Frank,
Tom Kirwin reminded me tonight that I forgotten to post the article. I meant to obtain permission to post it, but since it is on the AP newswire, I figure that it is no longer copyrighted.
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USED OIL RECYCLER FUELS UP
COMPANY FINDS NICHE WITH DISTILLERY THAT
TURNS WASTE PRODUCT INTO DIESEL
Published: Sunday, March 23, 1997
Section: BUSINESS
Page: G1
By JOHN WELBES, Staff Writer
>From his office on East Bay Street in Charleston, William Carraway can
look off a small balcony onto the restaurant-lined street popular with
tourists. The only thing that takes away from the quaint setting and a
breeze off the harbor is the heavy traffic that picks up around the
lunch hour.
All those cars are moving in Carraway's favor, though. They're rolling
ever closer to racking up another 3,000 to 4,000 miles and the need for
an oil change.
The company that Carraway heads, Green Oasis Environmental Inc., sees
dollar signs in the thick, black goo that gets drained from engine
blocks. The vast majority of used motor oil in the United States is
reprocessed into industrial fuel. But Green Oasis, just five years
young, is carving out a market for itself by turning used motor oil into
No. 2 diesel fuel.
Green Oasis is also making money selling its distilling equipment in the
United States and overseas and charging a 4-cent-per-gallon royalty.
"Everything is a timing thing," Carraway said. "We happen to have the
right product at the right time."
The company's distilling equipment - the patent is pending - sits in an
industrial area just 10 minutes from the company's downtown suite. Most
of the critical equipment is contained in a stationary, heavy-duty
tractor trailer, which is dwarfed by the Allied Terminal tank farm just
across the road.
"We're not doing anything that couldn't have been done in the 1940s,"
said Carraway, 53, as he walked toward the tractor trailer.
The company has engineered a distillation process that's designed to
make economic sense even with relatively small amounts of waste oil.
Tighter environmental regulations on waste oil and Green Oasis' method
of distilling it into diesel are helping balloon the company's growth
rate and keep stockholders happy.
Since starting up in 1991, Green Oasis has been working out the
technical bugs in its process that heats waste oil to temperatures
upwards of 650 degrees.
Last year, the company also started using a new method to control the
emissions at its small Charleston plant. The new process satisfied South
Carolina pollution regulators after a lengthy review of the former
emissions process put the company's future on hold.
While developing a business that counts on murky, used oil to turn a
profit may not sound glamorous, it's become plenty exciting for
investors in the last two months.
Fueled by announcements of new contracts and a report by an independent
lab that Green Oasis is producing the diesel fuel that it claims, the
stock has skyrocketed. Investors who bought Green Oasis shares on Jan.
15 at $2.56 a share saw the stock price bolt to $9.75 by Feb. 25. It's
now come back down to earth a bit at $6.50 a share, but even recent
investors have more than doubled their money.
"It's a case of exposure," Carraway said, cautioning that the run-up in
the stock price was pure speculation. "It's just people seeing we have
the technology and we can do it."
The company and its process are still too new to generate an opinion
from officials at the National Oil Recyclers Association. Stock analysts
and waste oil collectors have been quicker to embrace Green Oasis.
"We think (Green Oasis) will be a major player in the recycling of waste
oil," said Spencer Maus, an analyst with Tecumseh Asset Management Inc.
in Highland Park, Ill.
Green Oasis has signed a marketing agreement with a Swedish firm to sell
its oil processing units in northern European countries. The waste oil
processing units cost about $1.8 million each, and the company has deals
to sell more than nine this year, while keeping another six units for
itself.
Recently, Green Oasis announced a deal with Maneks Ltd. of Istanbul,
Turkey, for the sale of a minimum of another five of its waste oil
processing units over the next five years.
The process
At the plant, Pete McDonough, the project manager is busy watching
temperature gauges. The $1.8million system heats up the oil using hot
air - not a flame. Tanker trucks haul in waste oil and pipe it into a
holding tank. As the oil is distilled, impurities are removed and the
unwanted elements are spit into a 1,400-degree thermal oxidizer that
controls emissions. The distilling equipment runs around the clock with
three 8-hour shifts, as employees pull 400 gallons of No. 2 diesel fuel
out of the machine each hour.
As McDonough walks into the tractor trailer, he stops giving details
about the operating temperature of the distilling equipment. It's close
to 700 degrees, Carraway later says, but they'd like to make competitors
work to find what the best temperature is for making diesel fuel.
As the company's technicians were developing the distillation process,
they found they could convert waste oil to diesel fuel at a relatively
low temperature.
"The magic ended up being in the little metal particles," Carraway said.
Those little metal particles are microscopic pieces of engine blocks,
worn away over time and drained into a mechanic's oil pan at each oil
change. When motor oil is heated to 700 degrees, the switch to diesel
fuel isn't so easy to accomplish. When the oil contains microscopic
metal, though, it leads to "cracking" - large petroleum molecules being
broken down into smaller ones as the metal heats up.
The last two years of research and development work also found a way to
minimize the waste products left when the distillation is complete,
Carraway said. For every 100 gallons of waste oil that goes through the
process, approximately 70 gallons of diesel fuel are produced. Another
20 gallons come out as a lower-quality heating oil.
The oil's waste products are dried out in a clay filtration system, and
gases from the clay are sent to the thermal oxidizer.
Future plans
Green Oasis plans to buy oil collection companies in different parts of
the United States to expand its access to used motor oil. The collection
system is still fragmented among many small companies. In 1994, South
Carolina's 353 collection sites for used oil brought in 600,000 gallons.
Santee Cooper, the electric utility company, is a large collector.
Carraway found himself in the waste oil business because of a bad
investment years ago. He had invested in a Florida company that aimed to
use waste oil to run small electrical generators at auto garages. The
plan didn't work, and Carraway decided to stay focused on the waste oil
market but look for new technology.
"I just went and hired Ph.D. chemical engineers," he said.
Green Oasis is getting some more help from academics through a project
in international marketing strategy for nine graduate students in the
University of South Carolina's international business studies program.
"We're going to have a nice first quarter" of 1997, Carraway said. "It's
going to shock some people."
John Welbes covers economic development and public companies. He can be
reached at 771-8339 or by fax at 771-8480.
Green Oasis Environmental Inc.
* Headquarters and plant: Charleston
* Started business: 1991
* What the company does: Takes waste motor oil, puts it through a
distillation process and converts it into diesel fuel. The company is
also selling its technology overseas and collecting a royalty of 4 cents
per gallon of processed waste oil.
* Chairman and CEO: William D. Carraway. Has worked for the Federal
Reserve and Hospital
Affiliates, a Nashville, Tenn., firm. His background is in finance.
* Employees: 14
* The bottom line: Green Oasis' stock traded at $2.56 per share on Jan.
15. It went as high as $9.75 on Feb. 25. Earlier this week it was
trading at $6.50.
* Projected earnings per share, 1997: 50 cents per share. That would
follow a 3-cent-per-share loss for the first nine months of 1996, when
the company was working out emissions problems.
* World Wide Web address: www.greenoasis.com
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Regards,
Ron |
