Managing Industrial Oil - Oil Recycling and Life Extension

Donald Smolenski, General Motors

Improving a company’s environmental performance will be most successful when there is a good business case to do so. This strategy provides opportunities for significant cost savings while encouraging positive environmental stewardship.

Overall, fluid life extension and recycling, either on-site or off-site, makes sense. The practice helps to minimize environmental liability, enhance the company’s image as a responsible corporate citizen and can produce significant cost savings.

At General Motors (GM), we are guided by a set of environmental principles, one of which is particularly appropriate to this effort: “We are committed to reducing waste and pollutants, conserving resources and recycling materials at every stage of the product life cycle.” The program has several goals:

  • Utilize a closed-loop system (prevent pollution).

  • Do not compromise health and safety.

  • Optimize cost over the entire system.

  • Make technically sound decisions.

  • Minimize environmental liability.

  • Encourage plant acceptance.

  • Enhance green image.

Proper Lubricant and Fluid Specification and Selection

The first step in optimal oil management is proper specification and selection of lubricants and fluids. Maintenance lubricants are those intended to protect lubricated components within a machine or a piece of equipment. Examples are hydraulic fluids, gear oils, spindle lubricants and greases.

At GM, most maintenance lubricants are covered by the GM LS2 standard and must meet the LS2 requirements.1 The LS2 approval process requires disclosure of product formulation information as well as complete test data.

Metalworking lubricants lubricate a workpiece and tool. These include metal-removal fluids and metal-forming fluids such as cutting fluids, grinding oils, stamping and forming oils. The GM LS2 committee is developing standards for metal-removal fluids. Plant trials to evaluate all important performance attributes, such as effect on tool life, misting, corrosion and foaming must be performed, however, before routine use of a fluid.

LS2 base oil approvals are required for any mineral oil component of lubricants and fluids. Base oil requirements ensure only highly refined base oils and help protect workers.

Proper specifications allow product consolidation and reduce lubricant performance problems, oil usage and oil-related costs. Quality control specifications for incoming materials help ensure that the proper product is delivered. It is a good idea to periodically check for proper additive metals, water and solid contaminants, and proper viscosity.

Minimize Fluid Contamination, Degradation and Consumption

An effective proactive maintenance (PM) program can reduce or eliminate lubricant contamination and degradation, as well as minimize consumption. Proactive maintenance includes oil analysis, thermography, vibration analysis, ultrasonic analysis, etc., and works best when several methods are used in concert.

Proactive maintenance activities to eliminate contamination (heat, moisture, solids and chemicals) will extend sealing polymer life similar to that of lubricant life. Better seal integrity reduces leakage of the lubricant and leakage of the atmosphere into a lubricant sump. PM is often labor-intensive, but one can argue that the labor is more effectively used for PM efforts than fixing problems causing breakdowns.

Figure 1. Proactive Maintenance vs. Breakdown Maintenance2

Figure 1 illustrates why proactive maintenance is so effective. In breakdown maintenance, no action is taken until the end of the machine life – when the machine fails, and generally in service!

Downtime, extensive replacement parts and repairs result. This is ultimately expensive. Predictive maintenance can indicate a problem before the end of equipment life, therefore repair parts can be ordered and the work planned for scheduled downtime. Proactive maintenance activities help operators identify conditions known to degrade equipment and lubricant condition.

This strategy leads to failure avoidance altogether for a significant cost savings. Additional benefits can be found in improved quality, reduced waste, improved safety performance, and reduced maintenance staffing demand, all of which lead to improved capital utility for the organization.

In-plant recycling is another option. Despite best efforts, lubricants will become contaminated and degraded due to old or malfunctioning equipment, accidents, misapplication, mistakes or extended use. Lubricants contaminated with water or solids can often be recycled on-site. When solvents contaminate the fluid or it has become badly oxidized, on-site recycling becomes more difficult.

Reconditioning at the Machine

If the lubricant is still in the equipment (as opposed to all over the floor), the first consideration should be to use portable filtration equipment connected directly to the machine to recondition the fluid.

This involves vacuum distillation or other means of dehydration, followed by filtration. The process could damage the oil, but this risk is minimized by the use of effectively engineered equipment, experienced operators and comprehensive oil analysis. There are capital costs, but these generally have a short payback period.

Follow these steps in getting started using portable recycling equipment:

  • Perform oil analysis to determine the nature, rate and degree of contamination.

  • Decide on target health and contamination conditions after recycling.3

  • Contact recycling equipment manufacturers and request product literature. Dictate what must be accomplished so that there is no ambiguity in comparing proposals.

  • Invite several manufacturers to visit, view equipment, recommend recycling equipment and quote cost.

  • Select the best equipment, based on processing capabilities (throughput, ability to achieve targets), maintenance and purchase costs.

  • Run trials in conjunction with oil analysis to prove equipment capability.

  • Set recycling intervals based on contamination rate and targets; verify periodically with oil analysis.

  • Track cost savings.

Collection and Segregation of Used Oil

Used oil should be considered a valuable resource rather than a waste. The value of a used oil stream depends largely on its quality, which is defined in terms of the level of contamination with water, solids and other fluids.

The higher the quality of the used oil stream, the more valuable it is and the more recycling options available. Segregating different qualities or types of streams (for example, cutting oil and hydraulic fluid) is a good practice where possible.

Don’t mix a high-quality stream with one that is low-quality, or the remaining mixture will have a lower value than the sum of the two component streams.

Improve the quality of the oil stream where possible, using polymers, flocculants membranes or gravity settling. Typically a plant will pay to have low-quality oil streams hauled away, while receiving payment for high-quality oil streams.

For instance, the cost difference between a 15 percent oil stream and 90 percent oil stream may be about $0.26/gallon for a given plant. It is straightforward to decide whether or not it is cost-effective to improve the quality of a used oil stream. Don’t forget to include transportation costs in the calculations. With higher oil content streams, there will be fewer transports.

Figure 2. Quality Improvement Margins4

Figure 2 illustrates cost as a function of used oil quality. This includes both processing and transportation and is only an example. The difference in cost or payment per gallon between two different used oil streams is theoretically the amount of money that could be spent on-site to improve oil content.

Contract Oil Reclaiming Trailer or Central Fixed Recycling System

If it is not practical or cost-effective to recycle at the machine, the oil is often collected at a central plant facility. A permanent central recycling facility can be installed, but this requires capital and in-plant expertise in recycling. Several companies provide a service where a trailer equipped with recycling and analytical equipment travels to the plant and recycles the fluid on-site.

In this case, no capital or plant expertise is required. Conducting oil analysis and pilot trials before using the recycled fluids in critical plant equipment minimizes risks. Often the trailer is a good intermediate step prior to the installation of a permanent in-house recycling process. This helps generate a good estimate of the expected payback period on the cost of a central system.

Evaluating potential trailer recycling services is similar to evaluating portable recycling equipment. Such recycling could also encompass cascading. In this case, a spent lubricant, for example a badly contaminated hydraulic fluid, is recycled and used in an application that has less demanding requirements, such as a general-purpose cutting oil.

Off-site oil recycling is the last option. The obvious rewards are cost savings, although they are not likely to be as large as for on-site recycling. The risks are the same as for on-site, and can be minimized by quality product specifications, oil analysis and pilot trials.

Worker acceptance is an issue that may arise in off-site recycling because the fluid has now gone off-site. On-site recycling is therefore less of an issue because the fluid has never left the site. Honest communication and a program to address perceived concerns will help minimize worker objections.


Rerefining can be used to handle most types of oils, regardless of contaminant levels. Re-refining involves separation processes (distillation), followed by hydrotreating (reacting with hydrogen at high temperature and pressure in the presence of a catalyst) to destroy the remaining contaminants.


Reclaiming or reprocessing can be used to produce cutting and grinding fluids, and involves physical processes to remove contaminants from oil. Examples include vacuum distillation, centrifuging and clay filtration. Reprocessing often does not remove additives (the most expensive components of cutting fluids) and significant savings can be realized.

Reclamation of a waste stream generally cannot produce a high-quality hydraulic fluid from a nonsegregated stream. Efforts to convert waste streams to reusable lubricants should be accompanied with extensive testing, particular for solid particulates between 5 and .5 micron size ranges. Testing to grade the varnish potential of lubricating materials derived from waste oil stream would be necessary as well.

Demonstrated Benefits

An example of the benefit of proper lubricant specification and selection occurred at a transmission plant that was experiencing valve plugging in a way-lubricant distribution system.

System failures shut down production lines and created a need for $100,000 in replacement parts in a few months. The system was properly cleaned and an LS2-approved lubricant meeting particle count specifications was substituted for the existing product. Downtime and repairs dropped below traditional levels.

An example of in-situ reconditioning occurred at an engine plant that experienced a serious problem with water-soluble coolant contamination of hydraulic and spindle oil in crankshaft grinders. A portable vacuum dehydration unit was purchased and was effective in removing water and particulates from the lubricants while the machine was still operating.

With oil analysis, the plant developed a protocol for how often and for how long the dehydrator had to be run. The plant documented savings in oil purchase and disposal costs, labor, lost production, bearing replacements and scrap. The equipment paid for itself in a matter of months.

A waste stream reconditioning exercise was applied to an assembly plant where the plant’s oil was contaminated with ethylene glycol. The company contracted a trailer recycling service to remove the ethylene glycol via vacuum dehydration, processing 18,000 gallons every six weeks.

The plant reduced its new oil costs by 50 to 60 percent and nearly eliminated its used oil disposal costs. Analytical testing was provided as part of the reclamation service.

Technical Editor’s Note of Caution:
For some types of lubricants, additives in contact with glycol contamination can produce hard deposits. These deposits are referred to as “oil balls”, which can be difficult to filter and destructive to machine surfaces.

At another transmission plant, rerefined products are used for more than three-fourths of the maintenance lubricants. Savings total more than $500,000 per year in oil costs as a result. The plant has experienced no maintenance problems in four years of using LS2-approved rerefined lubricants.

Figure 3. Overall Program Schematic2

Figure 3 illustrates the overall program. The largest dollar savings are realized up front, through proper specification, selection and proactive maintenance. Opportunities are available at all levels of the flow diagram.

A systematic program will ultimately reduce downtime, repair costs, potential environmental liability, oil purchase and disposal costs. Most, if not all of the initiatives will result in a healthier and safer work environment.

Dr. Gene Gagnon, retired from General Motors, was a partner in developing the GM oil management and recycling model.


  1. The GM LS2 Standard

  2. “GM Oil Management Program; Oil Analyses, Life Extension, Recycling.” Practicing Oil Analysis Conference, Tulsa, OK, 2002.

  3. See Section L8 of reference 1, or Web site.

  4. Smolenski, D. “Industrial Oil Management from Cradle to Cradle.” 11 th Annual Waste Reduction and Energy Efficiency Workshop and Expo, November 2003.

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