State approves transition to low-sulfur diesel fuel in 2006
However, DEC asked the U.S. Environmental Protection Agency for another year to develop a transition plan for rural Alaska.
The rule for ultra-low sulfur diesel will be required across the nation in 2006, but EPA gave Alaska the option of a phase-in plan. Alaska was required to submit its plan April 1.
The federal agency adopted the rule to reduce sulfur particulates and other pollution from trucks and buses, which have been identified as a health hazard in major cities.
"Although we have fewer large trucks and buses in urban Alaska than in other areas of the U.S., these trucks still rumble down our roads, and children still ride on school buses," said Michele Brown, state commissioner of the Department of Environmental Conservation.< Font Face="arial,helvetica" size="2">’Arctic’ grade diesel fuel may come from Canada< Font Face="arial,helvetica" size="1">The big challenge for Alaska with the requirement for ultra-low sulfur diesel fuel in 2006 is getting the special "Arctic" grade needed in Interior, northern and Northwest Alaska, according to Ron King, head of the state Department of Environmental Conservation unit charged with implementing the new rule.
Ultra low-sulfur diesel with a sulfur content of 15 parts per million will be widely available in the Lower 48 when the requirement for its use kicks in. It will cost more after costs of transportation to Southeast and Southcentral Alaska are added, but at least it will be available.
Getting "Arctic" grade diesel at 15 ppm sulfur content will be challenging, King said. In the harsh winters in Interior and northern Alaska, diesel is needed that will pour at temperatures as low as minus 60 degrees, King said.
Diesel made for use in more temperate climates has a higher "pour point," he said. For example, in the Seattle area diesel with a minus 27 degrees pour point is sold. In Minnesota, diesel with a pour point of minus 33 degrees is sold.
King said he has found that refineries in Alberta will be making Arctic-grade diesel at 15 ppm. Canada is also requiring the new ultra low-sulfur fuel be used, and Arctic diesel is needed widely across northern areas of Canada.
However, getting the fuel to Alaska from Alberta won’t be cheap. It could be shipped by pipeline to the Pacific Northwest and then barged to Alaska, or it could be trucked directly to Interior Alaska.
Either way will be costly, King said.
Frank Dillon, executive vice president of the Alaska Trucking Association, said he has been told by the Alberta refiners that, "they will be glad to sell us Arctic grade diesel, and we’ll be glad to truck it, but it will cost more.""Using ultra-low sulfur diesel will reduce air pollution from large trucks and buses, and consequently reduce the risk of cancer, asthma and respiratory illnesses," she said.
Use of lower-sulfur diesel in engines with new emissions-control equipment will reduce particulate matter and nitrogen oxide-gas emissions by up to 90 percent, according to Ron King, chief of the DEC’s non-point mobile air pollution section.
It will, however, add to the cost of diesel for trucks and buses in Alaska, and there will be some loss of fuel efficiency due to the lower energy content of ultra low-sulfur fuel, he said.
Alaska refiners say they will be unable to economically reduce sulfur from diesel down to the 15 parts per million that will be needed for new diesel engines made in 2007 and after, King said.
Alaska’s four refineries are mainly built to manufacture jet fuel, and make smaller quantities of gasoline and diesel. Because diesel is only a small part of what Alaska refiners produce, and a smaller part of that is designated for highway fuel, production of the ultra low-sulfur diesel is not viable, the companies told the DEC in meetings leading up to the decision.
Williams Alaska Petroleum Co. has estimated that it would cost $100 million to install the facilities to reduce sulfur to 15 ppm.
Lower 48 refineries are geared to produce diesel in large volumes, however.
"The EPA has estimated that it will cost Lower 48 refiners about five cents a gallon more to make 15 ppm diesel compared with costs of making conventional diesel," King said.
"However, those costs will be higher when transportation costs to Alaska are added, as well as the costs of special handling to keep the fuel separated from other fuel products."
King said local fuel distributors estimated the delivered cost in Alaska could range from 25 cents to 40 cents per gallon above current diesel fuel prices.
The 15 ppm diesel will have about 3 percent lower energy content per gallon than diesel now being used, King said, but it is possible that calibration of engine settings can make up for this.
The EPA rule is actually directed at diesel-engine manufacturers, who are being ordered to install new pollution control equipment on diesel engines.
The equipment is very sensitive to sulfur content in fuel, however, and cannot tolerate fuel with a sulfur content higher than 15 ppm.
In the Lower 48 diesel is now made with a sulfur content of 500 ppm, to comply with an EPA rule adopted several years ago requiring that level of sulfur.
Alaska is exempt from that requirement, but the only high-sulfur diesel used in the state is that made by Williams Alaska Petroleum Co. at its refinery at North Pole, near Fairbanks, which has sulfur ranging from 300 ppm to about 1,000 ppm, King said.
Much of the diesel fuel used in Southeast Alaska has 500 ppm sulfur because it is shipped to Alaska from the Pacific Northwest refineries.
Tesoro Alaska Petroleum can make 500 ppm diesel because it uses Cook Inlet crude oil, which has a lower sulfur content than North Slope crude.
King said that although the federal rule requires pollution-control equipment on heavy trucks and buses with a gross vehicle weight greater than 8,500 pounds, engine manufacturers have decided to make only engines that require the ultra low-sulfur, 15 ppm diesel fuel.
Frank Dillion, executive vice president of the Alaska Trucking Association, said some new engines requiring the new fuel may start showing up in Alaska as early as 2004.
Truckers will not use higher-sulfur fuel in the new engines, he said. "One tank of high sulfur fuel will ruin a $60,000 new engine," he said.
Dillion predicted that by 10 years from now most diesel trucks in Alaska will have the new engines and use the new fuel.