Recycler Finds Growing Niche in Slippery Business : Environment: Evergreen Oil Co.’s mission is to make waste motor oil a renewable resource.

It’s a dirty job they are more than happy to do.

Evergreen Oil Co., a small Newark, Calif., company in an “environmentally correct� business, has gained national attention lately for its successful recycling of used engine oil. The 100-employee company has become a popular, if somewhat fumbled, football in the presidential campaign.

President Bush visited Evergreen in late June to praise the environmentally progressive venture--apparently unaware that Evergreen belonged to a trade group that was suing the U.S. Environmental Protection Agency over national used-oil rules.

Then, earlier this month, Democratic vice presidential nominee Al Gore visited the company, reportedly complaining that “George Bush and Dan Quayle trying to use oil re-refining as a photo opportunity is like Bonnie and Clyde going back to the scene of the crime wanting a free toaster the next day.�

On Wednesday, companies such as Evergreen suffered a setback in their efforts when the EPA settled the trade group’s lawsuit by issuing tighter rules for handling used motor oil. But the agency refused to label used motor oil as a hazardous waste.

The hazardous-waste designation had been sought by Evergreen and other oil recyclers as well as environmentalists. It would have required more complex and expensive used-oil handling methods for service stations and other users, making oil recycling more cost-effective in many cases.

California and a few other states already have laws that designate used oil as a hazardous material. But there are no similar federal rules.

Most old oil picked up for recycling--from automotive service stations or neighborhood collection points--is turned into fuel for ships or industrial boilers and energy plants. Some parts, including the oil additives, become part of asphalt.

Re-refiners, in contrast, reconstitute used oil and return it to the marketplace as a lubricant.

In the 1930s, when automobile engine oil was a simple product, re-refining was popular with drivers looking for a cheap oil change. Re-refined oil was also widely used in aircraft and military vehicles during World War II.

But re-refining became a complicated, expensive process as more additives were blended into engine oils. The percentage of additives in engine oil has gone from about 1.5% in the 1950s to 15% today.

“Like most recycling industries, we started out simple and then became more complicated,� said Evergreen President Mike Falconer. The company, which began production in 1986, uses what industry observers consider a state of the art oil-recycling process.

Environmentalists support recycling in either form because untreated used oil and its contaminants can foul the air during combustion or seep into ground water if the oil is improperly stored.

This is an enormous national problem, according to environmentalists. Every year, American back-yard oil changers and others dump down the nation’s sewers anywhere from 20 to 35 times as much oil as was spilled by the Exxon Valdez. In California, an estimated 60 million gallons of used motor oil is unaccounted for annually--despite legal restrictions on bulk oil users and the increasing presence of public collection centers set up by such retail chains as Kragen Auto Parts and Chief Auto Parts.

“We are looking for ways to create a vibrant collection industry,� said Linda E. Greer, a scientist with the Natural Resources Defense Council. Greer believes that only when it is as economical to recycle used oil as it is to dispose of it in often informal ways, will the hidden waste be brought under control.

Greer said the NRDC expects to return to federal court soon to try again to force the EPA to declare used oil a hazardous waste.

The EPA worried that such a classification would only increase the anxieties of service-station owners about their potential liability for the environmental impact of the used oil on their lots.

Instead, the EPA said it would tighten regulations that already apply to certain aspects of used-oil disposal.

In fact, many service station owners already refuse to accept used oil brought in by do-it-yourselfers, since it can contaminate their collection tanks if it contains solvents or antifreeze that often end up in homeowners’ waste oil.

“If you get a couple of jugs of ‘hot’ oil in a waste-oil tank, it will turn the entire batch into an economic nightmare,� said Dick Wilson, executive director of the Southern California Service Station Assn. Then, the station can be forced to pay as much as five times the few cents a gallon--plus a $75 pickup fee--now charged by most waste transporters to haul the stuff away.

Evergreen, a privately held company with about $15 million in revenue last year, is doing well at the moment, Falconer said. Of the 200 million gallons of base oil used in California annually, Evergreen re-refines about 7.5 million gallons. It expects to start collection efforts in Southern California soon, encouraged by a state-imposed 4-cent-a-quart redemption fee that will go into effect soon.

Falconer believes that Evergreen could eventually re-refine 30 to 40 million gallons of base oil a year.

“For us, the EPA ruling wasn’t that bad,� Falconer said, “but for the industry it was unfortunate.� Falconer and others estimate that up to 20% of the oil consumed in North America could one day be made to serve again.