By the OGJ Online Staff
WASHINGTON, DC, Mar. 1�The US Environmental Protection Agency Wednesday said a low-sulfur diesel rule finalized in the waning days of the Clinton Administration will take effect Mar. 19 despite calls by refiners to revisit or rewrite the proposal.
The plan requires refiners to slash highway diesel sulfur levels to 15 ppm by June 2006, a 97% reduction from today's 500 ppm.
The agency says the rule will cost industry about $4.2 billion/year but will produce more than $70 billion/year in benefits by reducing health costs associated with the public's exposure to smog, soot, and other air pollutants.
The industry estimate of the rule's cost is far higher�about $8 billion in up front capital investment and a 12�/gal increase at the pump to consumers.
Environmental and public health groups applauded the initiative, saying EPA's plan will save lives and dramatically reduce respiratory illnesses associated with diesel exhaust. Oil industry officials maintained that while they have voluntarily welcomed lower sulfur standards, the new levels are not cost-effective and could cause supply shortages.
EPA counters that the lead time will be sufficient for industry to make the investment needed to comply. Nevertheless, in a nod to industry concerns, EPA Administrator Christine Todd Whitman said she would ask an independent advisory board to examine how the rule could affect diesel supplies. The board, which will include as-yet-unnamed industry members, will also study technology trends.
The American Petroleum Institute praised Whitman's decision to form an advisory board, but it renewed earlier concerns that the regulation will hamper industry's ability to deliver fuel efficiently.
API Pres. Red Cavaney said, "Given the already historically high operating rates and the strain on the overall refinery and distribution system in our country, as well as broader concerns about energy supply in general, we are pleased with your acknowledgement of potential fuel supply risks for all those who rely on diesel as an integral part of our nation's delivery of goods and services."
Meanwhile, the National Petrochemical & Refiners Association said it still planned to "pursue vigorously" the lawsuit it filed Feb. 2 in federal court to require EPA to revise the rule into a "more balanced and workable form."