The US Environmental Protection Agency has proposed industry-supported nonroad, low-sulfur diesel regulations. The proposed rule requires fuel suppliers to sell a 500 ppm product in mid-2007, followed by a 15 ppm standard in 2010 (OGJ, Mar. 24, 2003, p 34.)
EPA Administrator Christine Todd Whitman said new engine technologies coupled with lower sulfur fuel means harmful diesel emissions will drop dramatically.
"Nonroad diesel engines are a major source of mobile emissions that up until this point have been virtually unregulated," Whitman said.
A new study by the American Lung Association and Environmental Defense said that nonroad diesel engines emit the largest source of particulate matter and sulfur dioxide in the transportation sector.
Those two environmental groups, along with the Natural Resources Defense Council (NRDC), and the Union of Concerned Scientists said EPA's forthcoming rule presents an important opportunity for regulators to reduce mobile source pollution.
"When it becomes law, Gov. Whitman's bold proposal will be the biggest public health step since lead was removed from gasoline more than 2 decades ago," said NRDC senior attorney Richard Kassel.
EPA said when the law is fully implemented by 2030, about 9,600 premature deaths and more than 8,300 hospitalizations will be avoided annually. The agency says that translates into an annual savings of over $80 billion that will "far outweigh" the estimated annual program costs of $1.5 billion.
Industry says, however, that the annual costs may be several times higher than EPA's $1.5 billion figure but that the new rule offers enough flexibility to meet investment challenges associated with the tougher standards.
Unresolved concerns
While environmental groups, engine makers, state regulators, and refiners generally support the proposal, concerns linger.
Public health advocates such as the US Public Interest Group (US PIRG) said they plan to urge EPA to tighten the proposal before making the rules final. They said that the diesel fuel used in locomotive and marine engines is subject to weaker standards. Additionally the offroad fuel rules aimed at diesel-powered construction, agricultural and industrial equipment are not fully implemented for more than a decade, unnecessarily delaying the public health benefits. US PIRG also cautioned EPA not to consider an alternative cost-benefit analysis favored by the White House's Office of Management and Budget that discounts the lives of the elderly or other Americans.
Last summer EPA favored a proposal that would have required all nonroad diesel to meet a 15 ppm sulfur limit by mid-2008. But the agency later reversed that position following meetings between refiners and OMB.
Refiners argued EPA was being too rigid and that industry needs more options or would go broke trying to comply.
Environmental groups did win a victory over OMB regarding cross-sector trading. A proposal floated by OMB last June would have considered an emissions trading program between nonroad and highway engines (OGJ Online, May 31, 2002).
Environmentalists opposed that plan, saying it could dilute the effectiveness of the new lower-sulfur highway diesel rules due to begin before 2007.
Industry vigorously contested the low-sulfur "highway" diesel fuel rule at EPA and later through the courts but lost. The rule requires 80% of highway diesel to meet new standards by mid-2006.
Some environmental groups are also worried that by allowing a longer lead time on reaching a 15 ppm level for sulfur fuel for the offroad market, refiners may be able to sell "dirtier," 500 ppm sulfur fuel originally intended for those offroad vehicles into the highway diesel market.
EPA and industry officials, however, deny the proposed offroad diesel rule allows refiners to redefine highway diesel fuel guidelines. Environmental groups are also expected to scrutinize credit-trading features of the proposed rule. The complete proposal is expected in the Federal Register shortly.
EPA wants to finalize the rule in spring 2004. Meanwhile, written comments may be submitted until Aug. 20; public hearings will be held in New York on June 10, Chicago on June 12, and Los Angeles June 17.
Stakeholder reactions
The National Petrochemical & Refiners Association said it appreciated the release of EPA's proposal and would study its impact on fuel supply.
"Because this rule will follow closely on the heels of the challenging gasoline sulfur reduction and highway diesel reduction rules, we will pay special attention to the impact on the domestic refining industry as well. NPRA has urged EPA to consider both factors in developing this proposal. In our discussions with EPA the agency indicated that the ultimate rule would be sensitive to supply impacts, given the heavy regulatory burden already faced by the refining industry," NPRA said.
Both NPRA and the American Petroleum Institute praised the two-step phase-in timetable.
"If adopted, this approach could help address some of the potential diesel fuel supply disruptions resulting from the sweeping highway diesel fuel sulfur reductions in the early years of that rule's implementation," said NPRA Pres. Bob Slaughter.
"Less sulfur in offroad diesel fuel is crucial to cutting emissions and improving air quality," said API fuels specialist Marc Meteyer. "These are substantial reductions that will require substantial investments from refiners. The phased-in approach makes it possible. It promises to give industry more flexibility, and it's a win-win for consumers who will get cleaner air at less cost."
