... refiners need four years' notice to begin production preparations.
May 9, 2001 The Energy Information Administration released a report Monday that shows the possibility for a tight diesel fuel market in 2006, the year new sulfur requirements are to be phased in through a regulation adopted in the final days of the Clinton presidency and later endorsed by President Bush. The report, called for last summer by then House Science Committee Chairman James Sensenbrenner (R-Wisc.), discusses the implications of the new regulation for vehicle fuel efficiency and examines the technology, production, distribution and cost implications of supplying diesel fuel to meet the new standard. Both short and mid-term effects are calculated, a first of its kind analysis in examining data year by year from 2006 to 2015, said James Kendell, the director of EIA's oil and gas division and the study's manager. To meet the new standards by 2006, the report says on the supply side that some of the current ultra low sulfur diesel (ULSD) producers would need to expand production while at least one refinery not currently producing the fuel would also need to enter the market. On the price side, the 2006 scenario says some refiners may be able to produce the fuel at a cost of an additional 2.5 cents per gallon, however at the volumes needed to meet demand, costs are estimated to be between 5.4 and 6.8 cents per gallon higher. Costs could be greater if the supply falls short of demand and consumers start bidding up the price. Between 2007 and 2010, the report shows prices rising an average of 6.8 cents per gallon. Prices will still be higher between 2011 and 2015, though at a slightly lesser average of 5.4 cents per gallon. The diesel rule requires a 97 percent reduction in sulfur content in fuels sold for heavy duty trucks and buses, decreasing the pollutant's levels from 500 parts per million (ppm) to 15 ppm. The ULSD fuel must be retailed by June 1, 2006. According to the Environmental Protection Agency, implementing the rule would annually reduce 2.6 million tons of smog-causing nitrogen oxide emissions and 110,000 tons of soot, or particulate matter. It would also prevent an estimated 8,300 premature deaths, 5,500 cases of chronic bronchitis and 17,600 cases of acute bronchitis in children each year. A coalition of environmental, state and industry groups has supported the rule, including the Alliance of Automobile Manufacturers, American Lung Association, Clean Air Network, International Truck and Engine Corp., Manufacturers of Emission Controls Association, Natural Resources Defense Council, Sierra Club and the State and Territorial Air Pollution Program Administrators. Oil company BP Corp., which has been marketing low-sulfur diesel in the United States since the summer of 1999, has also pledged its support for the rule. But there has also been criticism. The National Petrochemical Refineries Association, American Petroleum Institute, National Association of Convenience Stores, Society of Independent Gasoline Marketers and the technology group ANTEK all filed suit against the rule earlier this year in the U.S. Court of Appeals for the D.C. Circuit. Bob Slaughter of NPRA said his organization objects to the costs that will come in complying with the rule as well as the time frame required for implementation. The uncertainty which the EIA report refers to is a "point we've been making during the regulatory process and since the rule was made final," he said. Slaughter said EPA insufficiently studied the costs before adopting the rule and that there is still an opportunity for the agency to reconsider the standard by allowing a third party, such as the National Academy of Sciences, to conduct its own independent review. Such a study "must be done expeditiously," Slaughter added, because refiners need four years' notice to begin production preparations. Meanwhile, Frank O'Donnell, executive director of the Clean Air Trust, said he is concerned the EIA study will serve as ammunition for industry groups, as well as the Bush administration, to undo the rule. Pointing to past EIA reports cited by President Bush and Vice President Cheney in their decisions to exclude carbon dioxide in any mandatory emission caps for power plants and a recent call for a massive expansion of energy production facilities, O'Donnell said, "It raises real doubts about the Bush administration's intentions about the clean diesel standards. Will this lead to yet another flip-flop?" Greg Dana, vice president for environmental affairs at the Alliance of Automobile Manufacturers, said the diesel rule should not be delayed. Instead, he said his group is petitioning EPA to move up the start date for ULSD to 2004, because the fuel allows newly created technologies to be used at their cleanest and most efficient. Specifically, he said the clean fuel is needed for implementation of Tier II standards for light duty trucks and buses. Reaction to the study was tepid on Capitol Hill, where the 100-page study was still being reviewed by key members and their staffs. David Goldston, majority chief of staff for the House Science Committee, would only say the panel's new chairman, Rep. Sherwood Boehlert (R-N.Y.), has long supported the diesel rule. "It's going into effect," Goldston said. "There's nothing that needs to be done." Sensenbrenner, now chairman of the House Judiciary Committee, was traveling back to Washington and could not be reached for comment. ------------------------ Yahoo! Groups Sponsor ---------------------~--> 4 DVDs Free +s&p Join Now http://us.click.yahoo.com/pt6YBB/NXiEAA/MVfIAA/FGYolB/TM ---------------------------------------------------------------------~-> Biofuel at Journey to Forever: http://journeytoforever.org/biofuel.html Biofuels list archives: http://archive.nnytech.net/ Please do NOT send Unsubscribe messages to the list address. To unsubscribe, send an email to: [EMAIL PROTECTED] Your use of Yahoo! Groups is subject to http://docs.yahoo.com/info/terms/
