API supports GTL diesel 'EPAct' petitions, but comments show 'boutique fuel' worries

Diesel Fuel News, Dec 9, 2002 by Jack Peckham

American Petroleum Institute (API) this month told U.S. Department of Energy (DOE that it "generally supports" petitions to include GTL diesel (made from non-U.S. gas) as an "alternative fuel" under the Energy Policy Ac ("EPAct").

Such a designation would open up more possibilities for Fischer-Tropsch diesel (FTD) tc participate in some fleet fueling markets in the U.S., and might pave the way for wider use of FT fuel in related markets (see Nov. 2002 GTLN, p9).

That API would support GTL diesel shouldn't be surprising since some of its biggest members are keen GTL proponents, including ExxonMobil, Shell, ConocoPhillips, Chevron-Texaco and others.

However, API refiner members also are worried about states such as Texas mandating "boutique fuels" in order to earn "state implementation plan" (SIP) emissions credits from U.S. EPA. That's why API says it's worried about the method DOE is using to determine whether FTD meets "EPAct" requirements.

To qualify under EPAct, a fuel must be "substantially not petroleum" (not refined from crude oil and associated refinery feedstocks), yield energy security benefits and provide "substantial environmental benefits."

While FTD is indeed not from crude oil, and can offer energy security benefits, the environmental benefits aren't necessarily uniform across the entire diesel engine/vehicle fleet, API warns.

While nobody disputes that FTD can reduce particulate matter (PM) emissions, the amount of nitrogen oxides (NOx) benefit across the entire diesel engine fleet isn't so clear.

"API concurs with the DOE statement that a 6% reduction in NOx emissions should be considered 'substantial' with respect to the EPAct criteria . . . [but] while a 6% reduction may be considered 'substantial, it is not supported or validated by the existing database of published FTD emissions test results," API's letter to DOE says.

The letter specifically cites EPA's 6% NOx reduction benefit granted to Texas for its "CARB-like" diesel program that's supposed to take effect in 2005. Refiners oppose this measure and likewise raised strenuous objections to it at EPA's diesel fuel parameters/emissions effects workshop last year (see Diesel Fuel News Diesel Fuel News 11/12/01, p7; 10/29/01, p1).

"In fact, the eight light-duty engines/vehicles in the database developed and analyzed by NREL [National Renewable Energy Lab, for the EPAct study] are over-represented as more than 95% of diesel fuel is consumed by heavy-duty applications in the U.S.," API points out.

Meantime, the net emissions value of FTD might be overstated once refiners shift to ultra-low sulfur diesel (ULSD) for EPA 2006 requirements, API said. This ULSD shift might not only reduce sulfur, but also cause other diesel property changes with possibly some minimal emissions benefits across the existing diesel fleet.

What's more, newer diesel engines -- especially the low-Nox engines that debuted in the U.S. highway diesel market last month -- increasingly will dominate the U.S. diesel fleet. FTD emissions test databases to date don't represent the growing impact of this cleaner, low-NOx fleet, API argues.

"And there is evidence that suggests that the emissions response to fuel properties other than sulfur for newer technology heavy-duty engines is much lower than that of older engines," API says, citing a recent Society of Automotive Engineers paper.

Nor should DOE set specific limits on certain properties of FTD in order to qualify an FTD for EPAct status, API says.

As Shell and others have asked, API urges DOE to include blends of FTD and conventional diesel for partial EPAct credit, although DOE argues that anything less than 50% isn't "substantially not petroleum."

"The U.S. Congress has established precedent for the use of blended material by adopting a special statutory provision allowing limited use of 20 vol% biodiesel blends for partial EPAct compliance," API points out. "Given these considerations, API believes that DOE should expand the alternative fuels designation to include blends of conventional diesel fuel containing FTD as low as 20 vol%."