Feedstock, Recycle

Changes in Pricing for Used Motor Oil Feedstock

The blog also looks into the recycling markets from time to time and from what I have heard in the recycled PET industry, the market has been struggling to compete as virgin PET prices have softened dragged by the overall lower petrochemical feedstock prices (and plenty of available materials).

The blog has been following announcements from several industrial recycling companies in the US such as rubber tire recyclers, glycol recyclers, etc. Hopefully someday this year, I will write a more comprehensive article on this market as well as recycling of municipal solid waste (MSW) as more and more of these are becoming feedstock for chemical production.

Below are 2012 stats from the US Environmental Protection Agency (EPA) on several waste materials that are being recycled.

Screenshot 2015-01-04 13.34.34

Screenshot 2015-01-04 13.34.25

In the meantime, the blog is interested about this announcement from Texas-based Vertex Energy, an environmental services company that recycles industrial waste streams and off-specification commercial chemical products. The company announced a change in pricing for the sourcing of used motor oil (“UMO”), the primary feedstock for the Vertex Energy’s processing facilities.

After reducing the Pay for Oil price for internally collected UMO by over 50% since September 2014, the company will be moving to a service fee model for the collection of used motor oil and environmental services starting in 2015. The third party oil purchasing prices are currently being reset reportedly to reflect the current market conditions.

“Given the recent price changes by the major stakeholders in the industry, our valued suppliers now have the ability to work with their used oil generators and reestablish their pricing structure for the services they provide, while maintaining the viability of their business and our industry.”

Benjamin P. Cowart, the Chairman and CEO of the company, stated, “As a major refiner and one of the largest third party UMO buyers in North America, we are joining others in taking a leadership role in improving industry profitability. It is our belief that it is time for the collectors to start charging for their services given the current market conditions and the value the industry adds in the handling of this regulated waste stream. Moving to a charge for services model for collected UMO is a key milestone in improving the long term prospects of the industry.”

Vertex purchases used motor oil and other petroleum by-product streams from an established network of local and regional collectors and generators. Vertex also manages the transport, storage and delivery of the aggregated feedstock and product streams to end users, and manages the re-refining of a portion of its aggregated petroleum streams in order to sell them as higher-value end products, including low sulfur cutter, vacuum gas oil (VGO), and base oil. Vertex sells its aggregated petroleum streams as feedstock to other re-refineries and fuel blenders or as replacement fuel for use in industrial burners.

The re-refining of used motor oil that Vertex manages takes place at its facility, which uses a proprietary Thermal Chemical Extraction Process (“TCEP”) technology. Vertex collects oil through its H&H Oil in the Texas region and Heartland Petroleum in a four-state region.

About Doris de Guzman

Will Green Chemistry save the world or is it hype? Doris de Guzman examines alternative processing, new technology, R&D and other sustainability initiatives aimed at preventing pollution; replacing ingredients; and using renewable feedstocks in Green Chemistry. She has been covering the oleochemicals market for 15 years and spread her beat to inorganics, biofuels and green chemistry.

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