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Used Oil in Australia

Prepared by Meinhardt Infrastructure & Environment Group
Environment Australia
January 2002

Unaccounted for Oil

6.1 Introduction

Of the total amount of oil sold in the Australian lubricants market, not all is consumed during use or collected for recycling; a significant amount of used oil is not accounted for in either of these areas. Based on figures summarised in the previous sections, the amount of used oil presently unaccounted for may range between 103 - 153 megalitres. This is a large range and is dependent on the accuracy of the figures derived from analysis of the size of the lubricants market, the amount consumed during each type of use and the volume collected for recycling.

It should be noted when determining the volumes of unaccounted for oil that calculations of used oil generation factors in various applications are estimates which can vary depending upon a range of specific circumstances (e.g. engine age, frequency between service, equipment efficiency, etc.). Existing estimates of used oil generated in Australia may not fully account for particular causes of lubricant loss, either because they relate to highly specific applications (e.g. lubrication of wicket gate bearings in hydroelectric turbine power generators) or because the severity of their impact on quantities of recoverable oil has been incorrectly estimated. Miscalculation of used oil generation factors can significantly affect the resulting figure of unaccounted for oil; caution should therefore be exercised in relying upon these figures.

The portion of used oil which is not collected by oil recyclers or otherwise accounted for is also subject to a wide variation of understanding between industry stakeholders. This variation ranges from a presence to an absence of unaccounted for oil in Australia.

One stakeholder expressed scepticism that disposal of used oil to the environment was a significant issue, and asserted that no sources of used oil within their State are yet to be exploited.

Other stakeholders hold a strong view that it is a significant problem, although the source of such used oil may also differ between stakeholders. Sources quoted include DIY oil change activities to inappropriate re-use in areas such as dipping of fence posts by the farming industry and spraying of pests (e.g. termites, weeds). Investigation of these areas during this project showed little evidence that these practices were still undertaken or were significant repositories of used oil.

Anecdotal evidence from stakeholders in the farming industry suggests that there has been a significant reduction in recent years in the use of waste oil for dipping of fence posts. Stakeholders indicate that (for economic reasons due to the cost of labour and equipment) approximately 90% of fencing on farms is now carried out by specialised fencing contractors and that treated pine fence posts are mostly utilised. These pine posts are generally purchased off-farm and are already treated with a copper-chromium-arsenic (CCA) mixture, rather than dipped in used oil. Painting of non-treated timber used for construction of fencing and animal yards with used oil for maintenance reasons is also not widespread.

Farming stakeholders do acknowledge that some portion of the remaining 10% of fencing being carried out by farmers may involve oil dipping of untreated posts, as would the requirement for other farm improvements such as cattle and sheep yards. However they point out that there is more emphasis on retention of vegetation for the environmental health of their farms; the lower availability of timber on their properties suitable for harvesting has reduced the practice of using oil to treat timber by increasing the purchase of pre-treated timber.

Similarly, the availability of used oil from agricultural equipment has also reduced. Again for economic reasons, there has been a significant shift in recent years in the use of on-farm equipment (such as harvesters, headers, hay-balers, etc. owned by individual farmers) to services provided by agricultural contractors. Contracting companies with a fleet of equipment generally utilise commercial oil collection networks operating within urban areas.

There is also little evidence to support the claim of widespread use of used oil as a dust suppressant. There is some anecdotal confirmation that it may be used in remote communities in the Northern Territory where the cost of transport of collected used oils to markets is greater then the value of the used oil; the human health impacts of dust suppression in these communities are deemed to outweigh the environmental impact of the use of waste oil and the economic injection that would be required to establish a collection system in such remote areas.

The Alcoa aluminium refinery at Pinjarra (Western Australia) is also permitted to use waste oil emulsions to suppress dust from their bauxite stockpile and residue storage areas as a condition of their license from WA Department of Environment Protection. Advice from the refinery indicates that approximately 0.25 - 0.26 megalitres of waste oil are collected annually from the refinery and adjacent mine sites for use as a dust suppressant. This is the only instance of this practice licensed to occur in WA.

These examples are generally considered isolated incidences and do not represent significant volumes of used oil. The DIY sector is considered to be more significant; it also offers greater potential for recovery.

Used oil can be differentiated between that which is potentially recoverable and the oil that is not recoverable. It may be recoverable or not recoverable for a range of reasons, including practical ability to capture the used oil, capture in recoverable amounts, and economic feasibility to collect and recycle. Potentially recoverable and not recoverable used oil is discussed in more detail in the following sections.

6.2 Potentially Recoverable

Used oil may be potentially recoverable from a wide range of processes and applications. The main areas of potential recoverability are discussed below.

6.2.1 Domestic Households

Used oil from domestic households results mainly from DIY activities such as oil changes. The used oil is disposed of in a variety of forms, including in cans or containers partly filled with oil. Some of this used oil is not recoverable, e.g. spilt oil that has been recovered by absorption to kitty litter, etc. This is discussed in more detail in Section 6.3.

It has been asserted that the majority of packaged oil is purchased by domestic householders for use in the DIY market (EA 1999b). It should be noted, however, that small workshops and some service stations also purchase packaged oil.

Assumption 18: For the purpose of estimating the amount of used oil in the DIY market, it is assumed that oil sold in packs of up to 10 litres is sold to domestic householders for use in the DIY market. It is assumed that negligible amounts are sold to small workshops and service stations.

According to AIP reporting for the National Packaging Covenant, 54 megalitres of oils and lubricants were sold in small (up to 10 litres) packs in the year 2000. No data was available for packs between 20 and 205 litres.

As discussed in Section 4, the used oil generation rate for automotive engine oils (which account for the majority of the DIY market) is 60%. Based on the above data, the used oil generated by the DIY market in 2000 is expected to have been 32.4 megalitres.

According to Table 4.2, 56.5 megalitres of oil sold as automotive petrol engine oil was available for recovery in the year 2000. Of the total base stock sold in the year 2000, 79.4 megalitres was available for recovery. It has been suggested that the majority of base stock is converted into automotive oils and packaged (EA 1999b). As discussed in Section 3.3.1, it is known that base stocks are also used for mining and industrial uses, although the proportion of base stock used for each is unknown.

Assumption 19: In the absence of any additional information, it is assumed that all base stock is converted into automotive oil. Negligible amounts are used to produce other products.

Thus, the total amount of used automotive oil available for recovery in the year 2000 is approximately 135.9 megalitres.

A proportion of this oil would have been utilised by the DIY market. A proportion would also have been utilised in industry and commercial transport operations. Two second-tier stakeholders indicated that approximately 10% and 33% of their product was most likely bound for the DIY market. The midpoint of these estimates is about 20%.

Assumption 20: For the purpose of estimating the amount of recoverable used oil from the DIY market, in the absence of any additional information, it is assumed that the limited data obtained from second-tier companies can be averaged and extrapolated to all automotive oil. It is acknowledged that this will provide a broad estimate only.

Thus, it is estimated that approximately 27.2 megalitres of used oil was available for recovery from the DIY market in the year 2000.

This estimate corresponds well to the estimate from the National Packaging Covenant information (32 megalitres). Many assumptions have been made in estimating the amount of oil recoverable from the DIY market from the automotive engine and base stock categories. Care must be taken when utilising these figures.

For the purposes of this report it has been assumed that the approximate midpoint of these estimates, 30 megalitres, of used oil is potentially recoverable from the DIY market.

According to an ABS survey conducted in March 2000, 43% of all households disposing of used automotive oil took it to a business or shop. The same survey indicates that 18% of such households dispose of the oil to a "special area", thought to indicate an area which includes oil collection facilities. Thus, approximately 31% of households dispose of the oil by a variety of methods including the domestic waste stream, burial, etc. This oil is potentially recoverable used oil and using the above estimates equates to 10 megalitres of used oil.

6.2.2 Automotive

A portion of the unaccounted for oil will be entrained in waste or scrap equipment (oil filters, shock absorbers, engines, etc.). Advice from APRAA (Auto Parts Recyclers Association of Australia) indicates that the volume of oil drained is dependent on the engine design, position of engine when drained (e.g. upright or overturned, elevated, etc.) and thoroughness of removal (how much time is allowed for the oil to drain out).

Automotive recyclers and scrap merchants dismantle approximately 500,000 cars each year. Stakeholders have estimated that even after drainage, 0.25 litres can remain in an oil filter. Thus, car oil filters would retain approximately 0.125 megalitres of used oil. The shock absorbers and engine would retain additional quantities.

Anecdotal evidence suggests that, whilst positive moves have been made to ensure that all scrap equipment has used oil drained, this may not be occurring in all cases.

No investigations to determine the amount of used oil in end-of-life vehicles were identified by this study. It should be noted that the previous discussion focuses on automotive vehicles only. Larger machinery and equipment will also retain used oil at the end of their life.

Given that automotive recyclers and scrap merchants dismantle approximately 500,000 cars each year, the development and use of new technologies and practices to maximise oil removal from automotive components may yield a significant increase in used oil recovery.

Insufficient information is available to quantify the amount of used oil retained in end-of-life automotive vehicles, machinery and equipment, however, it is expected to be a significant quantity.

6.2.3 Collection Points

While collection facilities for used oil are in place at many waste disposal facilities (i.e. landfills, transfer stations), the infrastructure in place is often rudimentary. While facilities in metropolitan areas are generally well established, the used oil collection points in regional areas often consist of old drums or tanks which do not facilitate recovery of all used oil brought to the facility.

Practices which inhibit recovery may include:

The amount of potentially recoverable oil currently lost because of these practices cannot be determined. However given that this is widespread across regional Australia, it may be a significant volume.

To recover these volumes will require more sophisticated oil collection facilities to be established in regional areas, as well as supervision of disposal activities at waste facilities. As many rural facilities are currently not supervised (mainly on economic grounds), significant expense would be incurred by the relevant authorities (i.e. Local Governments) to staff existing landfills and transfer stations and provide better oil collection facilities.

While some funding through the waste oil levy is being made available to Local Government for oil collection and recycling infrastructure at waste disposal facilities, the provision of supervisory staff at waste facilities is the more significant on-going expense. Local Government currently bears the financial responsibility for this, unaided by additional government funding.

6.2.4 Illegal Dumping

The 1998 AIP study on used oil found that there were no indications of major dumping of used oil, however more recent advice from the relevant statutory authorities shows that this remains an issue in some areas.

The Queensland EPA advises that illegal dumping of used oil continues to be a problem in that State. A recent incident was the largest recorded, involving approximately 100,000 litres of oils, grease and solvents. Their investigations showed that the waste was sourced from local coal mines and sugar mills; the transporter involved was unlicensed and had offered a disposal service at a cheaper cost than licensed oil collectors.

While the size of this one incident is considered unusual, it indicates where some of the unaccounted for waste oil may be. This event accounts for only 0.01% of the unaccounted for oil. It is not considered likely that events on the scale of this one would be common; it is considered more likely that smaller events would occur.

It is considered unlikely that illegal dumping contributes to a large amount of the unaccounted for oil. Due to the environmental impacts of such events, however, illegal dumping must be addressed when identified. The circumstances of the event may indicate a lack of understanding of legal requirements by the generation sources of the used oil. An education campaign on appropriate disposal of used oil may thus increase recovery rates.

6.2.5 Stockpiles

Anecdotal evidence from stakeholders suggests that common practice in some areas in the past included retaining used oil on-site pending a future use or disposal method. This was particularly the case with respect to remote farming properties and other regional sites. This used oil may be retained on-site temporarily (e.g. stockpiles on industrial or mining sites waiting re-use) or for lengthy periods.

Long periods may particularly apply to farmers stockpiling used oil for future intended re-use in treatment of fence posts. Following the change in practice of treatment of fence posts (outlined in Section 6.1), waste oil may no longer be re-used on-site. Limited regional collection systems and the large availability of storage space on-farm, however, may inhibit moves to reduce the stockpile built up from past practices. For example, one recycling company indicated that they had collected used oil from a farm which may have been stockpiled for up to 50 years.

It has been estimated by ORAA that approximately 26 megalitres of waste oil is stockpiled across Australia (excluding the Northern Territory) (EA 1999b). It is suggested that the majority of stockpiled waste oil is stockpiled in Western Australia and the Northern Territory. The estimated maximum waste oil storage capacity in the Northern Territory is 23 megalitres (EA 1999b). This equates to a total Australian stockpile of 49 megalitres.

From the above discussion, it can be seen that whilst some stockpiles are temporary in nature, for example stockpiles of used oil awaiting re-use on industrial or mining sites, some stockpiles are historical. Historical stockpiles do not help identify any of the unaccounted for oil as they have not necessarily been produced in the specific year (2000) being investigated. Rather, it is more likely that they have been produced over a number of unspecified years.

There is no information available as to what portion of the 49 megalitres the ORAA estimates is stockpiled is temporary and what portion is historical. AIP acknowledge the existence of 'significant' stockpiles of used oil in some States / Territories which should be temporary in nature (AIP 1998).

Assumption 21: Based on stakeholder advice and available information, it is assumed that up to 49 megalitres of used oil is currently stockpiled throughout Australia.

6.2.6 Other

While no data could be sourced during the completion of this project to confirm the existence or magnitude of other sources of potentially recoverable oil, a range of other sources are likely to exist. This may include:

It should be noted that some of these sources may be considered as not recoverable under the current economic or market framework of the oil recycling industry, and are discussed further in Section 6.3. However should these circumstances change, it is possible that some of this used oil could become potentially recoverable.

6.3 Not Recoverable

As mentioned above, there are some sources of unaccounted for used oil that for practical, economic or other reasons are not considered recoverable. These are discussed below.

The contamination of waste process water with oil from machinery or from storage and handling can often occur in industrial situations, leaving manufacturers with an oily wastewater which needs to be disposed of. Oil recyclers advise that the average acceptable water content of used oil is approximately 10%, although this may change in certain applications (e.g. up to 15% when used as a coal beneficiation spray, or only 4% when used as a fuel in steel manufacturing plants). Beyond these specified concentrations, oily wastewater cannot be recycled and must be disposed of as a liquid waste. This disposal may be by way of a liquid wastewater treatment plant, sewer disposal as a trade waste, or (where regulations are breached) disposed of through stormwater drainage systems.

Oil that spills onto the ground or into water is considered unrecoverable. Oil spills can be the result of accidents, mechanical system failures or maintenance practices where used oil is not recovered. For example, recovery of waste oil may not be practical if the concrete mounting pads for farm irrigation pumps do not provide sufficient clearance to allow for the collection of oil drained during changes. Spills can occur during any stage of the supply chain.

Where oil is used in remote locations, recovery of the oil may be uneconomical due to the distance to oil recycling facilities or collection points. Earthmoving companies operating in remote locations and remote communities would be particularly affected by this. Remote mining activities are not considered likely to be affected by this as they would mostly reuse waste oil on site. There is no data available to estimate the quantity of waste oil produced in areas that are too remote for economic recovery of the oil.

The plastic bottles utilised for the majority of small packs of oil are estimated by AIP to absorb 2% of the product. Additionally, AIP estimates that between 3% and 4% of the product forms an oil sheen that cannot be drained from the container. According to AIP figures reported for the National Packaging Covenant, 54 megalitres of waste oil was sold in small packages in the year 2000. Utilising the absorption and sheen estimates, this results in approximately 3 megalitres a year of oil that would not be recoverable.

Stakeholders involved in Australian investigations of contaminated soil indicate that approximately 25% of oil storage tank shells leak. Oil lost through such leaks would not be recoverable. Increasing maintenance of such shells would reduce losses.

It is difficult to quantify the amount of used oil that is not recoverable due to a lack of information on the amounts of oil involved in the above processes. It is reasonable to assume, however, that the above losses would not account for the entire 103 to 153 megalitres of potentially recoverable used oil.

Based on the variety and expected frequency of the processes discussed above, it has been assumed that unrecoverable used oil accounts for approximately 20% of all unaccounted for used oil generated, or 21-31 megalitres. It should be noted that this is a broad estimate only, based on the wide variety of sources detailed above as very little information was available on this subject.

Assumption 22: Based on available information and stakeholder advice, an informed estimate that 20% of used oil is not recoverable has been assumed to be correct.

It should also be noted that the amount of unrecoverable oil can be reduced, for example, by altering economic conditions, increasing the incentive for used oil recovery in remote locations and improving operational practices to reduce the volume of accidental oil spills.

6.4 Summary

Based on estimates produced from earlier sections of this report, it is estimated that between 103 and 153 megalitres of used oil is currently unaccounted for. A portion of this amount is considered unrecoverable for a variety of reasons. This portion was broadly estimated to be 20%.

Potentially recoverable used oil sources included DIY activities; it was estimated that these activities account for between 7% - 10% (10 megalitres) of the total unaccounted for oil. Another significant source of unaccounted for oil is expected to be temporary stockpiles of used oil awaiting re-use. These stockpiles could not be quantified due to a lack of information, but may account for as much as 49 megalitres (32% to 48%) of potentially recoverable oil.

It should be noted that in addition to stockpiles of used oil from the specific year (2000) being investigated, historical stockpiles of used oil are also likely to exist. It was not possible to quantify the amount of used oil currently stored in historical stockpiles.

Other sources of potentially recoverable unaccounted for used oil included illegal dumping, oil retained in waste or scrap equipment, oil lost to the environment at collection points, illegal dumping and various other sources. Based on the limited information currently available, the quantity associated with these processes cannot be assessed.

A portion of the unaccounted for oil is considered unrecoverable for a variety of reasons. Based on the limited information that was available, this portion was broadly estimated to be 20%.

Based on the above estimates, at least 20% of the predicted unaccounted for used oil has not been identified. It is believed that this an acceptable variation given the nature of the data available and assumptions made. Data reliability is discussed further in Section 7.1.

Overall, it can thus be assumed that of the 103 - 153 megalitres of unaccounted for oil, approximately 20% is unrecoverable. The remaining 80% is potentially recoverable from a variety of sources.