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

Diesel Fuel News, Nov 13, 2000 by Jack Peckham

As for the potential impact on consumers of losing many small refiners, "if one large refinery goes down, it can easily cause a 5 cent/gallon price spike, and if it's 5-10% [diesel capacity represented by small refiners] that goes down then you'll get a huge cost. So it's important to retain that 5-10%."

Government programs such as DOE's ultra-clean fuels initiative eventually may deliver lower-cost desulfurization technologies to small refiners, while other new government programs might help small refiners finance the ULSD investments, he said. If such programs avoid disastrous price spikes, then "the public might get a bargain" from government-supported technology investments, he said.

"We support fiscal incentives for refiners on this," Alliance of Automobile Manufacturers environmental issues official Ellen Shapiro pointed out. "We support EPA's rulemaking -- it's a good, strong first step. But I was a little disappointed that the focus is almost exclusively on sulfur rather than other fuel parameters, and we'd like higher cetane as much as we want a catalyst enabler with lower sulfur."

"We've received your comments and we're in the process of review," Oge responded. "Our focus is what fuel quality will enable aftertreatment" in order to meet the proposed emissions limits.

* Euro Refiner Advantages

"This is not the first time the autos have talked about cetane," United's Moos pointed out, conceding that Europe has a far greater diesel penetration in light-duty than in the U.S.

However, European refiners have inherent advantages over U.S. refiners for producing higher-cetane diesel including greater availability of low-sulfur, highly paraffinic crudes, and much less LCO in the distillate stream. By contrast, U.S. refiners tend to run heavier crudes and produce lots of LCO and coker gasoil at less than 30 cetane.

"And where do you dump the worst of that 'decant' oil?" Moos asked. "For inland refiners, there's no market for No. 6 oil, and the only market on the coast is for bunker oil. You can't get rid of it unless you install a 2,000 psi hydrocracker and a new hydrogen plant -- and we can't afford that, unless you want all the small and mid-size refiners to go out of business."

* Lube oil sulfur debate

Meantime, while refiners may need to spend billions desulfurizing fuel, this could be all for naught if lubricant-borne sulfur wrecks vehicle catalysts.

"We have an aggressive plan to cut sulfur and phosphorous in half for GF-4 [industry-wide lube oil standards], and lube oil sulfur [in exhaust] today represents the equivalent of 3-4 ppm fuel sulfur," DaimlerChrysler's Beard said.

"Yes, we do have concerns with lube oil sulfur," International's Slodowske added. "The Advanced Petroleum Based Fuels program between DOE, EMA, API, additive companies and MECA, we're all going to approach this on an industry-wide basis. I expect new engine oil for the 2007 engine technology."

As for pipeline contamination of ULSD, Chevron product engineer Harry Hall pointed out that "it's going to become more difficult because of the spread of 'boutique' fuel standards. The U.S. has the most efficient fuel distribution in the world, but it's difficult for pipelines to control quality. Some pipelines don't push it that close, while others set stringent quality control. Sometimes we don't get what we expect when we buy product off pipelines," he said. "We'd like to see one diesel fuel, as well as minimum gasoline grades, and one jet fuel."