A Minnesota company formerly known as Rational Energies changed its name last month to Rational Resource and announced that it is switching its business from pyrolysis of waste plastics to recycling used motor oil into API Group I base stocks.
The company said it will more than double the size of a small plant in Plymouth, Minnesota – which uses a proprietary technology less intensive than modern rerefineries – and that it aims to open a second plant in Texas by 2023.
Rational Resource officials said they believe there is an untapped opportunity to provide recycled Group I oils for industrial lubricants.
“We think our strategy is unusual,” CEO Ed Driscoll said in an interview yesterday, noting that many modern used lubricant rerefineries now produce Group II and III base stocks. “Most of those companies are going up-market into the high-value transportation market. Group I is not the thing they are focusing on. We think that opens an opportunity for a small company like ours to serve the industrial segment and to compete on price and customer service.”
Rational Resource’s Plymouth plant has capacity to process 5 million gallons per year of used motor oil, or 325 barrels per day. The company is expanding that capacity to 12 million gallons per year in a project targeted to be complete by the first quarter of 2022. Officials did not disclose the location of the Texas facility but said it will be of similar size. Driscoll said the company plans to build two more plants after that but has not settled on their locations or timelines.
Rational was formed in 2007 and for nearly a decade focused on using pyrolysis to turn waste plastics into fuel. Driscoll said the company decided in 2016 to exit that business because low oil prices prevented it from generating satisfactory profits.
“The oil market dropped, and it’s not coming back in our opinion,” he said.
Rational’s oil recycling plant is built around a distillation process, but Driscoll said it is less intensive than rerefineries insofar that it does not employ hydrotreating. This prevents Rational’s plant from making Group II or III base stocks, but it also makes the company’s process less expensive.
“We have to be cost-competitive, and that’s our strategy,” he said. “There is still demand for Group I base stocks for industrial lubricants. Our goal is to win business based on price and quality and then to keep it by blowing [customers’] socks off with customer service.” Rational says it has already secured enough waste oil feedstock for the Plymouth expansion and has a strong start toward doing the same for the Texas facility.