ATA: ULSD transition could create fuel disruptions
May 30, 2006 12:45 PM
The transition to ultra low sulfur diesel (ULSD) could create fuel supply disruptions and operational challenges, as well as add five cents to the production and distribution of every gallon of fuel, according to Bill Graves, president and chief executive officer of the American Trucking Associations (ATA).
In addition, he said that ULSD is expected to reduce fuel economy by up to one percent. "The trucking industry recognizes the critical role that ultra low sulfur diesel fuel plays in ensuring future diesel emission reductions," Graves said. "The industry remains concerned that the transition could cause fuel supply and availability disruptions because it is easily contaminated during transport through a complex system of pipelines and fuel terminals that also transport high sulfur products like home heating oil or jet fuel.
"Transitioning to ULSD also initially may decrease domestic refining capacity. Increased imports are expected to make up for the shortfalls. This would further increase US dependence on foreign energy. Trucking is committed to meeting the 2007 emission reduction standards of the Environmental Protection Agency (EPA), but ULSD will force the trucking industry to spend more money on fuel that is less efficient at a time when current fuel prices already are hitting historic levels."
The transition mandated by the Environmental Protection Agency in efforts to reduce emissions requires that by June 1, 80 percent of the on-road diesel fuel refined or imported must be ULSD. Retail outlets have until October 15 to comply with the rules. The new fuel standard reduces the amount of sulfur in on-road diesel by 97 percent and will support smokeless diesel engine technologies hitting the market in 2007.
ATA said the US trucking industry currently is on pace to spend $98.3 billion on fuel in 2006, which is $10.6 billion more than it spent in 2005. The American trucking industry, which transports nearly 70 percent of all freight tonnage in the United States, requires a reliable source of energy. As a result, ATA has called for the expansion of US refining capacity and the establishment of a single national diesel fuel standard. Access to reserves in Alaska's Arctic National Wildlife Refuge and other offshore exploration also are viewed as critical components of a viable long-term comprehensive national energy plan.
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