Fuels

ULSD Arrives

Retailers cautious, but supply problems not expected

WASHINGTON -- Ultra-Low-Sulfur Diesel (ULSD) is now available for consumers at the pump, the U.S. Environmental Protection Agency (EPA) said earlier this week.

The EPA called ULSD the single, most far-reaching environmental and public health achievement since lead was removed from gasoline 25 years ago.

On June 1, refiners and fuel importers were required to start producing ULSD, which contains 15 parts per million (ppm) sulfur, down from 500 ppm. ULSD fuel is already the primary diesel fuel produced in the United States, representing [image-nocss] about 90% of highway diesel production. By October 15, many retail stations will complete their transitions to ULSD fuel.

Only ULSD fuel will be allowed for highway and virtually all off-road vehicles by 2010, and by 2014, all highway non-road, locomotive and marine diesel fuel will be ULSD.

This clean-burning fuel has 97% less sulfur and will deliver billions of dollars in environmental and public health benefits, the EPA said. Under the Bush Administration's clean diesel rules, ULSD combined with new engine technology will not only enhance environmental protection, but will also prevent nearly 20,000 premature deaths and tens of thousands of cases of respiratory ailments such as bronchitis and asthma, the agency added.

The availability of cleaner-burning diesel at the pump will allow for the use of new pollution control technology in cars, trucks and buses. The clean diesel rules are addressing diesel fuels and engines as a single system that will reduce air pollution from diesel engines by more than 90%--or about 13 millionof today's trucks and buses. Once fully implemented, ULSD will result in the annual reduction of 2.6 million tons of nitrogen oxides and 110,000 tons of particulate matter, said the EPA.

This new fuel will help to open up markets to clean-diesel passenger cars, pickup trucks and delivery vehicles that are 30% more efficient than current fleets with similar reductions in carbon dioxide emissions. In addition to the fuel economy and carbon emission benefits, a new fleet of clean-diesel vehicles will have lower maintenance costs, longer engine life and typically lower fuel costs, the EPA said.

When fully applied, clean diesel fuels and engines will result in more than $70 billion annually in environmental and public health benefits at a fraction of the cost ($4 billion per year), said the agency. Expanded use of ULSD also will enhance energy security since diesels tend to be more fuel efficient than gasoline engines.

The U.S. oil and natural gas industry is proud of its role as the great enabler in bringing the nation the cleanest diesel fuel in the world, API president and CEO Red Cavaney said at the official launch of national availability of ULSD fuel. Cavaney joined EPA Administrator Steve Johnson at the corporate headquarters of diesel engine maker Cummins Inc. at a ceremony marking the rollout of the ULSD retail program.

Thanks to the hard work and investment of more than $8 billion by the refining industry, we are now producing the cleanest diesel fuel in the world, he said. API member companies are justifiably proud of this achievement and of the major environmental benefits that will result from the 97% reduction in diesel sulfur content. This effort has been bolstered by our industry's close working relationship with EPA and vehicle technology advances by automakers.

He added, The ULSD fuel being produced today enables the use of cleaner technology diesel engines and vehicles with advanced emissions control devices, resulting in significantly improved air quality. In fact, auto and engine manufacturers will begin producing clean diesel vehicles with the 2007 model year. Use of these vehicles will lead to a 90% reduction in emissions, compared to today's trucks and buses, once the vehicle fleet has completely turned over.

Though this change is arguably the most costly and complex change ever experienced in the U.S. fuels market, the implementation of the ULSD program has been smooth thus far with no significant problems or issues concerning either supply or vehicle performance. In no small part, this was aided by EPA's willingness to work with industry to identify and fix potential problems early onbefore they had a chance to impact the market and consumers, Caveney said.

Some retailers have been concerned about the availability of the new fuel, the testing required to ensure it falls within government specifications and potential fines that could be levied for violating the rules, Michael O'Connor, president of the Virginia Petroleum, Convenience & Grocery Association, told the Richmond (Va.) Times-Dispatch.

Dave McComas, CEO of Fas Mart Convenience Stores, told the newspaper that the Mechanicsville, Va.-based chain will not be labeling its diesel pumps as ULSD until enough of the new fuel has gone through station tanks to ensure that the old fuel is gone and until his stations are assured a stable supply.

Michael Ward of the Virginia Petroleum Council, which represents oil refiners, told the paper that he has not heard about any supply problems.

For more information on the EPA's clean diesel programs, click here.

The EPA is a member of the Clean Diesel Fuel Alliance, a stakeholder group dedicated to providing the public ULSD-related information.

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