Fitting In with ULSD

Since the U.S. EPA began marshaling in ultra-low sulfur diesel, the biodiesel industry has been clinging to the prospect of becoming the diesel industry's near-term lubricity additive of choice. With that expectation fading, however, it now looks like America's new diesel is neither friend nor foe.
By Holly Jessen | October 13, 2006
In the 1970s, the U.S. EPA implemented the first standards to reduce the amount of lead in gasoline, paving the way for the use of catalytic converters in gasoline-powered vehicles. Now, three decades later, the federal agency is overseeing the practical elimination of sulfur from diesel-an action of enormous consequence not only to the nation's petroleum companies, but perhaps to the up-and-coming biodiesel industry, too.

Oct. 15 is the deadline for retail outlets that choose to sell ultra-low sulfur diesel (ULSD) to label the cleaner-burning fuel as being "in compliance" with new federal standards, according to Enesta Jones, a U.S. EPA spokeswoman. With the ULSD requirement in place, all U.S. diesel must now be 15 parts-per-million (ppm) sulfur, down significantly from what was previously allowed in "low-sulfur" diesel.

At press time, the EPA was sticking to its mid-October deadline, despite the fact that it previously extended the ULSD timeline 45 days from its original target date.

The shift from low-sulfur diesel to ULSD is a step principally being implemented for environmental purposes-less sulfur simply equates to less harmful emissions, Jones says. When the program is fully implemented, the EPA projects that it will reduce nitrogen oxide emissions by 2.6 million tons and reduce particulate matter by 110,000 tons annually. "Each year, [these emissions reductions] will prevent more than 360,000 asthma attacks, 22,000 cases of bronchitis and 8,300 premature deaths," Jones tells Biodiesel Magazine.

The environmental and human health benefits of removing 97 percent of the sulfur in diesel are indisputable, but industry experts like Rich Moskowitz, a regulatory affairs attorney for the American Trucking Associations (ATA), says the advantages of simply using ULSD are not as compelling as the pollution cuts that can be achieved with emissions-abatement technology that's compatible with the cleaner fuel. As Moskowitz explains, the real "bang for the buck" is new advanced-control emissions systems that will be installed in diesel vehicles starting in 2007. Removing the sulfur from diesel makes it possible to install exhaust gas recirculation and particulate matter traps in new diesel vehicles. These technologies don't function well in the presence of sulfur.

Biodiesel Blending
Blending biodiesel with ULSD has been touted as a good fit for two reasons, according to Paul Nazzaro, a petroleum liaison for the National Biodiesel Board. First, biodiesel is a clean-burning renewable fuel that contains no sulfur, so it can be added to ULSD without raising the new diesel fuel's sulfur content. Second, because sulfur is a lubricant, ULSD requires additives that increase its lubricity. Biodiesel can achieve that. With those two factors in mind, Nazzaro considers the two fuels-ULSD and biodiesel-a handsome match. A lot of people thought the implementation of ULSD would cause the biodiesel industry to "fade into the background," he says, explaining that he sees the situation quite differently. "ULSD gives biodiesel legs," he says.

A recent raise of diesel prices had another positive side effect, says Graham Noyes, vice president of business development for World Energy Alternatives LLC, a company that markets and produces biodiesel. High diesel prices have leveraged a very strong market demand for biodiesel.

On the other hand, the transition to ULSD has dealt some blows to the alternative fuel. "It has been a mixed picture for biodiesel," Noyes tells Biodiesel Magazine. First, storage availability has been very tight in the fuel marketplace, with some facilities maintaining dual storage for ULSD and low-sulfur diesel. That's made it more difficult to establish new storage facilities for biodiesel, Noyes says.

Besides storage problems, the transition to ULSD has also consumed the attention, and resources, of the major petroleum companies. "They are paying less attention to biodiesel than they would otherwise," Noyes explains.

Although most major petroleum companies see biodiesel and biodiesel blends as inevitably becoming part of the overall distillate mix-just as ethanol is now commonly mixed with gasoline in the United States-the ULSD switch has been a distraction. Until the transition to ULSD is more complete, major oil companies have essentially postponed any significant changes to the status quo, such as blending more biodiesel. "They're delaying any significant market participation until they finish what they have to do with ULSD," Noyes says, adding that petroleum majors should begin to more actively participate in the biodiesel market by 2007.

In the meantime, the Alliance of Automobile Manufacturers doesn't anticipate any problems integrating ULSD and biodiesel blends, says Charles Territo, a spokesman for the alliance. However, as with any major change to fuel and vehicles, it will be important to stay alert in the transition period. "We're hopeful that the new ultra-low sulfur diesel fuel, when blended with biodiesel, will prove compatible with today's diesel engines," Territo says.

Fuel Properties
Noyes says there's still technical work to be done to better understand the result of blending the two fuels. A significantly different refining process is used to produce ULSD, and with it comes the potential for different performance attributes, such as cold flow properties, that will have to be taken into consideration when the fuels are blended. "We need to have good technical information on how [ULSD] is going to perform, particularly with B20," Noyes says.

It's not just biodiesel-blended ULSD in question, however. The same technical information is needed on how ULSD itself will perform. Even with low-sulfur diesel, there were some differences in engine performance and which cold-flow additives worked best with diesel produced at various refineries. Noyes says those disparities will likely be greater with ULSD.

Before the Oct. 15 deadline, consumers were likely already using ULSD in their highway vehicles, even if the pumps weren't labeled as such, according to Al Mannato, fuels issues manager for the American Petroleum Institute (API). Since June 1, refiners have been required to produce at least 80 percent ULSD. However, it looks like production of ULSD is closer to 90 percent of diesel production, Mannato says. Low-sulfur diesel could be available until 2010, the deadline for all highway diesel to meet ULSD specifications. "How long that's going to last is hard to say," he says.

While ULSD can be used in diesel vehicle engines manufactured prior to the 2007 models, the new fuel's propensity to act as a solvent may have a greater impact on older motors and components. Drivers will need to be more vigilant about checking for possible fuel leaks or fuel filter clogs, Mannato says.

DaimlerChrysler, one of the world's leading manufacturers of diesel vehicles, considers the transition to ULSD positive, says Max Gates, a spokesman for the corporation. The new-generation fuel enables emissions controls to deal with particulates and nitrogen oxides. "For us, this is a great step," Gates says. "It is absolutely critical if we are going to sell more diesel [vehicles] in the [United States]. ULSD is absolutely critical."

DaimlerChrysler officials have been enthusiastic about the potential to introduce greater numbers of diesel-powered passenger vehicles in the United States. In September, the automaker announced that increased usage of diesel would play a part in solving the country's fuel crisis. Diesel engines provide about 30 percent better fuel economy and 20 percent reduction in carbon dioxide emissions, Gates says. When biodiesel is added to the mix, there's even more opportunity to maximize energy and reduce emissions.

The Lubricity Question
The buzzword around the ULSD issue is definitely lubricity. Without lubricity additives-which include biodiesel-ULSD would be hard on diesel engines, Mannato says. Early discussions about the biodiesel industry cornering the market as a lubricity agent have died down, but are not totally muted. Biodiesel might be able to fill niche markets as a lubricity agent, Nazzaro says. In the near term, however, most industry experts say synthetic lubricity additives will dominate.

Cost is one factor. Conventional lubricity additives are competitively and consistently priced, while the price of biodiesel is based on supply and demand, and is prone to greater fluctuations. To be attractive as a lubricant, biodiesel needs to be priced lower than diesel fuel, Nazzaro says.

The blend rates for chemical lubricity additives-often measured in parts per million-also come into play, Noyes says. It's generally considered easier to achieve desired ULSD lubricity levels with synthetic additives than with biodiesel. Simply stated, it takes less synthetic additive, on a gallon-for-gallon basis, to get the job done. To use biodiesel as a lubricity solution nationwide would require additional storage capacity.

Capacity is another issue. Currently, there just isn't sufficient biodiesel production to fulfill even a 1 percent blend for the entire U.S. diesel supply. "The (biodiesel) model is just not mature enough to be counted on as a lubricity agent," Nazzaro says.
Nazzaro believes the oil industry may be willing to look at the alternative fuel more closely in the future. Consistency, quality and reliability will remain the crucial factors, the last of which, some say, would require biodiesel to be available at almost every terminal in the United States.

Visit www.BiodieselMagazine.com for more coverage of the nationwide transition to ULSD, including articles on California's advanced ULSD timeline and how the fuel has impacted diesel prices at the pump.

ULSD Timeline
U.S. refiners and importers were required to import or produce at least 80 percent ULSD for on-highway use by June 1, 2006. The amount moves to 100 percent by June 1, 2010. California refiners and importers are already required to import or produce 100 percent ULSD for on-highway use.

For those between the refinery and fuel terminal, facilities that chose to carry ULSD had to meet the 15 parts per million sulfur specification by Sept. 1, 2006. All highway fuel in California must already by ULSD, as of July 15, 2006.

At press time, retail outlets carrying ULSD must meet the 15 ppm sulfur specification by Oct. 15, 2006. All California retailers were required to carry ULSD by Sept. 1, 2006. The requirement affects all U.S. retailers Dec. 1, 2010.


Holly Jessen is a Biodiesel Magazine staff writer. Reach her at hjessen@bbibiofuels.com or (701) 746-8385.
 
 
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