Monday, July 31, 2006

California Gets Cleaner Diesel Ahead of Schedule

California Gets Cleaner Diesel Ahead of Schedule
Sacramento Business Journal - July 28, 2006
by Celia Lamb
Staff Writer

California has met a more stringent new diesel fuel standard four years ahead of the rest of the United States, and most diesel car and truck drivers probably never noticed the difference.

The lower-polluting formula cuts the maximum concentration of sulfur from 500 parts per million to 15 parts per million. California refineries started producing the new fuel on June 1 and sent it trickling down through the pipeline distribution system.

"It's in place and running," said Jerry Engelhardt, spokesman for Kinder Morgan Energy Partners LP. The company pipes fuel from the Bay Area into the Sacramento region. By Sept. 1, all gas stations in the state must make the switch.

Lower sulfur means less soot and smog. But the fuel change is just a drop in the bucket for air quality protection, industry experts say. Bigger changes will come from advanced emissions control systems that work with the new diesel formula.

Allen Schaeffer, executive director of the Diesel Technology Forum in Frederick, Md., compares the new fuel change to the demise of leaded fuel, which ushered in the demand for pollution-reducing catalytic converters on automobiles. He's excited about the potential technological changes for diesel engines.

"We are standing at the doorstep of a new era in diesel technology," he said.

A quarter of a century ago, there were almost no air quality regulations for diesel-powered vehicles and equipment, Schaeffer said. The 500 parts per million requirement, implemented in California in 1993, was revolutionary enough to garner the title "low-sulfur" diesel. In practice, most refiners had brought the levels down to 150 parts per million.

The 15 parts per million regulation, a tenfold decrease, is called "ultra-low sulfur" diesel. It eliminates almost 97 percent of the sulfur found in raw diesel. Nationally, refiners must switch up to 80 percent of their production in line with California, which already has completely transitioned to the new formula. Out-of-state refiners have until 2010 to complete the transition.

California's fuel is already even cleaner than the federal sulfur limit, said state Energy Commission spokesman Rob Schlichting. That's because pipeline companies operating in the state are asking for 8 parts per million from the refiners just in case the fuel becomes contaminated. Also, California limits chemicals called aromatic hydrocarbons, which release soot particles when burned.

More limits are ahead. In 2010 the U.S. Environmental Protection Agency plans to reduce the amount of oxides in nitrogen in diesel, cutting the emissions of smog-forming chemicals.

The average truck driver probably cares more about the price of diesel than its quality. But the price of fuel has been so thoroughly driven by world market conditions that the formula switch in California has gone unnoticed at the pump. Diesel prices dropped in California from June to July, according to the Energy Commission.

"The production has been very high," Schlichting said. "(Oil companies) made the transition very easily."

National projections have estimated the additional costs of ultra-low sulfur diesel at three to five cents per gallon, Schaeffer said. New engine emissions technologies expected over the next few years will hit consumers' pocketbooks a little harder. Cleaner diesel makes it possible to add filters to engines that would further reduce output of soot particles called particulates.

In California, sales of the new engines will start en masse at the beginning of next year. Schaeffer said he has heard cost estimates of an additional $1,000 to $2,000 on a $100,000 truck. Mike Dettloff, a truck engine account manager with Holt of California in West Sacramento, said he has heard the new engines will cost about $7,500 to $9,000 more.

"The real (environmental) benefit comes when that fuel is used in engines with particulate traps," Schaeffer said. "These particulate filters and the fuel have all been optimized as a system."

It's possible to add filters to older engines, but they wouldn't be as efficient, Schaeffer said. Replacing truck engines is a better option.

The EPA has set aside $26 million for changing out the engines in large fleets. California is in a good position to apply for this funding because the cleaner diesel fuel is already here, Schaeffer said. California could also drive the market demand for new models of cars, trucks and sport utility vehicles that use diesel.

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