ULSD? No Worries

New ultra-low sulfur diesel fuel will be ready for prime time

Few issues are more important to U.S. refiners and fuel consumers than ultra-low sulfur diesel fuel (ULSD). It is difficult to overstate the importance of diesel fuels to our nation's economy: according to the U.S. Department of Energy, Americans consume 46 billion gallons of diesel fuel each year. Diesel fuel is America's primary commercial fuel; 70 percent of the nation's goods are transported in diesel-powered vehicles.

The U.S. Environmental Protection Agency (EPA) is requiring refiners to produce a new fuel that represents a 97 percent reduction from the current highway diesel fuel sulfur level beginning in mid-2006. This is a major fuels change, presenting significant technological challenges for refiners, but also providing major environmental benefits for our nation.

While concerned about potential transitional problems in the supply of diesel, the American Petroleum Institute (API) strongly supports the rule's emissions reduction objectives and is opposed to any delay in its implementation. We have worked with EPA to improve the phase-in of the rule and coordinate it with the new non-road diesel requirements.

API also strongly supports EPA's non-road diesel rule because it will deliver significant emissions reductions to consumers on a schedule that is feasible for the nation's fuel suppliers. This aggressive rule will reduce diesel sulfur content for the fuel used in non-road diesel vehicles by roughly 90 percent from current levels in 2007—the shortest possible time for refiners to make the necessary changes.

Early on, API's member companies decided to work with EPA to come up with a non-road rule that would meet the nation's environmental objectives and minimize negative impacts on U.S. consumers. We believe that our work and that of other stakeholders has resulted in a rule that balances fuel supply needs, environmental goals, and societal expectations.

But the highway and non-road rules also present some difficult technical challenges for the industry. Recent pipeline tests indicate a significant potential for sulfur contamination that may cause diesel sulfur levels to exceed the standard and the tolerances allowed by the regulations. In response, EPA has provided for flexibility during the transition to ULSD fuel and EPA actions have reduced the probability of contamination at the outset of the program.

Engine and vehicle manufacturers expect ULSD fuel to be fully compatible with the existing diesel-powered fleet, including 2006 and earlier model year vehicles. In some cases, the introduction of ULSD fuel to older vehicles may affect fuel system components or loosen deposits in fuel tanks. As part of a good maintenance program, owners and operators should monitor their diesel-powered cars, trucks and buses closely for possible fuel system leaks or premature fuel filter plugging during the changeover to ULSD fuel.

Like low-sulfur diesel, ULSD fuel requires good lubricity and corrosion inhibitors to prevent unacceptable engine wear. As necessary, additives to increase lubricity and to inhibit corrosion will be added to ULSD fuel prior to its retail sale. With these additives, ULSD is expected to perform as well as low-sulfur diesel.

Meeting the challenges of diesel sulfur requirements has imposed high costs on the oil and gas industry, which has already been making massive investments in environmental protection. From 1993 to 2002, API estimates the industry spent almost $89 billion to protect the environment. The industry's investments currently underway on diesel sulfur requirements alone in this decade will be considerable: $8 billion for gasoline sulfur reductions; another $8 billion for highway diesel sulfur reductions; and more than $1 billion for non-road diesel.

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