Maryland Bar Bulletin
Publications : Bar Bulletin : June 2007

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 Bar Bulletin Focus

Enviromental Law    

Perhaps you have noticed a green and white label on the diesel fuel pump at your service station. The label notes: ULTRA-LOW SULFUR HIGHWAY DIESEL FUEL (15 ppm Sulfur Maximum) required for use in all model year 2007 and later highway diesel vehicles and engines. This label is the manifestation of the Environmental Protection Agency’s (EPA) Heavy-Duty Highway Diesel Rule (a.k.a. 2007 Highway Rule). The rule, which was published in January 2001, provided a lead-time of almost six years to allow diesel engine manufacturers and refiners sufficient time to make the changes needed to meet the new emission limits. Moreover, the rule is one of many such rules issued pursuant to the Clean Air Act Amendments of 1990 aimed at reducing emissions from all types of diesel engines.

Diesel engines emit nitrogen oxide (NOx) and particulate matter (PM), or soot. NOx contributes to the formation of ground-level ozone or smog. Smog and PM cause a number health problems related to breathing, and children, the elderly and those with respiratory diseases are at greatest risk. EPA estimates that the 2007 Highway Rule will reduce NOx emissions by 2.6 million tons per year and PM emissions by 110,000 tons per year. Health benefits include the avoidance of 8,300 cases of premature death, 5,500 cases of chronic bronchitis and 17,600 cases of acute bronchitis in children each year.

The 2007 Highway Rule addressed the engine and the diesel fuel as a single system. A key element of the emission-control scheme was the reduction of the sulfur content of the fuel. Prior to 1993, there was no sulfur content limit on highway diesel fuel. That year, EPA limited the sulfur content to a maximum of 500 parts per million (ppm). This diesel fuel is known as low-sulfur diesel. However, to achieve the emissions reductions called for in the 2007 Highway Rule, a drastic reduction in sulfur content was required. This is because sulfur interferes with the engine emission-control technology required to control NOx and PM. The rule required a 97 percent reduction in the sulfur content of fuel with a maximum 15 ppm of sulfur. This fuel is called ultra-low sulfur diesel (ULSD).

There were two problems in meeting ULSD requirement. First, refiners need time to modify their refineries to produce ULSD. Second, a program was needed to assure that the ULSD was not contaminated with higher sulfur content fuel in the diesel fuel distribution system. Certain diesel fuels, such as home heating oil, can continue to have high sulfur content. The diesel fuel distribution system consists of pipelines, barges, tank cars, terminals and tank trucks that transport diesel from the refinery to the service station. Most of this equipment is used to transport different types of diesel; consequently, the risk for cross-contamination of ULSD with higher sulfur content fuel exists. Too high a level of sulfur would cause malfunction of the engine emission controls and excess emissions of NOx and PM.

With input from refiners and diesel fuel distributors, EPA developed a phased in approach to the ULSD requirements. EPA gave refiners nearly six years – until June 1, 2006 – to convert their diesel production to ULSD. Fuel terminals and transporters downstream of the refinery had until September 1, 2006 to comply. To protect against cross-contamination, a so-called “designate and track” program was established that require product transfer documentation to track fuel. Fuel distributors manage their equipment and product transfers to avoid contamination. Diesel retail outlets could begin to offer ULSD as of October 15, 2006. The ULSD costs an additional four to five cents per gallon. Because older model-year diesel motor vehicles continue to run on low-sulfur diesel, some retailers offer both types of diesel. However, pursuant to the rule, all highway diesel fuel must be ULSD by December 1, 2010.

The availability of ULSD at retail outlets in the fall of 2006 was timed to coincide with the introduction of model year 2007 cars, buses and trucks. Engines in these 2007 models were designed to run on ULSD. So the right fuel is delivered to the service station and right emission controls are installed in the engine. The final step is for the consumer to properly fuel the vehicle. That’s where the green and white label comes in. The label is affixed to the pump to alert the consumer of the new fuel, which is required for model year 2007. Improper fueling by the consumer will defeat all of the upstream efforts by the refiners and distributors. Improper fueling will also void the consumer’s warranty. Refiners, distributors and retailers can be fined up to $32,500 per violation per day for violating the ULSD regulations or for misrepresenting the sulfur content of diesel fuel.

Charles E. Wagner, Jr., is an associate with Blank Rome LLP in its Washington, DC, office.  He is also Vice Chair of the MSBA Environmental Law Section.

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Publications : Bar Bulletin: May  2007