Low-sulfur future in Alaska diesel sparks debate

Posted: Thursday, June 01, 2000

WASHINGTON (AP) -- A battle is brewing among environmental groups, the refining industry and regulators over how and when to eliminate rules that allow Alaska oil refiners to leave more sulfur in diesel compared with elsewhere in the nation.

The Environmental Protection Agency last week proposed a nationwide rule that would strictly limit the amount of sulfur in highway diesel, cutting it to 15 parts per million by 2006. The current standard is 500 ppm everywhere but Alaska, where it is unregulated.

EPA Administrator Carol Browner said the proposal would help reduce smog and dust that every year account for ''15,000 premature deaths, 1 million respiratory problems, 400,000 asthma attacks and thousands of cases of aggravated asthma, especially in children.''

Alaska would come under the 15 ppm rule in 2006. The agency has proposed to continue until then the complete exemption for fuel sold in Alaska because of the costly and complicated steps that it said would otherwise be necessary.

Following congressional amendments to the Clean Air Act, the EPA in 1994 exempted Alaska refiners from limits on sulfur content in the diesel they produce. Sulfur content in Alaska-produced diesel ranges from 650 ppm to 5,000 ppm, according to information from the industry and the EPA.

Jeff Cook, spokesman at Williams Alaska Petroleum's North Pole refinery, said the proposed new rules would mean more expensive diesel.

The EPA, in its analysis of the situation, expressed doubts about whether Alaska refiners would even try to meet the new limit. Because Alaska's small highway diesel market might not support the expense of the equipment, suppliers might just import fuel to meet demand. The agency said a recent fuel shipment invoice indicates the cost of moving such liquid from Seattle to Anchorage was about 17 cents per gallon.

Cheryl Richardson, project coordinator with the Alaska Center for the Environment in Anchorage, said the center opposes the EPA's proposed continuation of Alaska's exemption for the next six years.

''The EPA feels threatened that Alaska's delegation may demand another full exemption from the low sulfur if we do not allow a phase-in period,'' the organization said in a recent news release.

David Garman, chief of staff to Sen. Frank Murkowski, said the delegation is indeed watching the situation.

''''If you have a broadly distributed population and a small population, and the diesel impacts are very distributed, the health effects are very different--they might be non-existent--when compared to trucks in an area like Manhattan,'' Garman said.

Richardson said the air inversions in Alaska make the clean diesel just as important in the state as elsewhere.

''I'm concerned that this could go on for another 10 or 15 years,'' she said. ''We might as well go ahead and comply now, along with the rest of the nation.''

Cook said Williams will have to evaluate its diesel production if the new rules are established. ''We're looking at all our options, including new technology,'' he told the Fairbanks Daily News-Miner. ''Then you've got to look at it in the scope of overall demand.''

The EPA report said Williams has estimated the cost of meeting even the 500 ppm standard at $100 million.

Alaska uses about 15,800 barrels per day of diesel, Cook said. About 95 percent of that is for ''off-road'' use--power plants, generators, home heating oil, fishing boats and drilling rigs. Fuel produced for those uses isn't subject to the same sulfur restrictions, so that's in part why Alaska's standards were not set as tightly as in other places, Cook said.

EPA in 1994 granted Alaska two exemptions from the low-sulfur rules. Those included a temporary exemption for areas on the road system and a permanent exemption for areas off the road system. The exemption for fuel sold on the road system has already been extended several times and is set to expire in 2004. EPA has proposed to continue the rural exemption indefinitely.

In much of rural Alaska both off-road and highway fuel is stored in the same tanks, the EPA wrote last week in a lengthy defense of its Alaska-specific rules. That means imposing low-sulfur rules for highway diesel would cost villages a significant amount of money, the EPA stated. Either they would have to buy exclusively the more expensive low-sulfur fuel to feed not just local vehicles but also power plants and visiting aircraft, or they would have to build new storage tanks, the EPA report states.

The report notes that Trustees for Alaska, an Anchorage-based environmental law firm, questions whether this is truly a problem since similarly rural Canada recently adopted a 500 ppm standard for sulfur in its fuel. The group also questioned whether low-sulfur fuel is indeed that much more expensive.

The EPA report also acknowledges the difficulties of using high-sulfur fuel with the increasing numbers of new trucks whose emission control systems may become clogged by it. The Engine Manufacturers Association raised this problem in objecting to the Alaska exemptions.

The agency said it is proposing that the state be allowed to develop a ''transition plan'' to ''ensure that sufficient supplies of low sulfur diesel fuel are available in Alaska to meet the demand of any new 2007 and later model-year diesel vehicles.''

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