Fuels & Lubes International - Q4 2011 by F+L Asia

Quarter Four 2011 Volume 17 Issue 4

I N T E R N A T I O N A L

When one plus one

does not equal two

> Taxicab testing goes to desert extremes. > Proven performance goes to OLOA® 55501. > One additive goes for GF-5 and dexos1®. > Versatility goes broadened. > Winning formula goes to customers.

Picking an additive supplier shouldn’t have to feel like a game

product that meets ILSAC GF-5/API SN and GM dexos1®

of chance. At Oronite, we believe in taking the time to develop

specifications. It offers expanded base oil coverage, enhanced

great technology and test it under tough conditions like the

engine protection, and a very competitive treat rate. For more

desert heat in Las Vegas taxis. Our OLOA 55501 offers the

information, please contact your local Oronite Account

simplicity and logistical cost savings that come from a single

Manager or visit www.oronite.com.

© 2011. Chevron Intellectual Property LLC. All rights reserved. The Chevron hallmark is a registered trademark of Chevron Corporation. Oronite, OLOA and Making the things that go, go better are registered trademarks of Chevron Oronite Company LLC.

Editorial F+L in Macau, China

Our decision to offer a Chinese version side-by-side with English also coincides with our decision to move our headquarters to Hong Kong and our choice of Macau as the venue for F+L Week 2012.

OUR LAST ISSUE FOR THE YEAR IS ALSO THE FIRST TO BE completely translated into Chinese, since we first started publishing Fuels & Lubes International (FLI) in 1995. This move reflects the growing importance of the Chinese market, not only for our industry, but globally. China is now the second-largest economy in the world after the United States (as measured on a purchasing power parity (PPP) basis that adjusts for price differences), with a gross domestic product (GDP) of more than US$10 trillion. Our decision to offer a Chinese version side-by-side with English also coincides with our decision to move our headquarters to Hong Kong and our choice of Macau as the venue for F+L Week 2012, the convergence of two of Asia’s premier industry events— the 18th Annual Fuels & Lubes Asia Conference and the 6th AsiaPacific Base Oil, Lubricant & Grease Conference. You can learn more about F+L Week at www.fuelsandlubes.com/conference. As the fastest growing economy in the world, one of China’s major challenges is to contain environmental deterioration. In this issue, we write about one effort in the transport sector to address this. The green trucking revolution is just getting started in China. Read more about it on page 28.

Vicky Villena-Denton Editor-in-Chief & Publisher

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

CONTENTS 10

Features

12 28

24 34

NewsBites

Columns

Industry News 8 38

6 8 40 6 6

F U E L S & L U B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

Contributors Hank Hogan is an Austin, Texas-based freelancer who writes about business, energy, technology and science. Like others in Texas, he’s sold exploration rights to an independent but a gusher hasn’t come in yet.

34 38 Fuel economy takes center stage

Kelly Thornton is a freelance writer based in San Diego, Calif. She was a staff writer for 18 years at the San Diego Union-Tribune, covering law enforcement and legal affairs. Jeroen Looye spent seven years as a base oil trader for AP Chemicals in Belgium. He is now an entrepreneur based in The Netherlands and is director of the Dutch company Losiwo B.V. that launched the base oil platform, www. baseoilmarket.com, in 2008. Cristine Villena Amurao, MD, MPH completed her medical degree and residency program in dermatology at the University of the Philippines College of Medicine-Philippine General Hospital. She received her masters degree in public health, with a concentration on environmental and occupational health, from the Northwest Ohio Consortium for Public Health.

6 F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

NewsBites Chemtura to further boost capacity of high viscosity PAOs

Albemarle to produce Novviâ&#x20AC;&#x2122;s synthetic renewable base oils

Lubrizol to upgrade Mumbai lab facility

F U E L S & L U B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

ULTRA-SⓇ, a global leading base oil brand, provides the best solution fulfilling any challenging requirement with cutting-edge technology, customized services and efficient supply network around the world. Whatever you want and wherever you need top tier base oil, ULTRA-S Ⓡ is the answer. ■ http://baseoil.s-oil.com ■ baseoil @ s-oil.com

NewsBites Shell opens lubricants technical service center in Zhuhai

Sinopec starts construction of Singapore lube blending plant

Rhein Chemie introduces new sulfur carrier product range

F U E L S & L U B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

Fuel Additives Refinery Additives

KeroLine™ – Your passion brand for fuel Everything we do at BASF, we do with passion. KeroLine™ also bears this hallmark. Our new brand for the petroleum industry combines the unrivaled scope of the Kero product range and stands for the highest quality and a first class service. The Keropur® product name, which is part of the KeroLine™ range, represents an innovative selection of fuel additives which efficiently improve the quality of standard, commercially available fuels in terms of performance, corrosion protection and emissions. As individually formulated, multifunctional additive packages, these products convert any fuel into high-grade, brandquality gasoline and diesel. Differentiate your fuel – with KeroLine™.

www.basf.com/keroline

“That’s what we call the KeroLine™ Effect.”

™ = trademark of BASF SE EVO 1030e

Feel relaxed. That’s what we call the KeroLine™ Effect.

NewsBites AkzoNobel to acquire China’s Boxing Oleochemicals

Chevron Oronite OLOA® 55501 is GF-5 and dexos1® approved

Infineum Singapore gets recognition for workplace safety

10 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

Get a FREE ticket to Cirque du Soleil’s Zaia now showing at the Venetian Macao when you register for F+L Week by February 15, 2012!

Belong. Engage. Learn. Benefit. March 4-9, 2012 / Four Seasons Hotel Macao

Theme:

“Value Creation, Growth & Sustainability: Challenges and Opportunities”

Register by December 28, 2011 and SAVE as much as US$300! F+L Week is the convergence of Asia’s two premier industry events: the 18th Annual Fuels & Lubes Asia Conference and the 6th Asia-Pacific Base Oil, Lubricant & Grease Conference. This international conference also features Education Courses taught by the world’s leading experts.

www.fuelsandlubes.com/conference

The perfect

combination!

Get the new, completely updated edition of the Asia-Pacific Petroleum Buyer’s Guide and the Asian Lube Map and SAVE 30%. The perfect combination at a special pre-publication price!

Now only US$168! Save US$72

Email your order to subscription@fuelsandlubes. com and quote “BGLM2011” to get the special price of US$168. Offer ends on January 30, 2012.

NewsBites Japan to set new standards for vehicle fuel economy

Construction underway for new aromatics complex in Singapore

Shell to invest US$100 million in lube plant in Tianjin

12 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

AFT

AFTON_P11_013 Eng_F&L ol.indd 1

10/19/11 11:51 AM

BASE OIL COLUMN

I L LU S T R AT I O N BY C H I L I D O G S

A quarterly in-depth analysis of the global base oil market by www.baseoilmarket.com

2011 Base oil SN500 prices ($/MT)

$1500 $1400

FOB Asia

Jul Au g

FOB Middle East

FOB Baltic

FOB Asia

Jul Au g

$1500 $1400 $1300 $1200 $1100 $1000 $900

Fe b Ma r Ap r Ma y Jun

2011 Base oil SN150 prices ($/MT)

FOB Europe

FOB Middle East

FOB Baltic

2011 Base oil BS150 prices ($/MT)

$1700 $1600 $1500 $1400

FOB Europe

FOB Asia

Jul Au g

Fe b Ma r Ap r Ma y Jun

t No v De c Jan

$1300 $1200 $1100 FOB Middle East

2011 Base oil SN500 prices ($/MT)

$1500

CFR NE Asia

Jul Au g

Fe b Ma r Ap r Ma y Jun

t No v De c Jan

$1400 $1300 $1200 $1100 $1000 $900 CFR India

2011 Base oil SN150 prices ($/MT)

$1400 $1300 $1200 $1100

CFR NE Asia

Jul Au g

Fe b Ma r Ap r Ma y Jun

t No v De c Jan

$1000 $900 $800 CFR India

CFR NE Asia

Jul Au g

t No v De c Jan

Fe b Ma r Ap r Ma y Jun

2011 Base oil BS150 prices ($/MT)

$1700 $1600 $1500 $1400 $1300 $1200 $1100 Oc

THE ECONOMIC ENVIronment deteriorated rapidly in the third quarter. The economic slowdown in the early summer months was first considered to be nothing more than a soft patch and growth was expected to rebound by the second half. In the third quarter, however, it became clear that the slowdown was global, caused by both structural and cyclical factors that will probably not be resolved quickly. In developed economies, huge budget deficits and high-government debt restricted growth, causing panic in financial markets and further decreasing consumer confidence and spending. While Japan and the U.S. share these problems, the situation in Europe was the most pressing. In developing economies, such as China, India and Brazil, policy makers are fighting inflation through measures which would slow down growth. The global economic slowdown has impacted crude oil markets, especially the price of the U.S. benchmark crude, West Texas Intermediate (WTI). The price of Brent and other crude oils have held up well, considering the negative macroeconomic environment. The main reason is that supply continues to be hindered by the â&#x20AC;&#x153;Arab Springâ&#x20AC;? and the loss of production in countries such as Libya and Syria. Although Saudi Arabia has responded by raising production, supplydemand dynamics point to a further tightening of crude oil markets.

Fe b Ma r Ap r Ma y Jun

FOB Europe

t No v De c Jan

From standoff to falloff

t No v De c Jan

$1300 $1200 $1100 $1000 $900

CFR India

S O U R C E : W W W. B A S E O I L M A R K E T. CO M

14 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

Even in cold or harsh climates, innovative lubricant formulations developed with Evonik expertise and VISCOPLEX速 additives are proving instrumental in increasing fuel efficiency. How may we help you achieve your goals? For more information, visit www.rohmax.com.

In the third quarter, all of the above factors started to impact the base oil market. Under pressure of weak demand, the market first experienced a standoff. Then prices started to weaken, followed by a continuous decline in late August. By early September, Group I base oil export prices in the West quickly declined, dropping at least US$110-160 per metric ton (MT) from second quarter peak levels. In the East, Group I base oil export prices also fell, but only by US$30-45/MT. These price movements were an indication that base oil markets were largely overvalued in Europe, Russia and the CIS. As key Asian buyers, such as China and India, struggled to work down their high inventories, the traditionally slow lubricant season began dampening trading possibilities. Asian buyers built up downward pressure

Group I and II markets tightened because of heavy refinery turnarounds all over Europe and Asia during the first two quarters. This situation led up to global base oil prices reaching record highs in May. In June and July, refineries started rebuilding their stocks. Meanwhile they held on to firm offers in the hope of a pickup from Chinese and Indian buyers. This strategy did not pay off as economic growth started to slow down globally, including in China and in India, which resulted in reduced lubricant demand. Therefore, most blenders started to reduce production rates in the summer. Many small blenders even shut down their factories temporarily to avoid the risk of sudden price corrections.

In India, the monsoon season hammered down the market further, while Chinese refiners cut domestic base oil prices to bring down their inventory levels. In the third quarter, the arbitrage windows between the West and the East were totally shut. Trading activity for Group I and II were muted in Chinese ports. Major Chinese traders had no interest in importing; they even offered Group I and II export cargoes to South East Asia. In September, offer prices for solvent neutrals were between US$1,250 and US$1,320/MT FOB China. Group II N150 was offered at US$1,400/MT FOB China, but attracted little buying interest. To reduce inventories, Chinese oil giants Sinopec and PetroChina reduced operating rates at some plants. Some sudden turnarounds also reflected the weak demand and high inventory situation. By mid-September, base oil prices in North East Asia were averaging US$1,280/ MT for SN150, US$1,360/MT for SN500 and US$1,620/MT for Bright Stock on CFR basis, about US$35-40/MT lower than June prices. In the Middle East, the market started falling as well. As the traditional takers of Iranian origin base oil, Indian buyers expected Iranian LVI base oil prices to be at US$1,200-1,250/MT FOB Iranian ports, which brings CFR India prices at around US$1,240-1,290/MT. Actual deals were done within this range in September. Iranian Bright Stock was selling for under US$1,500/MT FOB. In the Middle East gulf, around 20,000 MT of HVI Turkmenistan SN180 and â&#x20AC;&#x153;From Standoff...â&#x20AC;? continued on page 33>>

Base Oil Market Weekly Be Successful, Be Informed

Expert Opinions and Prices in Your Inbox Every Week

Signup Now www.baseoilmarket.com

16 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

High performance additives forperformance your business growth. High additives for your business growth.

Our long-term investment in Asia is preparing for the future in ways that will add value to your business. Our long-term investment in Asia is preparing for the future Lubrizol delivers high performance additives in the transportation and industrial lubricant markets throughout Asia. in will addinvalue to we your business. Withways over 50 that years experience the region, continue to enable the growth and success of all our customers through our ongoing investments in technology, supply and marketing support. Lubrizol delivers high performance additives in the transportation and industrial lubricant markets throughout Asia. To fi nd out50more visit lubrizol.com/asia With over yearsplease experience in the region, we continue to enable the growth and success of all our customers through our ongoing investments in technology, supply and marketing support. With you every step of the way. To fi nd out more please visit lubrizol.com/asia With you every step of the way.

www.lubrizol.com LL6_M056_Delivery_Adv_A4.indd 1

03/08/2011 13:06

AUTOMOTIVE COLUMN

S w

Fuel economy takes center stage

OR THE PAST 20 YEARS, emissions regulations were the primary driving force of engine technology changes by the world’s automobile and trucking industries. But the latest rules have reached rock bottom—literally. They require that levels of criteria emissions such as particulate matter and oxides of nitrogen be cut almost to zero, leaving little room for further reductions. The market driver of the next decade is fuel economy, with more stringent regulations already on the way for both passenger cars and heavy-duty vehicles in the U.S., Japan and Europe. “We have emissions down to such low levels there’s not much more room to go. The focus has shifted now to fuel economy,” said Gary Parsons, global OEM and industry liaison manager for Chevron Oronite LLC based in San Ramon, Calif., U.S.A. “Fuel economy, and the directly related CO2 emissions, are now center stage and they’re very important.” An important part of the multipronged path to better fuel economy is engine lubricant, an inexpensive method

with immediate results and an added bonus: high quality engine oils also enable advances in vehicle and engine technology. “There is a strong interdependence between engine and vehicle technology and engine oil technology,” Parsons said during a session of the Japan Society of Automotive Engineers’ (JSAE) Powertrains, Fuels & Lubricants seminar in Kyoto, Japan, in August. At the end of July, U.S. President Barack Obama announced new fuel-efficiency standards for cars and light trucks for 2017-2025 models, requiring 54.5 miles per gallon (mpg) in 2025. That’s a big improvement from the current passenger car requirement of about 27.5 mpg. And, it’s above and beyond the 35.5 mpg requirement for passenger cars by 2016. The administration predicted that the new regulation will save motorists US$1.7 trillion at the pump over the life of the program, it will dramatically reduce fuel consumption by 12 billion barrels of oil and will eliminate 6 billion metric tons of carbon dioxide pollution. The White House projected that a family that buys a new vehicle in 2025 will save US$8,200

18 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

DEG

Skip a step and save money with our catalysts for biodiesel.

With sodium and potassium methoxide solutions from Evonik you don’t need to dissolve your catalysts. That’s because they are ready to use for biodiesel production. The water-free process yields fewer impurities and creates high-purity glycerol. Direct metering from the storage tank provides safe and easy handling. Contact us for more details on how our sodium and potassium methoxide catalysts can help you produce biodiesel cost effectively.

DEG-02-1238 AZ_Biodiesel_279_4x215_9 RZ1.indd 1

Evonik Degussa GmbH Industrial Chemicals P +49 2208 69-571 F +49 2208 69-852 michael.markolwitz@evonik.com www.evonik.com/biodiesel

07.02.11 12:29

over the lifetime of the vehicle compared to a similar 2010 car. About two weeks later, in mid-August, the White House announced the first fuel efficiency standards for medium- and heavy-duty trucks, vans and buses which call for reductions of fuel consumption of between 9 and 23% by 2018, depending on vehicle type. The White House said the new rules will save owners US$50 billion in fuel costs over four years starting in 2014 and will save the U.S. 530 million barrels of oil during the same period. Better fuel economy is important on two levels—to benefit the environment and to reduce reliance on oil imports. President Obama hopes the new rules will cut oil imports by one-third by 2025. The goals seem lofty but experts said all it takes is money. “It’s achievable. It’s just a matter of cost,” Parsons said, explaining that it will require changes to engine and vehicle technology and will add significant upfront cost to the consumer who buys a fuel-efficient car or truck. “The standards are severe enough they are going to drive technology change,” he said. Parsons said the U.S. government contends that consumers will pay more for new vehicle purchases, but will recoup the extra cost in fuel savings over the life of the vehicle. The actual break-even point depends on factors such as the incremental increase in vehicle cost, fuel prices and miles driven. Depending on the data source and estimates used, the break even period is estimated to be between three and seven years. Some people are skeptical of the break even numbers provided by the government, however. They said government estimates for meeting the 2002, 2007 and 2010 truck emissions regulations were vastly underestimated. Parsons said it would take a multipronged approach to accomplish these fuel economy requirements. “The car companies and truck builders are using a combination of many different things in order to come up with the most cost-effective solution and make the vehicles affordable,” he said. “There is a wide variety of techniques that incrementally give you better fuel economy.” While it’s just a small part of the big fuel-economy picture, engine oil is a key way to improve fuel economy immediately and inexpensively. Original equipment manufacturers (OEMs) are going for lower viscosity grades, as low as 0W-20 or 5W-20 for passenger cars and 5W-30 for heavyduty trucks. Lower viscosity oil reduces the

20 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

amount of energy it takes to pump oil to lubricate the engine. That translates to direct fuel economy savings. It’s like stirring honey versus water. The challenge of lower viscosity engine oils, of course, is to make sure the oil is properly formulated to protect the engine from friction and wear. Meanwhile, ILSAC (this acronym now stands for International Lubricant Specification Advisory Committee) is developing GF-6, the next engine oil specification for passenger cars being developed by U.S. and Japanese automakers, with a big emphasis on fuel economy. Likewise, the heavy-duty engine oil specification, API CJ-4, is set to be replaced around January 2016. The new category, with PC-11 as the development name, has a provision in it for a low viscosity, high temperature high shear (HTHS) “fuel efficiency” grade. Other elements being employed by OEMs to meet tougher fuel-economy standards include weight reduction; eightspeed automatic transmissions; continuously variable transmissions (CVT); startstop engine control system to save fuel at stop lights; gasoline direct injection (GDI); turbo downsizing; vehicle aerodynamics; friction reduction in new piston designs; electro-mechanical power steering; electrical cooling pump; fuel-efficient tires; pressure-controlled electrical fuel pump; and, variable displacement oil pump. There’s one other thing necessary to meet these new targets. “One thing is clear, the severity of the new fuel economy standards requires that the OEMs, additive companies, and lubricant suppliers all work together on a systems approach rather than on independent contributions,” Parsons said.

Parsons

FNL Mag “One thing is clear, the severity of the new fuel economy standards requires that the OEMs, additive companies, and lubricant suppliers all work together on a systems approach rather than on independent contributions,” Parsons said.

The smoother solution

Magazine-full size (8.5 X 11 inches)

for your lubricant business

Efficient Supply

Technical Performance Global Availability Our solution for you

YUBASE, the worldâ&#x20AC;&#x2122;s leading base oil brand, combines all the necessary elements required to keep your business running smoothly and brings your business a step closer to success.

Keep smiling with YUBASE www.yubase.com

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r T h r e e 2 011

Introducing Lubrizol速 4980A in 3D.

With you every step of the way.

A New Dimension in Performance. Whether it’s Moscow or Mumbai, Euro I or Euro V, quarry or highway, diversity comes in many forms. Whatever the end use application, geographical location or local operating conditions, Lubrizol® 4980A provides outstanding engine durability and a quality solution you can depend on. Lubrizol® 4980A in 3D: A Dependable and Durable solution in a Diverse world.

COV E R

S TO RY

WHEN ONE PLUS ONE DOES NOT EQUAL TWO

Chemetall survey shows that the sum of metalworking fluid components does not reflect biological characteristics of resulting compound.

24 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

HE TREND TOWARDS GREEN TECHNOLOGY AND sustainability is something different industries are striving for. That includes the metalworking fluid (MWF) industry. Today’s mantra is “reduce, reuse, and recycle.” Karen Eisenhauer discussed how one company arrived at formulating environmentally friendly coolants during the Society of Tribologists and Lubrication Engineers (STLE) Annual Meeting in May. She is metalworking industry market manager of Chemetall in New Providence, N.J., U.S.A. First, the company surveyed end users from the United States, Mexico and Puerto Rico, from a wide array of industries. They came from different backgrounds, she said, from floor personnel to plant managers and environment, health and safety officers. They used either central systems or stand-alone operations and used oil-based, as well as water-based fluids. Those who participated in the survey said their number one requirement was biostability as it meant longer sump life, followed by ease of disposal, multi-metal compatibility, lower consumption and ease of use (no pre-dilutions). Other requirements mentioned were minimum cleaning or none at all, low or no residue, no odor, improved tool life and multifunctionality. Further, dyed fluids were preferred over clear fluids. End users said they want to move to “green technology.” Some of the chemical restrictions mentioned by end-users included mineral oils, biocides/triazines, less amines (primary and secondary), no nitrites, no formaldehyde-releasing chemicals, low or zero chlorine, phosphates and phenolics. This long wish list defines what green technology means to end users today, the survey found. The challenge lies in getting the “green technology” metalworking fluid to perform as well as conventional technology, despite these chemical restrictions. So, what do MWF customers want? The answer is quite elementary, Eisenhauer said. They want the ability to reduce (toxicity, volatile organic compounds, odor), reuse and recycle (good biodegradability as measured by biological oxygen demand (BOD) and chemical oxygen demand (COD) ratio). Chemetall evaluated several MWF formulations that might resonate well with end-users. Eisenhauer discussed the results of their evaluation at the STLE meeting. For semi-synthetic fluids, there was low- to mid-range oil content, no chlorine, no biocides, no or minimum primary or secondary amines. They were hard water stable up to 1,000 parts per million (ppm), plus they had low foaming characteristics under high shear conditions. Synthetic formulations, on the other hand, were mineral free, had no or low amines, no biocides, contained a lubricity package and a rust preventative system (RPS). The synthetic non-amine formulation had no amines, no sulfur and no chlorine. Chemetall’s study looked at several parameters to assess the fluids. To measure biodegradability, they compared the BOD to the COD ratio. BOD measures the amount of dissolved oxygen needed (by the bacteria) to degrade organic matter, while COD measures the total amount of chemical

I L LU S T R AT I O N BY C H I L I D O G S

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

oxidizable organic material in the sample. The COD was calculated using a strong oxidizing agent and was not incubated for several days to give time for the bacteria to grow. This meant that the COD will be higher than the BOD in most instances. If the ratio is zero, this means that the sample is not biodegradable. If it is one, then the sample is 100% biodegradable under ideal conditions. Eisenhauer said they expected BOD values to decrease with organic content and the COD values to increase with higher molecular weight materials (using lubricity additives and mineral oils).

Both oil-containing and oil-free systems can be made with improved biodegradability, Eisenhauer said. The results showed that the synthetic formulation with triethanoloamine, fatty acids (FA), tolytriazoles (TTZL) and Chemetall’s proprietary non-chlorine, non-sulfur lubricant additive component system was the most waste treatable (highest BOD/COD ratio). The semisynthetic formulations showed increasing biodegradability with decreasing mineral oil content. The effect of amines with respect to biodegradability in semisynthetic formulations was not clear. Volatile organic compound (VOC) is increasingly becoming a mainstream topic. That’s because VOCs come from many sources, including house paint, and is an important consideration when choosing your MWF. 26 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

According to the U.S. Environmental Protection Agency (EPA), in 2005 29% of VOCs came from solvent use, 28% from vehicles, 19% from nonroad equipment, 11% from industrial processes and 13% from other sources. End users seemed to be unclear on their operations’ contribution to the total VOCs generated, however. Comments from end users ranged from “oils do not contribute to VOC” to “I don’t want to use any oil containing fluids…MW oils will contribute to VOCs”. They hypothesized that VOC content may increase with petroleum oil levels in the MWF formulation and that higher amine levels will produce higher VOC values. What Chemetall found out was there was no correlation between oil content and VOCs generated. The relationship between components and VOCs generated is not linear (one plus one is not necessarily two), it is not cumulative and is formulation dependent. In summary, the results showed that environmental data is formula dependent and the sum of its components does not necessarily reflect the biological characteristics of the resulting compound. Both oil-containing and oil-free systems can be made with improved biodegradability, Eisenhauer said. A very interesting point that she made was that amine- and oil-free MWFs are not necessarily the best on biodegradability. There is still a lot of work to be done to make the perfect metalworking fluid. Eisenhauer said they are leaning towards selecting chemistries based on renewable resources and minimizing the use of amines and biocides. However, these new formulations need to match the performance of old formulations. There are also unanswered questions about certain performance parameters. Biodegradable materials need to withstand certain temperatures and be stable. They need to prove that less toxic materials work as well as more toxic ones. Of course, cost and availability is always a concern, so those need to be addressed as well as market acceptance. Eisenhauer stressed that the industry needs to continue evaluating the biodegradation profiles and VOCs of newly formulated fluids, especially vegetable-oil based products. Continued education and market survey of end users is essential, she said. She also suggested a new list of priorities. First, thinking about out-of-the box solutions. Second, continuing with redesigning and formulating metalworking fluids. And third, minimizing waste.

FOCUSING ON SOLUTIONS. FOCUSING ON SOLUTIONS. FOCUSING ON FOR SOLUTIONS. AA WORLD IN MOTION. FOCUSING ON FOR SOLUTIONS. WORLD IN MOTION. FOR A WORLD IN MOTION. FOR A WORLD IN MOTION.

® C 8400 ADDITIN ®RRC 84IC00BOUND IN® RMCE8R400 UND DTIT DS ITPINO®LY FA DDIT 8EE4RA0IC AIR RACM UENDD D0DBBITO LY OIV IN PO S IC D T R E ASFDO R IRLSSIDT G M NE LY U EMIE! O O P®LYM B IT D IC D R 0 A E FIRST IN 0 S8ELE4EAADTDRITHIV AB IVEEIN CCHHEMIE! ECA O R P R G ID IR L IT IL F O S A D S V D E ANSOW REASB IE! ITRUIVHNEEDIN LIDAGGRLY BTO EDAAD H ININCCHHEEMMIE! MAAEEBRLLAIC LID E TTRRIV W T PAAOVVAAEIL S NOO E IL FSIR H NOW AILASBELAEDADIT SNOOLWIDAGVREA E AT RHEIN CHEMIE! ABL NOW AVAIL

Over recent years we have seen increasing application requirements for the use of Extreme Pressure (EP) greases with ever Over demanding recent years we have seenThe increasing application requirements forbeen the use Extreme Pressure (EP) greases with ever more incorporation of solid additives has oneof means to meet this demand. However more Over recent yearsperformance. we have seen increasing application requirements for the use of Extreme Pressure (EP) greases with ever Over recent years we have seen The increasing application requirements for the use of means Extreme Pressure (EP) greases with ever more demanding performance. incorporation of solid additives has been one to meet this demand. However more severe HSEQ regulations continue to be placed on the handling of such solid additives. Using its long established world remore demanding performance. The incorporation of solid additives has been one means to meet this demand. However more more demanding performance. The incorporation of solid additives has been one means to meet this demand. However more Over recent years we have seen increasing application requirements for the use of Extreme Pressure (EP) greases with ever severe HSEQ regulations continue to be placed on the handlingfor of suchrubber solid additives. UsingChemie its long established world renowned expertise in manufacturing polymeric bound chemicals industry, Rhein risen to the challenge. severe HSEQ regulations continue to be placed on the handling of the such solid additives. Using its longhas established world resevere HSEQ regulations continue be placedbound onofthe handling of solid one additives. its long established remore demanding performance. Thetoincorporation solid additives has meansUsing to meet this demand. more nowned expertise in manufacturing polymeric chemicals forsuch the been rubber industry, Rhein Chemie has risenHowever toworld the challenge. nowned expertise in manufacturing polymeric bound chemicals for the rubber industry, Rhein Chemie has risen to the challenge. severe regulations continue topolymeric be placedbound on thechemicals handling for of such solid additives. Using Chemie its long established renownedHSEQ expertise in manufacturing the rubber industry, Rhein has risen to world the challenge. We are very pleased to introduce to you the first product of our new product line “polymeric bound additives” for lubricants. nowned expertise in manufacturing polymeric bound chemicals for the rubber industry, Rhein Chemie has risen to the challenge. We are®very pleased to introduce easy to you rst product of ourmore new product line “polymeric bound additives” for lubricants. RC 8400 is non-dusting, tothe usefifiand outperforms solid alternatives in EP. Additin We are very pleased to introduce to you the rst product of our new traditional product line “polymeric bound additives” for lubricants. ® We are very pleased to introduce to you the fi rst product of our new product line “polymeric bound additives” for lubricants. RC 8400 is non-dusting, easy to use and outperforms more traditional solid alternatives in EP. Additin ® Additin® RC 8400 is non-dusting, easy to use and outperforms more traditional solid alternatives in EP. We are very to introduce to youtothe of our more new product linesolid “polymeric bound additives” for lubricants. RC pleased 8400 is non-dusting, easy usefirst andproduct outperforms traditional alternatives in EP. Additin Rhein Chemie truly wants to be your solution provider anywhere around the globe – keeping the world in motion. ® RC 8400 is wants non-dusting, easysolution to use and outperforms more traditional solid EP. in motion. Additin Rhein Chemie truly to be your provider anywhere around the globe – alternatives keeping the in world Rhein Chemie truly wants to be your solution provider anywhere around the globe – keeping the world in motion. Rhein Chemie truly wants to be your solution provider anywhere around the globe – keeping the world in motion. Solutions for lubricant industries. Rhein Chemie wantsindustries. to be your solution provider anywhere around the globe – keeping the world in motion. Solutions for truly lubricant Solutions for lubricant industries. Solutions for lubricant industries. Whatever requirements move your world: Solutions for lubricant industries. Whatever requirements movewww.rheinchemie.com your world: We will move them with you. Whatever requirements move your world: Whatever requirements your world: We will move them withmove you. www.rheinchemie.com We will move them with you. www.rheinchemie.com Whatever requirements your world: We will move them with move you. www.rheinchemie.com We will move them with you. www.rheinchemie.com

FE AT U R E

China’s green trucking revolution Former trucking company executive Joel Smith thought he would spend his retirement years taking leisurely walks with his wife on California beaches. Instead, he’s been working 70 plus hour-weeks, flying to China 10 times in less than three years to accelerate a trend that’s gaining momentum around the world.

SMITH, AN ACCOUNT MANAGER at U.S. trucking giant Caterpillar for 33 years, was recruited to be a consultant for Cascade Sierra Solutions (CSS), an American non-profit organization that helps trucking companies retrofit or replace polluting trucks with systems that reduce emissions and save fuel. The efficient movement of freight is crucial to the country’s economic development. More than 24 billion tons of freight was transported in China in 2010, twice as much as in the United States, said Sophie Punte, executive director of the Clean Air Initiative for Asian Cities (CAI-Asia). The number of highly polluting dieselfueled vehicles—mostly trucks and buses— 28 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

in China is projected to grow from about 10 million in 2005 to 60 million in 2035, according to a 2010 report by CAI-Asia. While only 4% of vehicles in China are trucks, they are responsible for 57% of particulate emissions, Punte said. And the number of trucks is increasing almost 10% a year, to keep up with freight demand. “The interest for green freight in Asia, and especially China, is emerging rapidly due to rising fuel costs and the relatively high contribution from trucks to air pollution compared to other vehicles,” Punte said. “Improving fuel efficiency from trucks is thus a unique win-win opportunity for both the economy and the environment.”

Italmatch Italmatchchemicals chemicalsSpa Spaisisaaspecialty specialtychemical chemicalgroup group leader leaderininthe thelubricant lubricantand andplastic plasticadditive additivemarkets. markets.The The Ketjenlube® Ketjenlube®range rangeofofpolymeric polymericesters estersprovide provideexcellent excellent lubricity lubricityasaswell wellasaslow lowviscosity viscositybase basefluid fluidcompatibility, compatibility, enhancing enhancingproduct productstabilities stabilitiesand andperformance performancewhen when considering consideringfor foruse useiningear gearoil oilapplications. applications. There Thereare areaarange rangeofofviscosities viscositiesand anddiffering differingpolarities polarities available availableininthe theKetjenlube® Ketjenlube®range rangewhich whichprovides providesthe the formulator formulatorwith withseveral severalchoices choiceswhen whendeveloping developingthe the optimum optimumproduct. product.Ketjenlube® Ketjenlube®are areproven provenbase basefluid fluid thickeners thickenersiningear gearoil oilapplications applicationswhere wherethey theyenhance enhance significantly significantlythe thepitting pittingand andmicro-pitting micro-pittingperformance, performance, which whichisisaakey keyattribute attributetotolongevity longevityininthe theperformance performanceinin gear gearapplications. applications.Additional Additionalbenefits benefitsafforded affordedby by formulating formulatingwith withKetjenlube® Ketjenlube®lielieinintheir theirexcellent excellentshear shear stability, stability,high highload loadbearing bearingcombined combinedwith withlow lowwear wear attributes. attributes.Their Theirneutrality neutralitytoward towardseal sealmaterials materialsisisdefinitely definitely another anotherpositive positiveeffect effectwhen whenconsidering consideringformulation.” formulation.” Italmatch ItalmatchChemicals Chemicalsportfolio portfoliofor forlubricants lubricantsextends extendsbeyond beyond the theKetjenlube® Ketjenlube®polymeric polymericesters estersinto intoaawide widerange rangeofof complex complexand andconventional conventionalesters, esters,amide amidefriction frictionmodifiers modifiers (Dapramid® (Dapramid®range), range),succinic succinicderivatives derivatives(PIBSA, (PIBSA,PIBSI, PIBSI, DDSA, DDSA,etc.) etc.)and andaarange rangeofoforgano-phosphorus organo-phosphorusderivatives derivatives including includingphosphites phosphitesasaswell wellasasphosphate phosphateesters. esters.

KETJENLUBE KETJENLUBE :: “Gearing “Gearing Up” Up” ®®

AA proven proven approach approach to to wear wear reduction reduction Headquarters Headquarters&&Sales SalesOffice Office Italmatch ItalmatchChemicals Chemicals Via ViaPietro PietroChiesa Chiesa7/13 7/13(8th (8thfloor) floor) Asia AsiaPacific Pacific(regional (regionaloffice) office) Torri TorriPiane, Piane,San SanBenigno Benigno No. No.1-3, 1-3,Jalan JalanSolaris Solaris2 2Solaris Solaris 16149 16149Genova, Genova,Italy Italy Mont MontKiara, Kiara, phone: phone:+39 +39010 010642081 642081 50480 50480Kuala KualaLumpur Lumpur e-mail: e-mail:sales.dpt@italmatch.it sales.dpt@italmatch.it Malaysia Malaysia phone: phone:+60 +603 36209 62099897 9897 Arese Aresemanufacturing manufacturing fax faxNo No: +60 : +603 36209 62099999 9999 plant plant&&sales salesoffice office mobile: mobile:+60 +60122783276 122783276 Via ViaE.E.Vismara, Vismara,114 114 e-mail e-mail: a.savidge@italmatch.it : a.savidge@italmatch.it 20020 20020Arese Arese(MI), (MI),Italy Italy phone: phone:+39 +390202935251 935251 fax: fax:+39 +39020293525496 93525496 e-mail: e-mail:sales.arese@italmatch.it sales.arese@italmatch.it

Italmatch ItalmatchChemicals Chemicals Shanghai ShanghaiOffice Office Room Room703, 703,8 8Dong'an Dong'anRoad, Road, Pine PineCity, City,Xuhui XuhuiDistrict, District, Shanghai Shanghai200032, 200032, P.P.R.R.China China phone: phone:+86 +8621213469 34691871 1871 fax faxNo No: +86 : +8621213469 34691872 1872 mobile mobile+86 +8613801854986 13801854986 e-mail: e-mail:sam.wang@italmatch.it sam.wang@italmatch.it

www.italmatch.it www.italmatch.it

On a larger scale, freight movement is also critical to economic development in Asia. For road freight, truck travel is expected to increase by 645% from 2000 to 2050, compared to 241% globally. CAI-Asia has teamed up with CSS, the World Bank and other groups to advance the “Green Trucking Revolution” in China. The aim is to bring affordable technologies to trucking companies that will help save fuel and reduce harmful emissions. Becoming greener— more fuel efficient and environmentally friendly—can be as simple and inexpensive as proper tire inflation, smart

driving and aerodynamics or as sophisticated and costly as infrastructure improvement, advanced technologies, upgrading or replacing trucks and upgrading old oil refineries or building new ones. In May, more than 90 Chinese government officials and private sector representatives gathered in Beijing for the first such collaboration on green freight strategies. They discussed how to improve fuel efficiency and reduce emissions from China’s freight sector. These goals are priorities in China’s 12th Five-Year Plan. The reason for China’s eagerness is obvious.

Guangzhou City government personnel and management of Star of City Logistics (SOCL) discussing truck operations in Guangzhou.

30 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

“Energy efficiency is a key factor in making the freight sector in China more competitive,” said Xu Yahua, deputy director-general, Road Transportation Department, Ministry of Transport, during his opening address. Some attendees said they were encouraged by the publicprivate sector partnership and forsee groundbreaking change coming in the near future. “I’m very optimistic that fuel efficiency is going to stay very high on the agenda for China because in comparison to many Western countries, there’s a huge efficiency gain to be made. What I’m more pessimistic about is how will this roll out to smaller truck drivers,” said Punte. Less than one percent of trucking companies have fleets. Almost all have just a couple of trucks. Seminar participants included China’s Road Transportation Department of the Ministry of Transport, the Vehicle Emission Control Center of the Ministry of Environment Protection, the Energy Foundation, the U.S. Environmental Protection Agency (U.S. EPA) and the World Bank. Presentations and panel discussions centered around five components of a potential Green Freight China Program: Clean technologies, freight logistics, financing mechanisms, knowledge and capacity and collaborative partnerships.

Pilot projects

Successful green-freight efforts in the U.S. have inspired other countries, including China, Canada, Mexico, Brazil, Australia and others to follow suit. These pilot projects generally mirror the U.S. EPA’s SmartWays program, which includes public-private sector partnership, data collection and performance benchmarking, technology evaluation and verification, financing programs, public education and marketing, logistics and multimodal sustainability efforts and carbon accounting. The SmartWay Transport Partnership was launched in the U.S. in 2004 with 50 partners. It has grown to nearly 3,000 partners, including the largest American trucking, rail and logistics firms, most of which operate globally. Under SmartWays, CSS has helped upgrade 4,152 U.S. trucks which resulted in saving 12.2 million gallons of fuel, plus tens of thousands of tons in emission reductions, including 122,720 metric tons of CO2. The organization helped haulers obtain US$25.3 million in financing for fleet upgrades, plus US$1.8 million in grants. In China, efforts began in 2010 with a small-scale green truck pilot involving 10 trucks over 90 days in the city of Guangzhou supported by the World Bank, CAI-Asia and the U.S. EPA. Smith worked with

Chinese officials and private companies, even riding along with truck drivers, to develop the project. “I got on the trucks, learned how they drive, learned about traffic, what are things the truck driver has to deal with. We designed a test to increase fuel efficiency and reduce emissions,” Smith said. The success of that pilot inspired government officials to proceed with a larger project in Guangdong Province, where 825,000 trucks are registered. That three-year project is set to begin in October. To prepare for this, back in the states in June 2010, Smith and CSS along with CAI-Asia and the U.S. EPA hosted 19 government officials from Guangdong Province to visit truck fleets, the California Air Resources Board (CARB) and several non-governmental organizations in California and Washington state. The pilot will include everything from introducing new fuel-saving technologies for trucks to financing new trucks to retrofitting solutions and education programs for drivers. The 90-day pilot project in Guangzhou resulted in 18% better fuel economy by using tire technologies from the U.S. SmartWays program, Smith said. The Global Environment Facility (GEF) through the World Bank and the Guangdong government are the sponsors of the US$14 million larger pilot program in

How it’s done Reducing fuel consumption and emissions can be accomplished by doing a number of things that add up—from improving aerodynamics and retrofitting exhaust systems to implementing new technologies and fleet modernization. Changing driving habits, combined with technology like battery-operated heating, ventilation and air-conditioning systems can result in significant improvements. Reducing unnecessary idling time, for instance, can save nearly US$5,000 in fuel costs annually while eliminating up to 20 tons of carbon emissions, according to Cascade Sierra Solutions (CSS). Installing diesel particulate filters can help too. Minimizing tire friction can provide fuel savings of 2-4%, particularly at speeds lower than 45 miles per hour (mph). Correct tire inflation can make a difference. Minimizing drag from trailers “is an affordable way to dramatically improve fuel efficiency and profitability for fleets” that regularly travel at highway speeds, CSS said. “An upgraded truck will save as much as 5,000 gallons of fuel per year, in addition to 50 metric tons in emissions. At today’s fuel prices, haulers can save as much as US$19,000 per year in operating expenses,” it said. A simple automated tire inflation system, for example, can save 100 gallons of fuel annually and eliminate one metric ton of CO2, while reducing tire wear and maintenance. But there are many challenges to overcome in China to achieve green trucking. Joel Smith of CSS said the biggest challenge is the unpredictability of sulfur content in fuel, which can be as high as 3,000 parts per million (ppm) or as low as 10 ppm. China’s fuel standards for heavy-duty vehicles fall years behind more stringent regulations for light-duty vehicles. The second biggest hurdle for the Chinese trucking sector is efficiency—cutting the kilometers driven with an empty trailer on return trips. Trucks are empty between 42 and 50% of the time, compared to 12-13% in the U.S. Empty trips equate to an estimated US$8 billion loss.

“That means that diesel engine is creating emissions running fuel and not hauling anything,” Smith said. In China, trucks and trailers are usually wed for life, while in the U.S., trucking companies swap trailers on return trips and pool resources. Another big challenge is convincing owners to upgrade their fleets with fuel efficient technologies, which can be expensive. There are no mechanisms in China for businesses to obtain loans to buy new trucks or to upgrade trucks that can be up to 20 years old. Another challenge is that China does not have a system in place to test and verify new green-trucking technologies. Although there are plenty of products such as additives that claim better fuel efficiency, the reality is that “very few technologies improve fuel efficiency in China,” Smith said. He expects provincial governments to set up a regulatory process involving academia to test and verify claims of new technologies within two to three years. China’s infrastructure is not green-truck-friendly either. High speeds needed to realize fuel savings from aerodynamic technologies, for instance, can’t happen because of traffic jams and poor conditions of highways outside of primary and secondary cities. Smith recalled a conversation with the owner of a Chinese trucking company who was involved in the pilot program. She used to lay on the grass as a girl to look up at the stars at night, she recalled. When she mentioned this to her 11-year-old son, he replied, “Mama, there are no stars in Guangdong.”

High speeds needed to realize fuel savings from aerodynamic technologies, for instance, can’t happen because of traffic jams and poor conditions of highways outside of primary and secondary cities.

“She wanted to be an example amongst her peers and other fleet owners of what you can accomplish with better technology,” Smith said of the trucking company owner. Smith is optimistic. “Everyone is taking ownership for cleaner air and less fuel. That’s unheard of in the United States. We can’t get people to agree or get a group to take ownership to make something happen,” he said.

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

Team members in front of Star of City Logistics (SOCL) trailer that was outfitted with U.S. technology trailer skirts for Green Truck Pilot.

Guangdong. In parallel, CAIAsia, with support from the Energy Foundation, is working with the Ministry of Transport to establish a green freight program at the national level. Convincing trucking companies to jump on the bandwagon is challenging, Smith said. “One of the biggest issues is what’s in it for me. What we did was make sure they understood technologies like these put money in their pocket be-

cause they lower the amount of fuel trucks are going to use.” The EPA has another selling point: Corporate responsibility. “Companies may also view environmental stewardship as a way to distinguish their brands. There are opportunities for new technologies and operational practices to save fuel and reduce costs for bottom line fuel savings, while demonstrating a commitment to sustainability,” the agency said.

32 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

Convincing trucking companies to jump on the bandwagon is challenging, Smith said.

>> “From Standoff...” cont. from pg 16

SN350 were sold to Iran and Turkey in July and August. It was confirmed that prices were lower than US$1,000/ MT on FOB Turkmenistan port basis. Many Group II and III cargoes were shipped into the Middle East gulf as well. In the third quarter, Group II N150 spot supply was offered at US$1,480-1,490/MT CFR UAE and Group III light grades at US$1,700/MT CFR UAE. On July 31, a fire led to the shut down of Taiwan’s Formosa Petrochemical refinery in Miaoli, which has a capacity of 500,000 MT/year. The plant restarted production five weeks later. The sudden outage did not have a direct impact on the Asian base oil market due to weak demand and high inventory levels. In the third quarter, Asian Group II prices fell by US$50-70/MT over June prices. N150 and N500 were trading at US$1,370-1,410/ MT and US$1,475-1,500/MT, respectively, CFR China basis. In India, Group II CFR import prices were US$20/MT higher as local supplies were limited compared with China’s oversupplied situation. India’s Hindustan Petroleum Corp. Ltd. (HPCL), is set to start new Group II production of 200,000 MT/year in the second half of September. Market participants believe that this new production capacity will add downward pressure to the Asian Group II market. European and Russian markets overvalued

In July and August, strong demand from destinations such as West Africa, Latin America and the U.S. supported the European and Baltic Sea markets. The shutdown of two major U.S. refineries in July caused base oil shortages in those regions, although the arbitrage windows were apparently shut. Some July and August surplus cargoes from Spain and Italy were offered at US$30-40/MT premiums above published high end prices. Russian and CIS

products were trading as high as US$1,400/MT on FOB Baltic basis in early July, a record high. The Baltic Sea export price was strongly supported by Africa and Latin America until late July, when buyers started to hold off after crude oil prices dropped significantly. Soon after, Baltic Sea traders had to lower prices by US$40-50/MT to sell their products as stocks were starting to build up. By the end of July, deals were done in the Baltic Sea at around FOB US$1,330/MT for SN150 and FOB US$1,335/MT for SN500. By late September, solvent neutrals were priced lower than US$1,200/MT on FOB basis. SN900 was offered at US$1,320/ MT FOB and Bright Stock at US$1,450/MT FOB. At this point, arbitrage windows between the Baltic area and Asia or Latin America were finally open again. Venezuela’s PDVSA offered a 30,000 MT base oil tender for September and October loading. A European trader won the tender and started to move cargoes from Europe and the Baltic Sea. In Europe, refineries and blenders suffered from weeklong standoffs due to the large gap between offer and bid prices. As buyers were determined to hold off, by the end of July several European refineries started to ask lower premiums or even flat prices. Deals were done at about US$1,420/MT for SN150, US$1,460/MT for SN500 and US$1,610/MT for Bright Stock on FOB export North West Europe basis by late July. In late September, deals were done at around US$1,310/ MT for SN150, US$1,330/MT for SN500 and US$1,490/MT for Bright Stock on FOB basis, which was US$110-130/MT lower. As expected, the obvious downward trend convinced buyers to wait for further price corrections. Weak demand and high inventories continued to add downward pressure on base oil markets. Market participants believed that the base oil market would only rebound when the economic situation improves. Group III prices in Europe

were rising in the first half of the year and have become stable since July. Producers confirmed that deals were done at €1,300-1,420/MT on FCA ARA basis in September. Only one producer stated that there were spot supplies in September, while other refineries had sold out their products until the end of the year. Annual Group III demand in Europe is estimated at 2,500,000 MT/year while current output is slightly above 500,000 MT/year. Shell’s Pearl GTL project in Qatar (capacity of 1,000,000 MT/year) and Neste’s joint venture in Bahrain (capacity of 400,000 MT/year) are set to change the global Group III base oil supply structure. It is reported that these two producers are still in the product analysis phase. Commercial production is believed to start in the fourth quarter. Some traders believe that base oil prices will continue to fall as crude oil futures started trending downwards and lube blenders hold off on their purchases. Falling Baltic prices are expected to continue to hammer the European base oil market. But refineries hold the opposite opinion that base oil prices could remain stable at current levels due to stable to rising prices of vacuum gas oil (VGO), gas oil and crude oil. The expected rebound in lubricant demand after the holiday season would certainly support base oil prices.

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

Bringing space lubes down to earth

OWEVER, LUBRICANTS ARE needed anyway, since spaceships, rovers and satellites all have moving parts. Spacebound lubes face some outof-this-world operating conditions, such as extreme temperatures and a hard vacuum. They also have to lubricate for many years, since there’s almost never a chance to lubricate a surface again after launch. This makes long-lived performance under harsh conditions important, and that need has grown over time, said Paul Bessette, president of Triboscience & Engineering in Fall River, Mass., U.S.A. “At the dawn of the space age, a mission’s success was predicated on hardware. Today, I would say that mission success is predicated on the longevity of the lubricant,” said Bessette, who’s been involved

34 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

with space lubricants for 35 years. Various liquid lubricants have been developed that are up to the challenge, such as Castrol Industrial’s Brayco™ and Braycote™, DuPont’s Krytox™ and Nye Lubricants’ Pennzane®. Space lubes aren’t cheap. Nonetheless, they have found uses beyond space applications, where their performance can justify their high costs. One of the essential requirements of space lubricants is non-flammability. That was the reason Krytox, a hydrogen-free perfluoropolyether, was chosen by NASA, the U.S. space agency, for its space program in the 1960s. This attribute continues to be important for succeeding generations of space lubricants. “We’re still, to this day, used in oxygen systems in everything from spacecraft to hospitals to emergency breathers for

I L LU S T R AT I O N BY C H I L I D O G S

FE AT U R E

rescue,” said Carl Walther, a DuPont tech service R&D engineer. In addition to the low volatility that makes them suitable for use in a vacuum, Krytox lubricants have great thermal performance, with grades that function down to about -90OC. For a Mars mission, NASA is looking to drop the temperature requirement even lower, to -110OC. DuPont is developing products that will perform even below this point, he said. Because of its chemical make-up, Krytox may not be the best lubricant when very low friction is required. However, if an application requires stability, long life and non-reactivity, this drawback may not matter, Walther said. For example, many cars have some Krytox in them, although it may only be a gram or two in an alternator bearing. Such bearings may reach a maximum temperature of 200OC. and there are very few lubricants that can withstand that heat without degrading. Another perfluoropolyether-based lubricant comes from Castrol Industrial. It was used in the Space Shuttle fleet and the Mars Rover, as well as the International Space Station, said Keith Campbell, business development manager for the company’s North America division. It was originally used, in part, because it was inert and non-reactive. Today it can be found in semiconductor clean rooms, lubricating bearings and robots which operate in a vacuum or at elevated temperatures. It also is used in disk drives and in automotive

Ionic liquids have anion/cation geometry mismatch preventing them from forming nice crystal structures so they have extremely low melting points

applications, although the latter may be somewhat restricted because it can cost 10 times its hydrocarbon-based equivalent. However, that expense may not matter if oxidation resistance and longevity are important requirements. “You get some off-the-wall applications, where somebody is putting a piece of equipment outside in Alaska and they want some kind of lubricant on the bolts that’s bolting the equipment down so 15 years later they can undo those bolts,” Campbell said. The cost of the lubricant is driven largely by the range of its operating temperature. The company’s current products can handle temperatures from -72 to +204OC. Testing has shown that it can be stored at -172OC. and brought back up to operating temperature repeatedly with no performance degradation. Pennzane is a hydrocarbon, technically known as a multiply alkylated cyclopentane. Studies have shown that using it lengthens bearing life, compared with perfluorinated oil. Bill Galary, a senior engineer at Nye, said that one of the keys to the success of its space lube is the filtering that it does. This removes contaminants, particulates and volatile materials that can lead to failure in space. The lack of volatiles in the lube is one reason why it has found a home in semiconductor manufacturing applications. As they are being made, chips are very sensitive to contaminants and so manufacturers don’t want anything evaporating into the air that can condense on the product. Traditionally, aerospace has driven product development but this is changing. A new version of Pennzane with very low

Ionic compounds (like NaCl) having similar anion and cation geometries form nice crystal structures leading to very high melting points

P H O T O S CO U R T E S Y O F N A S A

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

volatility was developed for the semiconductor market. It is now being considered for aerospace applications. Lubes for aerospace applications may be subject to export restrictions by the U.S., as provided for by the International Traffic in Arms Regulations (ITAR). Neither the aerospace nor semiconductor markets are huge volume markets. Together, however, they help bring down costs. Other non-space applications are becoming particularly important now, as aerospace companies wait to see what will serve as an encore to the retired Space Shuttle. In the meantime, Daniel Lockney, NASA technology transfer program executive, noted that the space agency has recently partnered with Chevron Corp. to explore their mutual technology portfolios. “That would be both for increased efficiencies, development of new materials and lubricants and also to increase safety,” Lockney said. NASA is also currently engaged in research and development for tomorrow’s space lubricants. The pace of change in this area tends to be extremely slow, however. A lube that first flew in space nearly 40 years ago is still in use today. In part, this is because every space lubricant undergoes rigorous testing. Bessette recalled tests measuring torque on precision bearings

P H O T O S CO U R T E S Y O F N Y E

(Above) Nye’s custom made ASTM E595 test rig that determines the amount of outgassing from lubricants (TML and CVCM); (Right) Filtering lubricants in a cleanroom readies them for aerospace applications.

36 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

running for more than 10 years and bearing tests under vacuum running for more than five. “When people evaluate a lubricant in a rolling element bearing, oftentimes this goes on for many years,” he said. Areas that still need work include greases, which Bessette would like to see made with as little thickener as possible. The use of a thickener leads to a two-phase system, introducing small particles that can conglomerate into bigger ones that cause problems, he said. However, grease has an advantage in that it tends to stay in place, unlike a liquid lubricant. NASA is beginning to look into a new class of lubricants called ionic fluids. Composed of positively charged anions and negatively charged cations, ionic fluids are liquids because of a mismatch between the anion and cation. With the proper choice of these two, an ionic fluid could combine the low coefficient of friction of hydrocarbon oil with the low volatility and long life of a perfluorinated lube. Kenneth Street, a chemist at NASA’s Glenn Research Center in Cleveland, Ohio, U.S.A, has been looking into ionic fluids as a base fluid and an additive, working with Covalent Associates of Corvallis, Oregon, U.S.A. There are trillions of possible ionic fluids; thus, focusing on the right ones can be particularly challenging. Street said the

P H O T O CO U R T E S Y O F N A S A /J P L- C A LT E C H

Charles Elachi, NASA’s Jet Propulsion Laboratory director (on the right) and Paul Siegele, president of Chevron Energy Technology Co., met at JPL to kick off a partnership for Advanced Energy Technology Development.

first step is to get a fluid with the right vapor pressure, friction coefficient and lifetime. “Then it’s time to start looking at some of the subtleties, like will it work at real low temperature? What happens when you heat it up? A lot of these ionic fluids tend to decompose at modest temperatures,” he said. So far, the results have been promising. Unless there’s a breakthrough, though, Street doesn’t expect to see an ionic fluid space bound for 10 or more years. Most likely, it could be used first

8662 WBM 1/4 page advert_Layout 1 13/09/2011 11:45 Page 1

NASA is beginning to look into a new class of lubricants called ionic fluids. Composed of positively charged anions and negatively charged cations, ionic fluids are liquids because of a mismatch between the anion and cation. With the proper choice of these two, an ionic fluid could combine the low coefficient of friction of hydrocarbon oil with the low volatility and long life of a perfluorinated lube.

www.greenpowerconferences.com www.greenpowerconferences.com 971 238 +44+1(0)20 70990700 0600

World Biofuels Markets WHERE THE BIOFUELS INDUSTRY MEETS TO DO BUSINESS

Pleas quote e F+L when registe ring

13 – 15 March 2012, Beurs-World Trade Center, Rotterdam, The Netherlands as an additive, rather than as a base fluid. Today, many additives are too volatile for use in a hard vacuum, he said. Ionic fluids are also the subject of research grants from the U.S. Department of Energy and other agencies. Although such research is not specifically aimed at producing a lubricant for space, something could come out of such work that could have aerospace applications. Victor Koch, president and CEO of Covalent Associates, said ionic liquids are fluids with a temperature range of more than 450OC. In bulk quantities, ionic liquids are competitive with the most expensive lubes in areas other than space, he said. He doubted, however, that an ionic liquid will ever replace motor oil, at least not without some significant changes to the way cars are designed that could take advantage of a more expensive lubricant. “Some of the automotive companies have been looking at ionic liquids and that has to do with a sealed crankcase,” Koch said. “You’d never change the lube.” For now, it looks like ionic liquids won’t see many earth-bound applications yet.

Green Power Conferences are delighted to announce that registration has now opened for the 7th annual World Biofuels Markets Congress and Exhibition. We will once again bring together the leaders of the biofuels industry for in-depth analysis on advanced biofuels, aviation, algae, finance, biorefineries and more.

8572 ABM Ad for F&L_8287 Advanced Biofuels Markets Brochure 24/08/2011 15:11 Page 1

For more information or to book your place visit www.worldbiofuelsmarkets.com www.greenpowerconferences.com +1 971 238 0700

2ND ANNuAL BioBaSed FuelS & chemicalS ceo SummiT and exhiBiTion Book before September 30 for discount ed rates

The Race FoR Scale November 8 - 10 2011 Parc 55 Wyndham hotel, San Francisco

JOIN THE BIOFuELS CEO SuMMIT: John Melo, Chief Executive Officer, Amyris

Richard Hamilton, Chief Executive Officer, Ceres

Jennifer Holmgren, Chief Executive Officer, LanzaTech

Pat Gruber, Chief Executive Officer, Gevo

Rick Wilson Ph.D., Chief Executive Officer, Cobalt Technologies

Jonathan Wolfson, Chief Executive Officer, Solazyme

Jim Imbler, Chief Executive Officer, Zeachem

Eric McAfee, Chief Executive Officer, AE Biofuels

Bill Sims, Chief Executive Officer, Joule Biotechnologies

Vincent Chornet, Chief Executive Officer, Enerkem

Arnold Klann, Chief Executive Officer, BlueFire

D. Hunt Ramsbottom, Chief Executive Officer, Rentech

Alan Shaw Ph.D., Chief Executive Officer, Codexis

Kirk L. Haney, Chief Executive Officer, SG Biofuels

Mark Niederschulte, Chief Executive Officer, INEOS Bio

Paul Woods, Chief Executive Officer, Algenol

Ed Dineen, Chief Executive Officer, LS9

John McCarthy, Chief Executive Officer, Qteros

Cindy Thyfault, Chief Executive Officer, Westar

Lee Edwards, Chief Executive Officer, Virent

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

IndustryNews Evonik team helps optimize low-viscosity engine oil THE AUTOMOTIVE INDUStry and its suppliers are always on the lookout for ways to optimize fuel consumption. Even low single-digit percentage improvements represent a considerable achievement. This is all the more important now that the EU has defined upper limits for CO2 emissions of new cars. For Evonik, too, resource efficiency has long been an important target. So it was no coincidence that lubricants producer Fuchs turned to Evonik when looking for new components—and found what it wanted. Thanks to a sophisticated development process, a new 0W-20 engine oil was at the starting line promptly at the opening of the racing season. “Because the technical requirements of the individual components were extremely high, we had partly to redevelop the products before producing them,” says Thorsten Bartels, head of the test laboratory for Evonik Oil Additives in Darmstadt, Germany. Over the last year, Bartels and

well as lower fuel consumption. And the new product is as easy on the environment as it is on the purse, because lower fuel consumption equals less CO2 emission. In the Lotus Exige, AIT regularly makes use of innovative techhis team have optimized the newly developed high-performance lubri- nologies for automotive construction, in lubricant additives and cant on an engine test-bench and fuel savings as well as other areas also tested it in racing cars under of expertise such as lightweight realistic driving conditions on a design and surface technologies. number of test tracks until it was The Lotus model built for this seafinally ready for use in racing. son weighs in at just 780 kilograms The RED Motorsport team (kg). The reduced weight results has had an excellent start so far. from the use of various Evonik In the first of six AvD 100-mile races of the season in Franciacorta, technologies such as the structurally rigid ROHACELL® foam core Italy, in mid-May, its Lotus Exige in the bodywork. took first place in the GT4 class. For the AIT, which brings The car was ranked 16th overall together the Group’s automotive in a field of 31 participants. experts, motor sports serve as the This is equally a success for Evonik’s Automotive Industry Team test field for series production. “Only those technologies that (AIT), which sponsors the Lotus withstand the rigorous conditions racing car, because the race was also a test run for the new engine oil of the race track can be considered basically suitable for serially proto which Evonik Oil Additives has duced vehicles,” says Klaus Hedcontributed novel and innovative rich, who heads AIT. Meanwhile, lubricant components. testing of the newly developed oil VISCOPLEX® and VISCOBASE® are the lubricant components on the Evonik RohMax Additives from Evonik that, as constituents of GmbH engine test-bench and roller dynamometer continues at Evonik the innovative high-performance in Darmstadt. engine oil, contribute to a sigThe innovative lubricant is nificant reduction of friction in the already undergoing long-term Gerengine. This leads to measurable many tests in a fleet of road vehicles. improvement in performance, as

38 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

Excellence is built on a foundation of commitment and integrity. Our customers trust our uncompromising standards, and rely on our base stocks to be the building blocks of their own products. No matter what challenges you face, ExxonMobil Basestocks can be depended upon throughout the world, now and into the future. In your pursuit of excellence, be confident knowing you will always have a reliable supplier. To learn more, visit exxonmobil.com/basestocks.

ÂŠ2011 Exxon Mobil. The ExxonMobil logotype is a trademark of Exxon Mobil Corporation or one of its subsidiaries.

IndustryNews

Sergio Iorio, Italmatch’s Group Managing Director (center), Sam Wang, Lubricants Sales Director China (right) and Kevin He, Sales Manager China for Plastic Additives (left).

Italmatch Lubes to expand in China ITALMATCH CHEMICALS SPA, an Italian-based specialty chemical company leading in polymers, special esters and phosphorus/ sulphur chemistry, has its main and core business in lubricant additives and base fluid markets, as well as in plastics additives.

The lubricants business focuses on the Ketjenlube Polymer Esters and a range of patented special esters and components used in the formulation of synthetic and semi-synthetic high performance lubricants, in both the industrial and automotive market segments.

Chevron Oronite to double plant capacity in Singapore

capability for the Asia-Pacific region. “Our Singapore plant, already the largest additives plant in the Asia-Pacific region, was built to support the growing Asia-Pacific market,” said Andy Tugendhat, vice president of sales. “The proposed project will help us meet the anticipated volume growth in the region.” CHEVRON ORONITE Chevron Oronite expects that recently confirmed that it is planthe additional capacity realization ning to significantly expand the cawill occur in 2014. The company pacity of its existing additives plant did not disclose the amount of its on Jurong Island in Singapore. investment in the project. Project plans include growth in “We are excited about this excomponent manufacturing, blending pansion in Singapore because it forms and shipping capacity and overall the apex of a long process of upgradinfrastructure to increase total supply ing this particular facility,” said Walt

40 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

In addition to establishing a regional office in Malaysia, Italmatch has invested and is committed to developing its presence in and across Asia, this being further highlighted by the recent opening of its new sales and technical support office in Shanghai and the appointment of Sam Wang as China lube sales manager and Kevin He as China plastics sales manager. Italmatch has recently invested in debottlenecking its plant in Europe, doubling its capacity to satisfy the increasing demand for its products, and is currently investigating a similar investment to produce a full range of lubricants in China. A consistent and high product quality is ensured by a team of experienced and skilled professionals, with particular focus on joint projects and developments with customers and partners. Ketjenlube polymeric esters’ main characteristics when used as a base fluid are in wear reduction, shear stability, low volatility and clean-burn aspects, and this is where they are more efficient as compared to other conventional synthetic base stocks. Furthermore, Ketjenlube polymeric esters are compatible with all mineral base fluids (Group I, II and III) as well as high and low viscosity polyalpha olefins (PAOs). Ketjenlube products have a wide range of viscosities and polarities, which makes them a very versatile product to consider when balancing not only technical perfor-

Szopiak, regional general manager for manufacturing and supply. “In fact, numerous upgrading projects have been completed since the plant’s commissioning in 1999. These include debottlenecking of production units, blending and shipping facilities and supporting infrastructure along with new capacity additions for selected production units. When the planned expansion is completed, the Singapore Plant capacity will effectively be doubled from its original size.” The Singapore plant occupies a 20-hectare site on the Jurong Island chemical hub that is a convenient source of feedstock and utilities. It

mance aspects and viscosity specifications of the lubricant but also a commercially viable, performancedriven choice as well. These attributes make Ketjenlube an obvious choice for formulators in 4-stroke, 2-stroke and gear applications, as well as in metalworking and grease applications. In addition, Italmatch produces a range of other ester technologies commonly found in lubricant applications, also branded under the Ketjenlube name. These consist of complex, di-ester and polyol esters used in both industrial and automotive lubricants. Finally, to complement this diverse range of ester technologies, Italmatch also produces a range of amide friction modification products, such as Oleoamide (Dapramid O) and Succinic derivatives (DDSA, PIBSA, PIBSI), in addition to a full range of organo-phosphite antiwear agents.

Construction on the new technical services laboratory at Jilin University has begun and the lab is expected to be functional in the third quarter of 2011.

Lubrizol announces new testing facility in China THE LUBRIZOL CORPORAtion announced plans to expand its additives testing capabilities to better serve the needs of its global customer base. The new technical services laboratory initially will be based on the campus of Jilin University in Zhuhai, Guangdong, China. “Our investment in testing capabilities in China and throughout Asia is significant because it will allow us to collaborate and improve the quality and efficiency of our work on a highly global scale,” said Phil Shore, vice president of testing. The lubricant and fuels market in China is growing at a rapid pace, in line with the expanding domestic automobile industry. The testing laboratory in Zhuhai will offer advanced technical services for Lubrizol’s lubricant and fuel additive customers and OEMs in China. Capabilities will encompass a full menu of services, including additive

is operated with an advanced distributed control system. The laboratory is fully equipped to monitor the quality of raw materials as well as finished products. It also has a private jetty to accommodate vessels of up to 40,000 dead-weight tonnage (DWT). The company, which is headquartered in San Ramon, Calif., U.S.A., also serves customers in the Asia-Pacific region through a joint venture manufacturing plant in Chennai, India, as well as a blending plant in Omaezaki, Japan. Sales offices are maintained throughout the region, including Beijing, Tokyo, Seoul and Mumbai.

and lubricant blending, physical and chemical analyses and performance testing. Lubrizol also plans to install a used lubricant analysis lab to support the company’s synthetic-based compressor lubricant business in the region. Tsung-Fei Tang, vice president, Lubrizol Additives, China, believes that situating the new facility on the Jilin University campus is beneficial for both organizations. “We are pleased to have this unique opportunity to work closely with Jilin University,” he said. “Not only will this modern, high-tech lab bring valuable services to our customers in China, but we will be able to build relationships with talented local students who may serve as Lubrizol interns and possibly as future Lubrizol employees. We intend to work closely with the university in a collaborative style to progress joint projects and other activities.”

“The proposed project will help us meet the anticipated volume growth in the region.”

F U E L S & LU B E S I N T E R N AT I O N A L

Q u a r t e r F o u r 2 011

Vicky Villena-Denton

Publisher & Editor-in-Chief

Cristine Villena Amurao Hank Hogan Jeroen Looye Kelly Thornton Contributors

Edna Ba単ares

Managing Director

Maria Cecilia Reyes

Business Development Officer

Jessica Esperidion HR Assistant

Albert Gaya

Web Developer

Laarni Rey

Marketing Assistant

Advertisers' Index 13

BASF

CHEVRON ORONITE

EVONIK DEGUSSA GMBH

EVONIK OIL ADDITIVES

EXXONMOBIL BASESTOCKS

EXXONMOBIL CHEMICAL

F&L ASIA LTD.

GREEN POWER CONFERENCES

INFINEUM

INTEX SHANGHAI

ITALMATCH CHEMICALS LUBRIZOL

RHEIN CHEMIE

SK LUBRICANTS

Office Assistant

Chili Dogs

Magazine Design

AFTON CHEMICAL

17, 22, 23

Mirma Madrona

S-OIL

42 F U E L S & L U B E S I N T E R N AT I O N A L Q u a r t e r F o u r 2 011

F&L ASIA LTD. Suite 1612, Silvercord Tower II 30 Canton Road Tsimshatsui, Hong Kong Phone: 852 8191-7449 Fax: 852 3753-5122 www.fuelsandlubes.com Like our page: F+L Asia, Inc. Follow us at twitter.com/fuelsandlubes Follow our LinkedIn page: F+L Asia

A nnua l Subscription Rates: Print:

Asia US$89 Australia and New Zealand US$112 Americas, Europe, ME and Africa US$134 PDF:

Corporate (multi-user) US$498 Fuels & Lubes International is a quarterly publication that chronicles the latest trends, issues and developments in the fuels, lubricants and additives industries, with special focus on AsiaPacific. Its contents are protected by international copyright laws. Unauthorized reproduction or distribution by print, electronic or other media is strictly prohibited. Fuels & Lubes International and F&L Asia Ltd., its officers and management, cannot be held liable for any misinformation inadvertently obtained. The opinions expressed by the writers do not reflect the opinion of the management.

moving to synthetics isn’t a challenge, it’s an opportunity Lubricant formulators are facing some of their toughest challenges ever. Specifications and regulations never stop changing. Demands for greater engine efficiency and performance are always increasing. That makes today the perfect time to reformulate with advanced synthetic base stocks from ExxonMobil Chemical. Start with our diverse portfolio of innovative low and high viscosity polyalphaolefin, ester and alkylated naphthalene base stocks. Add our global supply capabilities and experience helping formulators to optimize the benefits of synthetic formulations. Together let’s turn formulation challenges into opportunities to innovate.

exxonmobilsynthetics.com

ADVANCED SYNTHETIC BASE STOCKS

Innovative lubricants start here