1
MEMORANDUM
DATE:
June
8,
2005
SUBJECT:
Availability
of
Ultra
Low
Sulfur
Diesel
Fuel
FROM:
Melanie
Taylor,
Alpha­
Gamma
Technologies,
Inc.

TO:
Sims
Roy,
EPA
OAQPS
ESD
Combustion
Group
Introduction
The
proposed
new
source
performance
standards
(
NSPS)
for
stationary
compression
ignition
(
CI)
internal
combustion
engines
(
ICE)
require
owners
and
operators
of
stationary
CI
ICE
that
use
diesel
fuel
to
use
diesel
fuel
with
a
sulfur
content
of
500
parts
per
million
(
ppm)
or
less
(
known
as
low
sulfur
diesel
or
LSD)
beginning
October
1,
2007,
and
15
ppm
or
less
(
known
as
ultra
low
sulfur
diesel
or
ULSD)
beginning
October
1,
2010.
Larry
Sorrels
of
EPA's
Air
Quality
Strategies
and
Standards
Division,
Integrated
Policy
and
Strategies
Group
performed
an
analysis
to
determine
whether
a
sufficient
quantity
of
LSD
and
ULSD
will
be
available
when
the
fuel
requirements
take
effect.
Larry
used
the
EPA's
summary
of
pre­
compliance
reports
submitted
by
refiners
presented
in
the
"
Summary
and
Analysis
of
the
Highway
Diesel
Fuel
2004
Pre­
compliance
Reports"
(
EPA420­
R­
04­
014,
September
2004).
A
summary
of
the
results
is
presented
below.

Summary
Results
­
ULSD
Availability
in
2007
and
2011
Based
on
2004
Refinery
Pre­
Compliance
Reports
(
as
of
9/
21/
04)
for
CI
NSPS
Proposal
­
analysis
performed
by
Larry
Sorrels
2007
Results
C
The
gallons
of
fuel,
all
of
which
is
assumed
to
be
LSD,
needed
in
2007
for
new
stationary
CI
engines
(
including
both
prime
and
emergency
engines)
is
expected
to
be
196
million
gallons
each
year,
or
4.7
million
barrels
(
bbls)
per
year.
Both
prime
and
emergency
stationary
CI
engines
are
required
to
use
LSD.

C
Expected
production
of
LSD
in
2007
as
shown
in
the
report
on
2004
refinery
precompliance
reports
is
about
2,875,000
bbls/
day
or
about
120.8
million
gallons/
day.
The
2007
LSD
production
figure
represents
the
combined
total
of
both
LSD
and
ULSD.
Note
that
the
2004
OTAQ
report
estimates
that
95
percent
of
highway
diesel
fuel
is
expected
to
be
ULSD
nationally
by
June
1,
2006.
2
Translated
to
annual
terms,
the
number
of
barrels
produced
will
then
be
about
1.05
billion
bbls
or
about
44.07
billion
gallons.

C
The
increased
demand
for
ULSD
in
2007
based
on
the
need
for
new
stationary
CI
engines
is
equal
to
4.7/
1050
=
0.45
percent.
It
should
be
noted
that
the
Energy
Information
Administration
(
EIA)
has
estimated
a
demand
for
highway
diesel
fuel
of
2,788
bbl/
day
in
2007.

Conclusion
for
2007
C
Given
this
small
percentage
increase
in
demand,
it
is
likely
that
there
will
be
sufficient
ULSD
available
for
new
stationary
diesel
engines
affected
by
this
NSPS
in
2007.
However,
given
that
overall
highway
diesel
fuel
production
(
including
500
ppm
sulfur)
should
exceed
diesel
demand
by
only
3
percent
according
to
the
estimates
listed
above,
some
caution
in
making
this
conclusion
is
appropriate.

2011
Results
C
The
gallons
of
fuel,
all
of
which
is
assumed
to
be
ULSD,
needed
in
2011
for
new
stationary
CI
engines
is
expected
to
be
1.04
billion
gallons
each
year,
or
25
million
barrels
per
year.

C
For
2011,
expected
production
of
ULSD
is
3,022,000
bbls/
day.
We
take
2010
estimates
as
a
proxy
for
2011
since
2010
is
the
last
year
for
which
there
is
data
in
the
2004
OTAQ
report.
Translated
to
annual
terms,
the
number
of
barrels
produced
will
then
be
about
1.10
billion
bbls
or
about
46.33
billion
gallons.

C
The
increased
demand
for
ULSD
in
2011
based
on
the
need
for
new
stationary
CI
engines
is
equal
to
25/
1,103
=
2.3
percent.
It
should
be
noted
that
the
EIA
has
estimated
a
demand
for
highway
diesel
fuel
(
including
500
ppm
sulfur
content)
of
3,017
bbl/
day
in
2011.

Conclusion
for
2011
C
Given
this
relatively
small
percentage
increase
in
demand
(
just
over
1
percent),
it
is
likely
that
there
will
be
sufficient
ULSD
available
for
new
stationary
diesel
engines
affected
by
this
NSPS
in
2011.
However,
given
that
overall
highway
diesel
fuel
production
(
including
500
ppm
sulfur)
should
exceed
diesel
demand
by
only
2.4
percent
according
to
the
estimates
listed
above,
caution
in
making
this
conclusion
is
appropriate.

Notes
about
Results:
Reference
for
estimates
of
U.
S.
domestic
production
of
diesel
fuels
is
"
Summary
and
Analysis
of
the
Highway
Diesel
Fuel
2004
Pre­
compliance
Reports,"
September
2004.
This
is
an
OTAQ
report.
Results
are
based
on
precompliance
reports
filed
by
refiners
in
2004
for
expected
annual
production
from
2006
to
3
2010.
These
reports
are
required
under
the
heavy­
duty
diesel
fuel
rule.
Annual
reports
are
required
for
2005
as
well.

The
2004
reports
show
a
slightly
smaller
amount
of
highway
diesel
fuel
expected
to
be
available
in
2007
and
2011
compared
to
the
2003
pre­
compliance
reports.

The
reference
for
the
amount
of
ULSD
needed
for
consumption
by
new
stationary
CI
engines
is
a
spreadsheet
prepared
by
Alpha­
Gamma
for
Sims
Roy
that
I
received
from
Sims
on
June
3,
2005.
This
spreadsheet
("
calculation
of
consumption
of
diesel
fuel
2007­
2012
6­
3­
05.
xls")
contains
information
based
on
data
from
Power
Systems
Research
and
assumes
that
only
about
20
percent
of
the
new
CI
engines
are
prime
engines
that
will
be
affected
by
this
NSPS.
All
other
new
engines
are
assumed
to
be
emergency
engines.
The
spreadsheet
is
included
following
this
analysis.

Caveats:
These
reports
only
account
for
domestic
production;
import
data
is
not
included
in
the
totals
above.
Hence
the
production
estimates
above
may
underestimate
the
available
ULSD
in
the
future
years.
However,
the
size
of
this
underestimate
is
expected
to
be
small
(
less
than
2
percent
of
total
U.
S.
domestic
production).
Thus,
the
conclusions
drawn
above
are
relatively
robust
even
if
imported
diesel
fuels
are
accounted
for.
Also,
the
refinery
pre­
compliance
reports
only
cover
production
estimates
for
ULSD
and
500
ppm
sulfur
content
fuel,
and
do
not
cover
5000
ppm
sulfur
content
fuel
production.
Number
of
gallons
of
diesel
fuel
needed
for
stationary
CI
engines
in
2007
­
2012
6/
8/
05
Assumptions:
0.002544
MMBtu/
hp­
hr
(
conversion
factor)
38%
engine
efficiency
1000
avg
hours
of
operation
per
year
for
prime
engines
37
avg
hours
of
operation
per
year
for
emergency
engines
0.143
MMBtu/
gal
(
heating
value
of
fuel
oil)

Number
of
new
compression
ignition
engines
per
year
(
prime
and
emergency):
HP
Range
Avg
HP
2007
2008
2009
2010
2011
2012
50­
75
63
7,043
7,280
7,517
7,754
7,990
8,227
75­
100
88
11,389
11,914
12,440
12,965
13,491
14,016
100­
175
135
16,846
17,400
17,954
18,507
19,061
19,615
175­
300
238
16,506
17,187
17,868
18,549
19,230
19,911
300­
600
450
6,345
6,510
6,674
6,839
7,004
7,168
600­
750
675
894
910
927
943
960
976
750­
1200
975
2,078
2,140
2,202
2,264
2,326
2,388
1200­
3000
2100
2,038
2,103
2,167
2,231
2,295
2,359
>
3000
5000
160
160
160
160
160
160
Total
63,298
65,603
67,907
70,212
72,516
74,820
Number
of
new
compression
ignition
engines
per
year
(
prime
only,
assume
20%
are
prime):
HP
Range
Avg
HP
2007
2008
2009
2010
2011
2012
50­
75
63
1,409
1,456
1,503
1,551
1,598
1,645
75­
100
88
2,278
2,383
2,488
2,593
2,698
2,803
100­
175
135
3,369
3,480
3,591
3,701
3,812
3,923
175­
300
238
3,301
3,437
3,574
3,710
3,846
3,982
300­
600
450
1,269
1,302
1,335
1,368
1,401
1,434
600­
750
675
179
182
185
189
192
195
750­
1200
975
416
428
440
453
465
478
1200­
3000
2100
408
421
433
446
459
472
>
3000
5000
32
32
32
32
32
32
Total
12,660
13,121
13,581
14,042
14,503
14,964
Gallons
of
diesel
fuel
needed
each
year
for
prime
engines:
HP
Range
Avg
HP
2007
2008
2009
2010
2011
2012
50­
75
63
4,154,590
8,448,877
12,882,860
17,456,541
22,169,918
27,022,992
75­
100
88
9,383,813
19,200,629
29,450,448
40,133,271
51,249,096
62,797,925
100­
175
135
21,294,241
43,288,356
65,982,345
89,376,209
113,469,947
138,263,559
175­
300
238
36,782,123
75,081,871
114,899,243
156,234,239
199,086,859
243,457,105
300­
600
450
26,735,609
54,164,798
82,287,567
111,103,914
140,613,842
170,817,348
600­
750
675
5,647,104
11,398,492
17,254,163
23,214,117
29,278,355
35,446,876
750­
1200
975
18,967,711
38,502,344
58,603,900
79,272,379
100,507,780
122,310,103
1200­
3000
2100
40,080,781
81,423,918
124,029,410
167,897,258
213,027,463
259,420,023
>
3000
5000
7,490,615
14,981,229
22,471,844
29,962,459
37,453,073
44,943,688
Total
170,536,587
346,490,513
527,861,780
714,650,386
906,856,333
1,104,479,619
Gallons
of
diesel
fuel
needed
each
year
for
emergency
engines:
HP
Range
Avg
HP
2007
2008
2009
2010
2011
2012
50­
75
63
614,879
1,250,434
1,906,663
2,583,568
3,281,148
3,999,403
75­
100
88
1,388,804
2,841,693
4,358,666
5,939,724
7,584,866
9,294,093
100­
175
135
3,151,548
6,406,677
9,765,387
13,227,679
16,793,552
20,463,007
175­
300
238
5,443,754
11,112,117
17,005,088
23,122,667
29,464,855
36,031,651
300­
600
450
3,956,870
8,016,390
12,178,560
16,443,379
20,810,849
25,280,968
600­
750
675
835,771
1,686,977
2,553,616
3,435,689
4,333,197
5,246,138
750­
1200
975
2,807,221
5,698,347
8,673,377
11,732,312
14,875,151
18,101,895
1200­
3000
2100
5,931,956
12,050,740
18,356,353
24,848,794
31,528,064
38,394,163
>
3000
5000
1,108,611
2,217,222
3,325,833
4,434,444
5,543,055
6,651,666
Total
25,239,415
51,280,596
78,123,543
105,768,257
134,214,737
163,462,984
Total
all
engines
(
gallons)
195,776,002
397,771,109
605,985,323
820,418,644
1,041,071,070
1,267,942,602
(
barrels)
4,661,333
9,470,741
14,428,222
19,533,777
24,787,406
30,189,110
