NTTC, PMAA discuss ULSD challenges
Mar 23, 2006 12:23 PM
The National Tank Truck Carriers (NTTC) and the Petroleum Marketers Association of America (PMAA), along with several other associations, met with Senate Energy Committee staff recently in an effort to educate them on the new rule regarding ultra low sulfur diesel (ULSD) and its impact on the industry.
"While we are not specifically seeking legislative relief, we are making an effort to keep congressional members and staff properly informed about impacts of this major rulemaking on matters that the Environmental Protection Agency (EPA) did not seem to take into account," says Tom Lynch, NTTC vice-president and general counsel. "Practices like dedicated equipment, if necessary, could foreseeably lead to increased transportation costs and higher prices at the pump."
Beginning in June of this year, at least 80 percent of the diesel manufactured by refiners will be ULSD, with the remaining produced as LSD. The retail compliance deadline is October 15, 2006.
PMAA said that the transition to ultra low sulfur diesel (ULSD) is by far the most challenging transition the petroleum industry has ever faced.
"While until now, much of the focus has been on producing the new product, major challenges remain to be dealt with below the rack -- by the trucking industry, petroleum marketers, and retailers," PMAA said.
Because ULSD is prone to pick up contamination as it travels through the distribution system, refiners are planning to produce ULSD at between 8 parts per million (ppm) to 10 ppm. Most terminal operators are expecting that by the time it reaches the rack to be loaded into trucks, it will likely be at 15 ppm.
"This leaves no margin for error in transporting compliant product to retail locations," PMAA said.
The group also expressed concern that should there be regional supply disruptions such as those that occurred with last summerís hurricanes, EPA will not have as much flexibility to grant diesel sulfur waivers since new diesel engines are required to use ULSD.
PMAA said that possible supply problems could occur with either ULSD or low sulfur diesel (LSD) in certain geographic areas, consumer acceptance of ULSD, and price differentials between the two products driving consumers to one product, creating temporary shortages. Also, the ruleís downgrading provisions limit the flexibility of retailers to switch back and forth between fuels based on availability.
PMAA recently issued an updated memo on ULSD. For a copy, marketers should contact their state associations.
© 2013 Penton Media Inc.
Acceptable Use Policy blog comments powered by Disqus