Oil Industry Says EPA Diesel Rule May Threaten Supply

The American Petroleum Institute said it remained\r\nconcerned that federal regulations aimed to sharply cut diesel fuel\r\npollution by 95 percent may threaten supplies as\r\nrefineries scramble to meet the new requirements.

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The American Petroleum Institute (API) said last week it remained concerned that federal regulations aimed to sharply cut diesel fuel pollution by 95 percent from mid-2006 may threaten supplies as refineries scramble to meet the new requirements.

API President Red Cavaney, in a letter to EPA Administrator Christie Whitman, said the oil industry welcomed one provision of the rule allowing for an independent review of the diesel supply issue.

"Specifically, our concern is with the timetable for implementation, particularly with the rule''s impact on the availability of an adequate supply of diesel fuel," Cavaney said in his letter.

"We were pleased to hear of your decision to ask an independent advisory board to look at the issues of diesel supplies and related technology and report to you annually as part of the sulfur rule issued yesterday by EPA," he wrote.

The oil and refining industry has balked at the fuel portion of the rule, namely to cut sulfur in diesel to 15 parts per million (ppm), 97 percent below current levels.

The National Petrochemical & Refiners Association (NPRA) filed a lawsuit on Feb. 9 to force changes to the rule, arguing it needs until 2008 to 2010 to make costly refining changes.

The oil and refining industry supports a cut to 50 ppm.

Last week, EPA said it would stick with rules announced late in the Clinton Administration to make large trucks and buses cleaner, both by cutting sulfur in the fuel and by forcing cleaner engines.

Engine manufacturers will have flexibility to meet the new standards through a phase-in approach between 2007 ad 2010. The fuel provision will go into effect in June 2006 and be phased in through 2009.

EPA said special provisions and flexible approaches would stretch the phase-in time for smaller refiners.

Proponents had pushed for the new diesel rule, saying the sharp reductions in diesel pollution would save lives and boost production of cleaner-burning trucks and buses.

EPA says the changes will prevent 8,300 premature deaths each year, 5,500 cases of bronchitis and 360,000 asthma attacks.

by Virginia Sutcliffe

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