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, Shell did respond
following the article we published. What follows 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.
