Ultra-low Sulfur Diesel Production and Imports Begun June 1 ULSD Phase-in Begins [FONT=verdana,arial]ATA Worried over Increased Costs, Supply Disruptions[/FONT] Web source: http://oilspot2.dtnenergy.com/e_article000595565.cfm?x=b11,0,w On June 1, the Environmental Protection Agency started requiring refiners and fuel importers to cut the sulfur content of highway diesel fuel 97 percent, from 500 parts per million to 15. “When fully implemented, today's action will not only enhance environmental protection, but will also prevent nearly 8,300 premature deaths and tens of thousands of cases of respiratory ailments such as bronchitis and asthma,” said the EPA last week. Ultra low sulfur diesel fuel enables advanced pollution control technology for cars, trucks and buses. Consumers will be able to purchase ULSD and vehicles with clean diesel technology later this year. The agency expects a smooth transition and will closely monitor the industry as it transitions to ULSD making this historic milestone a reality that will benefit Americans' health and the environment said the federal agency. However, not everyone is as sure as the EPA that the ULSD transition will be smooth. “The trucking industry recognizes the critical role that ultra low sulfur diesel fuel plays in ensuring future diesel emission reductions,” said American Transportation Associations President and CEO Bill Graves. “The industry remains concerned, however, that the transition could create fuel supply disruptions and operational challenges.” The EPA mandated that by June 1, 80 percent of the on-road diesel fuel refined or imported must have no more than a 15ppm sulfur content, which compares with the current specification for diesel fuel that allows a maximum 500ppm sulfur content. In California, 100 percent of the on-road diesel fuel must meet the ULSD sulfur specification. Retail outlets have until September 1 in California and October 15 elsewhere in the country to comply with the USLD rule. The new fuel standard reduces the amount of sulfur in on-road diesel by 97 percent and will support smokeless diesel engine technologies hitting the market in 2007. ATA said the transition to ULSD could cause fuel supply and availability disruptions because it is easily contaminated during transport through a complex system of pipelines and fuel terminals that also transport high sulfur products like home heating oil or jet fuel. Transitioning to ULSD may initially decrease domestic refining capacity as well. Increased imports are expected to make up for the shortfalls, which would further increase the nation’s dependence on foreign energy. Trucking is committed to meeting the 2007 emission reduction standards of the U.S. EPA, but ULSD will force the industry to spend more money on fuel that is less efficient at a time when current fuel prices are already hitting historic levels. ULSD, for example, is expected to add about 5 cents to the production and distribution of every gallon of fuel reducing fuel economy by up to 1 percent. The U.S. trucking industry currently is on pace to spend $98.3 billion on fuel in 2006, $10.6 billion more than the year prior. The American trucking industry, which transports nearly 70 percent of all freight tonnage in the U.S., requires a reliable source of energy. ATA has called for the expansion of the nation’s refining capacity and the establishment of a single national diesel fuel standard. Access to reserves in Alaska’s Artic National Wildlife Refuge and other offshore exploration also are viewed as critical components of a viable long-term comprehensive national energy plan. The EPA says by addressing diesel fuel and engines as a single system, this action will produce the clean air equivalent of eliminating air pollution from 90 percent, or about 13 million of today's trucks and buses. Once fully implemented, ULSD will result in the annual reduction of 2.6 million tons nitrogen oxides and 110,000 tons of particulate matter. "Drastically cutting the emissions that cause soot and smog, EPA is delivering the American people cleaner engines, cleaner air and cleaner lungs," said EPA Administrator Stephen L. Johnson.
