By: Rich Wertenberger, Lube-Tech Liquid Recycling Business Manager

This story originally appeared in the July/August 2015 issue of Precision Manufacturing, the Journal of the Minnesota Precision Manufacturing Association (MPMA).


In 1992, the EPA classified used oil as a regulated waste and issued rules regarding its proper handling. The EPA requires used oil to be “recycled,” and specifically prohibits any other type of disposal.

Today, a billion gallons of waste oil is collected every year, and four million gallons of that is collected by Lube-Tech. There are two general types of used oil—(1) crankcase oil; and (2) industrial oil. Each type presents a unique set of recycling challenges. For industrial oils, water typically needs to be removed before it can be recycled, and chlorine sources need to be verified to ensure it is not hazardous waste.

Where Does Industrial Oil Come From, and How is it Handled?

Cutting lubes, way lubes, machine oils, and other machining fluids (used to cool and lubricate tooling as it works the metal during the machining process) are the main sources of industrial used oil. When industrial fluids reach the end of their lifespan, their disposal becomes a challenge. Unlike crankcase applications, industrial oils are typically emulsions (chemically stabilized water and oil mixtures). In order to be recycled, this emulsion must be broken and the water removed. Some manufacturers choose to do this on-site with an evaporator, which basically boils off the water into the atmosphere— leaving the oil and other waste accumulated from the manufacturing process to be recycled.

An on-site evaporator comes with challenges:

• It requires a person to run it and, as businesses do more with less staff, an evaporator can get neglected or be left idle

• The evaporator is slow, and often can’t keep up with the cyclical demand of a busy shop

• The machine takes up valuable space in the facility

• It consumes a lot of energy

At Lube-Tech, the industrial oil or oily water is processed in four steps: (1) oil removal; (2) metals removal; (3) oil recovery; and (4) water discharge. This process is energy efficient, good for the environment, and compliant with all government regulations.

Value of Used Oil

There is value in recycled oil but as crude oil prices have dropped, so has the value of recycled oil. Most of that value lies in crankcase oil found in auto dealerships, oil change shops, and other automotive and fleet-related businesses. These businesses are large volume; they typically have used oil storage, making collection easy; are less than 5 percent water; and do not contain chlorine. Crankcase oil typically does not require processing. Industrial oil typically requires processing because of water and chlorine levels. That usually results in a service charge for recycling which cuts into the already slim value of used industrial oil.

Uses for Recycled Oil

After oil is collected, one of two recycling processes begins. Crankcase oil—such as that gathered by an automotive shop—as well as the oil separated from the industrial emulsion, will go through a “light process,” where the oil is filtered of non-soluble contaminants and de-watered in preparation for use as burner fuel. Burner fuel is rated at 135,000 BTU per gallon, about the same as diesel fuel. It is sold in bulk and typically is used to heat aggregate to produce asphalt.

Sometimes an auto service shop or other used oil generator will burn oil on-site to heat their facility. Drain oil can be burned as heating oil as it comes out of the vehicle, but without filtering or de-watering, the user often will run into problems with the heating system due to contaminants in the oil.

Another process, called re-refining, prepares used oil for use in an engine or other machine, the same as originally intended. This process includes vacuum distillation to remove volatile contaminants (fuel) and hydro treatment to remove impurities. One gallon of used oil typically results in a half-gallon of recycled base stock.

Oily Water Treatment & Chain of Liability

Once the emulsion in the industrial fluid is broken, the water left over is not suitable for disposal. Before this water can be discharged, metals such as zinc, copper, and lead must be removed to acceptable levels. There are various ways to achieve this, but Lube-Tech has developed a unique proprietary process to remove metals from oily water, making the water safe to discharge into the sewer.

Business owners should know that oily water disposal, like any regulated material, is an area in which a machine shop can run into trouble. Even though the business follows the regulations, they are still liable if someone else mishandles the waste after it leaves their site. This is what regulators call “cradle to grave” liability. To minimize risk, machine shops should verify all parties that touch any waste after it leaves the site. Unfortunately, this verification can be difficult when working through brokers and out of state disposal companies.

Lube-Tech has made a conscious effort to help machine shops manage risk by providing both material supply and disposal. In fact, Lube-Tech is the first and only licensed oily water treatment facility in the state of Minnesota. As a solutions-driven company, Lube-Tech partners with its clients to supply fluids, analyze fluids, and dispose of them properly when they reach the end of their service life, taking liability worries away from the shop owner.