TORONTO — Way back in the first few months of this year, a trucking analyst in the U.S. described the North America-wide roll out of ultra low sulfur diesel as a “planned hurricane.”
Well, the change to ULSD proved to be not much more than a Category-One storm. In fact they could have named this one Hurricane Elvis, for how smooth it strolled in and out of the market — at least so far.
In September, fuel suppliers in Canada were required to begin selling diesel at the pump with only 22 ppm (parts per million) sulfur content — down from 500 ppm. That was reduced even further in mid October to a final standard of 15 ppm.
The fuel is required for new low-emission engines hitting the market in the New Year. But since ULSD is fully backwards compatible with existing equipment, most truckers in Canada have been filling up with the stuff for months.
Concerns these last couple of years that massive amounts of ULSD could get contaminated (and thereby downgraded as off-spec product) by coming into contact with higher-sulfur petroleum like jet fuel during pipeline distribution and handling really haven’t materialized.
“It’s all worked out very well,” says Don Munroe, senior environmental and fuel quality adviser for Petro-Canada, who adds recent sampling by the company shows that each one of its retail outlets is 100 percent on spec, with virtually no ppm pick-up.
Jacques Jobin of Quebec-based Ultramar says that after turning over its tank system this summer, the provider no longer has to downgrade any fuel. “We were expecting much more trouble than we (got),” says Jobin.
Still, that doesn’t mean supply shortages can’t result via other market cracks — and there’s one issue in particular some companies in Canada and the northeast U.S. are keeping a close eye on.
In order to prevent waxing in older trucks, suppliers need to winterize fuel for customers in cold climates with kerosene, which under the same environmental rules, must also be 15 ppm. Trouble is, says Jobin, most refiners that focused on making on-highway ULSD didn’t add capacity for low sulfur kerosene.
“If there is a ULSD shortage, it won’t be because of off-spec supply, but how severe the winter will be,” he says. “If the winter is as mild as last year, there shouldn’t be a shortage problem.”
Because kerosene is normally earmarked for the jet fuel market, most ULSD makers would have little reason to produce it themselves. That means a low sulfur mixture would have to be imported, says Jobin. “We’re looking around. There’s some supply, but not too much. So the acquisition price may be very high to properly winterize the on-road diesel market.”
Unlike Canada, which mandates that 100 percent of diesel produced or imported must be ULSD for on-highway applications, in the U.S. the EPA has allowed refiners to make both 15 and 500 ppm on-highway products until 2007, provided that at least 80 percent of all the company’s on-highway business is ULSD.
That means in some pockets down south, 500-ppm highway diesel could still be flowing at some service pumps. Canadian truckers in particular — especially the limited few with ’07 engines who require only ULSD — should be aware of the differences in labeling, says Munroe.
“Any retail outlet in Canada — even mom-and-pop stations — is 15 ppm. Period. So (ULSD) is just (diesel fuel) to us,” says Munroe.
But in the U.S., 500 ppm is referred to as low-sulfur product, while 15 ppm is marked with ULSD labels. “There could be some issues where a guy heads across the border and thinks low sulfur there is the same as (ultra low) here,” he continues. “I’m not too concerned with people misfueling in Canada, but instead Canadian truck drivers misfueling in the U.S.”
Misfueling once or twice shouldn’t do much to harm new engines, but repeatedly pumping off-spec diesel could eventually plug up and damage diesel particulate filters — which reportedly can cost a couple grand to fix or replace. “That’s something you really want to be careful with,” says Jobin.
Or else your boss will make sure it won’t be just Elvis who has to leave the building.
— (Be sure to check out today’s accompanying online story, titled ‘Tankless Job’, to read how fuel haulers are affected by the ULSD transition).
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