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Why remanufacturing is important

February 29, 2012

Wherever the new oil comes from, be it the artic extremes or the bottom of the oceans, it will be expensive. Even when you have found the oil there is a lack of refining capacity, so the oil we have is precious and every four or five litres used to make a cartridge is prized and not to be wasted. Every new cartridge, whether it is an OEM or clone, wastes four to five litres of oil.

Or put it another way: every cartridge that is remanufactured saves four to five litres of oil. Every 50 cartridges save about a barrel of oil.

While the oil focus is on politics, daily demand and the price of a barrel of oil, the real issue is overlooked. For the last 50 years, the discovery of new oil fields has declined and, according to Halligan, “more than four-fifths of the world’s major fields are beyond peak production. The output of the world’s largest 580 oil fields is declining at a 5.1 percent annual average”. So during an economic downturn, the use of oil is increasing against a background of reducing supply and refining capacity.

Crude oil hit a nine-month high on 24 February, breaking through $125 (€92.83) a barrel. Although this is lower than its 2008 value of $149 (€110.65), in both Pound Sterling and Euro it is now higher. Oil prices are up around 14 percent since the start of the year.

Prices are high because of concerns over Iran, the world’s third largest exporter, and the supply through the Straits of Hormuz, a 30-kilometre channel through which a third of all the world’s oil supply passes through.

But according to Liam Halligan of the Daily Telegraph, “in 2001, the world consumed 76.6m barrels of oil a day. Last year, just a decade on, global oil use was a hefty 89.1m barrels daily, 16 percent higher. In 2011, the world economy was sluggish, with global GDP growth of 3.8 percent, down from 5.2 percent the year before. Yet world oil use still rose almost one percent in 2011, with crude averaging $111 (€82.45) a barrel, more than 40 percent up on 2010”.

According to the International Energy Agency (IEA), crude demand is “declining remorselessly throughout the OECD [countries]”, and are therefore consuming less, with OECD oil use falling just 0.9 percent in 2012. Where as in the emerging markets, demand is forecast to rise by 2.8 percent, giving a rise in crude demand of about one percent.