Summary and Analysis of the 2008
Nonroad Diesel Fuel Pre-Compliance
Reports
- -~je_2 *->.-. ^iSIWK?:S5?
v>EPA
United States
Environmental Protection
Agency
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Summary and Analysis of the 2008
Nonroad Diesel Fuel Pre-Compliance
Reports
Transportation and Regional Programs Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
NOTICE
This technical report does not necessarily represent final EPA decisions or
positions. It is intended to present technical analysis of issues using data
that are currently available. The purpose in the release of such reports is to
facilitate the exchange of technical information and to inform the public of
technical developments.
SER&
United States
Environmental Protection
Agency
EPA420-R-08-017
September 2008
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Table of Contents
I. Executive Summary i
II. Nonroad Diesel Program Overview 1
III. Nonroad Pre-Compliance Reporting Requirements 3
IV. NRLM Summary Data 4
A. Nationwide Analysis 4
1. Refineries and Importers - Numbers and Production 4
2. Projected Credit Generation and Use 7
3. Project Scope and Timing 9
4. Small Refiner Options 9
B. PADD Analysis 10
1. PADD 1 13
2. PADD 2 14
3. PADD 3 15
4. PADD 4 16
5. PADD 5 17
C. Comparison of 2007 and 2008 NRLM Pre-Compliance Reports 18
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I. Executive Summary
I. Executive Summary
Any refiner or importer planning to produce or import nonroad, locomotive, or
marine (NRLM) diesel fuel containing 15 ppm sulfur or less after June 1, 2010 is required to
submit to the U.S. Environmental Protection Agency ("EPA" or "the Agency") annual pre-
compliance reports. Reports are due annually by June 1 from 2005 through 2011 under the
diesel sulfur regulations. This report summarizes the results of refiners' June 2008 pre-
compliance reports.
Refiners' and importers' nonroad pre-compliance reports must contain estimates of
total highway and NRLM 15 ppm diesel fuel and total highway and NRLM 500 ppm diesel
fuel produced or imported from June 2010 through December 2014. For those refiners and
importers planning on participating in the credit trading program, the reports must contain a
projection of how many credits will be generated and/or used by each refinery or importer.
The pre-compliance reports must also contain information outlining each refinery's timeline
for complying with the 15 ppm sulfur standard and provide information regarding
engineering plans (e.g., design and construction), and capital commitments for making the
necessary modifications to produce 15 ppm NRLM diesel fuel.
The 2008 nonroad pre-compliance reports showed that:
- 120 refineries are planning to produce 15 ppm diesel fuel by June 1, 2014
20 refineries are either undecided as to their plans, or are choosing to produce
only heating oil by June 1, 2014
refiners have projected an increase in diesel fuel production from 2010 through
2014
refiners are taking advantage of the flexibilities offered by the regulations (18
refineries said they generated early high sulfur credits in 2006 and 2007, 14
refineries plan to generate early 500 ppm credits in 2009 and 2010, small refiners
are utilizing all of the options available to them)
total highway and NRLM diesel fuel ("total diesel fuel") production and
importation in each Petroleum Administration for Defense District (PADD) is
projected to grow from 2010 through 2014
refiners project a slight decrease in expected production and importation of total
diesel fuel beginning June 1, 2010, compared to the 2007 nonroad pre-
compliance reports.
Many refiners have developed firmer plans to produce 15 ppm NRLM diesel fuel by
June 1, 2010 than what they indicated in their 2007 pre-compliance reports, although these
plans are still subject to change. EPA expects that next year's nonroad pre-compliance
reports will contain more definite information on refiners' plans to produce 15 ppm NRLM
diesel fuel by June 1,2010.
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II. Nonroad Diesel Program Overview
II. Nonroad Diesel Program Overview
The Nonroad Diesel final rule (69 FR 38958, June 29, 2004) contains a two-
step approach to reducing the sulfur content of nonroad, locomotive, and marine
(NRLM) diesel fuel from uncontrolled levels down to 15 ppm. Beginning June 1,
2007, refiners and importers were required to produce or import NRLM diesel fuel
with a maximum sulfur content of 500 ppm. Beginning June 1, 2010, refiners and
importers are required to produce or import nonroad (NR) diesel fuel with a
maximum sulfur content of 15 ppm. Beginning June 1, 2012, refiners and importers
are required to produce or import locomotive and marine (LM) diesel fuel with a
maximum sulfur content of 15 ppm.
The rule includes provisions for refiners and importers to generate credits for
early NRLM diesel sulfur reduction efforts. "High sulfur" credits could be generated
for early production of 500 ppm NRLM diesel fuel between June 1, 2006 and June 1,
2007. Similarly, "500 ppm" credits may be generated for early production of 15 ppm
NRLM diesel fuel between June 1, 2009 and June 1, 2010. "High sulfur" credits
could be used to comply with the 500 ppm NRLM standard beginning June 1, 2007,
while "500 ppm" credits could be used to comply with the 15 ppm NR standard
beginning June 1, 2010 and the 15 ppm LM standard beginning June 1, 2012. For
both high sulfur credits and 500 ppm credits, one credit is equivalent to one gallon of
diesel fuel that meets the respective standard earlier than required. In addition, "high
sulfur" credits can be converted into "500 ppm" credits for use in 2010 and later.
NRLM sulfur credits may be transferred nationwide. No credit trading area
restrictions exist such as those found in the Highway Diesel rulemaking.
Small Refiner Flexibilities
Additional compliance flexibilities are provided for small refiners in the
nonroad diesel sulfur regulations. The criteria for qualification as an NRLM small
refiner are similar to those under the Gasoline Sulfur and Highway Diesel rules. To
qualify as "small", a refiner must: 1) process NRLM diesel fuel from crude oil; 2)
employ no more than 1,500 people corporate-wide, based on the average number of
employees for all pay periods from January 1, 2002 to January 1, 2003; and, 3) have a
corporate crude oil capacity less than or equal to 155,000 barrels per calendar day
(bpcd) for 2002.
The small refiner relief options provide additional time for compliance and,
for small refiners that choose to comply earlier than required with the NRLM
requirements, the option of either generating diesel fuel sulfur credits or receiving a
limited relaxation of their gasoline sulfur standards. These small refiner options are
described in more detail below.
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II. Nonroad Diesel Program Overview
Option 1 - Delay 500 ppm NRLMproduction
This option allows approved small refiners to delay compliance with the
NRLM diesel fuel sulfur standards as follows. Instead of a 500 ppm NRLM
compliance date of June 1, 2007, small refiners have a compliance date of June 1,
2010. Production of high sulfur (greater than 500 ppm) NRLM diesel fuel from a
small refiner's refinery between June 1, 2007 and June 1, 2010 is limited to 105
percent of the refinery's average NRLM diesel fuel production from 2003 through
2005.
Option 2 - Delay 15 ppm NRLM production
This option allows approved small refiners to delay compliance with the
NRLM diesel fuel sulfur standards as follows. Instead of separate 15 ppm NR and
LM compliance dates of June 1, 2010 and June 1, 2012, respectively, small refiners
have a single 15 ppm NRLM compliance date of June 1, 2014. Production of 500
ppm sulfur NRLM diesel fuel from a small refiner's refinery between June 1, 2010
and June 1, 2014 is limited to 105 percent of the refinery's average NRLM diesel fuel
production from 2006 through 2008.
Option 3 - NRLM Credit Option
An approved small refiner may choose to use the NRLM Credit Option in
combination with the NRLM Delay Option. The NRLM Credit Option allows
approved small refiners the opportunity to generate nonroad diesel sulfur credits for
early production of compliant NRLM diesel fuel. Small refiners could generate
"High Sulfur" credits for producing 500 ppm NRLM diesel fuel prior to June 1, 2010.
Small refiners could also generate "500 ppm" credits for producing 15 ppm NRLM
diesel fuel between June 1, 2009 and June 1, 2014. These credits can be banked for
future use or traded to another refiner.
Option 4 - NRLM Diesel/Gasoline Compliance Option
This option is available to small refiners that produce greater than 95 percent
of their NRLM diesel fuel at the 15 ppm sulfur standard by June 1, 2006 and elect not
to use the NRLM Credit Option described above. Production of 15 ppm sulfur
NRLM diesel fuel from a refinery using this option must be at least 85 percent of the
refinery's 2003 through 2005 baseline NRLM production. Refiners choosing this
option will receive a modest relaxation in their interim gasoline sulfur standards
beginning January 1, 2004. Specifically, the applicable small refiner annual average
and per-gallon cap would be increased by 20 percent for the duration of the interim
program. The interim program is through 2010 if the refiner elected to extend the
duration of its interim gasoline sulfur standards by producing 15 ppm highway diesel
fuel by June 1, 2006, and through 2007 if the refiner did not produce 15 ppm highway
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II. Nonroad Diesel Program Overview
diesel fuel by June 1, 2006. However, in no case may the per-gallon gasoline sulfur
cap exceed 450 ppm.
Other Flexibilities
Unlike the Highway Diesel rule, the Nonroad Diesel rule did not provide any
specific flexibilities for refineries located in the Geographic Phase-in Area (GPA).
Refiners located in the Rocky Mountain States (ID, MT, ND, WY, UT, CO and NM)
must comply with the 500 ppm and 15 ppm NRLM sulfur standards within the
compliance deadlines discussed above. NRLM diesel fuel used in rural areas of
Alaska (a GPA state in the gasoline sulfur rulemaking) is exempt from the 500 ppm
NRLM diesel fuel sulfur standard beginning June 1, 2007, but must meet the 15 ppm
sulfur standard beginning June 1, 20101. This fuel is regulated under a special rule
for Alaska which was finalized in June 2006 (71 FR 32450, June 6, 2006).
Transmix processors distill off-specification interface mixtures of petroleum
products from pipeline systems into gasoline and distillate fuel and are considered
refiners by EPA. Their simple refinery configuration does not make it cost effective
for them to install and operate a hydrotreater to reduce distillate fuel sulfur content.
As a result, they have been provided with additional flexibility to comply with the
diesel sulfur standards. Transmix processors may choose to continue to produce all
of their highway diesel fuel to the 500 ppm sulfur standard until 2010. They may
further choose to continue to produce all of their NRLM diesel fuel as high sulfur
diesel fuel until June 1, 2010, all of their NRLM diesel fuel to meet the 500 ppm
sulfur standard until June 1, 2014, and all of their LM diesel fuel to meet a 500 ppm
sulfur limit indefinitely.
III. Nonroad Pre-Compliance Reporting Requirements
The diesel sulfur regulations require that any refiner or importer planning to
produce or import 15 ppm NRLM diesel fuel after June 1, 2010 must submit annual
pre-compliance reports to EPA. The first pre-compliance report was due on June 1,
2005 and subsequent reports are due annually through 2011, or until the production of
15 ppm sulfur NR and LM diesel fuel commences, whichever is later.
The pre-compliance reports must contain the following information:
1. Any changes in the refiner's or importer's basic company or facility
information since registration.
2. Estimates of the average daily volumes (gallon) of each sulfur grade of
highway and NRLM diesel fuel produced at each refinery or imported at each
import facility. The volume estimates must include both fuel produced from
crude oil and other sources for the periods of June 1, 2010 through December
Rural areas are defined as areas of Alaska not served by the federal aid highway system (FAHS)
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III. Nonroad Pre-Compliance Reporting Requirements
31, 2010, calendar years 2011-2013, January 1, 2014 through May 31, 2014,
and June 1, 2014 through December 31, 2014.
3. For refiners or importers expecting to participate in the NRLM credit
program, estimates of the number of credits generated and/or used during the
periods above.
4. Information on project schedule by known or projected completion date (by
quarter) for each stage of the project (strategic planning, front-
end engineering, detailed engineering and permitting, procurement and
construction, and commissioning and startup).
5. Basic information regarding the selected technology pathway for compliance
(e.g. conventional hydrotreating versus other technologies, revamp versus
grassroots, etc.).
6. Whether capital investments have been made or are projected to be made.
7. An update of the progress in each of these areas.
We recognize that the pre-compliance reports contain preliminary information
and that final decisions on desulfurization plans may not have been made in all cases
as of the reporting deadline. Accordingly, the information in this summary and
analysis is based on the best available refinery information as of June 1, 2008. The
information presented here will be updated with more current analyses as subsequent
pre-compliance reports are received annually in 2009 through 2010.
IV. NRLM Summary Data
A. Nationwide Analysis
1. Refineries and Importers - Numbers and Production
According to the Energy Information Administration (EIA), 140 refineries
reported producing either high or low sulfur (or both) distillate fuels in 2003. This
reported production includes data from four refiner/importers that are located outside of
the continental United States (in the U.S. Virgin Islands, Aruba, and Eastern Canada)
whose production is targeted to the U.S. market. We received 2008 pre-compliance
reports for 129 refineries, all of which produced high and/or low sulfur diesel fuel in
2003. The 11 refineries which did not send pre-compliance reports may be planning to
produce high sulfur distillate fuel for the heating oil market, or may be planning to sell
their high sulfur distillate fuel to other refineries that can desulfurize it.
Refiners indicated that, for most of their refineries, they have made decisions
whether or not to produce 15 ppm NRLM diesel fuel. Table 1 shows that a total of 121
refineries reported they anticipate producing 15 and/or 500 ppm diesel fuel beginning
June 1, 2010. The remaining 8 refineries that sent pre-compliance reports said they either
plan to produce only high sulfur distillate for the heating oil market, or are still deciding
whether to produce 15 ppm NRLM diesel fuel.
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IV. NRLM Summary Data
Table 1.
U.S. Aggregated Report Information
Highway and NRLM Diesel Fuel Refinery Data 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
2010
121
99
6
16
2011
121
99
6
16
2012
123
103
4
16
2013
122
109
3
10
2014a2
122
110
3
9
2014b
120
120
0
0
The 2008 nonroad pre-compliance reports indicated that production of 15 ppm
and 500 ppm total diesel fuel beginning June 1, 2010 is projected to be 4.41 million
bbls/day, as shown in Table 2 below. The reported information does not allow for any
distinction between highway and NRLM production. However, from EIA's weekly
supply estimates (http://tonto. eia. doe. gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm),
production and importation of 15 ppm and 500 ppm diesel fuel for the second annual
compliance period in the highway diesel program (June 1, 2007 through May 31, 2008)
averaged approximately 3.8 million bbls/day. This average production includes all
highway diesel fuel and nearly all NRLM diesel fuel produced in or imported into the
U.S. during the compliance period.3 Thus, by comparing total production and
importation from the 2008 reports with average production from the second annual
compliance period, refiners are planning to produce approximately 600 thousand bbls/day
total additional 15 ppm and 500 ppm diesel fuel beginning June 1, 2010.
Table 2 and Figure 1 also illustrate that national production of 15 ppm diesel fuel
is projected to increase by 249 thousand bbls/day from 2010 to 2014, to 4.56 million
bbls/day. However, this projected increase is offset by a projected decrease in 500 ppm
NRLM diesel fuel production of 107 thousand bbls/day from 2010 to 2014. Twenty six
thousand bbls/day of the projected decrease in 500 ppm production occurs by June 1,
2012 as some refiners begin producing 15 ppm sulfur LM diesel fuel. The remaining 500
ppm diesel fuel production ends by May 31, 2014, when the flexibilities for small refiners
and NRLM credit use end.
Projected total production should be sufficient to meet future demand of 15 ppm
and 500 ppm total diesel fuel. Total demand for 15 ppm and 500 ppm diesel fuel
calculated from EIA's Annual Energy Outlook (AEO) 2008 is 4.04 million bbls/day in
2010 and 4.32 million bbls/day in 2015, compared to projected total production of 4.41
million bbls/day in 2010 and 4.56 million bbls/day in 2014.4
Data from the pre-compliance reports is divided into two sections for 2014 throughout this report. In all
tables and figures, data for the first five months of 2014 is labeled 2014a, and data for the last seven months
of 2014 is labeled 2014b.
3 The average does not include a relatively small amount of high sulfur NRLM diesel fuel produced by
small refiners and hardship refiners.
4 AEO 2008 projected a total distillate fuel oil demand of 4.40 million bbls/day in 2010 and 4.68 million
bbls/day in 2015 (see Table Al 1 in http://www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf). Both of these totals
include 355 thousand bbls/day distillate fuel oil (heating oil) for residential energy consumption (see Table
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IV. NRLM Summary Data
As mentioned previously, 140 refineries reported to EIA that they produced low
and/or high sulfur distillate fuel in 2003. Nine of these refineries either reported that they
have no plans at present to produce 15 ppm diesel fuel by June 1, 2014, and eleven did
not send an NRLM pre-compliance report to EPA in 2008. In 2003, these 20 refineries
produced a total of 118 thousand bbls/day of diesel fuel containing less than 500 ppm
sulfur, and 87 thousand bbls/day of distillate fuel containing more than 500 ppm sulfur.
We cannot tell at this time if or when these refineries might choose to produce 15 ppm
diesel fuel, or whether they will simply choose to continue to serve the heating oil market
indefinitely.
Table 2.
U.S. Aggregated Report Information
Diesel Fuel Production 2010-2014
Year
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm NRLM, bbls/day
Total 15 ppm and 500 ppm (highway +NRLM),
bbls/day
2010
4,308,094
106,571
4,414,665
2011
4,346,837
108,436
4,455,274
2012
4,487,715
80,113
4,567,828
2013
4,538,350
56,208
4,594,557
2014a
4,539,620
54,274
4,593,894
2014b
4,557,232
0
4,557,2325
Figure 1. Projected (Highway + NRLM) Diesel Fuel Production by Type, 2010-2014
5,000,000 -,
"m A c;nn nnn
LJ_
A nnn nnn
to
1 c;nn nnn
u>
11 nnn nnn
S c;nn nnn
"- o
2010 2011
2012 2013 2014a 2014b
Year
D 15 ppm sulfur • 500 ppm sulfur
A2 at http://www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf). EPA does not require heating oil to meet either the
15 ppm or 500 ppm sulfur standard, so total demand for 15 ppm and 500 ppm diesel fuel can be calculated
by subtracting heating oil demand from total distillate fuel oil demand.
5 Total 15 ppm and 500 ppm production decreases slightly during the last 7 months of 2014 because some
refineries plan to shut down for maintenance during this time.
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IV. NRLM Summary Data
2. Projected Credit Generation and Use
Table 3 shows total reported nonroad diesel sulfur credits generated and used for
each year of the nonroad diesel sulfur credit program. High sulfur credits are shown for
the last 7 months of 2006 (refiners could not begin generating high sulfur NRLM credits
until June 1, 2006), the full calendar years 2007 through 2009, and the first 5 months of
2010. 500 ppm credits are shown for the last 7 months of 2009, the full calendar years
2010 through 2013, and the first 5 months of 2014. Eighteen refineries indicated they
generated a total of 1,929 million high sulfur credits (1 credit = 1 gallon diesel fuel),
mostly during the high sulfur early credit generation period from June 1, 2006 through
May 31, 2007, including four refineries owned by small refiners who plan to continue
generating high sulfur credits after May 31, 2007. Nine refineries indicated they planned
to use a total of 2,516 million high sulfur credits from June 1, 2007 through May 31,
2010.
Fourteen refineries indicated they plan to generate a total of 1,260 million 500
ppm credits, mostly during the credit generation period from June 1, 2009 through May
31, 2010, including two refineries owned by small refiners who plan to continue
generating 500 ppm credits through December 31, 2013. Four refineries indicated they
planned to use a total of 406 million credits from June 1, 2010 through May 31, 2014.
Table 3.
U.S. Aggregated Report Information
Nonroad Diesel Fuel Credits 2006-2014
Year
# refineries generating high sulfur credits
# refineries using high sulfur credits
High sulfur credit generation, millions
High sulfur credit usage, millions
Year
# refineries generating 500 ppm credits
# refineries using 500 ppm credits
500 ppm credit generation, millions
500 ppm credit usage, millions
2009
13
429
2006
18
724
2010
14
4
539
108
2007
18
9
1,038
583
2011
2
3
94
167
2008
4
9
106
944
2012
2
3
97
90
2009
3
8
51
822
2013
2
2
100
29
2010
2
4
10
167
2014
2
12
total
1,929
2,516
total
1,260
406
Figures 2 and 3 illustrate cumulative projected generation and usage of high sulfur
credits and 500 ppm credits by year. Although Figure 3 shows that 500 ppm credit
generation significantly exceeds 500 ppm credit usage, Figure 2 shows a projected
shortfall in high sulfur credits beginning in 2009. EPA has talked with refiners who had
indicated in their pre-compliance reports that they planned to use more high sulfur credits
than they generated, and learned that they have flexibility to use fewer high sulfur credits,
if necessary. Based on our conversations with these refiners, we believe they have
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IV. NRLM Summary Data
sufficient flexibility to reduce their usage of high sulfur credits in order to match the
available supply of high sulfur credits.
Figure 2. Total U.S. High Sulfur Credits
2,500
j2 2,000
£ 1,500
| 1,000
S 500
r^=P]
a
^1
n
f
-* —
71
•*
x
^
X
2006 2007 2008 2009 2010
Year
• cumulative HSC generated • cumulative HSC used
Figure 3. Total U.S. 500 ppm Credits
1,400-1
1,200
| 1,000
g 800
§ 600
| 400
200
0
A
-> -• -> *
F
__
=P
T
f —
T
__
2009 2010 2011 2012 2013
Year
I
2014
D cumulative 500 ppm credits generated • cumulative 500 ppm credits used
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IV. NRLM Summary Data
3. Project Scope and Timing
In addition to providing diesel fuel production and credit projections, refineries
must also include information outlining both their timeline for compliance with the 15
ppm sulfur standard and their engineering plans (e.g., design and construction) in their
pre-compliance reports. We requested that refineries report their progress according to
the following five stages: 1) strategic planning, 2) planning and front-end engineering, 3)
detailed engineering and permitting, 4) procurement and construction, and 5)
commissioning and start-up. In the 2007 nonroad pre-compliance reports, most refineries
indicated they were either just starting to develop their plans to produce 15 ppm
NRLM diesel, or did not plan to produce any more 15 or 500 ppm diesel than indicated in
their highway pre-compliance reports.
In the 2008 NRLM pre-compliance reports, refiners indicated they have plans to
install new desulfurization capacity at 26 refineries specifically to produce 15 ppm
NRLM diesel fuel. Most of these refineries are generally in the middle stages of their
projects to produce 15 ppm NRLM diesel fuel. Most have completed their front-end
engineering design work, have ordered long lead time equipment like reactor vessels, and
are well into the detailed engineering and permitting stage.
All 26 refineries indicated that they would either be revamping existing
hydrotreating or hydrocracking units, or installing new hydrotreating or hydrocracking
units. Twenty two of these refineries indicated specific project scopes to produce 15 ppm
NRLM diesel. Of those 22 refineries, 9 are planning to install a new desulfurization unit,
9 are planning to revamp an existing desulfurization unit, and 4 refineries are planning to
both install at least one new desulfurization unit and revamp at least one existing
desulfurization unit. The other 4 refineries did not report detailed project information.
4. Small Refiner Options
As discussed previously, the diesel sulfur regulations contain four options which
provide qualified small refiners with flexibilities regarding production of 15 ppm NRLM
diesel fuel. Option 1 allows a refinery owned by an approved small refiner to delay
production of 500 ppm sulfur NRLM diesel fuel until June 1, 2010. Option 1 was chosen
by 5 refineries. These 5 refineries produced twenty two thousand bbls/day high sulfur
distillate fuel in 2003.
Option 2 allows a refinery owned by an approved small refiner to delay
production of 15 ppm NRLM diesel fuel until June 1, 2014. Option 2 was chosen by 5
refineries. These 5 refineries produced twenty two thousand bbls/day high sulfur
distillate fuel in 2003. (As Options 1 and 2 are not mutually exclusive, small refiners
may choose both Options 1 and 2.)
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IV. NRLM Summary Data
Option 3 allows a small refiner utilizing Option 1 to generate credits for any 500
ppm sulfur NRLM diesel fuel produced between June 1, 2006 and May 31, 2010, and
also allows a small refiner utilizing Option 2 to generate credits for any 15 ppm sulfur
NRLM diesel fuel produced between June 1, 2009 and December 31, 2013. Option 3
was chosen by 4 refineries. These 4 refineries produced six thousand bbls/day high
sulfur distillate fuel in 2003.
Lastly, Option 4 allows a refinery owned by a small refiner the ability to increase
its gasoline sulfur standards by 20 percent, provided that the refinery begins producing 15
ppm NRLM on June 1, 2006 and the refinery's 15 ppm NRLM production is at least 85
percent of the refinery's NRLM baseline production. Option 4 was chosen by 5
refineries. These 5 refineries produced fourteen thousand bbls/day high sulfur distillate
fuel in 2003.
The number of refineries owned by small refiners, and the production of high
sulfur distillate fuel from these refineries in 2003, are shown below in Table 4 for each
option.
Table 4.
Intended Small Refiner Compliance Options by Number of Refineries and
High Sulfur Distillate Fuel Production
Option
1.
2.
3.
4.
Description
Delay 500 ppm NRLM Production
Delay 1 5 ppm NRLM Production
NRLM Credit Option
NRLM Diesel/Gasoline Compliance Option
Number of
Refineries
5
5
4
5
2003 High Sulfur Distillate
Fuel Production
(thousand bbls/day)
22
22
6
14
B. PADD Analysis
This section presents information specific to each PADD. Tables 5 and 6 show,
by PADD, the number of refineries producing 15 and/or 500 ppm diesel fuel for 2010
(from June 1 through December 31) and 2014 (from June 1 through December 31). The
total number of refineries producing diesel fuel decreases by one from 2010 to 2014, as
two refineries enter the diesel fuel market in 2012, and three refineries exit by 2104. In
2010, 22 refineries are using flexibilities in the rules (producing 500 ppm LM diesel fuel,
producing 500 ppm NR diesel fuel using NRLM credits, small refiner flexibilities) to
produce some or all 500 ppm diesel fuel. However, by June 1, 2014, all of these
refineries will only be producing 15 ppm diesel fuel and/or heating oil.
10
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IV. NRLM Summary Data
Tables 7 and 8 show, by PADD, anticipated production of 15 ppm and 500 ppm
total diesel fuel for 2010 (from June 1 through December 31) and 2014 (from June 1
through December 31), and Figure 4 illustrates the average anticipated production of 15
ppm and 500 ppm total diesel fuel by PADD from June 1, 2010 through December 31,
2014. Tables 7 and 8 show that from 2010 through 2014, projected total diesel fuel
production in PADDs 1 and 3 increases by a total of 128 thousand bbls/day, while
projected total diesel fuel production increases slightly in PADDs 2, 4 and 5.
Table 5.
Projected Number of Highway and NRLM Diesel Fuel Refineries by PADD for 2010
PADD
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
1
12
8
0
4
2
26
23
2
1
3
44
37
3
4
4
14
11
0
3
5
25
20
1
4
Total U.S.
121
99
6
16
Table 6.
Projected Number of Highway and NRLM Diesel Fuel Refineries by PADD for 2014b
PADD
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
1
13
13
0
0
2
25
25
0
0
3
44
44
0
0
4
14
14
0
0
5
24
24
0
0
Total U.S.
120
120
0
0
Table 7.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2010
PADD
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm (highway + NRLM), bbls/day
Total 1 5 ppm and 500 ppm total (highway + NRLM),
bbls/day
1
480,001
20,476
500,478
2
1,028,534
13,425
1,041,959
3
2,109,397
53,844
2,163,242
4
182,569
7,500
190,069
5
507,592
11,326
518,918
Total
U.S.
4,308,094
106,571
4,414,665
Table 8.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2014b
PADD
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm (highway +NRLM), bbls/day
Total 1 5 ppm and 500 ppm total (highway + NRLM),
bbls/day
1
530,105
0
530,105
2
1,050,024
0
1,050,024
3
2,261,308
0
2,261,308
4
192,869
0
192,869
5
522,926
0
522,926
Total
U.S.
4,557,232
0
4,557,232
11
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IV. NRLM Summary Data
Figure 4. Projected (Highway+NRLM) Diesel Fuel Production by PADD, 2010-2014
—i ra
£ 5
z _
+ ^
r
O)
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
1,500,000
1,000,000
),000
0
2010 2011
2012 2013
Year
2014a 2014b
More detailed information for each PADD is shown below in Tables 9 through
13.
12
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IV. NRLM Summary Data
1. PADD1
Reported totals for all PADD 1 refineries and importers are summarized below in
Table 9. Table 9 shows that for 2010, 12 refineries anticipate producing approximately
500 thousand bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Eight refineries
reported they intend to produce all of their diesel fuel containing 15 ppm or less of sulfur,
and four refineries reported they intend to produce approximately 20 thousand bbls/day
500 ppm NRLM diesel fuel beginning in 2010. Table 9 also shows that total diesel fuel
production in PADD 1 is projected to increase by approximately 30 thousand bbls/day
from 2010 through 2014, including production from one refinery that enters the diesel
fuel market in 2012.
Table 9
PADD 1 Diesel Fuel Data: 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 1 5/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
12
8
0
4
480,001
20,476
500,478
2011
12
8
0
4
487,929
20,476
508,405
2012
13
9
0
4
508,806
20,476
529,282
2013
13
9
0
4
529,629
12,476
542,105
2014a
13
10
0
3
529,629
10,476
540,105
2014b
13
13
0
0
530,105
0
530,105
13
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IV. NRLM Summary Data
2. PADD 2
The reported totals for all PADD 2 refineries are summarized below in Table 10.
Table 10 shows that for 2010, 26 refineries anticipate producing 1.04 million bbls/day
total (15 ppm and 500 ppm sulfur) diesel fuel. Twenty-three refineries reported they
intend to produce all of their diesel fuel containing 15 ppm sulfur or less, and three
refineries reported they intend to produce a small amount of 500 ppm sulfur diesel fuel.
Table 10 also shows that total diesel fuel production in PADD 2 is projected to increase
very slightly from 2010 through 2014, although one refinery plans to exit the diesel
market in 2014.
Table 10.
PADD 2 Diesel Fuel Data: 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
26
23
2
1
1,028,534
13,425
1,041,959
2011
26
23
2
1
1,041,259
13,091
1,054,350
2012
26
23
1
2
1,045,213
9,227
1,054,439
2013
26
25
1
0
1,058,391
7,825
1,066,216
2014a
26
25
1
0
1,058,158
7,825
1,065,983
2014b
25
25
0
0
1,050,024
0
1,050,024
14
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IV. NRLM Summary Data
3. PADD 3
Reported totals for all PADD 3 refineries are summarized below in Table 11.
Table 11 shows that 44 refineries anticipate producing 2.16 million bbls/day total (15
ppm and 500 ppm sulfur) diesel fuel in 2010. Thirty-seven refineries reported they
intend to produce all of their diesel fuel containing 15 ppm sulfur or less, and seven
refineries reported they intend to produce some amount of 500 ppm diesel fuel. One
refinery plans to enter the diesel fuel market in 2012, and one refinery plans to exit the
diesel fuel market in 2013. Total diesel fuel production is projected to increase by 98
thousand bbls/day from 2010 through 2014.
Table 11.
PADD 3 Diesel Fuel Data: 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
44
37
3
4
2,109,397
53,844
2,163,242
2011
44
37
3
4
2,125,285
55,980
2,181,266
2012
45
39
2
4
2,228,880
42,559
2,271,440
2013
44
41
1
2
2,242,663
30,889
2,273,552
2014a
44
41
1
2
2,243,878
30,889
2,274,767
2014b
44
44
0
0
2,261,308
0
2,261,308
15
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IV. NRLM Summary Data
4. PADD 4
Reported totals for all PADD 4 refineries are summarized below in Table 12.
Table 12 shows that 14 refineries anticipate producing 190 thousand bbls/day total (15
ppm and 500 ppm sulfur) diesel fuel in 2010. Eleven refineries reported they intend to
produce all of their diesel fuel containing 15 ppm sulfur or less, and three refineries
reported they intend to produce some amount of 500 ppm diesel fuel. Table 12 also
shows that the projected total diesel fuel production in PADD 4 remains relatively
constant from 2010 through 2014.
Table 12.
PADD 4 Diesel Fuel Data: 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
14
11
0
3
182,569
7,500
190,069
2011
14
11
0
3
184,771
7,500
192,271
2012
14
11
0
3
190,222
3,399
193,621
2013
14
13
0
1
193,071
500
193,571
2014a
14
13
0
1
193,358
500
193,858
2014b
14
14
0
0
192,869
0
192,869
16
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IV. NRLM Summary Data
5. PADD
Reported totals for all refineries in PADD 5 are summarized below in Table 13.
Table 13 shows that 25 refineries anticipate producing 519 thousand bbls/day total (15
ppm and 500 ppm sulfur) diesel fuel in 2010. Twenty of these refineries indicated they
expect to produce all of their diesel fuel containing 15 ppm sulfur or less, and five
refineries reported they intend to produce some amount of 500 ppm diesel fuel. Total
diesel fuel production is projected to remain relatively constant from 2010 through 2014,
although one refinery plans to exit the diesel fuel market in 2014.
Table 13.
PADD 5 Diesel Fuel Data: 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
25
20
1
4
507,592
11,326
518,918
2011
25
20
1
4
507,593
11,388
518,982
2012
25
21
1
3
514,595
4,452
519,047
2013
25
21
1
3
514,596
4,517
519,113
2014a
25
21
1
3
514,598
4,583
519,181
2014b
24
24
0
0
522,926
0
522,926
' Alaska refineries are included in this analysis
17
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IV. NRLM Summary Data
C. Comparison of 2007 and 2008 NRLM Pre-Compliance Reports
Total reported production of 15 ppm and 500 ppm diesel fuel in the 2008 pre-
compliance reports changed very little, compared to the 2007 pre-compliance reports.
Table 14 shows the projected production of 15 ppm and 500 ppm diesel fuel from the
2007 and 2008 pre-compliance reports for 2010 (from June 1 to December 31). Total
production of diesel fuel from the 2008 reports was fourteen thousand bbls/day less than
total production from the 2007 reports. A large decrease in reported production for
PADD 1 was mostly offset by increases in reported production for all remaining PADDs.
Table 14.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2010
PADD
2007 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 15 ppm and 500 ppm , bbls/day
2008 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 15 ppm and 500 ppm , bbls/day
Change in reported production, bbls/day
1
562,357
267
562,624
480,001
20,476
500,478
-62,147
2
1,026,871
6,207
1,033,078
1,028,534
13,425
1,041,959
8,880
3
2,056,162
81,355
2,137,518
2,109,397
53,844
2,163,242
25,724
4
181,784
6,500
188,284
182,569
7,500
190,069
1,785
5
496,094
11,326
507,420
507,592
11,326
518,918
11,498
Total
U.S.
4,323,268
105,656
4,428,924
4,308,094
106,571
4,414,665
-14,259
Table 15 shows the projected production of 15 and 500 ppm diesel fuel from the
2007 and 2008 pre-compliance reports for 2014 (from June 1 to December 31). Total
production of diesel fuel from the 2008 reports was five thousand bbls/day greater than
the total production from the 2007 reports. A large decrease in reported production for
PADD 1 was offset by increases in reported production for all remaining PADDs,
primarily PADD 3.
18
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IV. NRLM Summary Data
Table 15.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2014b
PADD
2007 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 15 ppm and 500 ppm , bbls/day
2008 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 15 ppm and 500 ppm , bbls/day
Change in reported production, bbls/day
1
607,820
0
607,820
530,105
0
530,105
-77,715
2
1,035,090
0
1,035,090
1,050,024
0
1,050,024
14,934
3
2,194,391
0
2,194,391
2,261,308
0
2,261,308
66,917
4
192,084
0
192,084
192,869
0
192,869
785
5
522,571
0
522,571
522,926
0
522,926
355
Total
U.S.
4,551,957
0
4,551,957
4,557,232
0
4,557,232
5,275
19
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V. Appendix
Appendix - List of Acronyms
bbls/day
bpcd
EIA
EPA (or, "the Agency")
FR
LM
NR
NRLM
PADD
ppm
ULSD
barrels per day
barrels per calendar day
Energy Information Administration
U.S. Environmental Protection Agency
Federal Register
Locomotive and Marine
Nonroad
Nonroad, Locomotive, and Marine
Petroleum Administration for Defense District
parts-per-million
Ultra Low Sulfur Diesel
20
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