Taken from large pipeline and terminal company:



Ultra Low Sulfur Diesel:
Roadblock or Opportunity?

When it comes to Ultra Low Sulfur Diesel (ULSD), here's some fuel for thought. In 2000, the Environmental Protection Agency (EPA) introduced a Clean Air Act that requires two things. First, it establishes new exhaust emission standards for heavy-duty highway vehicles (2007 models). Second, it sets new fuel quality standards for highway diesel. The goal is to improve air quality by reducing a significant amount of nitrogen oxide emissions and particulate matter from diesel exhaust.

The current highway diesel standard allows diesel to be produced with as much as 500 parts per million (ppm) sulfur. However, the new highway diesel standard will reduce the sulfur concentration to a maximum of 15 ppm. This combination of new heavy-duty vehicle emission standards and the use of ULSD will decrease tailpipe emissions, resulting in cleaner air.

Timeline
The standard requires 80 percent of on road diesel produced this year to be ULSD (15 ppm sulfur limit). The remaining 20 percent can meet the current sulfur limit of 500 ppm. In 2010, however, all on road and off road diesel must meet the ULSD standard.

The EPA granted a transition period for companies to develop their plans, and what started six years ago is coming to fruition. Engine and vehicle manufacturers are phasing in 2007 models that meet the emissions mandate, while refiners will produce the new ULSD grade starting June 1. Pipeline companies are modifying their systems to ship ULSD so 15 ppm sulfur diesel will be available at service stations by October 2006.

Did you know?

“On road” diesel - used by highway vehicles, such as trucks and buses (500 ppm).
“Off road” diesel - used by other vehicles on railways or water, such as tractors, locomotives or marine vessels. By the year 2014, off road diesel is required to meet the 500 ppm sulfur standard.Popular Mechanics
Kinder Morgan is working closely with customers to understand their needs and is making the necessary operational changes to be in compliance. One example is the new 8 ppm "entry spec." Traces of sulfur from other high sulfur fuel shipments, such as turbine and high sulfur diesel, can easily contaminate and cause the ULSD to exceed the 15 ppm. The products pipelines group found a solution by establishing a maximum sulfur content of 8 ppm for ULSD that provides a buffer should inadvertent commingling with residual high sulfur fuels occur.

Other preparation activities include running ULSD test batches, upgrading and installing new equipment and implementing new processes at transmix and products terminals. Some of the most important equipment installations are new lubricity injection systems.

Despite the lack of sulfur (which acts as a natural lubricant), transporting ULSD with low lubricity won't damage pipelines, but will present a different set of challenges. New diesel engines will require lubricity additives to make up for the loss of lubricity in ULSD. However, recent pipeline studies have shown that additives used to improve lubricity can trail back and contaminate jet fuel during shipments. Kinder Morgan cannot allow lubricity additive in the pipelines, and has resolved this issue by modifying terminals for lubricity injection into tanks, or injecting the lubricity agent at terminal truck racks.

Although the road may be paved with good intentions, skeptics believe that the ULSD initiative may not survive the long haul. Some say refinery retrofits could drive producers out of business leading to fuel shortages. Others predict increased prices at the pump and more expensive vehicles. Only time will tell. Meanwhile, Kinder Morgan supports the EPA mandate and remains on a fast track to deliver ULSD to customers.

 

I also work in the industry and right now our lobbyist is in Washngton to get a compromise to allow a higher consetration of sulfer if we carry a set amount of bio in our diesel. Consistant test have shown that with just 5% bio added to a higher consetration of sulfered diesel has better aeromatics, lower soot levels, and lower NOX. And would be inline with the levels of ULSD but with higher lubricity.

 

Talk about BD being added for lubricity in ULSD has been around for awhile but the problem is it has to be added at the end of the pipeline so as to not contaminate jet fuel. Presents a new set of hassles if even just 1% of our diesel (BD) has to travel by truck or new dedicated pipelines built.

Interesting thing I was reading yesterday is that part of the reason for high diesel prices in the last year is that many refiners who have already switched to ULSD are shipping it to Europe where they are short and US refiners can make more money. There goes the theory that the reason for high prices in the US are due to lack of new refineries here.
Good old supply and demand keeping prices high.