Lubricants that are Benign by Design
Questions & Answers May 21, 2007
What did the Green Oil do and what is it doing now?
Green Oil Company supplies biodegradable lubes, formulated from canola oil. It started in 1991 as a pilot bio-lubricants operation. Its key objective was to test the market for biodegradable, canola oil based lubricants.
How did we do it?
We set out to prove the viability of environmentally safe, vegetable oil based lubricants.
We "toll blended" high-quality, canola-based, rapidly biodegradable lubricants ("bio-lubricants") at a batch processing plant in
Findings?
There is a large and growing profitable market for the product. We found that bio-lubricants based on canola oil can be made to be highly competitive with petroleum for several important reasons.
What are the benefits of Bio-lubes
Its use has a positive impact on the environment and on our nation’s energy and farm policies.. It is safe because it biodegrades rapidly; i.e., when spilled, it is not persistent as compared to petroleum, which pollutes and affects living things adversely due to its toxicity. Bio-lubes on the other hand, being toxicologically safe, also do not require special product labeling warning that they are carcinogenic. Many users of petroleum products suffer from eczema and other skin ailments on a daily basis. Also, there are no costly clean-up or litigation costs when spilled. Vegetable oil is a sustainable, farm product. It is unlike petroleum, which is a limited, insecure resource that continues to impact our economy, transferring wealth to the
What has been the government’s response?
On the Environment:
Passage of the 2002 U.S. Farm Bill, Section 9002 requires federal agencies to purchase designated bio-based items--with few exceptions, subject only to their efficacy; i.e., that they work; that they are readily available for procurement when needed, and that thet are priced competitively.. The
On the Nation’s Oil Supply
Obviously, switching a sizeable portion of the vast, billion gallon/year lubes market to a sustainable farm product is in the national interest, particularly given the world’s continuing dependence on insecure petroleum. Moving vast amounts of money to the
What impact has national policy had on Green Oil, to date:
Green Oil has been awarded a contract with the
What are the details of the marketing portion of the federally supported study?
Green Oil researchers and their consultants will be developing an “off-take” model that will be measuring the ability of American industry to replace the petroleum products they now use with corresponding bio-based products. This model will explore key decision makers’ attitudes relating to the assessment of this new technology, specifically focusing on critical aspects of product performance, and set within the context of their work place environment. In short, it is a practical testing of the ability of these new products to be adopted by multiple American industries, replacing petroleum products.
What are the research & development aspects of the federally supported study:
Green Oil researchers will be investigating “Uptake issues,” the measure of Green Oil’s ability to provide sufficient, viable lubricants and fuels to replace corresponding petroleum products. Green Oil has identified several million acres of land in the United States that are projected to yield hundreds of millions of tons of Canola seeds for refining and processing of bio-products. This can begin to meet our national goal for energy self-sufficiency by competing effectively with non-renewable petroleum products – based on performance, price and availability.
How Does Green Oil’s Business Expansion Plan meet the future challenges and needs, as well as national policy with regard to bio-lubricants?
Under the Expansion Plan, the company’s operations will be vastly expanded. Each of the proposed five plants now under study will have a minimum 100 million gallon capacity, with built-in flexibility to supply canola oil based lubes, as well as bio-diesel, and food grade canola as optional products. In all cases, the refinery complexes also will produce valuable fertilizers and animal foods from the residual cake (byproducts) of the oilseeds. :
How profitable is the Green Oil venture, based on its Business Expansion Plan?
Green Oil bio-lubricant products will be value-priced for maximum profit, with the margin averaging $ 1.20/gallon when manufactured under the conditions and in the volumes specified in the Plan.
Are the refineries and their production processes state-of-the-art?
The technologies to be used in the plants are basically off-the-shelf. Risks involved in its construction and operation are minimized by the use of highly skilled engineers and technicians with many years of experience in this industry. Refineries much larger than those proposed by Green Oil have been constructed and are operating successfully, both here and abroad.
What are the benefits of using canola over soy?
There are several advantages, of which the major ones are yield and performance. Soy and other oils yield only 20%-25 oil from the plant’s seed, vs. 40% for Canola. That alone is a significant plus for canola. On performance, canola provides extreme lubricity, as compared to both soy and petroleum oils. This enables canola lubricated equipment to cycle and operate cooler with less breakdowns from over-stressed hose lines and overheated pumps and other equipment.
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How much seed input will be required by Green Oil to make the plant work?
Consultants have determined that the plant will operate optimally at 3,000 metric tons seed input per day. Each plant is projected to operate for about 300-325 days per year, with the remainder for turn-around maintenance.
What kinds of terminals will Green Oil construct in order to transport and store the product most efficiently?
Terminals will include deep water ports, rail lines and truck access, with adequate storage and handling capacities.
What are the seed conveyances that take the seed from the ship, train and truck to the plant?
Seeds are consolidated from the farm co-ops at the rail stations; and they are conveyor belted through the plant.
What are the proposed real estate needs for each of the Green Oil plant?
Ideally, each plant requires 30-40 acres of build able land to accommodate the storage, handling, processing, shipping, employee and visitor parking. Their designed annual outputs provide 100 million gallons of high-quality canola-based lubricants and other bio-products
Why is Green Oil targeting bio-lubes rather than bio-diesel or other bio-products; and if conditions warrant, can other bio-products be manufactured in these plant refineries without need for major retrofitting?
Manufacture of canola-based products to include food-grade and bio-diesel are designed-in to the plant, so that no retrofitting will be required should conditions warrant their manufacture. Green Oil prioritizes bio-lubricants, due to their higher profit margins.
Do Green Oil’s proposed plant refineries need new buildings, or can existing facilities be rebuilt to accommodate all of their required functions?;
Facilities built from the ground up are not necessarily required, although they certainly are desirable. A newly constructed plant can be especially configured for the multiple purposes required by Green Oil, while retro-fitting an existing building can be more costly and time consuming to design and construct.. .
Will Green Oil’s plant refineries be open or enclosed and what will they look like?
The refineries and all other equipment are contained within enclosed buildings and silos. (See model)
Where should these facilities be located; and what will be the criteria for locating them?
The facility locations will be optimized to minimize transportation costs, both from seed growers and for access to end-users. Other issues that require consideration include the availability of utilities, road access, taxes and tax incentives, and labor issues including availability of a suitable labor force.
What can an acre of land be expected to produce.
It can range from a minimum of 105 to well over 150 gallons per acre, depending upon numerous factors. To calculate this, note that- 1 bushel = 50 pounds, 40% canola oil yield (Soy is closer to 20%) is 20 pounds/ bushel, we can expect any where between 45 to 60 bushels/acre. (Note that our Business Plan assumed 40 bu/ac,). There are 7.8 pounds/gallon of oil)
Can farmers produce the 100 metric tons of seed required to feed the Green Oil plant?
With today’s agronomic technologies, Canola can be grown as a winter-over crop or a gap crop (any time). What this means is that it germinates during the winter season while being planted after the last fall harvest of current crops. It then is ready to be harvested before the standard spring planting without any interference with a farmers' normal crop rotation. It should be noted that canola plantings do not deplete the soil's nutrients significantly.
Is there enough land available to grow this much canola?
The
Is this situation unique to the
This scenario exists in a majority of other places as well, such as in
How will the growing of canola impact farmers in general.
Farmers would welcome the opportunity to have an additional growing season which would not require unique equipment or conflict with their existing programs.
Canola would not have any economic impact on their other crops, while additional plantings on this available land would be adverse. For example, planting an additional 100,000 acres of cabbage would kill that market.
What does the process of producing canola oil from canola seed entail?
It is made from rape seeds that are pressed and chemically extracted for their oil, mixed with additives and packaged for distribution
What incentives does Green Oil require in order to make this project viable?
None, necessarily, because the financial viability of this enterprise stands on its own; i.e., profit margins are void of any government subsidies. Passage of the 2002 U.S. Farm Bill, Section 9002 requires federal agencies to purchase designated bio-based items--with few exceptions, subject only to their performance capabilities and their being readily available and competitively priced.. The
• See 3/19/2007 email in outlook i-
Can we use the canola oil from the supermarket to lubricate machinery and run hydraulics?
No, not feasibly. Machine specifications require the use of our high-tech additives, just as petroleum lubricants require their own packages of additives. In order to assure that machinery is not damaged after several uses, and depending upon the application, additive, packages may include anti-oxidants, anti-wear, pour point depressants and other chemicals to enable the oil to remain stabilized and to work properly and economically over a reasonable cycle period, after which the reservoirs have to be re-supplied.
Are Green Oil products more or less combustible than competing petroleum base products?
Bi degradable products are flame resistant with much higher flash points. That would make them slightly less combustible.
What are the issues related to odor of Green Oil vs. petroleum products from the standpoints of manufacture and from equipment operations?
All vegetable oil products should be bleached and deodorized, rendering them acceptable by industry standards. Unlike pungent petroleum oil, vegetable oil smells like French fries.
What is the Cake smell?
As above, for relatively nominal costs the cakes can be deodorized, as needed.
Are there Import/Export Options for Canola Seed or Oil?
These alternatives are under study now, as we know that extremely optimistic bio-diesel mandates in the European Union have made canola oil a valuable and scarce commodity. For example, canola from the U.K is being sent to
What are the Patent Issues for Green Oil?:
Currently, we have three patents pending: the first relates to our business plan and its implementation; the second on the use of a coloring agent to assure that petroleum is not being used where Green Oil is specified; and the third involves the process to alleviate the problem of birds overfeeding on Green Oil spilled in waterways.
A possible other patent could be the development of various flexible lubricant combinations, to meet minimum federal biodegradable standards, which are much less stringent than those of Green Oil. This would enable us to enhance the scope of products lines.
What are the consequences of mixing petroleum and Green Oil?:
Both products are compatible one with the other. It was found to be very costly to purge 100% of elevator and automobile hydraulic lift reservoirs, and therefore some petroleum remained in the machinery. Over time, all of it was mixed and operated as expected with no adverse affects. As a result, should a customer wish a “Flex-Lube;” i.e., a mixture of Green Oil and petroleum lubes at different proportions which yield less biodegradability, it can be made.
Why does our company list the amount of $30,000 for accounting expenses?:
The actual work performed by our CPA did amount to $30,000 and it all was in-kind services; i.e., sweat equity performed to get our contract underway with the US Department of Energy (DOE). DOE staff personnel understand fully what it takes to work with them and get grant-in-aid projects of this sort up and running, per their many requirements.
DOE did allow that expenditure, which was not cash but volunteered services that assisted in multiplying out the federal dollars of our matching project.
As the Green Oil Company (GOCO) has been in the business of selling product for seventeen (17) years, why would we need the private placement of $5,000,000 at this time?:
Over the years, GOCO has served as a pilot operation, with the purpose of testing its formulations and markets for its various bio-products. Having done so successfully, our Board of Directors saw fit to redirect the efforts of the company away from batch blending (but not totally until the new plant is built). It is redirected to mega-scale, continuous manufacturing of our bio-products in a proposed state-of-the-art refinery.
This decision was based on the dual need to (1) find ways to reduce the cost of our product to that of corresponding petroleum products, and (2) making the products readily available in adequate quantities to government and industry. We found that the only way to do these two things is through achieving the economies of scale that are derived from continuous, mega-manufacturing of the product.