EPA issues rule slashing diesel sulfur 97%

The US Environmental Protection Agency Thursday announced rules requiring cleaner burning diesel engines and a 97% reduction in the sulfur content of highway diesel fuel from 500 ppm to 15 ppm. The agency also set toxic chemical compound emissions limits for conventional and reformulated gasoline.

The US Environmental Protection Agency Thursday announced rules requiring cleaner burning diesel engines and a 97% reduction in the sulfur content of highway diesel fuel from 500 ppm to 15 ppm. The agency also set toxic chemical compound emissions limits for conventional and reformulated gasoline.

Industry groups complained the rules were regulatory overkill.

EPA said the diesel engine rule "would provide the cleanest running heavy-duty trucks and buses in history. These vehicles will be 95% cleaner than today's trucks and buses.

"By addressing diesel fuel and engines together as a single system, this action will produce the clean-air equivalent of eliminating air pollution from 13 million of today's trucks."

Carol Browner, EPA administrator, said the action will result in "the greatest reduction in harmful emissions of particulate matter, or soot, ever achieved from cars and trucks."

EPA said the rules will reduce 2.6 million tons/year of smog-causing nitrogen oxide emissions once the program is fully implemented. Emissions of soot, or particulate matter, will be reduced by nearly 110,000 tons/year.

It said the action will prevent 8,300 premature deaths, 5,500 cases of chronic bronchitis, and 17,600 cases of acute bronchitis in children.

EPA said most diesel trucks and buses have not used the pollution control devices installed on autos the last 25 years. It said to enable modern pollution-control technology to be effective on trucks and buses, diesel fuel had to be significantly cleaner.

The standards will be phased in for engine manufacturers between 2007 and 2010. The fuel provisions are effective June 2006, but refiners can request more time and there are exemptions for small refiners.

EPA said new trucks cost up to $150,000 and buses cost up to $250,000, but the engine rule would only raise those costs $1,200 to $1,900/vehicle. It said the cost of diesel fuel would increase 4-5�/gal.

Toxics rule
Separately, EPA set new toxics emission performance requirements for conventional gasoline and reformulated gasoline.

Under them, refiners must maintain their average 1998-2000 toxics performance levels, which are better than what regulations require, for benzene, formaldehyde, acetaldehyde, 1,3-butadiene, and polycyclic organic matter, identified as "toxic air pollutants."

EPA said all five of the air toxics are known or probable human carcinogens.

It said levels of air toxics from mobile sources are decreasing as a result of EPA programs for cleaner cars and cleaner burning gasoline. "For example, benzene levels in urban areas have decreased nationwide by almost 40% between 1993 and 1998. This trend is expected to continue because of more stringent standards for cars and light and heavy-duty trucks and cleaner diesel fuel."

EPA said because motor vehicles emit a variety of toxic air pollutants, it will re-evaluate emissions of the pollutants in 2003.

The American Petroleum Institute said EPA's action on air toxics "would codify the industry's overcompliance with EPA's existing regulations limiting toxic emissions. By EPA's own admission, it results in no environmental improvement but penalizes those companies that already have done the most to improve air quality."

Sixteen organizations representing diesel fuel manufacturers, distributors, retailers, and users objected to the rules for engines and diesel sulfur. The groups included API, the National Petrochemicals and Refiners Association (NPRA), and US Chamber of Commerce.

They said, "We are deeply disappointed that EPA has issued a rule that threatens to limit essential diesel supplies to farmers, truckers, bus operators, food distributors, small businesses, and other users.

"The rule puts the nation's diesel supplies at risk because some refiners may not be able to afford the changes to their refineries needed to make the ultralow sulfur diesel fuel EPA has mandated.

"In turn, significantly less diesel on the market could sharply increase prices, similar to what we experienced earlier this year in some of the nation's gasoline and heating oil markets, but perhaps for a longer duration. Diesel fuel users could pay substantially more, and consumers everywhere could feel the impact as the higher costs ripple through the economy.

"Phase-in of the requirements will not solve the problem. EPA's phase-in actually precludes any meaningful alternative for refiners due to physical constraints on shipping and storing an additional variety of diesel fuel. The supply problems that a phase-in implicitly recognizes would be better addressed through changes in the underlying program.

"There is already evidence that government regulations have contributed to constrained supplies and higher prices for gasoline, heating oil, diesel fuel, electric power, natural gas, aviation jet fuel, and other energy products. EPA's extreme, costly, and technologically unjustified diesel rule will make it even harder to keep the nation well supplied with the affordable energy consumers and the economy require."

Oil groups
Separately, API noted that refiners support diesel sulfur reductions.

"Nearly a year ago, petroleum refiners recommended that the maximum sulfur content of on-road diesel fuel be reduced by 90% from current levels. The industry's aggressive proposal would have provided virtually the same environmental benefits as EPA's more severe rule, but at a much lower cost to consumers, and without placing our nation's diesel fuel supply at risk. Without subsequent adjustments, EPA's new rule could have the unintended consequence of reducing vital diesel fuel supplies to the nation's consumers."

API said it would work with EPA, but the challenge "is exacerbated because refiners cannot begin taking action to reduce on-road diesel sulfur until the sulfur limit for the other part of the diesel market�off-road�is known."

It explained that refiners make both kinds of diesel in the same process.

NPRA said, "EPA has failed to balance its mission to seek environmental improvements against the equally compelling need for adequate fuel supplies. Widespread reports that the Department of Energy sought significant changes in EPA's program based on supply concerns suggest that NPRA's concerns are well founded."

The association said, "New technologies that might have been able to mitigate the cost impact of producing lower sulfur fuels will not be available in time to meet the 2006 standard. And, of course, consumers will ultimately bear the high cost of this rule through higher prices for the many vital products transported by diesel vehicles.

It said a recent Charles River Associates study warned the pending EPA rule could result in a 12% national shortage in diesel supplies.

NPRA said, "Since lower sulfur diesel fuel will only be needed by a small number of new vehicles stating in 2007 (at most 5% of highway diesel demand) there is ample time to reassess EPA's decision before refiners must make costly investment decisions."

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