I use a soluble oil for coolant, Biokool14 from Hallett Oils. It seems quite happy sitting for months, or years, without going sour.
I use coolant on my machines as follows, with the proviso that brass and cast iron are normally cut dry:
Lathe: I mostly use insert carbide tooling and cut all materials dry; coolant is only used with HSS tools, mostly drills
Repetition lathe: I always use coolant, mainly to wash away swarf, although all tooling is HSS
Vertical mill: Carbide cutters run dry, for HSS I use coolant if it involves heavy cuts
Horizontal mill: Mostly HSS cutters, so I use coolant
CNC mill: I always use coolant, irrespective of cutter type, to wash away swarf, escept for cast iron
Cylindrical grinding: I always use coolant
All my machines use flood coolant, I just can't see the point of the occassional 'dab' of coolant. Think about the numbers. Let's assume we have a 3/4hp motor on the lathe and we're running a decent depth of cut and feedrate. So we might be consuming about 500W of electrical power, let's say 450W of useful power allowing for losses in the headstock. Most of the 450W is going to end up as heat, ideally mostly in the swarf, but some in the tool and workpiece. Now 450W is equivalent to 450J/sec. So each second we need to get rid of 450 joules. The specific heat of water is about 4.2 joules per gram per degree. Let's assume we want to keep the coolant temperature rise to 30°C, we don't want to boil it away. That means we need 3.57 grams of water per second or 214 grams per minute. One litre of water weighs about 1kg. So 214 grams is 214 millilitres, or about 0.38 pints. That's a lot of dabbing!
Regards,
Andrew