1. ENERGY EFFICIENCIES Maximize The Opportunity – Select the Right Lubricant ALBERTA FOREST PRODUCTS ASSOCIATION SEPTEMBER 2012

2. OBJECTIVE • This presentation is to review the opportunities in reaching energy efficiencies and prolonging equipment and oil life in the forestry industry. • Traditional thinking • Indoor: Mono-grade oils • Outdoor: Multi-grade oils • We will discuss advantages of moving to multi-grade lubricants indoors.

3. OPPORTUNITIES FOR CHANGE FORESTRY - INDUSTRY TRENDS • Overall reduction in costs (who isn’t) • Energy consumption reflects a substantial operational cost for the Forestry industry • Hydraulic systems are becoming smaller but more efficient resulting in higher temperatures and pressures • A typical hydraulic pump converts approx 20% of its horsepower into heat, therefore most fluids run at elevated temperatures • Gear design changes to improve efficiency require gear lubricants to work at higher temperatures.

4. OPPORTUNITIES FOR CHANGE • The trends and more severe requirements on today’s hydraulic and gear systems can and are met with existing high quality mono-grade (straight-grade, single-grade) oils. • However, further improvements in performance, as well as an added bonus in energy efficiencies is possible through the use of non-traditional products multi-grade oils in indoor applications.

5. FUNCTIONS OF A LUBRICANT • Reduce Friction • Minimize Wear (Keep Moving Surfaces Apart) • Cool Parts (Carry Away Heat) • Prevent Corrosion • Disperse Combustion or Oxidation by-products • Act as a Sealant • Transmit Power

6. Steel Air Steel No Lubricant: High Friction Oil Film Steel Steel Steel Steel Thin Film (Boundary) Lubrication: Moderate Friction Full Film (Hydrodynamic) Lubrication: Low Friction WHY LUBRICATE? • Lubrication is key when sliding (area) contact is present. • Lubricants are used to reduce friction and wear by preventing metal to metal contact.

7. FRICTION - 1986 NRC-ACOT REPORT • $5 Billion* per year is lost in Canada due to friction and wear • 25 - 30% is recoverable with existing technology *NRC Report published in 1986

8. FRICTION - 1986 NRC-ACOT REPORT 1986 to 2012 what is the $$ amount today? Significant opportunity to reduce friction losses

9. LUBRICANT PROPERTIES • Viscosity is a measurement of resistance to flow at onetemperature. • Viscosity Index (VI) is a measurement of the rate of change of viscosity over a range of temperatures. In simple terms: it measures how fast the oil thickens up as it gets colder or how fast it thins out as it gets hotter. • Generally the higher the VI the more all-season the product

10. VISCOSITY INDEX • Viscosity Index is an inherent property of the base oil used to blend a lubricant. • Some oils have naturally higher VI than others (i.e. Group II or synthetics) • VI can be improved significantly by blending soluble additives called VIImprovers (VII) into the oil. • These additives are long polymer molecules which uncoil at high temperatures to increase viscosity, while at low temperatures they form tight “balls” which no longer contribute much to viscosity.

11. Viscosity increase at low temperatures is relatively small resulting in cold temperature viscosity near original base oil. Base Oil + VII Multi-grade (all-season) Product (i.e. Hydraulic MV) Viscosity Index Improver (VII) additive expands with higher temperatures resulting in a higher viscosity at high temperatures Viscosity cSt (LOG-LOG) Base Oil Mono-grade Product (i.e. Hydraulic AW) Potential reduction based on shear stability (i.e. quality) of VII. Temperature oC (LOG) VISCOSITY INDEX IMPROVER (VII)

12. Gain in effective operating temperature range Multi-grade Product (i.e. Hydraulic MV 32) OEM Recommended Operating Range Viscosity cSt (LOG-LOG) Mono-grade Product (i.e. Hydraulic AW 32) -20 40 100 Temperature oC (LOG) VISCOSITY INDEX IMPROVER (VII)

13. OPPORTUNITIES FOR CHANGE • Although all indoor components may see benefits of multi-grade oils the two biggest opportunities in the forestry industry are: • Hydraulics • Gear systems

14. VISCOSITY IMPACT - HYDRAULICS Viscosity (cSt)

15. INDUSTRIAL GEAR APPLICATIONS • Basic Principles • Rolling at the pitch point • Sliding occurs above and below the pitchpoint Original animation by Doug Wrighte, UWA Modified by Fluid Life

16. HYDRAULIC PUMP EFFICIENCY Volumetric Efficiency: All pumps have internal leakage paths. Mechanical Efficiency: Energy is consumed to rotate pump and overcome fluid frictional losses. The amount of mechanical and volumetric loss in a pump is primarily a function of the fluid’s viscosity and lubricity properties.

17. HYDRAULIC PUMP EFFICIENCY Ref: Evonik Industries

18. SHEAR STABILITY IS IMPORTANT Ref: Evonik Industries

19. SHEAR STABILITY IS IMPORTANT Ref: Evonik Industries

20. OEMS LIMITS ON SHEAR STABILITY

21. INDUSTRY - TEST RESULTS Ref: RohMax

22. INDUSTRY – TEST RESULTS Source: Evonik Industries

23. INTERNAL HYDRAULIC OIL TESTS

24. GL-5 80W-90 Synthetic Blend 75W-90 Synthetic 75W-90 GEAR OIL TESTS RESULTS

25. FIELD TEST RESULTS • Test results indicated a fuel savings of 3.8% ($8740) Field trial done by vendor on a medium size excavator with dual piston pump feeding 3 piston motors (tracks and swivel) plus boom, stick and bucket cylinders (5000 psi / 345 bar max.) Each product ran for 4 days (~6 hours / day) Results above are extrapolated to 4000 hrs using a Denison T6CM pump (B10 cartridge, 2000 rpm, 200 bar, 70oC) to benchmark field trial products and internal multi-grade. Since the efficiency of the pump is based on viscometric properties of the fluid at certain temperatures and pressure conditions, data can be accurately extrapolated from the field trial and bench tests to other products.

26. SUMMARY • Significant opportunities are available to improve energy efficiencies by changing to multi-grade oils in applications otherwise suitable for mono-grade products. • Multi-grade hydraulic and gear oils that are shear stable will maintain viscosity and allow operations to run under wider temperatures • Improved shear stability results in improved energy efficiencies • Although much of the test results shown in this presentation are related to mobile equipment, the opportunities of energy efficiencies are relevant to all equipment based on the lubricant technology. • Selecting the right multi-grade oil saves money.

27. Thank-you for your time & interest