Fuels / BioDiesel / Diesel Prices Use this forum to discuss your biodiesel information, and to find the best price on fuel.

Diesel Sulpher Rule

Thread Tools
 
Search this Thread
 
Old 03-30-2008, 01:15 AM
  #1  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Diesel Sulpher Rule

This article has info that we all should know about regarding our fuel and what is in it. Some of it may surprise you as it did me......




Diesel Sulfur Rule: Analysis of Rule's Impact on Diesel Fuel Marketers

A Memorandum from Collier Shannon Scott, PLLC to the National Association of Convenience Stores
January 4, 2001

I. Introduction
U.S. Environmental Protection Agency ("EPA") Administrator Carol Browner signed a final rule on heavy duty engine and vehicle standards and highway diesel fuel sulfur control on December 21, 2000. This memorandum summarizes the final rule with particular emphasis on the diesel fuel sulfur control program and the impact this program will have on diesel fuel marketers.

Questions on the final highway diesel sulfur control rule should be addressed to NACS counsel Gregory M. Scott at (202) 342-8646 or at gscott@colliershannon.com.

II. Executive Summary
In general, the final rule mandates that refiners and importers of diesel fuel reduce the sulfur content of this fuel to 15 parts per million ("ppm") by June 1, 2006. There are three notable exceptions to this general rule: (1) a provision in the final rule that permits a refiner or importer to produce a maximum of 20 percent of its highway diesel fuel at the current 500 ppm standard between June 1, 2006 and May 31, 2010 (hereinafter referred to as the "phase-in provision"), with the remainder mandated to meet the 15 ppm specification; (2) a provision that provides refiners supplying the "geographic phase-in areas" (i.e., PADD IV) with an additional two years to comply with the gasoline sulfur reduction mandate, provided that all of the refiner's highway diesel fuel output meets the 15 ppm diesel fuel sulfur mandate; and, (3) a small refiner hardship provision, which permits companies that meet the definition of "small refiner" to continue to produce 500 ppm highway diesel fuel until May 31, 2010, provided that the small refiner certifies that ample supplies of 15 ppm highway diesel fuel will be available in its PADD from other suppliers. By May 31, 2010, all highway diesel fuel must meet the 15 ppm sulfur mandate, and all exceptions to the general rule will expire.

As a result of these exceptions to the general 15 ppm sulfur mandate, two different types of highway diesel fuel will be available between mid-2006 and mid-2010. The final rule mandates that 15 ppm diesel fuel and 500 ppm diesel fuel must be segregated throughout the distribution system, including retail diesel fuel outlets.

For diesel fuel marketers, compliance with the final rule is fairly straightforward, at least at first glance. A marketer may choose to sell either 15 ppm diesel fuel or 500 ppm diesel fuel, or both, from its retail outlets. However, as noted above, the two different types of highway diesel fuel may not be commingled. The final rule does not mandate that a marketer sell either or both types of highway diesel fuel -- EPA has left that issue to the marketplace.

There are no diesel fuel testing and sampling mandates imposed on marketers by the final rule. Instead, diesel fuel marketers will be held to a similar standard of liability that exists in other fuels programs -- i.e., maintenance of product transfer documents ("PTDs") from suppliers identifying the product and taking steps to assure that 500 ppm diesel is not sold as 15 ppm diesel at their outlets. The final rule does mandate that labels be affixed to all retail diesel fuel dispensers identifying the type of highway diesel fuel being sold.

In the preamble to the final rule, EPA states that it will consider an additional rulemaking in the coming years to determine whether different sized dispenser nozzles or color-coded dispenser handles or nozzles will be required to assist consumers in distinguishing between the two different types of highway diesel fuel. However, these mandates are not included in the current final rule.

III. Impact of Final Rule on Diesel Marketers
While compliance with the regulatory requirements of the final diesel sulfur rule should not be onerous for diesel fuel marketers, other, non-regulatory impacts of the rule may affect marketers more severely. First, it will be expensive for refiners to upgrade their equipment to make 15 ppm diesel fuel. Faced with this expense, some refiners -- particularly small- and medium-sized refiners -- may choose to reduce their highway diesel fuel production or exit the on-road diesel market entirely. Consequently, the final rule may have the affect of reducing the number of suppliers of diesel fuel across the nation, as well as the amount of highway diesel fuel available.

Second, EPA's decision to grant exceptions to the general 15 ppm mandate will result in two highway diesel fuels being available to marketers between mid-2006 and mid-2010. NACS strongly opposed EPA's exceptions because they will force marketers to either choose one type of highway diesel fuel to carry (thereby limiting the classes of trade that marketers may serve) or install additional tanks and dispensers to carry both types of highway diesel fuel. Whichever option a marketer chooses, it will cost the marketer money, either through lost business or capital investments.

Third, EPA's decision to phase-in the 15 ppm highway sulfur standard will create logistical problems for the diesel fuel distribution system because the two highway diesel fuels must be segregated throughout the system. It remains to be seen whether both fuels will be available in widespread markets, or whether 500 ppm fuel is available only in some areas of the country where the higher sulfur diesel can be transported directly from a refinery to retail outlets by truck.

IV. EPA's Rationale for the Diesel Sulfur Standard
The target of the final rule is emissions of oxides of nitrogen ("NOx") and particulate matter ("PM") from heavy duty vehicles, such as tractor trailers. As part of the final rule, EPA established an emissions standard for heavy duty vehicles (both gasoline- and diesel-powered) that will reduce NOx and PM emissions by 95 percent. EPA accomplishes these reductions by requiring that the engines of Model Year ("MY") 2007 heavy duty vehicles include emissions reduction devices to remove NOx and PM from these vehicles' exhaust.

EPA has insisted, and has been backed by the manufacturers of heavy duty vehicle engines, that these emissions reductions can only be achieved if highway diesel fuel sulfur content is reduced drastically. EPA has argued that the advanced emissions control devices it anticipates will be installed on heavy duty engines will be "poisoned" and rendered ineffective by the sulfur in diesel fuel if the sulfur level exceeds 15 ppm. Thus, EPA mandated the 15 ppm diesel fuel sulfur standard to take effect in mid-2006 so that this fuel would be widely available to use in MY 2007 heavy duty vehicles -- the model year for which the final rule mandates the new emissions standards take effect.

As a result, MY 2007 heavy duty vehicles will be required under the final rule to use only 15 ppm highway diesel fuel. Pre-MY 2007 vehicles are permitted under the final rule to use 500 ppm highway diesel fuel as long as it is available. According to EPA, pre-MY 2007 vehicles will be able to use 15 ppm highway diesel fuel without performance problems. However, EPA acknowledges in the preamble to the final rule that 15 ppm highway diesel fuel may have to be additized with a lubricity agent if it is to be used in pre-MY 2007 vehicles. EPA expects that the marketplace will determine whether such additization is necessary and that ample quantities of such additives will be available by the time 15 ppm highway diesel becomes widely available in 2005 or 2006.

V. Brief Analysis of Final Highway Diesel Fuel Sulfur Rule for Refiners and Importers
As stated above, the final rule mandates that all refiners and importers produce/import at least 80 percent of their highway diesel fuel to the 15 ppm sulfur standard starting on June 1, 2006. If a refiner or importer chooses to do so, it may produce/import up to 20 percent of its highway diesel fuel volume with a 500 ppm sulfur content until May 31, 2010. At that time, all highway diesel fuel produced/imported must meet the 15 ppm sulfur specification.

A refiner or importer may generate "sulfur credits" for the early introduction of 15 ppm highway diesel fuel or for producing/importing more than 80 percent of its production at the 15 ppm standard. Thus, if a refiner produces 15 ppm diesel fuel in 2005, it will generate one credit for each gallon it produces prior to the 2006 implementation date. Likewise, a refiner that produces only 15 ppm diesel starting in mid-2006 will generate one credit for every gallon of 15 ppm fuel over the 80 percent threshold.

Sulfur credits may be bought and sold by refiners and importers. As a result, a refiner that does not meet the 80 percent production mandate may purchase another refiner's credits to come into compliance with the mandate. All credits must be used by May 31, 2010.

Small refiners are given substantial additional flexibility by the final rule. Small refiners are defined as those companies with fewer than 1,500 employees (company wide) and a production capacity of less than or equal to 155,000 barrels per day in 1999. Small refiners are given until May 31, 2010 to comply with the 15 ppm mandate and can generate sulfur credits for any 15 ppm fuel produced prior to that date. However, in order to qualify for the small refiner flexibility, a small refiner must certify to EPA that adequate supplies of 15 ppm diesel fuel will be available in the areas it supplies between mid-2006 and mid-2010. If the refiner cannot make this certification, then the flexibility will not be granted.

VI. Analysis of the Final Highway Diesel Fuel Sulfur Rule for Diesel Fuel Marketers
1. Implementation Dates
Refiners and importers (with the exception of refiners that qualify for the small refiner hardship provisions of the rule) must begin to produce/import at least 80 percent of their highway diesel fuel at the 15 ppm sulfur standard by June 1, 2006. At the terminal level of distribution, July 15, 2006 is the implementation date. Retail outlets and wholesale purchaser-consumer facilities must comply with the final rule by September 1, 2006.

For downstream parties, these compliance dates are somewhat illusory. Because wholesalers and retailers are permitted to store and market both types of highway diesel fuel, storage or marketing of either fuel does not constitute non-compliance. However, on the compliance dates, downstream parties must be sure that their highway diesel fuels are properly segregated and in compliance with the appropriate sulfur standards and that diesel dispensers are properly labeled to prevent misfueling. In addition, on the appropriate compliance dates, marketers must have PTDs in hand that account for all diesel inventory in their storage tanks and that certify that the fuel is in compliance with the appropriate sulfur standard.

2. Additizing/Blending Diesel Fuel
It is a common practice for diesel fuel wholesalers to blend diesel fuel with another substance, such as an additive, kerosene, or used oil, to improve performance characteristics of the fuel or to dispose of waste products. In general, these practices will be permitted under the final rule for 15 ppm diesel, but with some restrictions. It must be noted, however, that a marketer could face liability for blending 15 ppm diesel fuel with another substance if the resulting mixture's sulfur content exceeds 15 ppm.

a. Blending 15 ppm Diesel with an Additive

Manufacturers of diesel fuel additives are required, under the final rule, to certify that their additives either have a sulfur content at or below 15 ppm or a sulfur content above 15 ppm. The additive manufacturer, and all parties in the additive distribution system, must provide PTDs that contain the following information:

the names and addresses of the transferor and the transferee; the date of transfer; the location at which the transfer took place; and the volume of additive transferred.
if the additive is certified to contain 15 ppm sulfur or less, the following statement must be included on the transferor's PTD: "The sulfur content of this diesel fuel additive does not exceed 15 ppm."
if the additive is certified to contain more than 15 ppm sulfur, the following statement must be included on the tranferor's PTD: "This motor fuel diesel fuel additive may exceed the federal 15 ppm sulfur standard. Improper use of this additive may result in non-complying diesel fuel." In addition, the PTD must include the following information: the additive's maximum sulfur content; the maximum recommended concentration in volume percent for use of the additive; and, the contribution of the sulfur level of the fuel, in ppm, that would result from the use of the additive at this maximum recommended concentration.
b. Blending Diesel with Kerosene

Under the final rule, marketers may blend 15 ppm diesel fuel with kerosene for winterization purposes, as long as the resulting blend continues to meet the 15 ppm sulfur standard. In order to assure that the resulting blend meets the sulfur standard, a marketer must either:

possess and retain PTDs that indicate that both the base diesel fuel and the kerosene met the 15 ppm sulfur standard before blending; or,
test the kerosene to assure that it complies with the 15 ppm sulfur standard, and retain the test results, and possess and retain PTDs that indicate that the base diesel fuel meets the 15 ppm standard.
c. Blending Diesel with Used Motor Oil

The final rule generally prohibits the blending of 15 ppm diesel fuel with used motor oil because motor oil generally has a sulfur content that exceeds 2,000 ppm. Thus, unless the manufacturer of the engine has received a Certificate of Conformity from EPA that certifies the emissions of the diesel/oil blend, this type of blending is prohibited.
Old 03-30-2008, 08:56 AM
  #2  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
That is interesting

I like the part where they determine the refinery size based on 1999 employment numbers. Wonder how much that cost somebody.
Old 03-30-2008, 11:52 AM
  #3  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Did you notice that you are purchasing diesel fuel at the pump mixed with used motor oil?
Old 03-30-2008, 12:49 PM
  #4  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
I didn't see that. I did see this:
The final rule generally prohibits the blending of 15 ppm diesel fuel with used motor oil because motor oil generally has a sulfur content that exceeds 2,000 ppm. Thus, unless the manufacturer of the engine has received a Certificate of Conformity from EPA that certifies the emissions of the diesel/oil blend, this type of blending is prohibited.
I knew that a certain percentage of fuels were blended in the pumping process because that's done by timing.
Old 03-30-2008, 01:52 PM
  #5  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
It says that the wholesaler would mix different additives including used oil to the 500 ppm fuel. But as you say it can't be done with ulsd. Guess that is how Flying J gets better mileage than the others but also dirty filters.
Old 03-30-2008, 07:39 PM
  #6  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
I know my mileage was allot better with the 500 ppm fuel. I may need to call around and see if anyone on my side of town is stocking it.
Old 03-30-2008, 09:34 PM
  #7  
Registered User
 
HOHN's Avatar
 
Join Date: Apr 2003
Location: Cummins Technical Center, IN
Posts: 6,564
Likes: 0
Received 6 Likes on 5 Posts
I'm actually getting better mileage with ULSD-- which I didn't expect.

I like the the lower smoke the ULSD seems to have, too.

jmo
Old 03-30-2008, 10:06 PM
  #8  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Originally Posted by Totallyrad
I know my mileage was allot better with the 500 ppm fuel. I may need to call around and see if anyone on my side of town is stocking it.
The best mileage around here comes from Flying J on Danial Payne Drive. In Temple Georgia they have three lanes designated ULSD, assuming the rest are 500ppm. I do have to add some Howes to keep my injectors from hammering. I also have noticed that sometimes Flying J fuel is a bright green as opposed to the yellowish color. The green seems to be a good mileage. But around here they all fill the tankers in Midfield at the same depot.
Old 03-31-2008, 08:51 AM
  #9  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
I wish the Flying J on DP wasn't on the other side of town from me, I do get better mileage from a fill-up there. I just can't justify the drive over there to buy 35-40 gallons.
Old 03-31-2008, 11:16 AM
  #10  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Rick google Map Quest gas prices and hit the diesel tab. It can be a real eye opener and does include all the off beat diesel sources. There are one or two in the Birmingham area that are much cheaper. One in the Vandever area was at 3.80 last week. Unfortunately I can't get 75 to 80 foot of truck in there or over AL 25.
Old 03-31-2008, 02:04 PM
  #11  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
Just remembered this, a buddy called me a couple weeks ago to tell me he saw a station in Alabaster selling bio in the $3.75 range. I'll try to find out exactly where it's at.
Old 03-31-2008, 08:11 PM
  #12  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Hey great, please let me know if you find it. Next time I am down there I will smell around. I move all the cars for Shorty right there on 119. It is being closed now but he has other lots and auctions. He may know about it.
Old 03-31-2008, 11:25 PM
  #13  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
Diesel hit $3.999 at my exit today. I59 north at the 141, CRAP!
Old 04-02-2008, 10:41 PM
  #14  
Administrator / Free Time Specialist
 
Totallyrad's Avatar
 
Join Date: Nov 2005
Location: Birmingham, Alabama
Posts: 7,707
Likes: 0
Received 14 Likes on 8 Posts
Haulin, I talked to my buddy today and he said the bio was at the Coosa Mart in the 3500 block of Highway 31. The Map Quest fuel map shows it in Pelham. He said it was B-20.

Hohn, I'm surprised by that. The folks I have talked to reported a drop in mileage.
Old 04-03-2008, 12:41 AM
  #15  
Registered User
Thread Starter
 
Haulin_in_Dixie's Avatar
 
Join Date: Nov 2001
Location: Branchville, Alabama
Posts: 4,199
Likes: 0
Received 1 Like on 1 Post
Thanks Rick, I will check it out soon.
Related Topics
Thread
Thread Starter
Forum
Replies
Last Post
cwrhnr
Fuels / BioDiesel / Diesel Prices
16
07-17-2007 06:17 PM
cville6
General Diesel Discussion
2
09-09-2006 11:25 AM
Nitecap
Fuels / BioDiesel / Diesel Prices
2
06-06-2006 02:32 PM
Chip
3rd Gen Engine and Drivetrain -> 2003-2007
16
06-02-2006 09:52 PM
highoutput75
Fuels / BioDiesel / Diesel Prices
27
05-06-2006 08:03 PM



Quick Reply: Diesel Sulpher Rule



All times are GMT -5. The time now is 09:58 PM.