US EPA proposes severe diesel sulfur limits

The US Environmental Protection Agency officially proposed Wednesday its long-debated rule to eliminate 97% of the sulfur content in US diesel fuel. But that is a standard 'that the refining industry cannot meet, for a new product that the fuel distribution system cannot provide, at a cost that American consumers cannot afford,' said the head of the National Petrochemical & Refiners Association (NPRA).


Sam Fletcher
OGJ Online

The US Environmental Protection Agency (EPA) officially proposed Wednesday to eliminate virtually all sulfur from US diesel fuel�a program that industry officials for months have warned is impossible to implement by the federal deadline in 2007.

That long-debated proposal "is little more than an exercise in wishful thinking. It sets a nationwide standard that the refining industry cannot meet, for a new product that the fuel distribution system cannot provide, at a cost that American consumers cannot afford, creating a burden that the US economy cannot sustain," said Urvan Sternfels, president of the National Petrochemical & Refiners Association (NPRA).

EPA's proposed regulation, which is expected to be implemented this year, would require a 97% reduction of the sulfur content in diesel fuel to a maximum 15 ppm, down from current levels of 340-500 ppm. It also imposes stricter emissions standards on diesel engines and heavy-duty diesel vehicles, thus taking a "systems" approach to reducing diesel exhaust emissions, rather than a fuel-only approach.

EPA estimates the rule will increase diesel fuel prices by 3-4�/gal and heavy-duty vehicle costs by $1,000-1,600 per vehicle.

Public hearings on the proposed regulation are scheduled in New York, Chicago, Atlanta, Denver, and Los Angeles. NPRA officials charge that the EPA is carefully avoiding areas where US refining capacity is concentrated.

Too much, too soon
The proposed rule is the most stringent environmental control ever imposed on large tractor-trailer rigs, heavy-duty trucks and large buses. It would reduce their tailpipe pollution by 95% when fully implemented�tantamount to taking 13 million of the current trucks and buses off the nation's highways, said EPA Administrator Carol Browner at a Washington, DC, press conference late Wednesday.

Meeting the fuel restrictions alone would cost several billion dollars to accomplish, at a time when the refining industry is already implementing an $8 billion program to reduce the sulfur content of gasoline by the same deadline, say industry officials. And it could create diesel shortages that would cripple the trucking industry that moves most of the goods to US markets.

"There are few synergies in the gasoline and diesel sulfur reduction strategies, so there is no justification for doing both concurrently," said Sternfels. "Supplies of home heating oil and gasoline will also be affected if and when refineries close or reduce capacity because of the crushing investment burden."

NPRA was among nine industry groups that opposed the EPA proposal when it earlier was presented to the White House Office of Management and Budget for review. Other opponents include the American Petroleum Institute, 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.

As an alternative, industry officials proposed a 90% reduction to an average 30 ppm, with a 50 ppm cap for on-highway diesel fuel.

The difference between 90% and 95% reductions may seem small, but it's like trying to wring all of the water out of a wet towel, said Sternfels. "That last bit is the hardest to get," he said.

A 90% reduction would still be significant, but one with which most refineries could comply, Sternfels said.

"Unfortunately, EPA has turned a deaf ear to repeated industry warnings that uncoordinated environmental programs will lead to frequent market disruptions that affect all petroleum products, especially diesel and gasoline," he said.

The American Petroleum Institute said it supports sharp reductions in diesel sulfur content but strongly opposes EPA�s "unrealistic proposal" for on-highway diesel fuel controls.

"The extreme reduction...has been proposed without consideration of its potential to seriously affect supplies, adversely affect US consumers, and harm the US economy,� said API Pres. Cavaney. He asserted that the proposal "does not account for some predictable adverse consequences.

"For example," Cavaney said, "nearly 70% of the nation�s diesel fuel is transported by pipeline, as are other products refined from crude oil. Yet pipeline companies have said it is impossible to ship the ultra-low-sulfur fuel proposed through the nation�s pipelines without picking up additional levels of sulfur from other fuels shipped through those pipelines. That fuel would then not meet the regulatory specifications of a 15 ppm sulfur level for on-highway diesel and could not be used in trucks, potentially reducing supply."

Cavaney said API wants to continue working with the EPA to develop a plan that is "effective, workable, and consistent with the energy needs of the nations� consumers and transportation industry.�

Engine, vehicle modifications
The pending EPA regulation also requires vehicle manufacturers to reduce emissions of soot, smog-causing nitrogen oxides (NOx), and nonmethane hydrocarbons (NMHC) from diesel truck and bus engines starting in 2007.

The proposed EPA regulations would reduce diesel exhaust particulate, or soot, to 0.01 g per unit of engine energy, from 0.1 g/unit currently. It would also reduce NOx emission to 0.2 g/unit from 2.5 g. The soot regulations will take full effect in 2007, but the NOx and NMHC standards are to be phased in over 4 years.

Proposed standards for complete heavy-duty vehicles would be implemented on the same schedule as the engine standards, says the EPA. For vehicles with an 8,500-10,000 lb gross vehicle weight rating (GVWR), the proposed standards are 0.20 g/mile for NOx, 0.02 g/mile for particulates, and 0.195 g/mile for NMHC. For vehicles with a GVWR of 10,000-14,000 lb, the proposed standards are 0.4 g/mile for NOx, 0.02 g/mile for particulates, and 0.230 g/mile for NMHC.

The EPA is proposing to revise evaporative emissions standards for heavy-duty engines and vehicles as well, effective in the 2007 model year.

Officials of the Diesel Technology Forum�a new group that claims to represent diesel engine and vehicle manufacturers, fuel suppliers, and other interested parties�applauded the EPA for taking a systems approach "for the first time" in trying to solve a problem, rather than addressing just one aspect. However, they faulted EPA officials for not applying the same fuel and emissions requirements to diesel-fueled off-road vehicles, such as farm tractors and railroad engines.

Forum officials would not take a stand either for or against the EPA's 15 ppm fuel sulfur limit. "Any reduction of sulfur will be helpful. We support that," David Bartlett, the forum's spokesman, told OGJ Online.

ExxonMobil Corp. is the only refiner that is a member of that forum.

Some engine manufacturers have said the sophisticated new pollution control devices that the EPA is compelling them to use will require extremely clean diesel fuel to work properly.

Forum members also are examining the economic effects of the EPA's strong push to reduce the sulfur content of diesel. "It's easy for environmentalists to say, 'Ban all pollution.' But that would shut down the railroads, marine transportation, and emergency backup systems at hospitals and other critical facilities. It's just not feasible," Bartlett said.

Moreover, he said, "We want to get it on record that new diesel engines don't pollute." Modern diesel engines are "smokeless" and more energy-efficient, emitting only one-eighth as much pollution as engines manufactured more than a decade ago, he claimed. "But diesel engines are durable, so there are a lot of older engines still out there on the road," Bartlett said.

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