January 24, 2001
Oil-Refiners Will Attempt to Delay
Rule Aimed at Cleaning Diesel Fuel
By JOHN J. FIALKA
Staff Reporter of THE WALL STREET JOURNAL
WASHINGTON -- The trade association that represents most U.S. oil
refineries is preparing legal action aimed at blocking a regulation that would
remove most sulfur from diesel fuel.
Adopted by the Environmental Protection Agency in the Clinton
administration's final days, the regulation is among many being studied for
possible reversal or modification by the Bush administration. The rule is
intended to spur the production of low-sulfur fuel starting in July 2006 for a
new generation of cleaner-burning diesel engines for cars and trucks.
Robert Slaughter, general counsel of the National Petrochemical and
Refiners Association, said his group hopes to delay imposition of the rule
until 2008 or 2010 to give refiners adequate time to refit. Most of the
nation's 160 refineries are being modified to obey an earlier EPA mandate:
to remove most sulfur from gasoline between 2004 and 2006. Mr.
Slaughter said a suit would be filed with the U.S. Court of Appeals here.
Mr. Slaughter said most refiners support the new rule but want it
postponed until they finish retooling their gasoline-refining processes,
otherwise the changes will be too expensive. "To do them at the same time
pulls on the same construction and engineering people," he said. "You bid
up the costs of everything."
According to the refiners association, which represents 98% of the nation's
refining capacity, the cost of refitting for low-sulfur diesel fuel would be
about $8 billion above the estimated $8 billion in modifications needed to
make low-sulfur gasoline. Both costs will be passed on to consumers in the
form of higher prices at the pump, Mr. Slaughter said.
Saying "the supply impact is so significant," Mr. Slaughter cited an industry
study that predicts a 12% shortfall for diesel fuel in 2006 under the new
rule. "We've seen what happens in California when policy makers don't
pay enough attention to supply concerns," he said.
The EPA rule, pushed by the agency's former administrator, Carol
Browner, would reduce sulfur content in diesel fuel from as high as 500
parts per million to 15 parts per million. It is supported by most
manufacturers of truck engines and automobiles because it will allow them
to use more powerful catalytic converters and other devices to clean soot
and smog-forming ingredients from engine exhausts. Sulfur poisons the
catalytic reaction.
According to EPA statistics, smog problems cause 8,000 deaths a year,
mainly among elderly Americans and people with lung problems. Rebecca
Stanfield, a lawyer for U.S. Public Interest Research Group, called the
sulfur rules "the most important thing that happened to protect public health
in the last two years."
Write to John J. Fialka at john.fialka@wsj.com |
