As noted in last weeks issue of JobbersWorld,
JobbersWorld continues to field questions
from marketers about Shell's sale of flush
oil (line wash) into the US market. And the
questions are typically the same. The first
being, "How does Shell reconcile its recent
efforts (Motor Oil Matters) to promote
quality lubricants in the market place while
it sells flush oil to others who some believe
resell this Shell product as engine oil
meeting current specs?" The second question
often heard is, "How can a Shell marketer
compete with the low priced flush oil Shell
sells into the market?"
In an effort to address marketer's questions
concerning this issue, JobbersWorld went
right to the source. On April 6, 2010, we
asked Shell a follow-up question we posed to
them in 2009. That question being: "Is Shell
still selling line wash to other blenders and
to some of its lubricant distributors? Also,
if it is sold, I would assume the line wash
contains the same markers as Shell's genuine
branded product. If that's the case, what do
you think the likelihood is that Shell line
wash could end up sold directly as Shell
branded product or commingled with Shell
product, thereby defeating or diluting the
intent and/or effectiveness of the markers?"
Although Shell had not provided a response
prior to last weeks issue of JobbersWorld,
they have since publication. What follow is
Shell's response to each of the questions.
Regarding Flush Oil
Flush oil is generated at our blending plants
as part of our work to protect the quality
and integrity of our Shell branded
lubricants. We generate flush oil through
many daily activities, such as moving
additives or base oils from storage tanks to
blending tanks, flushing lines moving product
from blending tanks to storage tanks, or
storage tanks to bulk trucks, and flushing
lines between filling operations. We flush
lines to ensure the integrity of our
formulations. We have initiatives underway to
continually reduce the flush oil output from
our facilities. For example, we are making
fluid-handling improvements to our largest
facility that will result in a 75% reduction
of flush oil produced.
In the meantime, we sell flush oil to be used
appropriately by other companies. The amount
we sell annually is around 3 to 4 million
gallons, significantly less than the amounts
suggested in the recent Jobber's World
article. Flush oil is virgin product that is
suitable for a variety of uses. We consider
that selling this product to be repurposed
(rather than having it hauled away by a used
oil carrier) to be a responsible, sustainable
approach to this by-product of our
manufacturing and quality assurance processes.
Flush oil typically contains a mixture of
various product streams (PCMO, HDEO, gear
oil, industrial oils, ATF, base oils,
additives). We clearly communicate to flush
oil buyers the possible components of the
material and do not make any guarantees
regarding the substance's characteristics,
because they vary from batch to batch. We
also clearly communicate that the flush oils
we sell are not to be resold under any Shell
or Pennzoil-Quaker State Company trademark.
It is our understanding that buyers typically
use flush oil as a blend component in a
hydraulic fluid, bar and chain oil, process
oil or other such product, packaged under a
private label. Others use flush oil as
low-grade boiler or marine fuel.
On Motor Oil Matters and Flush Oil
We had two goals for the Motor Oil Matters
initiative. The first is to educate consumers
about the benefits of using quality motor oil
to help engines perform optimally. API will
continue these efforts as it expands Motor
Oil Matters into an industry-wide program.
The second, which we are continuing to
pursue, is to halt unauthorized installers
that illegally display and advertise Pennzoil
and Quaker State trademarks, yet fail to
deliver these branded oils.
Our approach to the sale of flush oil is
consistent with the principles of product
quality and integrity that we communicate
through Motor Oil Matters. As a competitor in
the motor oil marketplace, we object to
anyone misrepresenting flush oil as quality,
on-spec motor oil. If we were to have
convincing evidence that someone was selling
this flush oil as a low-cost "motor oil,"
whether under one of our motor oil brands or
simply "from Shell," we would take steps to
stop any such sale to the buyer in question.
