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Oil industry seeks break on gasoline sulfur limits
Fuel Fix ^ | February 14, 2014 | Jennifer A. Dlouhy

Posted on 02/14/2014 5:22:30 AM PST by thackney

Oil industry lobbyists are making a last-ditch appeal to the Obama administration to soften looming new limits for sulfur in gasoline, warning that without changes, the mandates could send fuel costs up and force some refineries offline.

But the Environmental Protection Agency has shown little appetite to lift the strict 10-parts-per-million cap it proposed last year, one-third the current sulfur threshold and 97 percent less than an earlier limit phased out in 2004.

So when lobbyists from oil companies, refiners and industry trade groups meet with administration officials in coming days, they will focus their arguments on why they should get more time to comply with the limits. The EPA has proposed a January 2017 deadline.

“We’re going to reiterate that we don’t think this rule is technically justified — not based on science or economics or common sense,” said Patrick Kelly, senior fuels policy adviser for the American Petroleum Institute, which is set to meet on Friday with analysts in the Office of Management and Budget.

“But, recognizing that the EPA is moving forward, we’re turning our focus to emphasizing our concerns with the lead time and demonstrating that January 2017 may not be feasible.”

Bad timing

Representatives of the American Fuel and Petrochemical Manufacturers, a refiners’ trade association, will amplify that message when they meet with the OMB Wednesday.

Brendan Williams, the group’s senior vice president of advocacy, said he and his colleagues still will argue against the limits themselves.

“But if they are moving forward, the way the rule is set up poses some big challenges,” Williams said.

The two industry groups say refiners need at least five years before they can strip more sulfur out of gasoline — either by installing new devices called hydrotreaters at an average price tag of $228 million or in some cases by making smaller but still costly upgrades.”

Refineries that have scheduled maintenance periods — or turnarounds — this year wouldn’t have time to prepare to make the changes, and the next planned downtime might be years away.

And the industry groups say it makes the most sense to perform the needed construction during those turnarounds, working within normal maintenance schedules.

“It does take a lot of time to go through the process of planning, designing, engineering, constructing and tying in a new unit or units into a facility,” Kelly said. “These are not off-the-shelf technologies.”

Cleaner cars

Supporters of the EPA rule say the changes are necessary to improve air quality and public health. Beyond lowering the sulfur content of gasoline, the rule would set new vehicle emissions standards and align the U.S. requirements with the stricter ones in California, effectively allowing automakers to sell the same vehicles in all 50 states.

Automakers say any move to relax the deadline would prevent them from selling the same cars nationwide beginning with the 2017 model year.

The fuel change would allow them to build cleaner combustion engines, as lower sulfur fuel allows catalytic converters to work more efficiently, causing fewer tailpipe emissions.

And some state and local governments view the new mandates as essential to attain existing air standards — much less the tighter ozone requirements EPA is considering.

Even in areas with heavy traffic — where automobiles are a major source of smog — local governments are largely limited to focusing their attention on industrial facilities and other stationary sources of pollution. Curbing vehicle pollution would help those regions hit air quality targets.

“This is the best tool available to EPA to reduce smog-forming pollutants such as nitrogen oxides,” said Frank O’Donnell, president of Clean Air Watch. “Literally every car on the road would pollute less.”

Consumer costs

The EPA says the requirements — on track to be finalized by the end of the month — could hike the price tag for vehicles by about $130 in 2025 and ultimately add a penny per gallon to the cost of gasoline.

By contrast, a study by Baker & O’Brien commissioned by the oil industry said gasoline prices could climb by 6 cents to 9 cents, as the industry spends $10 billion on new infrastructure to comply with the rule and an additional $2.4 billion in annual operating costs. Kelly, of the American Petroleum Institute, said the capital costs probably would be “significantly higher” under a 3-year timetable not contemplated by the Baker & O’Brien analysis.

“We already knew it is an expensive rule,” Kelly said. “If they proceed with this 2017 date, it’s really only going to exacerbate the problems we’ve identified already.”

Beyond the oil industry, plenty of interests are doing last-minute lobbying on the rule. For instance, on Feb. 3, the makers of emissions control equipment made their pitch to the Office of Management and Budget.

TOPICS: News/Current Events
KEYWORDS: energy; oil; refinery; ulsg
Links to related stories at the source.

If you liked the price hikes that came with Ultra-Low Sulfur Diesel (ULSD), you are going to love the new gasoline price hikes.

1 posted on 02/14/2014 5:22:30 AM PST by thackney
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To: thackney

Lower sulfur would make for cleaner, longer lasting lubes...

2 posted on 02/14/2014 5:39:09 AM PST by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: thackney

I was out shoveling snow yesterday (for hours and hours). I got a pretty good sampling of foul odors from the passing cars — I swear they smell worse every year. Some of these gases and fumes can make me, a macho chemist, ill with one whiff. I get the feeling that every time the formula is “improved”, it gets far worse. The exhaust odors, if I smelled them in the lab, would make me turn on the “big” fan (the fan that makes the walls creak.)

The environmentalists are going to kill us all.

3 posted on 02/14/2014 5:53:40 AM PST by Born to Conserve
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To: Eric in the Ozarks

I had not seen that as a claim in the implementation of ULSD.

Keep in mind gasoline already has very little sulfur allowed in it already.

The change will go from 0.003% to 0.001% sulfur. 30 parts per million = 3 thousandths of 1%.

4 posted on 02/14/2014 6:44:12 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
Sulfur content in fuel is a big issue in big marine engines. These engines also consume a portion of the lube oil and the combination can produce acids that attack bearing surfaces.
There are about 79 thousand ships in the world's merchant fleets. They operate mostly on heavy oil but there is some evidence of a move toward more expensive low sulfur diesel. This cost is partially offset by reducing cruising speed from 25 knots to 18-20 knots.
5 posted on 02/14/2014 7:17:28 AM PST by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: Eric in the Ozarks

But isn’t that stuff more than 500 ppm, except in the states?

I was thinking US gasoline was already so low in sulfur the users would not notice a difference.

6 posted on 02/14/2014 7:57:19 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
The black oil can be a high as 4 percent from what I've heard. Amazingly, they can re-bore the motors and keep on chugging...
7 posted on 02/14/2014 8:17:25 AM PST by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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To: Eric in the Ozarks

Oh wow, that is likely no treatment at all.

In EPA speak, 40,000 ppm versus the 30 ppm in gasoline today.

8 posted on 02/14/2014 8:31:57 AM PST by thackney (life is fragile, handle with prayer)
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To: thackney
Not exactly the mother's milk from the hydrocracker...
9 posted on 02/14/2014 11:09:04 AM PST by Eric in the Ozarks ("Say Not the Struggle Naught Availeth.")
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