Summary and Analysis of the
2007 Nonroad Diesel Fuel
Pre-Compliance Reports
&EPA
United States
Environmental Protection
Agency
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Summary and Analysis of the
2007 Nonroad Diesel Fuel
Pre-Compliance Reports
Compliance and Innovative Strategies Division
Office of Transportation and Air Quality
U.S. Environmental Protection Agency
v>EPA
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.
United States EPA420-R-08-003
Environmental Protection , „„„
Agency January 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 Statistics 4
A. Nationwide Analysis 4
1. Refineries and Importers - Numbers and Volumes 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 2006 and 2007 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 from 2005 through 2011 by June 1 of each year under
the nonroad diesel sulfur regulations. This report summarizes the results of refiners' June
2007 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 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 2007 nonroad pre-compliance reports showed that:
- 122 refineries are planning to produce 15 ppm diesel fuel by June 1, 2014
18 refineries are either undecided as to their plans, or are choosing to produce
only heating oil
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, 10
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 an increase in expected production and importation of total diesel
fuel beginning June 1, 2010, compared to the 2006 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 2006 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 are 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.
This rule includes provisions for refiners and importers to generate credits for
early NRLM diesel sulfur reduction efforts. "High sulfur" credits may 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 that begins 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 Tier 2/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 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 Tier 2/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. These credits can be banked for
future use or traded to another refiner. Small refiners could generate "High Sulfur"
credits for producing any volume of 500 ppm NRLM diesel fuel prior to June 1,
2010. Small refiners could also generate "500 ppm" credits for producing any
volume of 15 ppm NRLM diesel fuel between June 1, 2009 and June 1, 2014.
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 rulemaking, the nonroad diesel sulfur regulations do
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 in
rural areas of the state 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 Nonroad Rule requires 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 (gallons) of each sulfur grade of
highway and NRLM diesel fuel produced or imported at each refinery
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
(facility). The volume estimates must include both fuel produced from crude
oil and other sources for the periods of June 1, 2010 through December 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, 2007. The
information presented here will be updated with more current analyses as subsequent
pre-compliance reports are received annually in 2008 through 2011.
IV. NRLM Summary Statistics
A. Nationwide Analysis
1. Refineries and Importers - Numbers and Volumes
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 2007 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 123
refineries reported they anticipate producing 15 and/or 500 ppm diesel fuel beginning
June 1, 2010. The remaining 6 refineries that sent pre-compliance reports said they either
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IV. NRLM Summary Statistics
plan to produce only high sulfur distillate for the heating oil market, or are still deciding
whether to produce 15 ppm NRLM diesel fuel.
Table 1.
U.S. Aggregated Report Information
Highway and NRLM Diesel Fuel Refinery Statistics 2010-2014
Year
# refineries producing diesel fuel
# refineries at 100% 15 ppm
# refineries at 100% 500 ppm
# refineries with 15/500 ppm mix
2010
123
106
5
12
2011
123
106
5
12
2012
124
108
3
13
2013
123
114
2
7
2014a2
123
115
2
6
2014b
122
122
0
0
The 2007 nonroad pre-compliance reports indicated that production of 15 ppm
and 500 ppm total diesel fuel beginning June 1, 2010 is projected to be 4.42 million
bbls/day, as shown in Table 2 below. The reported information does not allow for any
distinction between highway and NRLM volume. However, from EIA's weekly supply
estimates (http://tonto.eia.doe.gov/dnav/pet/pet sum sndwdcusnusw.htm),
production and importation of 15 ppm and 500 ppm diesel fuel for the first annual
compliance period in the highway diesel program (June 1, 2006 through May 31, 2007)
averaged approximately 3.4 million bbls/day. Thus, by comparing total production and
importation from the 2007 reports with the average from the first annual compliance
period, refiners appear to be planning to produce approximately 1.0 million bbls/day total
additional 15 ppm and 500 ppm NRLM diesel fuel beginning June 1, 2010.
Table 2 and Figure 1 also illustrate that production of total 15 ppm diesel fuel is
projected to increase by 230 thousand bbls/day from 2010 to 2014, to 4.55 million
bbls/day. However, this projected increase is offset by a projected decrease in 500 ppm
NRLM diesel fuel production of 105 thousand bbls/day from 2010 to 2014. Thirty
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) 2007 is 4.11 million bbls/day in
2010 and 4.44 million bbls/day in 2015, compared to projected total production of 4.42
million bbls/day in 2010 and 4.55 million bbls/day in 20143.
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 AEO 2007 projected a total distillate fuel oil demand of 4.53 million bbls/day in 2010 and 4.86 million
bbls/day in 2015 (see Table All in http://www.eia.doe. gov/oiaf/aeo/aeoref_tab.htmlX Both of these totals
include 425 thousand bbls/day distillate fuel oil (heating oil) for residential energy consumption (see Table
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IV. NRLM Summary Statistics
As mentioned previously, 140 refineries reported to EIA that they produced low
and/or high sulfur distillate fuel in 2003. Eighteen of these refineries either reported that
they have no plans at present to produce 15 ppm diesel fuel by June 1, 2014, or did not
send an NRLM pre-compliance report to EPA in 2007. In 2003, these 18 refineries
produced a total of 76 thousand bbls/day of diesel fuel containing less than 500 ppm
sulfur, and 70 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 Volume 2010-2014
Year
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm NRLM, bbls/day
15+500 ppm total (highway + NRLM), bbls/day
2010
4,323,553
105,656
4,429,209
2011
4,348,778
101,485
4,450,263
2012
4,431,146
72,523
4,503,668
2013
4,500,089
50,130
4,550,219
2014a
4,503,560
50,099
4,553,659
2014b
4,552,242
0
4,552,2424
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n
2010 2011
2012 2013 2014a 2014b
Year
D 15 ppm sulfur • 500 ppm sulfur
Figure 1. Projected (Highway + NRLM) Diesel Fuel Production by Type, 2010-2014
A2 at http://tonto.eia.doe.gov/dnav/pet/pet sum sndw dcus nus w.htm). 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.
4 Total 15 + 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 Statistics
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. Nineteen refineries indicated they
plan to generate a total of 1,583 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 two refineries owned by small refiners who plan to
continue generating high sulfur credits after May 31, 2007. Ten refineries indicated that
they plan to use a total of 2,114 million high sulfur credits in 2007, including four
refineries that plan to continue using high sulfur credits through May 31, 2010.
Nine refineries indicated they plan to generate a total of 1,177 million 500 ppm
credits 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, 2009. One refinery indicated that it plans to use a
total of 40 million 500 ppm 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
10
519
2006
19
691
2010
10
1
419
6
2007
18
10
762
573
2011
2
1
79
10
2008
2
6
82
691
2012
2
1
79
10
2009
2
5
42
675
2013
2
1
82
10
2010
1
4
7
176
2014
1
4
total
1,583
2,114
total
1,177
40
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 will have a clearer picture of high
sulfur credit supply after we have analyzed the high sulfur credit generation and usage
reports for the first annual compliance period (June 1, 2006 through May 31, 2007),
submitted to EPA by August 31, 2007, since the pre-compliance reports indicated that
most high sulfur credits would be generated during the first annual compliance period.
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IV. NRLM Summary Statistics
Additionally, we have 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 sufficient flexibility to reduce
their usage of high sulfur credits in order to match the available supply of high sulfur
credits.
2006 2007 2008
Year
2009
2010
D cumulative HSC generated • cumulative HSC used
Figure 2. Total U.S. High Sulfur Credits
1,200-.
1,000
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=5 800
£
^ 600
o
= 400
i
200
o
A
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^
V
^
<=>
5?
^
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^
2009 2010 2011 2012 2013 2014
Year
• cumulative 500 ppm credits generated • cumulative 500 ppm credits used
Figure 3. Total U.S. 500 ppm Credits
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IV. NRLM Summary Statistics
3. Project Scope and Timing
In addition to providing diesel fuel volume 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 last year's 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 2007 NRLM pre-compliance reports, refiners indicated they have plans to
install new desulfurization capacity at 29 refineries specifically to produce 15 ppm
NRLM diesel fuel. All of these refineries are generally in the early stages of their
projects to produce 15 ppm NRLM diesel fuel. Many have completed their strategic
planning, are well into, or just beginning, their front-end engineering design work, and
will soon be ordering, or have ordered, long lead time equipment like reactor vessels.
All 29 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 7 refineries did not report detailed project information.
4. Small Refiner Options
As discussed in greater detail above, the Nonroad Diesel fuel 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 4 refineries. These 4 refineries produced eighteen 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 4
refineries. These 4 refineries produced eighteen thousand bbls/day high sulfur distillate
fuel in 2003. (As Options 1 and 2 are not mutually exclusive, there are some small
refiners that chose both Options 1 and 2.)
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/or
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IV. NRLM Summary Statistics
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 volumes reported by refineries regarding the small refiner options, and the
number of refineries by option chosen, are shown in Table 4 below.
Table 4.
Intended Small Refiner Compliance Options by Number of Refineries and
High Sulfur Distillate Fuel Production Capacity
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
4
4
4
5
2003 High Sulfur Distillate
Fuel Production
(thousand bbls/day)
18
18
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
one refinery enters the diesel fuel market in 2012, and two refineries exit in 2012 and
2104 respectively. In 2010, 17 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 2014 all
but one of these refineries will be producing only 15 ppm diesel fuel.
Tables 7 and 8 show, by PADD, anticipated production rates 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
10
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IV. NRLM Summary Statistics
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, the projected total diesel fuel
production in PADDs 1, 3 and 5 increases by a total of 117 thousand bbls/day, while
projected total diesel fuel production remains nearly constant in PADDs 2 and 4.
More detailed information for each PADD is shown below in Tables 9 through
13.
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
14
13
0
1
2
25
23
1
1
3
44
37
3
4
4
14
12
0
2
5
26
21
1
4
Total U.S.
123
106
5
12
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
15
15
0
0
2
25
25
0
0
3
43
43
0
0
4
14
14
0
0
5
25
25
0
0
Total U.S.
122
122
0
0
Table 7.
Projected Volumes of (Highway + NRLM) Diesel Fuel by PADD for 2010
PADD
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm (highway + NRLM), bbls/day
1 5 + 500 ppm total (highway + NRLM), bbls/day
1
562,357
267
562,624
2
1,026,871
6,207
1,033,078
3
2,056,162
81,355
2,137,518
4
182,069
6,500
188,569
5
496,094
11,326
507,420
Total
U.S.
4,323,553
105,656
4,429,209
Table 8.
Projected Volumes of (Highway + NRLM) Diesel Fuel by PADD for 2014b
PADD
Total 15 ppm (highway +NRLM), bbls/day
Total 500 ppm (highway +NRLM), bbls/day
1 5 + 500 ppm total (highway + NRLM), bbls/day
1
607,820
0
607,820
2
1,035,090
0
1,035,090
3
2,194,391
0
2,194,391
4
192,369
0
192,369
5
522,571
0
522,571
Total
U.S.
4,552,242
0
4,552,242
11
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IV. NRLM Summary Statistics
0)
.2
Q
-
Di
ra
+ -g
o>
1
5,000,000
4,500,000
4,000,000
3,500,000
3,000,000
2,500,000
2,000,000
1,500,000
1,000,000
500,000
0
2010 2011 2012 2013 2014a 2014b
Year
Figure 4. Projected (Highway + NRLM) Diesel Fuel Production by PADD, 2010-
2014
12
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IV. NRLM Summary Statistics
1. PADD1
Reported totals for all PADD 1 refineries and importers are summarized below in
Table 9. Table 9 shows that for 2010, 14 refineries anticipate producing nearly 563
thousand bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Thirteen refineries
reported that they intend to produce 100 percent of their diesel fuel at 15 ppm or less of
sulfur, and one refinery reported they intend to produce a small amount of 500 ppm
NRLM diesel fuel through May, 2014. Table 9 also shows that total diesel fuel
production in PADD 1 is projected to increase by approximately 45 thousand bbls/day
from 2010 through 2014, including one refinery that enters the diesel fuel market in 2012.
Table 9
PADD 1 Diesel Fuel Statistics 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+500 ppm (bbls/day)
2010
14
13
0
1
562,357
267
562,624
2011
14
13
0
1
562,600
424
563,024
2012
15
14
0
1
587,290
228
587,518
2013
15
14
0
1
607,938
98
608,035
2014a
15
15
0
0
607,426
0
607,426
2014b
15
15
0
0
607,820
0
607,820
13
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IV. NRLM Summary Statistics
2. PADD 2
The reported totals for all PADD 2 refineries are summarized below in Table 10.
Table 10 shows that for 2010, 25 refineries anticipate producing 1.03 million bbls/day
total (15 ppm and 500 ppm sulfur) diesel fuel. Twenty-three refineries reported that they
intend to produce 100 percent of their diesel fuel at or below 15 ppm sulfur, and two
refineries reported that 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
remain essentially constant from 2010 through 2014.
Table 10.
PADD 2 Diesel Fuel Statistics 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+500 ppm (bbls/day)
2010
25
23
1
1
1,026,871
6,207
1,033,078
2011
25
23
1
1
1,035,923
5,921
1,041,844
2012
25
23
0
2
1,034,731
2,595
1,037,326
2013
25
25
0
0
1,037,875
0
1,037,875
2014a
25
25
0
0
1,038,896
0
1,038,896
2014b
25
25
0
0
1,035,090
0
1,035,090
14
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IV. NRLM Summary Statistics
3. PADD 3
Reported totals for all PADD 3 refineries are summarized below in Table 11.
Table 11 shows that 44 refineries anticipate producing nearly 2.14 million bbls/day total
(15 ppm and 500 ppm sulfur) diesel fuel in 2010. Thirty-seven refineries reported they
intend to produce 100 percent of their diesel fuel at or below 15 ppm, and seven
refineries reported that they intend to produce some amount of 500 ppm diesel fuel.
Although one refinery currently plans to exit the diesel fuel market in 2014, total diesel
fuel production is projected to increase by 57 thousand bbls/day from 2010 through 2014.
Table 11.
PADD 3 Diesel Fuel Statistics 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+500 ppm (bbls/day)
2010
44
37
3
4
2,056,162
81,355
2,137,518
2011
44
37
3
4
2,058,745
81,355
2,140,100
2012
44
37
2
5
2,105,163
62,265
2,167,428
2013
43
40
1
2
2,147,463
45,015
2,192,479
2014a
43
40
1
2
2,149,566
45,015
2,194,582
2014b
43
43
0
0
2,194,391
0
2,194,391
15
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IV. NRLM Summary Statistics
4. PADD 4
Reported totals for all PADD 4 refineries are summarized below in Table 12.
Table 12 shows that 14 refineries anticipate producing nearly 189 thousand bbls/day total
(15 ppm and 500 ppm sulfur) diesel fuel in 2010. Twelve refineries reported that they
intend to produce 100 percent of their diesel fuel with 15 ppm or less of sulfur and two
refineries reported that 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 Statistics 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+500 ppm (bbls/day)
2010
14
12
0
2
182,069
6,500
188,569
2011
14
12
0
2
184,271
6,500
190,771
2012
14
12
0
2
189,722
2,982
192,704
2013
14
13
0
1
192,571
500
193,071
2014a
14
13
0
1
192,858
500
193,358
2014b
14
14
0
0
192,369
0
192,369
16
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IV. NRLM Summary Statistics
5. PADD 5
Reported totals for all refineries in PADD 5 are summarized below in Table 13.
Table 13 shows that 26 refineries anticipate producing over 507 thousand bbls/day total
(15 ppm and 500 ppm sulfur) diesel fuel in 2010. Twenty-one of these refineries
indicated that they expect to produce 100 percent of their diesel fuel with 15 ppm sulfur
or less, and five refineries reported that they intend to produce some amount of 500 ppm
diesel fuel. Although one refinery plans to exit the diesel fuel market in 2014, total diesel
fuel production is projected to increase by 15 thousand bbls/day from 2010 through 2014.
Table 13.
PADD 5 Diesel Fuel Statistics 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+500 ppm (bbls/day)
2010
26
21
1
4
496,094
11,326
507,420
2011
26
21
1
4
507,238
7,284
514,523
2012
26
22
1
3
514,240
4,452
518,692
2013
26
22
1
3
514,241
4,517
518,758
2014a
26
22
1
3
514,814
4,583
519,397
2014b
25
25
0
0
522,571
0
522,571
5 Alaska refineries are included in this analysis
17
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IV. NRLM Summary Statistics
C. Comparison of 2006 and 2007 NRLM Pre-Compliance Reports
Total production of 15 ppm and 500 ppm diesel fuel increased significantly in the
2007 NRLM pre-compliance reports, compared to the 2006 NRLM pre-compliance
reports. Table 14 shows the projected volumes of 15 ppm and 500 ppm diesel fuel from
the 2006 and 2007 NRLM pre-compliance reports for 2010 (in bbls/day, from June 1 to
December 31). Total reported production of diesel fuel in 2007 was 280 thousand
bbls/day greater than total reported production in the 2006 reports. Several refineries in
each PADD reported increases in anticipated production, most significantly in PADDs 1,
2 and 3. This includes two refineries in PADD 1 and two refineries in PADD 3 which
reported in 2006 that they were not planning to produce any 15 ppm diesel fuel beginning
June 1, 2010, but are now planning to begin producing 15 ppm diesel fuel by June 1,
2010.
Table 14.
Projected Volumes of (Highway + NRLM) Diesel Fuel by PADD for 2010
PADD
2006 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total (15 + 500) ppm , bbls/day
200 7 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total (15 + 500) ppm , bbls/day
Increase in reported production, bbls/day
1
461,843
71
461,915
562,357
267
562,624
100,710
2
1,001,381
9,936
1,011,317
1,026,871
6,207
1,033,078
21,761
3
1,920,020
78,920
1,998,940
2,056,162
81,355
2,137,518
138,577
4
166,439
14,054
180,492
182,069
6,500
188,569
8,077
5
488,758
7,548
496,306
496,094
11,326
507,420
11,114
Total
U.S.
4,038,441
110,529
4,148,970
4,323,553
105,656
4,429,209
280,239
Table 15 shows the projected volumes of 15 and 500 ppm diesel fuel from the
2005 and 2006 NRLM pre-compliance reports for 2014 (from June 1 to December 31).
Total reported production of diesel fuel in the 2007 reports was 262 thousand bbls/day
greater than the total reported production in the 2006 reports. Several refineries in each
PADD reported increases in anticipated production, most significantly in PADDs 1, 2 and
3.
18
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IV. NRLM Summary Statistics
Table 15.
Projected Volumes of (Highway + NRLM) Diesel Fuel by PADD for 2014b
PADD
2006 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total (15 + 500) ppm , bbls/day
2007 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total (15 + 500) ppm , bbls/day
Increase in reported production, bbls/day
1
465,822
0
465,822
607,820
0
607,820
141,998
2
1,006,079
0
1,006,079
1,035,090
0
1,035,090
29,011
3
2,113,326
0
2,113,326
2,194,391
0
2,194,391
81,065
4
186,615
0
186,615
192,369
0
192,369
5,754
5
518,202
0
518,202
522,571
0
522,571
4,370
Total
U.S.
4,290,045
0
4,290,045
4,552,242
0
4,552,242
262,197
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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