a broad spectrum of OEMs, please contact your local account manager or visit www.oronitegoes.com.

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things that gr, ego better.

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Pat Wirths company, J&PLube Inc., owns and oper-ates a fast-lube store nearWashington, D.C., and sheis the current president ofAOCA, the trade group rep-resenting owners of conve-nient oil change outlets.This organization has morethan 1,200 members whotogether operate some3,800 fast-lubes and automaintenance centers in theUnited States, Canada,Mexico and elsewhere.Some of these are hugenational chains, like Jiffy

MARCH 2013

Owners Manuals: More Pages, Less Oil

AUTOMOTIVE

BY STEVE SWEDBERG

6

Lube and Valvoline InstantOil Change, but many arefranchisees or independentone-shop retailers.Pat told me she is

increasingly concernedabout the oil change rec-ommendations in vehicleowners manuals and theirimpact on her industry.Specifically, she recentlypurchased a 2013 AcuraMDX, and on reading theowners manual found thatshe was supposed tochange the oil only whenthe change oil light cameon. There is no maximummileage or time intervalrecommended for this ser-vice just when the lightcomes on.She also shared with me

a note from another col-league, who enclosed apage from a Mini Cooperowners manual. That man-ual states, Only Mini deal-ers are to perform oilchanges. For someonewho sells oil change ser-vices, thats like theproverbial red flag in thebulls face!The fact is that many

established oil changestores are seeing declinesin car counts, the numberscoming into their bays

The other day I spokewith Scotti Lee andPatricia Wirth about

recommendations forengine oil changes, as seenin vehicle owners manuals.For those of you who dontknow them, Scotti Lee is alongtime veteran of thefast-lube industry. Founderof Oil Changers inWilmington, Del., he is apast president of theAutomotive Oil ChangeAssociation and a guru foranyone trying to learn theropes in the business.

Continued on page 8Santa Monica Mayor Richard Bloom, left, and CalRecycles Mark Oldfield, promoting Californias Check YourNumber campaign, which urges drivers to rethink their oil drain intervals. (Photo: Barbara Gregson/PR Newswire)

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Start your next lubricant formulation with a company as committed to innovation as you are. Whether your latest formulation challenge is meeting changing specifications or new regulations, our diverse portfolio of low and high viscosity polyalphaolefin, ester and alkylated naphthalene base stocks opens the door to a broad range of innovative solutions. With global supply capabilities, continuous synthetic innovation and extensive experience working with formulators to help them optimize their formulations, ExxonMobil Chemical can help you turn todays formulation challenges into tomorrows opportunities.

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each day for service, andhave for the last five years.To keep the businessgoing, many operators are

branching out into lightmaintenance work oradding carwashes. Someare even offering ownersmanual classes, teachingtheir customers about theimportant information andsafety practices theyll findin there, such as regularlychecking tire pressure.As Scotti Lee pointed

out, waiting to change theoil until the light comes onmeans fewer chances toinspect the other vehiclesystems. He urged fast-lube operators to providecustomers with a writtenchecklist that explains howregular checkups help toassure vehicle safety andreliability; why the engineoil needs changing; whatother fluids need to bechecked and topped off;and the value of investingin vehicle maintenance.All this led me to thinking

about owners manuals andhow they have changedover the years. I decided totrack down some oldermanuals and compare whatwas in them back in theday versus now.

I started my quest bytrying to latch on to anowners manual for a1957 Chevy Bel Air, whichwas the first car I owned

(second-hand, of course).Its not easy to find suchthings. Finally, I got intouch with Jim Linden.Retired now from GeneralMotors, he chairs the SAEFuels & LubricantsDivision and also worksas a consultant.Linden is more Internet

savvy than I am, and sooncame back with an elec-tronic version of the book a grand total of 33pages long. When I com-mented that the ownersmanual for my 2001 GMCpickup has 446 pages, hequipped that the sectionon how to set up theGMCs radio probably ranmore than 33 pages.(Actually, its only 18pages.) The GMC manualhas 70 pages of advice onseat belts; my 57 Chevydidnt even have seat beltsuntil I installed them.At any rate, the direc-

tions on oil maintenancein the 57 book are quiteinteresting. The primaryrecommendation forengine oil reads, In theselection of the gasoline

8 MARCH 2013

Continued from page 6 and engine oil to be used,it is best to consider thereputation of the refineror marketer. He is respon-sible for the quality of hisproduct and his reputa-tion will be your best indi-cation of quality.The 57 manual goes on

to define oil quality as MSor DG, under the classifi-cation system which pre-ceded our current APIService (S) and Commer -cial (C) categories. themanual is very ambiguousand leaves a lot of roomfor interpretation. Finally, itoffers viscosity-grade rec-ommendations, shown inthe table at left.GMs recommended oil

change interval for the BelAir was 2,000 miles undernormal driving conditions,with adverse drivingrequiring more frequentchanges; howeveradverse wasnt defined.Quite frankly, I dont

know what viscosity gradewas actually used in the57, since I had the oilchanged by my friendlylocal Mobil service station.I think it cost about $3.95to do the job, whichincluded servicing all ofthe grease fittings and theother items covered bythe oil maintenance guide.Weve owned many

other cars along the way,but tracking down ownersmanuals for any of thesehas been a challenge. Sofor comparison, I turned tomy manual for the 2001GMC Sierra pickup which Iam still driving (93,000

Continued on page 10

AUTOMOTIVE

Recommended Engine Oil Viscosity: 57 Chevy Bel Air

Lowest Anticipated Temperature During Recommended RecommendedTime Oil Will Be in Crankcase SAE Viscosity Oil SAE Multi-Viscosity Oil

32 degrees F SAE 20W or SAE 20 SAE 10W-30

0 degrees F SAE 10W SAE 10W-30

Below 0 degrees F SAE 5W SAE 5W-20

NOTE: For sustained high-speed driving where daytime temperatures are above 90 F, SAE 30 oil may be used.

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SUCCESSTOGETHER

Lubrizol

miles and going strong).The oil change information hereis quite a bit different than for thatold 57. Gone are the days when areputable brand is sufficient. The2001 manual tells me that the soleindicator of acceptability is the APIstarburst trademark, signifying anengine oil that meets the ILSAC GFspecification.

The other API trademark seen onengine oil containers, the donut, wasintroduced in 1983 to identify perfor-mance level and viscosity grade;later, fuel economy performance wasadded too. The donut is still foundon most oil containers and is oneway to identify performance.However, the starburst was intro-duced in the early 1990s to satisfyOEMs that only oil with the properperformance credentials includingfuel economy was being used.There are viscosity recommenda-tions here, too. However, they nowemphasize fuel economy, rather thanlowest operating temperature, andthe preferred grade for ensuring thatis SAE 5W-30.To answer the big question of whento change the oil, my truck has theGM Oil Life System, with its dashlight indicating when to change. AsIve pointed out before, this works onthe basis of an algorithm (a set ofrules for solving a problem), using thenumber of crankshaft revolutions andthe range of oil temperatures to deter-mine when the oil has had enough.The algorithms rules were estab-lished by a large number of ongoingfield tests on oils of known quality.In fact, as higher quality oils comeinto use, GM has modified the algo-rithm to account for such things asbetter oxidation resistance anddeposit control.Thanks to this system, the 2001manual indicates that the changeinterval light will likely blink on some-where between 3,000 and 10,000miles, and warns me not to pushbeyond 10,000 miles or one yearbetween oil changes. (No worry!Here in hot, dusty Arizona, I typicallysee the light come on around 4,500to 5,500 miles.)Fast-forward another decade, to thecurrent crop of 2013 vehicles, and Imight not need to consult an owners

10 MARCH 2013

Continued from page 8AUTOMOTIVE

Continued on page 12

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Pure AdvantagePerformance now and in the future. PURITYTM Base Oil.Whether youre formulating for today or tomorrow, look to PURITY Base Oils to optimize performance and cost. Petro-Canadas line of 99.9% pure Group II, Group II+ and Group III base oils gives you the advantage and flexibility you need. With over 25 years experience in manufacturing high quality 99.9% pure base oils, Petro-Canada has the base oils to help you meet your formulating needs for current and next generation engine oils, transmission fluids and industrial lubricants. High purity, excellent thermal and oxidative stability, low volatility, low pour point.

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Beyond today's standards. MROCANADA

M

org, whose online calcula-tor almost always tells visi-tors to stretch their oildrain intervals to 5,000miles or more. Many otherconsumer sites, such asEdmonds.com, loudlytrumpet the wastefulnessof too-frequent oilchanges.As you can see, PatWirth, Scotti Lee and theirAOCA colleagues are hold-ing the shrinking end ofthis stick. More and more,they are going to see carsless and less frequently.Besides General Motorsand Ford, OEMs includingChrysler, Honda, Acura,Mercedes-Benz, BMW andAudi now have oil life mon-itors. Fifty percent of dri-vers may still feel 3,000miles is a good, safe inter-val, but these systems arerapidly supplanting theneed to change at a rec-ommended mileage; andtherein lies the rub. For theoil change business, thereis waning certainty aboutwhen the customer willreturn. There is also aworry that car owners willnot pay attention to thelight, and view it as areminder rather than arequirement.The question of how longan oil can successfullylubricate has been battedaround for some time now.There are those who statethat they have seen signifi-cant oil degradation after3,000 miles; depending onthe duty cycle, Im surethat there are indeed somesituations where the oilshould be changed that

manual at all. Many OEMmaintenance recommenda-tions are on the Internet. Atwww.fleet.ford.com, forexample, you can enter theyear and make of your car,pickup or SUV, and instantly

obtain Fords oil changerecommendation. Click2013, Ford and Mustang,and you learn that this caris equipped with anIntelligent Oil LifeMonitor, and its oil (syn-thetic recommended)need only be changedwhen the display light goeson. Same thing with theLincoln Navigator, andmany other models.Likewise, last yearbrought Californias CheckYour Number website,www.CheckYourNumber.

AUTOMOTIVE

12 MARCH 2013

Industry consultant SteveSwedberg has over 40years experience in lubri-cants, most notably withPennzoil and ChevronOronite. He is a longtimemember of the AmericanChemical Society and SAEInternational, where hewas chairman of TechnicalCommittee 1 on automo-tive engine oils. He can be reached at steveswedberg@cox.net.

often. The OEMs are satis-fied that oil quality is suchthat they can go far longer 7,500 or 8,000 or 10,000miles in many cases andtheir oil life monitors arecovering the field.Pat and Scotti are facingsome really tough deci-sions. There are probablymany oil change stores thatwont survive this change inowner habits, and they willneed to develop a newbusiness model. Somehave already done so withthe addition of other main-tenance activities and ser-vices, and there may beother ways to go.I wish them the bestsince I am a customer anddont want to lose my con-venient, fast and cost-effec-tive oil change partner.

Continued from page 10

1957 Bel Air As this page from the owners manualshows, oil changes were expected every 2,000 miles.

Ester and PAG base stocks are used as co-solvents or main uids in lubricant formulations. Top performance criteria as energy ef ciency, longer drain intervals and improved equip-ment protection will be achieved. When formulators meet these performance criteria and take advantage of BASFsbest-in-class technology and manufacturing strengths, its because at BASF we create chemistry. If you are interested in our products please contact us: Basestocks.NA@basf.com

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EV

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We createchemistry that makes lubricant formulators love ester and PAG base stocks.

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14 MARCH 2013

StickerShock

Lubricant manufacturers arequickly learning that there isa substantial cost to comply-ing with the U.S. Occu -pational Safety and HealthAdministrations revisedHazard CommunicationStandard, published March26, 2012, as 29 CFR1910.1200. More commonlyknown as HCS 2012, thestandard aims to bring U.S.workplaces and productsinto conformance with theinternationally adoptedGlobally HarmonizedSystem of Classification andLabeling of Chemicals(GHS).Overall, the cost for all

U.S. industry to complywith the new standard wasestimated to be $2.1 billiondollars, to be spent over theestimated four-year imple-mentation period. Of thattotal, $408 million was asso-ciated with those compa-nies which manufacturechemical products andtherefore author SafetyData Sheets or SDSs. Thebalance was associated withthe many, many users ofchemical products, andincludes their costs foremployee training and man-agement familiarization.Perhaps most astonishing-

ly, OSHA estimated that thecosts for the lubricant indus-try specifically, NAICScode 324191, Petroleumand Lubricating Oil andGrease Manufacturing toconvert its Material SafetyData Sheets and labels tothe new GHS format weregoing to be over $110 mil-lion. Thats almost 27 per-cent of the total to be spent

by all chemical manufactur-ing industries, and the high-est of the 44 industry groupsanalyzed.

Deeper into the Data Theseare not the total costs of thelubricants industrys HazardCommunications Standardprograms, just the additionalcosts of compliance with thenew provisions of HCS 2012.As the table on page 16 illus-trates, the vast majority ofthat amount was estimatedto be associated with thecost of reclassification ofchemical hazards and revi-sion of SDSs and labels.Why is this cost so high? In

part, it is because the entireprocess we use to determinethe hazards of products weproduce has changed, fromhazard determination to haz-ard classification. This game-changer fundamentally altersthe way chemists understandthe raw materials and reac-tion products in the lubri-cants they formulate, and theway hazard communicatorsauthor SDSs and communi-cate the products hazards.Another reason is that in

total our industry manufac-tures thousands and thou-sands of unique formula-tions. In fact, the initial esti-mate OSHA first made of thevolume of products forwhich new SDSs would needto be authored was seen tobe too low. Speaking beforethe agency on March 2010,Cathy Novak, who was thenpresident of theIndependent LubricantManufacturers Association,testified that OSHA hadunderestimated the number

of SDSs produced per firmin the lubricating oils indus-try. She said the average firmin the industry producedapproximately 1,700 lubricat-ing products requiring anSDS. OSHA accepted theestimate of 1,700 SDSs pro-duced per firm in NAICS324191 and, with 329 affect-ed establishments in thisindustry, increased the num-ber of affected SDSs byapproximately 400,000 SDSs.Thats a lot of SDSs! Lets

look at this more closely sowe can understand just whylubricants need so many.

Classification of MixturesUnder HCS 2012, there hasbeen a fundamental changein how the hazards of mix-tures, the kind of productlubricant manufacturers pro-duce, are estimated. InAppendix A to 1910.1200,Health Hazard Criteria, OSHAdescribes the tieredapproach to hazards of mix-tures and their classification.OSHA assumes that manyfirms will have actual test datafor the many hazards a formu-lated product might have,such as for acute toxicity, eyeand skin irritation, mutagenic-ity, reproductive toxicity andtarget organ toxicity.Essentially, in the tiered

approach OSHA prescribes,test data on the completemixture are considered asthe first tier in the evalua-tion, followed by the applica-tion of so-called bridgingprinciples to classify formu-lations whose formulas areso similar to the tested for-mulations that the test datamay be used to classify the

15LUBESNGREASES

BY JOHN HOWELL AND RICH KRASKA

M

arijus - F

otolia

such as that maintained bythe European ChemicalsAgency, so that the lubricantmanufacturer can classify itsproducts using the cut-offand concentration limit crite-ria described in detail inAppendix A.

Doing the Math Heres anexample of why suchdetailed information is need-ed. Lets say you produce asynthetic metalworking fluidformulation which contains10 different chemical ingredi-ents, one of which is a reac-tion product between analkanolamine and an organicfatty acid you blend yourself.You dont have any test datayourself. In order to deter-mine the skin irritation clas-sification of the mixture, you

closely-related-but-untestedmixture. Lastly, if test data arenot available and bridgingprinciples cannot be used,classifications of mixtures arethen determined by usingthe classifications of includedraw materials and reactionproducts.As a result, absent complete

test data on all of their formu-lations, lubricant manufactur-ers must understand the for-mulation details and classifica-tions of all of the raw materi-als they include in their for-mulations. That includes pur-chased mixtures whichadditive suppliers are reluc-tant to disclose for some for-mulations. The result: hoursand hours of analysis of infor-mation, including that pub-licly available in data bases

have to have available theskin irritation classificationsfor all of the raw materials.Your formulation may be aCategory 1 skin irritant if itcontains 5 percent or moreof skin Cat 1 ingredients.Even if not a Cat 1 skin irri-tant, it may be Category 2skin irritant if:a) the formulation contains

more than 1 percent but lessthan 5 percent Cat 1 ingredi-ents, orb) 10 percent or more skin

Cat 2 ingredients, orc) if the sum of 10 times

the concentration of skin Cat1 ingredients plus the sum ofskin Cat 2 ingredients is 10percent or more.Sound complicated? It is.

But that is just one of 10 dif-ferent hazards for which all

available data for each of theincluded raw materials mustbe analyzed. The algorithmfor eye irritation using theadditivity approach requirescalculation of five differentcombinations of included Cat1 and Cat 2 skin or eye irri-tants. And that alkanolamine-organic fatty acid reactionproduct that you manufac-ture? Youll need to under-stand the hazard classificationof that material as well.If you dont have acute tox-

icity test data for your formu-lation, you will need to haveavailable acute toxicity infor-mation for all of the includedingredients.Until raw material manu-

facturers complete the clas-sification process for their

16 MARCH 2013

Total Implementation Costs by Industry Segment, per OSHA

324191 Petroleum lubricating oil & grease mfg. $109,394,737 $166,018 $176,282 $46,950 $109,783,987

324121 Asphalt paving mixture & black mfg. $19,507,491 $349,431 $497,823 $499,510 $20,854,256

211111 Crude petroleum & natural gas extraction $19,372,038 $2,651,234 $3,623,590 $0 $25,646,863

339 Miscellaneous Manufacturing $17,119,063 $13,316,596 $16,370,063 $1,729,520 $48,535,243

325510 Paint & coating mfg. $14,252,071 $545,201 $776,347 $181,900 $15,755,519

325211 Plastics material & resin mfg. $11,786,608 $1,105,863 $399,367 $210,110 $13,501,948

327 Nonmetallic Mineral Product Mfg. $11,255,479 $11,014,675 $7,696,463 $3,466,920 $33,433,536

326 Plastics & Rubber Products Mfg. $9,918,393 $19,293,692 $6,996,994 $2,393,990 $38,603,069

325998 All other miscellaneous chemical prod. mfg. $9,735,649 $632,012 $727,691 $171,790 $11,267,143

325920 Printing ink mfg. $7,111,319 $196,206 $245,528 $117,620 $7,670,673

325520 Adhesive mfg. $5,185,730 $391,262 $324,138 $118,460 $6,019,591

325199 All other basic organic chemical mfg. $4,202,772 $1,127,684 $354,429 $188,220 $5,873,105

325413 In-vitro diagnostic substance mfg. $4,028,692 $294,582 $131,150 $48,440 $4,502,864

324110 Petroleum refineries $3,950,224 $1,105,201 $170,923 $104,110 $5,330,458

325620 Toilet preparation mfg. $3,916,910 $1,070,277 $511,173 $93,070 $5,591,430

331 Primary Metal Manufacturing $3,587,506 $9,809,003 $2,711,738 $895,140 $17,003,386

325611 Soap & other detergent mfg. $3,386,775 $431,109 $439,460 $64,270 $4,321,613

325412 Pharmaceutical preparation mfg. $2,945,309 $1,946,506 $532,750 $218,940 $5,643,505

324122 Asphalt shingle & coating materials mfg. $2,928,198 $245,560 $95,128 $68,250 $3,337,136

325188 All other basic inorganic chemical mfg. $2,740,735 $745,601 $290,336 $177,240 $3,953,912

325612 Polish & other sanitation good mfg. $2,245,744 $280,726 $359,492 $47,370 $2,933,332

325320 Pesticide & other agricultural chemical mfg. $1,154,461 $171,100 $124,788 $54,030 $1,504,379

325991 Custom compounding of purchased resin $1,060,665 $402,427 $346,392 $93,080 $1,902,564

325411 Medicinal & botanical mfg. $1,058,085 $334,287 $207,015 $47,960 $1,647,347

324199 All other petroleum & coal products mfg. $1,039,991 $69,844 $44,007 $16,140 $1,169,982

325613 Surface active agent mfg. $1,000,438 $80,842 $82,686 $32,030 $1,195,995

All Other $7,190,166 $1,789,110 $1,617,145 $722,720 $11,319,147Source: Table VI-8, Federal Register Vol. 77, No. 58, p. 17628

Continued on page 18

NAICS Code Industry

Costs ofReclassificationand Revision ofSDSs & Labels

Cost ofTraining

Employees

Cost ofManagement

Familiarization& Other Costs

One-time Printer Costs Total Costs

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.YOU'LL LEARN THAT YOU CAN'T AFFORD NOT TO BE USINGTHE BIEDERMAN PLASTIC GREASE CARTRIDGE.

DURABILITY: Less Leakage equals Less Scrap Cost. Less Damage in Shipping & Handling.

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An Economic Litmus TestOSHA, in its analysis of anynew rule, needs to deter-mine whether the rule iseconomically feasible. Partof that test is whether thecost of compliance exceeds 1percent of revenues orexceeds 5 percent of anaffected industrys profits.

products, lubricant formula-tors are obligated toresearch available informa-tion from other sources suchas the European ChemicalAgencys Classification and Labeling database(http://echa.eruopa.eu/information-on-chemi-cals). There, lubricant manu-facturers will find thatEuropean manufacturers andusers dont always agree onclassifications of even suchbasic chemicals as tri-ethanolamine. It is up to youto choose which classifica-tion to use, the consensusclassification or, perhaps, themost conservative.And once youve estab-

lished the classification forthat 10-ingredient syntheticmetalworking fluid, there are1,699 more products waiting.

OSHA concluded that in noindustry size class includ-ing the lubricant industry do the annualized costsexceed 0.28 percent of rev-enues or 3.3 percent of prof-its. (Federal Register Vol. 77,No. 58, p. 17661.)OSHA examined the

impact of HCS 2012 on all

small petroleum, lubricatingoil and grease manufacturerswith respect to their costs asa percentage of revenuesand profits. Its analysis of anestimated 261 small firmsshowed total annualizedcosts of hazard communica-tion (costs over 20 years witha discount factor added)

18 MARCH 2013

Summary of Cost Estimates Per Product

Task Large Company Medium Company Small Company(>500 formulations) (100-499 formulations) (

were almost $6 million ayear. While the cost of HCS2012 as a percentage of prof-its was very high 3.28 per-cent it did not exceed 5percent. While that may notexceed OSHAs statutorylimit, thats a lot of moneylubricant manufacturersmight have put to good usesomewhere else!OSHA then went further

and looked at very small enti-ties in our industry, firmswith 20 or fewer employees.OSHA estimated there are176 such entities. Each,OSHA said, would have toproduce more than 310chemical products, each withits own SDS and label, to getto the agencys level of signif-icance. OSHA suggests eventhe very smallest firms in ourbusiness would not produceSDSs and labels without the

assistance of specializedcomputer software, whichOSHA assumes most smallfirms do not now use. OSHAbelieves even these verysmall firms would insteadinvest in appropriate soft-ware to lower their costs, asmost larger firms do.(Federal Register Vol. 77, No.58, p. 17668.)What else did OSHA sug-

gest companies in ourindustry might do? OSHAsaid firms producing largenumbers of chemical prod-ucts commonly do sobecause they sell a varietyof different mixtures withsimilar ingredients. Onceappropriate test data forthe ingredients of thesemixtures has been devel-oped, using the bridgingprinciples outlined inAppendix A, OSHA says

small firms developing SDSsand labels for each mixturewould take far less than theseven hours per chemicalproduct it had estimated forsmall firms to convert tothe GHS system. However,OSHA did not include thecosts of product testing inthese estimates of cost ofcompliance. Product test-ing, as many manufacturersknow, can be very costly.OSHA concluded that

there are not a substantialnumber of small entities orvery small entities that wouldhave significant economicimpacts from this rule as aresult of producing a verylarge number of distinctchemical products (p.17668). As a result, OSHAconcluded, the rule met theeconomically feasible barthe law imposed.

What Will It Really Cost Me?OSHA estimates that the timea very small entity mightspend to reclassify a productand modify an SDS is sevenhours. The table on page 18summarizes the estimatesand the amount of time andassociated costs for large,medium and small sized firmsto classify a single lubricantmixture.Large firms with more staff,

OSHA acknowledges, aregoing to enjoy someeconomies of scale: Thosefirms will spend on averagethree hours per SDS and anadditional $208 for softwaremodifications. (Thats a num-ber OSHA has used to esti-mate the cost per SDS of buying or leasing or hiringthe software to get this jobdone).

19LUBESNGREASES

Continued on page 20

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If you calculate the cost ofthe people who do the job ofactually reviewing your prod-uct formulas and reclassifyingthem as described above, andadd to that the cost of pur-chasing, leasing or hiring thesoftware, and also to trainyour employees, OSHA esti-mates youll find your costswill range from a low of $406per product for a large firm,to $538 per product for amid-size firm, to up to per-haps $670 for a small firm,per product.A larger company that man-

ufactures 500 unique lubri-cant formulations might befacing over $200,000 of addi-tional compliance costs. Asmaller firm, say one whichproduces just 100 products,could well be looking at closeto $70,000 in compliancecosts over that four-year HCSimplementation period.Now you can see why the

numbers in our industry areso high. By OSHAs own calcu-lations, the steps of reviewingingredient raw materials andthen, from the ingredient clas-sification data developed, clas-

sifying each product, are notgoing to be inexpensive. Manylubricant manufacturers willbe looking at six-figure HCS2012 implementation costswhen everything is added up.

What Do I Do Next? If yourea lubricant manufacturer andhave not already done so,develop a written HCS 2012implementation plan rightnow. Include an estimate ofcosts for purchasing or leasingSDS database software, or forhiring an authoring service.Your plan needs to address

employee training, too. Thefirst compliance date fortraining your staff on labelelements and the globallyharmonized SDS format isDec. 1, 2013 barely ninemonths away. OSHAs HazardCommunication web page(www.osha.gov/dsg/hazcom/index.html) contains a wealthof information, including sev-eral OSHA Quick Cardswhich you can use right awayto begin your training.The sooner you begin,

the sooner you will be doneand the less costly this will be.

20 MARCH 2013

Continued from page 19

Rich Kraska

John Howell

John K. Howell, Ph.D., is vice president and Richard Kraska, Ph.D.,is president of the specialized consulting firm GHS Resources(www.GHSresouces.com). Howell, arecognized author, spokesman andadvocate for the lubricants industry,has 30-plus years of experience in safe-ty, health, hazard communication andregulatory compliance. Kraska, aBoard certified toxicologist, has 30years of chemical and lubricant indus-try experience focusing on regulatoryaffairs and industrial toxicology. Formore information about this article, e-mail rhkraska@ghsresources.com,or phone (877) 544-7776.

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11 ESTE OIL

2012 showed a sustained rate ofmerger and acquisition activity thatwas nearly equal to the annualized$200 billion in transactions seenyearly before the 2009 recession.This year will likely experience a

similar level of buy-sell activity, given estimates thatbetween $2 trillion and $5 trillion dollars of privateequity is sitting on the sidelines in the form of cashreserves. As market uncertainty and depressedinterest rates keep this capital on the sidelines, pri-vate equity investors are left to search for morelucrative ventures.

In our increasingly litigious climate, financing formergers and acquisitions requires substantialdemonstration that the deal will yield solid returns.Investors wont give up their dollars without com-prehensive due diligence being performed on theproposed deal. The 30-day deal is a thing of thepast for all but the simplest of transactions.

Transactional due diligence comes in many dif-ferent forms, including legal, financial and environ-mental, and is akin to letting a certified mechanicevaluate a used car before you buy it. This articlefocuses primarily on the environmental aspects ofdue diligence, but also touches on how it inte-grates into other disciplines.

Rooted in RegulationsEnvironmental due diligence has been aroundsince at least the early 1980s, when it beganhumbly as a brief site audit with the goal of look-ing for obvious signs of environmental contamina-tion and mismanagement. Under theComprehensive Environmental Response,Compensation and Liability Act of 1980 (CERCLA),commonly known as Superfund, financial responsi-bility for environmental liabilities is placed with thecurrent site owner and operator. CERCLA also pro-vides a mechanism to assign liability to historicproperty owners in the event that the most cur-rent owner becomes insolvent.

The due diligence process took shape as a possi-ble way to avoid CERCLA liability via an innocent

22 MARCH 2013

Environmental Due Diligence

BY GEORGE MATHES, GARY RISSE AND HEATHER BARBARE

23LUBESNGREASES

What to Know Before You Buy, Sell or Ship

that indicate an existingrelease, a past release, or amaterial threat of a release ofany hazardous substances orpetroleum products into thestructures on the propertyor into the ground, ground-water, or surface water of theproperty.

Some Phase I ESAs alsotake into considerationitems that may represent aBusiness Environmental Risk(BER), including compliancewith environmental and safe-ty regulations.However, since the publi-

cation of the ASTM guid-ance, the environmental duediligence process hasevolved to meet the needs,objectives and end-goals ofthe industry. Today, Phase IESAs are only the beginningof what is typically necessaryto secure financial backing.The cost of addressing

environmental issues can bequite significant; not only interms of dollars, but also interms of time, resources,

land owner defense, ifunknown, preexisting envi-ronmental liabilities werediscovered post-transaction.The due diligence processbecame more formalized byASTM through its proceduralguidance E-1527 in 1990.Thanks to this guidance doc-

ument, there is a standard-ized environmental due dili-gence process involvinginterviews, records searches,and historical site informa-tion. These steps are knowngenerally as a Phase IEnvironmental SiteAssessment (ESA).Under the ASTM standard,

environmental liabilitiesinvolving past, current orpotential releases to the envi-ronment are typically identi-fied as either RecognizedEnvironmental Conditions(RECs) or suspect RECs. PerE-1527, a REC refers to thepresence or likely presenceof hazardous substances orpetroleum products on aproperty under conditions

and public perception.Therefore, it is not surpris-ing that environmental duediligence is becoming anincreasingly predominantaspect of acquisitions, merg-ers, divestitures and clo-sures. In addition andprior to waste shipment

companies routinely per-form due diligence on non-owned disposal facilitiessuch as landfills, incineratorsand recyclers, to protectagainst potential future CER-CLA claims.Acquiring businesses may

also conduct due diligenceto determine accurate cashflows, to assess risk associat-ed with disposal facilities,and to make informed andresponsible business deci-sions. A wide-ranging duediligence effort identifiesand quantifies financial liabil-ity, environmental liabilityand the potential for third-party claims.This type of due diligence

may be well beyond the

scope of an ASTM Phase IESA, but should not beoverlooked when weighingprofit and growth potentialagainst risk and liability, orwhen making other vitalbusiness decisions. Thesedecisions may includeacquisitions and mergers,divestiture and closure of afacility, selection of a non-owned treatment and dis-posal facility, refinancingand compliance. A wellqualified, third-party envi-ronmental consultant canhelp determine and quanti-fy transactional risks. Thisplaces you in a position ofwell informed strengthwhen entering into pivotalnegotiations.

Case Studies: What Can Happen?In a number of cases,Potentially Responsible Partygroups (PRPs) were requiredby the U.S. EnvironmentalProtection Agency to retaincontractors to perform CER-CLA removal and decontami-nation actions at severalabandoned industrial facili-ties and centralized water-treatment operations. Theseparties were identified ashaving shipped varyingamounts of waste to thefacilities; some aggregatetotals were as small as single55-gallon drums of wastematerial.Typically, the PRPs entered

into an Administrative Orderon Consent with the EPA,which is a voluntary agree-ment stipulating requiredactivities for proper sitecleanup and decommission-ing. These remedial andenvironmental actionsincluded: Evacuation of millions of

24 MARCH 2013

Continued on page 26

How will this information be used?

Excellence is reliable supply anywhere in the world.

When it comes to the industrys leading base stocks, reliable supply is just as important as consistent quality. With multiple refi neries strategically located around the globe, our customers get what they need to stay ahead, no matter where they are in the world. When excellence demands consistency and reliability, count on ExxonMobil Basestocks. To learn more, visit exxonmobil.com/basestocks.

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Thinking AheadHow can exposure to thesetypes of removal action costsand possible remediationcosts be minimized and man-aged? The answer is evaluat-ing sites from the outset.Trihydro was recently

approached by a companypreparing to consummate a$100-million-plus acquisitionof numerous productionfacilities located in multiplestates. The client was seek-ing a combination of duediligence, insurance andengineering support servicesto facilitate the transaction.Trihydro recognized that

the likelihood of identifyingliabilities was high, but alsounderstood that the goal ofour effort was not to scuttlethe deal. Rather, it was toquantify the environmental

gallons of waste contained inconcrete structures. Removal/disposal of

thousands of gallons of oilysludges impacted by poly-chlorinated biphenyls (PCBs). Transport and disposal

of hundreds of drums andtotes of unused product andhazardous waste. Stormwater treatment

and management. On-site hazardous waste

treatment and stabilization. Follow-on intrusive envi-

ronmental investigations atthe facilities.Although removal and

investigation actions resultedin timely and successful ter-mination of the Adminis -trative Order of Consent,implementation costs to thePRPs were significant.

risk such that it could beproperly factored into thetransaction.By identifying this goal up

front, we were able toreview site data, visit eachsite, complete a complianceevaluation, provide insur-ance support, and generateenvironmental defect costestimates that were thenused in reducing the pur-chase price all in a matterof weeks. While there are noabsolutes or guarantees,well-orchestrated and imple-mented due diligence activi-ties bring to reality the con-cept of managed risk.

Whats Right for MySituation?Due diligence should not bethought of as a one-size-fitsall approach. Types of due

diligence can include ASTMPhase I ESAs, or Phase IIassessments which involveinvasive testing. There arealso compliance audits, safetyaudits, non-owned disposalfacility audits, or an approachtailored to a specific need.A few common-sense best

practices can help ensurethe success of environmen-tal due diligence endeavors:1. Define the Objective.

The due diligence processshould begin with the end inmind. Setting clear goals canensure expectations are met.When defining the goals ofthe due diligence, all disci-plines (e.g., financial, legal,business, environmental)and stakeholders should beconsulted to assure eachteam members concernsare addressed.

26 MARCH 2013

Continued from page 24

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2. Share and SummarizeInformation. Legally requireall environmental informa-tion to be shared. If possible,establish a data repositoryand systematically reviewand capture highlights of thedata so that it can quickly besummarized and shared withthe entire team. Establish -ment of an online or elec-tronic war room is onesuggested approach.3. Regulatory and Records

Review. During the firststages of due diligence,review of historical Phase Iand Phase II ESAs is clearlythe most logical starting placeand may eliminate someduplicative effort. State andfederal databases, and inter-net and publication searchescan be used to expand theregulatory and records review

stage of due diligence. Whenevaluating historical site doc-umentation, be aware of thepossible data gaps that maybe present. For instance,vapor intrusion issues havebecome prevalent only inrecent years, and certainenvironmental media maynot have even been previous-ly considered. Additionally,new and pending regulationsmay create a liability that for-merly was nonexistent.4. Ask the Right

Questions. Do the legworkand prepare for site assess-ments and interviews toensure proper focus onobjectives and goals thatwere defined at the projectoutset. A carefully devel-oped checklist or audit formis a simple and valuable toolthat can preclude oversights

and omissions. Facilityhealth and safety programsand compliance history canprovide valuable insight tolegacy concerns, and possi-bly steer future actions. A

jaded enforcement historymay be the tale-tell sign ofcostly underlying environ-mental issues. Lastly, thestakeholders should developand agree upon a list of per-sonnel who will be consult-

ed/interviewed during thedue diligence effort.5. Collect Data with

Purpose. If intrusive assess-ments and sampling are nec-essary, carefully consider how

the end data will be evaluatedand for what purpose. Makemulti-media data gatheringefficient, and sufficient toallow relevant comparisonswith published screening cri-teria, while minimizing the

27LUBESNGREASES

Key Acronyms in Environmental Due Diligence

AOC. Administrative Order on Consent

BER. Business Environmental Risk

CERCLA. Comprehensive Environmental Response, Compensation and Liability Act of 1980(Superfund)

ESA. Environmental Site Assessment

PRP. Potentially Responsible Party

REC. Recognized Environmental Conditions

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need for supplemental mobi-lizations. Prior to collection,consider how a dollar valuecan be assigned to liabilitiesresulting from unfavorabledata. Avoid seeking just thesmoking-gun, but ratherfocus on quantifying whateverfuture liability it could possi-bly create. If the worst-caseresults of the data are notgoing to be a cost driver, con-sider focusing due diligencedollars elsewhere.

6. Quantify AllInformation. Informationgathered during environ-mental due diligence mustbe concisely summarized,and quantified, and reducedto its simplest defensibleterms. The due diligencereport may end up in a roomfull of lenders, attorneys andbusiness interests who arenot environmental experts.Properly quantifying and tab-ulating liabilities is a power-ful negotiating tool.

Dont Let EnvironmentalKill the DealEnvironmental due diligencehas advanced to the pointwhere it is now more of a toolto help structure a deal than away of killing a deal outright.Gone are the days where aminor soil stain scuttles amulti-million dollar deal.

Use the information gath-ered in the due diligenceprocess to your advantage.Consider that quantified lia-bility can be managedthrough a variety of mecha-nisms: escrow, remediationagreements, liability agree-ments, and/or adjustments inthe purchase price.Environmental insurance isalso a vehicle available tomitigate the risk in thesetransactions.

Environmental due dili-

gence, in all its forms, is aversatile and powerful toolto use during transactions.Properly executed, it canassist in facilitating nearly anydeal, and can allow stake-holders to make informedbusiness decisions that willenhance their bottom line.

George Mathes and GerhardGary Risse are profession-al engineers with Trihydroand Heather Barbare is anenvironmental chemistthere. Trihydro serves manyFortune 100 corporations,especially in the petrochem-ical and related industries,and has specialized envi-ronmental due diligenceexpertise in complex, multi-facility mergers and acqui-sitions. Founded as a two-person firm in 1984 inLaramie, Wyo., Trihydronow has 15 offices nation-wide and more than 360employees. For information,e-mail grisse@trihydro.comor visit www.trihydro.com.

28 MARCH 2013

George Mathes

Gary Risse

Heather Barbare

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About 300 people will beemployed during the year-and-a-half-long constructionproject, George Arndt Jr.,general manager of globalbase stock and specialties forExxonMobil Fuels, Lubricantsand Specialties MarketingCo., told LubesnGreases.We expect to meet contrac-tual commitments to cus-tomers throughout the con-struction period.In its February announce-

ment, the company said theexpansion will significantlyincrease output of Group II

ExxonMobil plans to expandAPI Group II and II+ produc-tion capacity at its Baytown,Texas, base oil plant by early2015. The project will add anew Group II base stockdesigned for blending heavy-duty engine oils, and animproved Group II+ offeringwith enhanced low-tempera-ture properties for optimiz-ing engine oil formulations.Construction could begin latethis year, subject to fundingand regulatory approval, andstartup is targeted for early2015.

and Group II+ base stocksand will employ ExxonMobilproprietary technologies,including MSDW dewaxingcatalyst, for improved low-temperature performance. Itdeclined however to dis-close the size or cost of theincreased capacity.According to Arndt, the

project will make a 4.5centiStoke Group II+ and a6.5 cSt Group II grade,branded respectively as EHC45 and EHC 65. His compa-ny plans to issue the GroupII+ product specifications in

30 MARCH 2013

late 2013, he added.Baytown will continue to

make its Group I Core 600grade, as well as Core 2500bright stock. This projectdoes not have a materialimpact on Group I produc-tion capabilities at Baytown,ExxonMobil spokeswomanRachael Moore said.According to the American

Fuel & PetrochemicalManufacturers 2012Lubricating Oil & WaxCapacities Report, theBaytown plant now has 9,800barrels per day of Group I

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and 11,700 b/d of Group IIcapacity. The Group II out-put already includes someGroup II+, which Baytownhas produced for more than13 years, Charles Baker, dis-tinguished engineering asso-ciate with ExxonMobilResearch and Engineering,reminded LubesnGreases.To be clear, there is no for-

mal definition of Group II+given by API or ATIEL, heacknowledged. Group II+ isa term that has been used bythe industry to differentiatebetween lower performing

and higher performingGroup II base stocks.Viscosity Index (V.I.) is

most often used to differen-tiate Group II and GroupII+. Base stocks with a V.I.in the higher range of 110to 119 are typically consid-ered Group II+, Bakerpointed out. However, thereal distinction is that aGroup II+ base stock has asuperior Noack volatility/Cold Cranking Simulatorrelationship, which enablesblending lower viscositygrade engine oils with limit-

ed or no Group III correctorstocks, he explained.William Downey Jr., a part-

ner in Roland Bergers Oiland Chemical CompetenciesCenter, told LubesnGreasesthat ExxonMobil has opti-mized its Group II+ base oilfor multigrade passenger carmotor oils like SAE 5W-XX,focusing on getting thetradeoff correct betweenNoack volatility and low-tem-perature properties.He noted that Group II

base oils may range from 80to 119 V.I., according to the

American PetroleumInstitute, but a V.I. of 120and higher is what distin-guishes Group III base oils.If you talk to people whoare expert in formulatingthese 5W engine oils, thedifference between 119 anda 120 V.I. is not really partic-ularly significant, Downeysaid. The Group II+ suppli-ers ExxonMobil is one ofthem have really tried toadvance that the line of 120is an arbitrary line, given theperformance requirementstoday.

31LUBESNGREASES

The Baytown, Texas, refinery

Downey said the 120 V.I.demarcation between GroupII and III might have madesense at one time, butgiven the refining technolo-gy, that line is a bit morearbitrary now. What youhave seen is people talkingabout the requirements ofthe products as formulated.Many Group II+ properties such as volatility, low-tem-perature capabilities, hightemperature/high shear vis-cosity and others havebeen optimized to meetPCMO requirements, heexplained. So thats certain-ly why they would be talkingabout adding Group II+capacity, recognizing that itcosts more for a Group IIrefiner to make Group II+than Group II. If you lookacross the other Group IIsuppliers, youll see theamount of Group II+ orGroup III they make avail-able is actually pretty small.As industry standards con-

tinue to become moredemanding, Baker said,ExxonMobil expects thatGroup II+ base stock prop-erties also will need to beadjusted, to meet new prod-uct requirements.Our planned Baytown

project will not only increaseour Group II+ capacity, but itwill also yield an improvedEHC 45, which has beendesigned with this outstand-ing Noack volatility/CCS rela-tionship, he stated. Ourtechnical analysis has shownthat our new EHC 45 GroupII+ base stock can be used inmany cases in place of GroupIII, such as when blending5W SAE viscosity gradePCMOs. We believe that overtime, EHC 45 will reduce costand operational complexityfor our customers.

ExxonMobil today is thelargest U.S. base oil refiner,with total capacity of 47,500b/d. ExxonMobils other U.S.plants are in Baton Rouge,La. (14,500 b/d Group I and1,500 b/d Group II capacity)and Beaumont, Texas(10,000 b/d Group I).Looking at the projects

outline, one industry sourcesurmised, the installation ofan MSDW (hydroisomerisa-tion) unit implies they seevalue in upgrading theirslack wax to Group II baseoil. Another industrysource suggested theBaytown expansion likelyreflects the difficulty in sell-ing light-to-mid-vis Group Ibase stocks. The demandfor bright stock and heavyGroup I neutrals is stillthere, but with excessGroup I capacity in Europeand the lack of demand forGroup I light-to-mid-visproducts in North America,it is possible upgrading toGroup II/II+ was the onlyway for ExxonMobil to sellthese stocks, this sourcetold LubesnGreases sisterpublication, Lube Report. Italso helps fulfill a needinternally for ExxonMobil.They have a very robustdemand for 6 cSt productinternally for their heavy-duty business, so this helpssupply that demand. I sus-pect a good portion ofwhatever their capacity iswill be used internally.This source considered

the Group II+ expansionan oddity, pointing outthat, with all the newGroup III plants being builtnow and in the future,many industry experts areprojecting Group II+ willeventually wither away tonothing.

32 MARCH 2013

He also noted thatbecause EHC 45 is part ofExxonMobils global GroupII slate, blenders who formu-late worldwide can takeadvantage of API Base OilInterchange and ViscosityGrade Read-Across guide-lines to extend their productformulations to higher vis-cosity engine oils with littleor no additional engine test-ing required.Baker explained that the

company has designed theEHC product slate for blend-ing the heart of the finishedlubricants market. In NorthAmerica, primary automotivegrades targeted are 5WPCMO and 15W-40 heavy-duty engine oils, he said.ExxonMobils analysis ofpublicly available data hasshown that North Americandemand for these automotiveengine oils will remain robustfor many years to come.The new Group II+ EHC

45 has been designed withimproved low-temperatureproperties, as well. In fact,our technical analysis hasshown that our new EHC 45can be used in many cases inplace of more expensiveGroup III corrector stocks,said Baker.Also coming is EHC 65, a

new product that willreplace EHC 60. It is a supe-rior Group II base stock tar-geting heavy-duty engineoils, Baker said. Designedwith a slightly heavier viscos-ity than our current EHC 60,it optimizes 15W-40 HDEOblending by eliminating theneed for an additional high-er viscosity component. And,when EHC 65 is blendedwith the new EHC 45, itenables 10W-30 HDEO, help-ing to meet future genera-tion needs.

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34 MARCH 2013

John Manderfield, design director forConsolidated Container Co. in Atlanta, Ga.,described current trends in motor oil packagedesign at the fall meeting of the PetroleumPackaging Council. He also outlined the processhe goes through to design a package that is notonly aesthetically pleasing but can survive therigors of shipping and handling.A number of market trends are affecting the

types and sizes of packaging being developedfor motor oil, Manderfield told the gathering inCharleston, S.C. For example, were seeing amove away from single-quart bottles to largercontainers. This shift is small right now, but hesees the trend continuing to favor multi-quartpackages.Pointing to data from Nielsen, he noted that

one-quart containers are still popular. And salesof quarts did inch up in total units sold fromJune 2011 to June 2012 but sales of five-quartjugs grew even faster over that time, posting a9.2 percent gain in the number of units moved.Beyond size, other factors are at work, too.

Suppliers are also using different aesthetic ele-ments to attract attention in the marketplace,Manderfield said, including transparent bottles,metallic colors, brighter colors, textures andgradients.International suppliers are also influencing

bottle design. Ive found that internationalcompanies are leading the trends. One trend inEurope is a larger cap, he added. Creative bot-tle designs provide opportunities for differentlabel designs, all to differentiate products onthe shelf.

Design VariablesManderfield then described the key factors thatgo into designing motor oil packaging. Thereare many different layers to consider, he said.We have to consider the consumer, the retailenvironment, the filling process, and how thecontainer gets into the supply chain. Toolsused in this analysis include conventional labo-ratory testing and finite element analysis (FEA)on the computer.The variables to consider in any bottle design

are what resin to use, the types of moldingmachines that will be employed, and the capa-bilities expected of the bottle, Manderfield said.We use a variety of resins in our bottles, includ-ing high-density polyethylene (HDPE),polypropylene (PP), polycarbonate (PC), poly-ethylene terephthalate (PET), low-density poly-ethylene (LDPE), and co-polyester, as well ascustom and multilayer materials.Types of bottle-molding equipment include

rotary wheel, conventional and long-strokeshuttle, reciprocating, accumulating head (forpolycarbonate), single-stage (for polyethyleneterephthalate), and two-stage blowmoldingmachines (injection and stretch).Finally, the expected capabilities of a bottle

can encompass decoration, the amount of post-consumer recycled material, high environmen-tal stress-cracking resistance, oxygen barriers,chemical barriers, and creative design anddevelopment.Manderfield reminded the attendees, One

thing you have to think about when designing abottle is not to handle the empty container. You

35LUBESNGREASES

MOTOR OIL

BY RICHARD BEERCHECK

Packaging TrendsPackaging design is as much science as art. The process requires close

interaction between the design team and production experts because

a package that looks great but causes hangups on the filling line or

buckles during shipping is a poor design.

might slow down bottle production.Another issue to guard against is thinningof the wall, which might create a weakspot in the bottle.Another popular convenience on many

bottles today is a view stripe that lets usersknow how much fluid they are putting inthe crankcase or have remaining in thebottle. There are many ways to incorpo-rate this element. Our approach is tomake the mold and do some trial runs.Then go back and add the engraving andunits to the package, said Manderfield.Then there is the so-called no-glug fea-

ture. Many years ago, we were working onthe problem of pouring bleach withoutsplashing it all over, he recalled. The prob-lem was solved by adding a pinched-offneck area that lets liquid pass out while let-ting air in. This feature has been heavilyborrowed and transformed over the yearsfor various types of bottles and products.

Is It Shelf-friendly?The next thing to consider is what retailerswant. We go shopping a lot in differenttypes of stores to see what the retail envi-ronment is like, said Manderfield. Itcould be a small convenience store, phar-macy, automotive parts store, or big-boxstore. We check how the shelves look,

have to fill it with liquid because that givesyou the true nature of what the bottle willfeel like.

Handling the ConsumerWhat were seeing in the last severalyears is packaging with more than one

handling point if its amulti-quart bottle,Mander field said. Two-and even three-han-dle packages are be -coming more com-mon, especially ascontainers go up inscale. We have toremember multi-quart packages cancontain up to fiveliters of oil, and that

can be heavy. Designers must considerwho might be handling the bottle whendetermining the number of handlingpoints. Should the handle be at the top, orslant along the side, for ease and control?Besides adding handles, Manderfield

noted, another thing you can do is add acrevice in the base of the bottle to assistthe user in pouring the oil. The primedesign consideration with this element isto avoid a mold equipment hangup that

how they are arranged and how productsare displayed.All these things add up, and constrain

what a package can look like and its foot-print and size. One important considera-tion is that retail store shelving is set inplace and not easily changed in height ordepth. So we cant arbitrarily change bot-tle design, because it may not conform toexisting shelf constraints, he added.Manderfield explained that his team is

constantly visiting stores to see whatsnew. For example, endcaps [shelvingunits at the ends of the aisles] are beingset up, and gravity racks are being used inmany places. This helps us to see if thereare any issues, such as bending of the bot-tles in the rack.Consolidated Container also considers

the cases that the bottles are shipped in,using package design software which canreverse-engineer the bottle footprintbased on the desired shipping carton.Any time were doing a redesign, we

have the opportunity to tweak the foot-print, Manderfield added. This is espe-cially true in the redesign of older stockbottles. Thirty years ago, companies werenot considering packing efficiencies likethey are now. We have software that canhelp us optimize bottle and case size, pal-let load and trailer load to ship productmost efficiently.In general, round packages do not pack

efficiently. Even square bottles providesome packing inefficiency, so engine oilbottles (and many others) tend to be anoblong shape. Weve found that everypackage has a sweet spot that allows themost efficient packing in a case and on theshelf, Manderfield stated.

Dont Slow the FillerSimply put, filler efficiency is king. If wedo a pretty design and it only fits in thefiller at 50 percent efficiency, that doesntsolve anyones problems, he continued.So we have to go back and look at thefootprint again.Typically, the filling equipments only

adjustment factor may be bottle height and rather than slowing down the filler, itmay be better to retool the bottle.One trick we have for adjusting volume

36 MARCH 2013

Continued on page 38

-4%

-2%

0%

2%

4%

6%

8%

10%

640 oz.300+ oz.160 oz.128 oz.32-128 oz.32 oz.< 32 oz.

-0.5%

2.5%0.5%

-2.2%

9.2%

0.7%

-0.5%

Source: Nielsen Scantrak, 52 weeks ending 8/4/12

Less than 32 oz. 6% 32 oz. 25%

32 to 128 oz. 0.5%

128 oz. 30%

160 oz. 39%

300+ oz. 2%640 oz. 1%

Source: Nielsen Scantrak, 52 weeks ending 8/4/12

U.S. Packaged Motor Oil Sales Mix

Shifts in U.S. Motor Oil Package SizesPercent change in units sold

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A vertical adjustment may not be theonly needed adjustment to the bottle.Designers can also put in a different type ofheel. This is common because whenredesigning to reduce bottle weight, thebottom might flex too much. So the heelhas to be redesigned to strengthen it.A final consideration is to look at thetypes of testing the bottle must pass. Forexample, the UN drop test is required forUnited Nations certified packaging, and is

without harming filler efficiency involvesmaking whats known as a shim heightadjustment. Here, the heel of the bottle cancome off the mold and a segment be insert-ed or removed from between the heel andthe rest of the bottle, Manderfield said. Thenew bottle can be either shorter or taller,but the footprint has not changed. Theseare relatively minor changes in terms of timeand expense.

one of the most severe tests. Here the pro-totype carton, full of filled containers, isheld at an angle and dropped on a corner.The UN protocol allows for some crushedareas, but the bottles cannot leak.

Help from the ComputerOne tool package designers use, as men-tioned above, is FEA, finite element analy-sis. In this analysis, we import the bottledesign into a three-dimensional computeraided design program, which converts thedesign to a mesh pattern, Manderfieldrelated. Then we assign material proper-ties to the design, related to the exactgrade of the resin used.Resin properties can change as the mate-rial is heated, runs through an extruder andis blown into shape. So designers test bot-tle prototypes and samples, and use thattest data for the material properties loadedinto the CAD software.Then, we add wall thicknesses andboundary conditions, Manderfield said.Finally, we apply a load to the top of thebottle, watch it deform, and analyze theresults. The illustration at left showssome typical FEA results, and the stepstaken to improve the design.

38 MARCH 2013

Continued from page 36

Universal Lubricants has introduced a flexible stand-up pouch for Eco Ultra that it boasts is sustainable

and environmentally responsible. Pouch-packed engine oil products already haveearned consumer acceptance in many coun-tries around the world, said John Wesley, chiefexecutive officer of Universal Lubricants. Theone-quart FlexPak offers consumers a faster,easier and cleaner way to change their oil.Once drained and flattened, flexible pouchescan significantly reduce landfill waste and requiremuch less raw material to make, he added.Victor Franco-Paredes, operations director ofCommercial Roshfrans in Mexico City, agrees. Hiscompany has been using flexible pouches in a 950ml size for its premium Roshfrans HD+ and AK+engine oils for more than five years, he toldLubesnGreases. Strong and puncture-resistant,the RoshPack has great shelf appeal. It permitsall-over decoration, he noted, unlike bottles withpaper labels.

In Wichita, Kan., Universal Lubricants partneredwith two companies to develop its FlexPak. StarPackaging Corp. produces the three-layer plasticpouch, and Innovative Packaging Network engi-neered the pour spout that prevents glugs and bub-bles that cause splatters and spills. The 1-quartFlexPak is constructed using a polyethylene barrierthat provides superior burst and seal strengthsrequired for the rigors of oil, said Wesley. A larger,5.1-quart FlexPak will be available in this quarter.The FlexPak requires 68 percent less raw material tomake compared to HDPE bottles. The package alsoweighs less, providing freight cost reductions. Onetruckload of unfilled FlexPaks is equivalent to 26 truck-loads of unfilled rigid plastic containers, Wesley said.Franco-Paredes echoed that comment. Rosh -frans flexible pouches arrive flat at the companysplant, rolled in a coil. Thus, the inbound shippingcosts are far less than for empty rigid quarts, andthey also save on warehouse space prior to filling.

Dick Beercheck

Finite Element Analysis of Bottle Designs

Starting Mesh First pass: Bottlebuckles under neck.Resolution: Movemore material toneck area.

Second pass: Bottlebuckles at sidewall.Resolution: Movemore material tosidewall.

Third pass: Bottlebulges outwardslightly; stress moreevenly distributed.Acceptable.

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For generations, paddlewheels and pro-pellers have churned the muddy watersnear Geismar, La., moving riverboatsand other vessels up and down theMississippi. During this time,International-Matex Tank Terminals hasbeen one of the largest players in the

bulk liquid storage industry and has beenexpanding its capacities in the tiny town on theriverbank between Baton Rouge and NewOrleans.Geismar is one of 12 North American facili-

ties operated by International-Matex TankTerminals, which is headquartered in Bayonne,N.J. In 2008, the company began storing prod-uct for a major manufacturer of industrialchemicals. This manufacturer had issued a

challenge to IMTT several years before: notonly to manage its products bulk storage butalso to take on responsibility for drummingthese products at the facility.This was a first for IMTT, which is well known

in bulk liquid storage but had never beforeincorporated a container filling system into oneof its terminals. While just a small segment of amassive years-long project, this service was cru-cial to IMTTs customer and that made it cru-cial for IMTT. To get the job done, IMTT wouldneed an expert with deep experience, both indesigning filling machines and in facility layout.IMTT is the fourth-largest provider of bulk liq-

uid storage in the United States. The companyprimarily stores chemicals, mineral oils and veg-etable oils at capacities of up to 500,000 drums

40 MARCH 2013

Drumming Up Business in Geismar

IMTT selected fullyenclosed Haver Type86 automatic drum

filling machines,each able to handle100 drums per hour.

How aBulk

TerminalDelivered

for itsCustomer

in 10 facilities in the United States and two morein Canada. In its 70 years in business, it hasworked with some of the biggest oil and chemi-cal companies in the world.

Manufacturers contract with IMTT to storetheir chemicals and oils, both hazardous andnon-hazardous. They ship their products toIMTT facilities via pipeline, ship, barge, rail ortruck, and the products are transferred to bulkstorage tanks. There they stay until they need tobe sent to end users. The challenge for Geismarwas to customize an on-site drum filling facilityfor this chemical manufacturer, whom it cannotname for reasons of confidentiality.

Most of the products come into our storagetanks via pipeline from the production facility,and IMTT is able to handle all of the remaininglogistics from there, said Jos Wolke, who wasIMTTs project manager for what would becomethe Geismar Logistics Center. The win for ourcustomer is that they do not have to transporttheir products to the facilities of other terminalcompanies that they used to rely on for theirstorage and logistics. Now theyre able to place it

all with one company and primarily all in onefacility. Those transportation costs are eliminat-ed, and that is a significant savings.

Fundamentals for Filling Wolke and his teamneeded to manage the construction of an entire-ly new facility and step outside their comfortzone into container filling technology and sys-tems. Were experts in bulk liquid storage, hesaid. Although drum filling wasnt our core busi-ness, we were all confident we could deliver onour customers needs and expectations for thenew facility.

To get there, IMTT needed a manufacturingpartner capable of providing a complete turnkeysystem that included everything from emptydrum feeding conveyors, liquid filling machines,container labeling and container palletizing. Tohelp ensure safety standards were met, IMTTrequired a vapor extraction system and thermaloxidizer to eliminate all hazardous vapors. Inaddition, the entire system needed to be highlyautomated and able to handle high volumes.Perhaps most crucial of all, due to the hazardous

41LUBESNGREASES

Totes are filled onthe Type 26 semi-automatic palletfiller.

By Martin Fredricks

of Geismars equipment and operatingneeds.These services, combined with the

fact that Haver is one of the few suppli-ers of fully automated liquid fillingequipment in the United States, point-ed to using the Feige brand. IMTT andHaver formed a team in 2003 to answerthe complex needs presented by thischemical manufacturer.

More than Drumming After identifying allof IMTTs customers needs, the solu-tion began to take shape. The core ofthe system would include six machines:four Type 86 automatic drum fillers, andtwo Type 26 semi-automatic pallet fillingmachines.The Type 86 automatic drum fillers

the most advanced Haver offers arecapable of filling up to 100 drums perhour, with six integrated stations insidethe machines. The functions of the sta-tions are drum positioning and capremoval; nitrogen purging; coarse fill-ing; fine filling; cap placement; and capsealing.With these highly automated process-

es, the IMTT operator simply selects theproduct to fill from the fillers controlpanel and the machine takes care of therest. The filling systems are fully

nature of some of the chemicals, thesystem also had to meet strict safetyrequirements specified by the customer.Wolke and his team began at the most

logical starting point, past experience.Fortunately, they had a bit of a headstart in their research. IMTTs customeralready had a relationship with FeigeFilling Technology, a division of HaverFilling Systems Inc., which provides themajority of container filling equipmentfor the customers chemical productionfacilities in Europe.This particular customer of IMTTs is

one of our biggest in Germany, pointsout Gudrun Gibson, Havers marketingmanager. In one facility alone, Haverhas supplied more than 100 machines,so we were already very familiar withthis company and the types of haz-ardous and non-hazardous chemicals itmanufactures.Haver, based in Conyers, Ga., has sup-

plied customers with turnkey liquid fill-ing systems for more than 37 years. Notonly could it supply the systems andmeet the strict requirements for safety,but it also would need to customizeeverything to the new facilitys require-ments. IMTT also wanted Havers engi-neers to ensure the filling systemswould take into consideration the rest

enclosed, so all of these processes arecompleted without exposing the opera-tor to any potentially harmful chemicals.The system ensures harmful vapors areremoved during the filling of the 55-gal-lon drums a crucial requirement forflammable, toxic and hazardous liquids.Its very important we dont mix haz-

ardous and non-hazardous, Wolke said.We keep the hazardous product familyseparate from all the others and dedi-cate two full systems to it. Then wehave two additional full systems specifi-cally for our other product families.The Type 26 pallet filling systems can

fill palletized drums or palletized inter-mediate bulk containers (IBCs), whichhave volumes equal to five drums.These fillers can handle the same prod-ucts as the Type 86 system, but giveIMTT more flexibility to handle cus-tomer requests to fill totes.The semi-automatic Type 26 machines