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Fueling a summer of change

CALGARY, Alta. - With no blueprint to draw from, ensuring the integrity of new ultra-low sulfur diesel (ULSD) is a work in progress and responsibility will fall to everyone involved in the process....

CALGARY, Alta. – With no blueprint to draw from, ensuring the integrity of new ultra-low sulfur diesel (ULSD) is a work in progress and responsibility will fall to everyone involved in the process.

By Oct. 15, the sulfur content in on-road diesel will be lowered to 15 parts per million (PPM) at the point of sale, which leaves little room for error at every junction from the refineries to the fuel tank.

With a plunge in sulfur content of 90%, as current rates sit at 500 PPM, the Canadian Petroleum Products Institute (CPPI) has compiled a comprehensive reference document for handlers of ULSD.

The institute finalized its Recommended Management Practices in November 2005 and released the document on the organization’s Web site a couple of months later.

“This plan has a long tale; it was originally drafted about 10 years ago and was in line with what was happening in the US,” noted John Skowronski, director of environmental affairs with CPPI. “This process has required significant upgrades to the refineries to produce this lower sulfur product range.”

Shell Canada invested $400 million to upgrade its refineries in Montreal East, Que. and Fort Saskatchewan, Alta. Two diesel hydrotreaters were constructed to reduce sulfur content in December 2005 and production of the fuel to the new specifications began in early March.

Although ULSD will not be reaching retail pumps until later this fall, refineries must begin producing the new diesel at the point of production by June 1. With the low threshold of allowable sulfur in future diesel fuel, it is expected refineries will produce the low-sulfur diesel at even lower levels than the allowable 15 PPM.

“As a rule of thumb most refineries will be in around that eight to 10 PPM range,” Skowronski told Truck West. “There is no set rule that says a refinery has to produce at a certain ppm, but they will leave space to ensure the integrity of the ultra-low sulfur diesel.”

Originally ULSD was expected to begin selling at retail points on Sept. 1. An application to extend the point-of-sale compliance by 45 days was granted, pushing back the release date to Oct. 15.

“It’s a significant step and not something that we just decided on last September,” said Skowronski. “It is important because you need to provide enough warning to people so they can plan their capital investments accordingly.”

Compliance with the new regulations will be tested at the retail point. Four key “hand-offs” are noted in the CPPI reference manual as areas where additional levels of sulfur can be picked up: from the refinery to the pipeline/terminal, from the terminal to the bulk plant, from the bulk plant to the tank truck and from the tank truck to the retail point.

The Recommended Management Practices document provides insight for handlers from each of the noted areas of concern, including truck transport. A number of preventive steps are cited in the document with an emphasis on securing equipment used specifically for ULSD.

“It’s a reference document for people handling that product,” explained Skowronski. “It’s similar to the professional driver’s manual of our Driver Certification Program; it’s just a little more stringent to make sure there is no contamination and more diligence in flushing.”

As the manual is just a reference document, each hauler will develop carrier-specific strategies to ensure the integrity of ULSD is maintained in its deliverance to the final retail stage.

Taking direction from the oil companies, the carriers transporting the ULSD will work throughout the summer to develop practices which will effectively reduce the sulfur content in diesel fuel by the time the Oct. 15 deadline rolls around.

Pricing details of ULSD have yet to be determined (it’s expected it will cost 3-4 cents per gallon more than today’s fuel) but with the arrival of the new line of low-emission 2007 engines Skowronski is not worried about consumers shying away from the product.

“The new engine technology is designed to use ultra-low sulfur diesel,” he noted. “It becomes a self-regulating thing; for example, you wouldn’t put diesel in a gasoline car.”

Refineries will continue producing dual levels of diesel fuel for the next six years. On-road diesel will follow the ULSD spec’ this fall; but, off-road diesel consumption will not be regulated to 15 PPM until Oct. 1, 2010 with rail and marine diesel falling in line with ULSD regulations shortly after.

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