Nine industry groups are urging the US Environmental Protection Agency to withdraw a pending rule that would slash the sulfur content of automotive diesel fuel to 15 ppm in 2006 from the current 500 ppm. The industry has offered a reduction to 50 ppm, and the White House Office of Management and Budget is reviewing the proposed rule.
The groups said, "We are committed to dramatically reducing diesel engine emissions but are concerned about maintaining a stable and reasonably priced supply of diesel fuel and other middle distillates, including home heating oil."
The nine groups are the American Petroleum Institute, the National Petrochemical & Refiners Association (NPRA), the Petroleum Marketers Association of America, the Society of Independent Gasoline Marketers of America, the Independent Fuel Terminal Operators Association, the National Association of Convenience Stores, the Service Station Dealers of America & Allied Traders, the National Association of Truck Stop Operators, and the National Council of Farmer Cooperatives (NCFC).
They wrote EPA Administrator Carol Browner, "The proposed cap and time frame are in excess of what is feasible or advisable from either an energy supply or environmental standpoint. We consider it a blueprint for future shortages of diesel and home heating oil.
"EPA has not released any compelling data to support its choice of sulfur standard or time frame. A study of the impact of this proposal on diesel supply has not been conducted or made available for review and analysis.
"Insufficient information is available on the performance of heavy-duty diesel advanced engine systems, which might conceivably require very low sulfur numbers. EPA should refrain from taking actions that are without sound technical justification and that could impose severe costs and supply impacts on diesel consumers."
Ed Murphy, manager of API's downstream segment, said that meeting a 50 ppm standard would require refiners to invest $5 billion in new equipment, and a 15 ppm standard "would at least double that."
But Murphy said, "The real issue here is supply and availability." He said creating a sulfur level for diesel different from the similar home heating oil would make it difficult to switch between the fuels, import 50 ppm diesel from Europe, or move the low-sulfur diesel through the same pipelines and tankage as higher-sulfur fuels.
NPRA Pres. Urvan Sternfels said, "Clearly, it would take more crude oil" to make the 15 ppm diesel vs. 50 ppm diesel. He said some small refiners may close plants rather than comply with the rule. "There are some marginal-and I mean marginal-refiners who can't justify investing more than the book value of their facilities" to make low-sulfur diesel.
NCFC said one of its member refineries was likely to close rather than comply with the tougher rule.
Meanwhile, two associations have urged EPA to set a 15 ppm standard for diesel fuel. The State and Territorial Air Pollution Program Administrators and the Association of Local Air Pollution Control Officials also said EPA should slash standards for nitrogen oxide emissions from new diesel trucks and buses by 2007. They said NOx emissions could be cut 90% through use of low-sulfur fuel and advanced exhaust emission controls.
