Are Synthetics Really Too Expensive?
Examining the Value Equation

by Ed Newman
AMSOIL Director of Advertising
This article appeared in National Oil & Lube News, September 2006

When I first began writing for AMSOIL 20 years ago one of the biggest “complaints” I heard from new Dealers was that at five dollars a quart synthetic motor oil was “too expensive.” What I find interesting is that while the price of conventional petroleum oils have risen dramatically over the years, synthetic oil price increases have been modest at best. Synthetic oils were once 10 times the price of regular oils.

Yet there were other issues, too.  People did not have the confidence in synthetics then that they do today.  Back then you heard people say that it caused seal swell or was so slippery it would leak right out of the car.  Today, however, when all is said and done, nearly everyone agrees synthetic oils are better, but still some feel that they cost too much for what you get.  Are synthetic oils expensive?  Let’s take few moments here to compare the cost of synthetic oil to the cost of bottled water. 

A Google search led me to a Jeff Matthews column where he does a breakdown on the cost of “Ethos” bottled water that is sold at Starbucks.  According to Matthews the bottle contains 1.5 pints of water from the Tomhicken Mountain Springs near Pottsville, Pennsylvania. Cost: $1.23 a pint or near two dollars a quart and over nine dollars a gallon.  This is water from a spring and, yes, it is good, but what is involved in making it?

Well, there are more expensive waters than this. SuperNariva is magnetically energized water from a spring in Japan’s Magnetic Mountain, purportedly providing a number of spectacular properties including resistance to disease and longer life. At $99.95 per milliliter, or $10,000 a liter, you won’t want to spill a drop.

Other waters claim exotic origins, though many bottled waters are simply taken from municipal water supplies, treated and bottled. At one to three dollars a quart, bottled water companies are experiencing a good brisk business. In fact, according to the Beverage Marketing Corporation, Americans spent more than nine billion dollars on bottled water, an industry growing nearly 10 percent per year for 10 years straight.
 
Whatever the price, the process of making bottled water is probably pretty straightforward. Take some water, put it in a bottle, label it and ship it. By way of contrast, let’s review a few of the steps involved in making premium synthetic motor oil and the associated costs.

First, the raw materials must be assembled.  But before the raw synthetic base stock is unloaded from the tank truck or rail car, quality control test sequences are commenced.  Incoming bulk materials cannot be placed into storage tanks containing pure supplies until they have been tested and approved. At AMSOIL we tie a red ribbon on every outlet valve at the time of sampling and quality control testing procedures are carried out for every single ingredient that will become part of the finished product.

Once the certificate of analysis is written up, the incoming material is moved from dock to stock status. This procedure is carried out for every additive, which varies with each lubricant from 5 to 12 ingredients.

From here we go to blending, a process far more complicated than the simple assembling of ingredients as in making chocolate chip cookies.  Assuming a commitment to high standards, there are quality control procedures for cleaning the hoses, tanks, pipes and valves as well as the containers for sampling.  Records are kept for each step.

After the lubricant is blended, another round of quality control testing is undertaken. Each lube has its own sequence of tests to pass. Not all are time consuming. One test for the gear oils, for example, takes half an hour.  Motor oils have the Noack test for volatility which takes 1.5 hours, but another standard test takes 13 days. IR scans on all samples are run on a $250,000 piece of equipment. Field trials when developing new formulations can take years. How do you even measure these kinds of costs? Researchers are continually looking into the unknown and reacting to results.  Amount of time spent and the testing varies with each product. 

Summing Up
The easiest way to describe QC for our company is that all products are tested three times before they reach the customers’ hands. Once as a raw material, once as a finished product, and once before packaging. Add to this the cost of raw materials themselves, plus labor and equipment costs for blending and manufacturing. Space does not permit me to outline the multi-page documents outlining the operation of our bottling line. 

Ultimately, the consumer does not care much about all these details. You can help reassure them that oil companies are holding the line on costs as best they can, that there is more involved than meets the eye. Motorists want to protect their investment, whether car or light truck, so they can spend time thinking about other things. 

Are synthetic oils a good value? Everyone knows they are indeed superior to conventional petroleum in protection, performance, power, engine cleanliness, and better mileage. The price of synthetics may be higher than most bottled water by a smidge, but the benefits to a vehicle are immeasurable.