Techno-Economic Evaluation of Used Oil Recycling
The price of virgin oil dramatically affects the used oil management system,because used oil competes with virgin oil as a source of fuel and as a base stock for lubricating oil. Like all recycling markets, recycled oil products must be sold at a lower price than virgin oil products in order to compete. Used oil recyclers must cover the costs of collecting and recycling used oil, as well as maintain a profit to stay in business. When the virgin oil price is high, the used oil recyclers make large enough profits that they can pay generators for the used oil they produce or the transporters for the used oil they collect. When the virgin oil price drops, the used oil recyclers can then have a little profit margin to pay (or must charge) generators or transporters. When recyclers and transporters pay for used oil, the service stations, quick-lube shops, fleet operations, and DIY collection centers have an incentive to have their used oil recycled off site. As a result, high virgin oil price encourages used oil processing and re-refining. Conversely, low virgin oil price encourages the on site burning of used oil.How to choose a cost-effective recycling option, therefore, depends on the projected price of virgin oil. Other than that, protecting human health and the environment must always be the main concern. Choosing the most environmentally sound used oil management method will minimize potential liability costs and eliminate fines and other costs associated with enforcement actions for violating environmental regulations.