'Tell It Like It Is' Panelists See Clean-Diesel Deadline Problem

Diesel Fuel News, Nov 13, 2000 by Jack Peckham

"Auto, EPA, and DOE bought into a construct in which diesels must meet Tier 2 [light duty] standards, with one diesel fuel," McNutt pointed out, "and we were blown off" on an earlier suggestion that EPA should require a special ULSD for light-duty cars. Now, DOE is proposing a five-to-seven-year phase-in of ULSD that would fuel both light- and heavy-duty diesels.

"You can debate whether these [exhaust treatment] technologies will get you there [to EPA standards] or not, but EPA's left us one escape hatch: a technical review on heavy-duty diesels" around 2002 or so.

"But the light-duty standards are fixed," which raises questions about whether the technical review could still leave the auto industry with a diesel fuel that's unsuitable for meeting light-duty Tier 2 limits, or else leave the heavy-duty industry with an exceptionally costly ULSD. Or maybe, both.

"We believe you need a cleaner diesel for both light-duty and heavy-duty," EPA's Oge responded. "You can't get either to Tier 2 or the heavy-duty standards without one clean fuel, though Tier 2 is not driving the heavy-duty standards. It's the heavy-duty emissions driving that. So we're not doing this just to fulfill what the auto industry wants."

One refinery technology developer in the Hart audience pointed out that if the U.S. government really wants better fuel efficiency, energy security and good public health, then perhaps the emergence of ultra-clean electric hybrid vehicles could slash oil demand by up to 3 million barrels/day, "get oil down to $20/barrel and save $15 billion a year on oil import cost" as well as make a solid contribution to global-warming reduction.

Such savings might justify European-style tax credits for advanced technology, which raises the question: Is government the real customer for clean-diesel and hybrids?

"I do agree with you that this could have a big impact, that such technology could add to fuel economy and greenhouse gas reduction," EPA's Oge said. "But the customer is the public. We got thousands of comments on our proposed rule, and they're asking us why don't we set these diesel standards earlier than 2007?"

At the same time, "consumers are incredibly irritated with high fuel prices," McNutt pointed out.

"As for the tax credit question, the question is: how to get this fuel into the market? Tax policy to bring ULSD to market has been and is being discussed. EPA's official position is that tax policy is not their business, but it is [presidential] administration business. I'm not advocating it. I'm saying we should have a discussion about that. Tax policy is really income transfer, and if it means less cost [for ULSD], then we need to look at that."

"I have an interest in surviving," United's Moos pointed out. "There are still small refiners, but there aren't any small auto-makers anymore. And I was never invited to your auto/oil [fuels/engines/technology] discussions. A refiner of our size -- we're 65,000 barrels/day -- it will cost us $25-30 million just for 30 ppm sulfur gasoline, and if we face a similar limit on diesel, then I don't think we can do it."