The Organisation of Arab Petroleum Exporting Countries (OAPEC) acted successfully in its early years as an instrument of Arab economic integration (as discussed in last week’s column).
It even endeavoured to build working relations with organisations, research centres, universities and specialised companies outside of the Arab world “to present an Arab perspective on energy and development” and to promote cooperation among energy stakeholders.
Most importantly, the relationships developed with hydrocarbon research bodies were to “facilitate access to new scientific and technological developments in the field of energy”.
All these were maintained either by direct contacts or by from specialised seminars whose highlights were reported to member countries through the publication of the OAPEC journal “Oil and Arab Cooperation” or through a monthly bulletin.
OAPEC and Opec are founding members of the Oxford Institute for Energy Studies (OIES), established in November 1982, and which became one of the most important seminars on oil and energy by its affiliation to Oxford University and support of major energy companies.
For more than 20 years, OAPEC held bi-annual research competitions on topics deemed important to the hydrocarbon industry with its relevance to the Arab countries.
Last year’s topic was “Re-refining of Used Lubricating Oils and its Economic & Environmental Implications”.
The topic is important not only because used lube oils are a resource that should not be wasted, but because of the detrimental impact on the environment if the disposal of these oils is not carried out properly.
The problem is created by the increased use of lubricating oils, which were dumped into the environment after use.
But as environmental awareness increased and prices of oil rose in the 1970s, many governments and companies turned to the recycling of used lubricating oils either for their energy value or to re-refining them for use as fresh lubricating oils.
These oils are not destroyed by use but only become contaminated and their lubricating properties deteriorate.
The advancements made in refining technology, especially with the use of hydrogen treatment, made it possible to produce from used lubricating oil products as good as those produced from the fresh refining of crude oil.
Some countries such as Italy and Germany have mastered the full cycle of steps needed to treat used oils to the benefit of the economy and the environment.
Others such as the US and the UK favour the burning of used oils under controlled conditions, especially in cement and brick manufacturing and other industries that do not need clean fuels.
The economic debate of burning versus re-refining is unlikely to be settled soon. But the most important thing is to make use of this resource is by proper collection and prevention from dumping into the environment.
In both cases, the industry was supported by strong government intervention through regulations to force the proper collection and use of these oils. Advanced countries generally charge the consumer for the collection and treatment in accordance with the “polluter pays” principle.
Some governments subsidise the industry to a large extent to make sure that it survives, and where subsidies are deemed less expensive than cleaning up the environmental damage caused by dumping used oil and the health hazard associated with such dumping.
In Arab countries, lubricant production capacity is about 3 million tons a year with Saudi Arabia, the UAE and Bahrain as the major producers. Consumption is less than 2 million tons a year.
Therefore, Arab countries are net exporters of lubricants. The generated used oil is probably close to two-thirds of consumption and its environmental impact is not to be belittled at all. In addition, there is its resource conservation value.
But unfortunately the re-refining or even burning of used lubricating oils is still in its infancy. There is scant information about this industry. But the three major producing countries in addition to Kuwait and Egypt have some sort of collection and treatment facilities.
There is a need for more government intervention to ensure the proper collection and disposal of used oils either through burning in cement kilns or through re-refining. When this activity is left to the private sector, it is important to regulate the companies and hold them to a high standard of well-established practices if we are to realise the benefits.
On the consumption side, users must be made aware of the advancements made in lube oils manufacture and additives that should prevent the premature change of oil. By doing this, reduction of the volume of used oils is achieved upfront and the load is reduced on collection and processing.
It remains to be seen how OAPEC would promote this activity.
The writer is former head of the Energy Studies Department at the Opec Secretariat in Vienna.