Centrifugal air & gas blowers can be ordered with either grease, or oil, lubrication for the bearings. In general, the smaller(less than 50 HP), can only be supplied with grease, while the larger(greater than 200 HP), can only be supplied with oil lube.  The mid-range blowers can be manufactured with either lube system. The deciding factor is usually just customer preference, but extreme heat applications may prefer oil mist lubrication.

Grease lube bearings are susceptible to over, or under, greasing, and must be periodically "purged".  Oil mist lubrication needs only weekly additions to the oil reservoir, and annual drain & refilling. The lower maintenance is often a key deciding factor in the selection of oil lube.

The design of the oil mist system used in centrifugal blowers is very simple.  A flat disc attached to and rotating with the blower shaft dips into the oil reservoir throwing oil into the air to create the "mist".  This oil laden air keeps the bearing wet with the oil, thus providing lubrication to extend the life of the bearing.  The air/oil combination also contributes to cooling of the bearing as it rotates at the relatively higher speed of 3600 rpm. 

The type of oil used in the oil mist system varies with each blower manufacturer, but the simple design doesn't.  It could be hydraulic, turbine, synthetic, or even automobile motor oil.  The important factor is not to mix them.  The manufacturer may spec a specific oil for a particular application.  A blower designed for the desert will have different oil than a blower installed in the arctic. 

One drawback of oil lubrication is oil leaks.  It is almost impossible to eliminate all oil leaks. Some manufacturer's do a better job than others, but eventually the oil mist will escape from the bearing reservoir and coat the components in the area, or just drip onto the floor.  Overfilling the reservoir, even slightly, can cause more leakage. A clean room application should never have oil mist lubrication. Landfill applications should have totally enclosed bearing housings to prevent gas leakage.  Oil lube needs air, and venting, to operate satisfactorily, which also allows a place for the gas to escape. 

Finally, there are many things to look at in solving for excessive oil leakage: gaskets, worn/damaged parts, loose bolts, etc...  I've even eliminated oil leaks by adding STP to the motor oil to thicken it up.  This may greatly reduce the life of the bearing, so don't do it unless you are ready to accept the consequences.

Changing the oil in a blower once per year is a very easy, and economical way to ensure long life of a very expensive cast iron, centrifugal blower.   Invest in PM, it will save you money!