Summary and Analysis of the
2010 Nonroad Diesel Fuel
Pre-Compliance Reports
&EPA
United States
Environmental Protection
Agency
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Summary and Analysis of the
2010 Nonroad Diesel Fuel
Pre-Compliance Reports
Compliance and Innovative Strategies 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.
&EPA
United States
Environmental Protection
Agency
EPA-420-R-10-028
December 2010
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Table of Contents
I. Executive Summary 1
II. Nonroad Diesel Program Overview 2
III. Nonroad Pre-Compliance Reporting Requirements 4
IV. NRLM Summary Data 5
A. Nationwide Analysis 5
1. Refineries and Importers - Numbers and Production 5
2. Projected Credit Generation and Use 8
3. Project Scope and Timing 9
4. Small Refiner Options 10
B. PADD Analysis 11
1. PADD 1 14
2. PADD 2 15
3. PADD 3 16
4. PADD 4 17
5. PADD 5 18
C. Comparison of 2009 and 2010 NRLM Pre-Compliance Reports 19
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II. Nonroad Diesel Program Overview
I. Executive Summary
Any refiner or importer planning to produce or import nonroad, locomotive,
or marine (NRLM) diesel fuel containing 15 parts per million (ppm) sulfur or less
after June 1, 2010 is required to submit annual pre-compliance reports to the U.S.
Environmental Protection Agency (EPA). Reports are due annually by June 1 from
2005 through 2011 under the diesel sulfur regulations. This report summarizes the
results of the 2010 nonroad pre-compliance reports.
Refiners' and importers' nonroad pre-compliance reports must contain
estimates of the volume of diesel fuel containing 15 ppm sulfur or less ("15 ppm
diesel fuel") and diesel fuel containing 500 ppm sulfur or less ("500 ppm diesel fuel")
produced or imported from June 1, 2010 through December 31, 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 2010 nonroad pre-compliance reports showed that:
- 115 refineries are planning to produce 15 ppm diesel fuel by June 1, 2014
- 25 refineries are either undecided as to their plans, or are choosing to stop
producing NRLM diesel fuel by June 1, 2014
refiners are taking advantage of the flexibilities offered by the regulations
(19 refineries said they generated high sulfur credits in 2006 and 2007, 24
refineries said they generated 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 is projected to grow from 2010 through 2014
- total diesel fuel production and importation beginning June 1, 2010 is
projected to decrease compared to the 2009 nonroad pre-compliance
reports
Many refiners have developed firmer plans to produce 15 ppm NRLM diesel
fuel than what they indicated in their 2009 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.
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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 3-step
approach to reducing the sulfur content of nonroad, locomotive, and marine (NRLM)
diesel fuel from uncontrolled levels down to 15 ppm or less. 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
were 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 efforts to reduce NRLM diesel sulfur. "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 could 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 sulfur standard for NRLM diesel fuel
beginning June 1, 2007, while "500 ppm" credits could be used to comply with the 15
ppm sulfur standard for NR diesel fuel beginning June 1, 2010 and the 15 ppm sulfur
standard for LM diesel fuel 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 after June 1, 2010. NRLM diesel sulfur
credits may be transferred nationwide. No credit trading area restrictions exist such
as those 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 production of 500 ppm NRLM diesel fuel
This option allows approved small refiners an additional 3 years to comply
with the 500 ppm sulfur standard for NRLM diesel fuel. Small refiners have a 500
ppm NRLM compliance date of June 1, 2010, compared to a compliance date of June
1, 2007 for non-small refiners. Small refiners may continue to produce high sulfur
(greater than 500 ppm) NRLM diesel fuel until June 1, 2010. However, production of
high sulfur 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 production of 15 ppm NRLM diesel fuel
This option allows approved small refiners additional time to comply with the
15 ppm sulfur standard for NRLM diesel fuel. Small refiners have a single 15 ppm
NRLM compliance date of June 1, 2014, compared to compliance dates for non-small
refiners of June 1, 2010 and June 1, 2012 for NR and LM diesel fuel, respectively.
Small refiners may continue to produce 500 ppm NRLM diesel fuel until June 1,
2014. However, production of 500 ppm 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
The NRLM Credit Option allows approved small refiners additional time to
generate nonroad diesel sulfur credits, compared to non-small refiners. Small refiners
could generate "High Sulfur" credits if their refinery's annual average 500 ppm
NRLM diesel fuel production between June 1, 2006 and June 1, 2010 exceeded the
refinery's annual average NRLM diesel fuel production from 2003 through 2005
(non-small refiners could only generate "High Sulfur" credits between June 1, 2006
and June 1, 2007). Small refiners could also generate "500 ppm" credits if their
refinery's annual average 15 ppm NRLM diesel fuel production between June 1, 2009
and December 31, 2013 exceeded the refinery's average annual NRLM diesel fuel
production from 2006 through 2008 (non-small refiners could only generate "500
ppm" credits between June 1, 2009 and June 1, 2010). These credits can be banked
for future use or sold to another refiner.
Option 4 - NRLM Diesel/Gasoline Compliance Option
This option is available to small refiners that elect not to use Options 1, 2 or 3.
Under this option, at least 95 percent of the NRLM diesel fuel produced at a small
refiner's refinery must meet the 15 ppm sulfur standard by June 1, 2006. Annual
average production of 15 ppm NRLM diesel fuel at the refinery must also be equal to
or greater than 85 percent of the refinery's annual average NRLM diesel fuel
production from 2003 through 2005. Small refiners who chose this option received a
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II. Nonroad Diesel Program Overview
modest relaxation in their interim refinery gasoline sulfur standards beginning
January 1, 2004. Specifically, the applicable refinery annual average and per-gallon
cap standards were increased by 20 percent through 2007. A small refiner may elect
to further extend the duration of the refinery interim gasoline sulfur standards through
2010 by producing all highway diesel fuel at the refinery containing less than 15 ppm
sulfur or less 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 sulfur standards by the NRLM
compliance dates 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, 2010.l 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 meet the 500 ppm sulfur standard until June 1, 2010.
They may further choose to continue to produce all of their NRLM diesel fuel as high
sulfur diesel fuel until June 1, 2010, and all of their NRLM diesel fuel to meet the 500
ppm sulfur standard until June 1, 2014.
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 nonroad pre-compliance report was due on
June 1, 2005 and subsequent reports are due annually through 2011, or until the
refiner or importer begins producing or importing 15 ppm NR or NRLM diesel fuel.
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.
1 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
2. Estimates of the average daily volumes 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 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 proj ected 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, 2010. The
information presented here will be updated with more current information from the
annual pre-compliance reports submitted in 2011.
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 4 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 2010 pre-compliance reports for
130 refineries, all of which produced high and/or low sulfur diesel fuel in 2003, including
reports for 3 refineries that have been shut down since refiners submitted their 2009 pre-
compliance reports. The 10 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 119
refineries reported they anticipate producing 15 and/or 500 ppm diesel fuel beginning
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IV. NRLM Summary Data
June 1, 2010. The remaining 8 operational 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.
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
119
92
8
19
2011
120
94
8
18
2012
119
95
5
19
2013
118
107
4
7
2014a2
118
109
3
6
2014b
115
115
0
0
The 2010 nonroad pre-compliance reports indicated that production of 15 ppm
and 500 ppm total diesel fuel beginning June 1, 2010 is projected to be 3.93 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 fourth annual
compliance period in the highway diesel program (July 1, 2009 through May 31, 2010)
averaged approximately 3.65 million bbls/day. This average production and importation
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 2010 reports with average production and importation from the
fourth annual compliance period, refiners and importers are planning to produce and
import approximately 280,000 bbls/day additional 15 ppm and 500 ppm total 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 546,000 bbls/day from 2010 to 2014, from 3.75 to 4.29 million
bbls/day. However, this projected increase is offset by a projected decrease in 500 ppm
NRLM diesel fuel production of 179,000 bbls/day from 2010 to 2014. Production of 500
ppm NRLM diesel fuel decreases from 179,000 bbls/day in 2010 to 92,000 bbls/day in
2012, as some refiners begin producing 15 ppm LM diesel fuel by June 1, 2012.
Production of 500 ppm NRLM diesel fuel ends completely by May 31, 2014, when the
flexibilities for small refiners and NRLM credit use end.
Projected total diesel fuel production should be sufficient to meet future diesel
fuel demand. Although projected total production from the 2010 pre-compliance reports
2 Data from the pre-compliance reports is divided into two sections for 2014 throughout this summary and
analysis. 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.
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IV. NRLM Summary Data
has decreased compared to the 2009 pre-compliance reports, projected total diesel fuel
demand from EIA's Annual Energy Outlook (AEO) 2010 has also decreased compared to
projected demand from AEO 2009. Total diesel fuel demand calculated from AEO 2010
is 3.80 million bbls/day in 2015, compared to projected total diesel fuel production of
4.29 million bbls/day in 2014.4
As mentioned previously, 140 refineries reported to EIA that they produced low
and/or high sulfur distillate fuel in 2003. Fifteen of these refineries reported that they
have no plans at present to produce 15 ppm diesel fuel by June 1, 2014, and 10 refineries
did not send an NRLM pre-compliance report to EPA in 2010. In 2003, these 25
refineries produced a total of 137,000 bbls/day of diesel fuel containing less than 500
ppm sulfur, and 169,000 bbls/day of distillate fuel containing more than 500 ppm sulfur.5
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 produce heating oil 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
3,747,684
178,602
3,926,286
2011
4,076,849
111,727
4,188,575
2012
4,115,018
91,657
4,206,675
2013
4,188,946
34,454
4,223,400
2014a
4,282,377
26,291
4,308,669
2014b
4,294,205
0
4,294,205
Figure 1. Projected (Highway + NRLM) Diesel Fuel Production by Type, 2010-2014
o>
3
"o>
O
I CtS
C£ !2
+ -g
gp 2,OOO,OOO
i£
"o
1 1
• 5OO ppm sulfur
n 15 ppm sulfur
2010 2011 2012 2013 2O1 4a 2O14b
Year
4 AEO 2010 projected a total distillate fuel oil demand of 4.08 million bbls/day in 2015 (see Table All in
http://www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf). This total includes 280,000 bbls/day of distillate fuel oil
(heating oil) for residential energy consumption (see Table A2 at previous link). EPA does not require
heating oil to meet either a 15 ppm or 500 ppm sulfur standard, so total demand for 15 ppm and 500 ppm
diesel fuel was calculated by subtracting heating oil demand from total distillate fuel oil demand.
5 2003 EIA data has been used as a baseline for comparison in all summary reports published since 2003.
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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. Twenty refineries indicated they
generated a total of 1,998 million high sulfur credits (1 credit = 1 gallon diesel fuel),
mostly during the early credit generation period from June 1, 2006 through May 31,
2007, including 4 refineries owned by small refiners who planned to continue generating
high sulfur credits after May 31, 2007. Nine refineries indicated they planned to use a
total of 1,844 million high sulfur credits from June 1, 2007 through May 31, 2010.
Twenty four refineries indicated they plan to generate a total of 2,295 million 500
ppm credits, mostly during the early credit generation period from June 1, 2009 through
May 31, 2010, including 3 refineries owned by small refiners who plan to continue
generating 500 ppm credits after May 31, 2010. Five refineries indicated they planned to
use a total of 1,525 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
24
1,048
2006
19
742
2010
24
5
862
461
2007
20
9
984
563
2011
3
4
136
141
2008
4
8
131
111
2012
2
5
120
423
2009
4
7
106
466
2013
2
5
131
394
2010
2
2
34
39
2014
2
106
total
HI^H
1,998
1,844
total
2,295
1,525
Figures 2 and 3 illustrate cumulative projected generation and usage of high sulfur
credits and 500 ppm credits by year. Both figures show that based on current plans,
refiners should generate more than enough of each type of credit to meet the demand for
each type of credit.
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IV. NRLM Summary Data
Figure 2. Total U.S. High Sulfur Credits
2,500
j2 2,000
^ 1,500
£ 1,000
E 500
0
2006 2007 2008 2009
Year
2010
I cumulative HSC generated • cumulative HSC used
Figure 3. Total U.S. 500 ppm Credits
2,500
w 2,000
£ 1,500
O
I 1,000
S 500
0
2009 2010 2011 2012
Year
2013
2014
D cumulative 500 ppm credits generated • cumulative 500 ppm credits used
3. Project Scope and Timing
In addition to providing diesel fuel production and credit projections, refiners
must also include information outlining both their timeline for compliance with the 15
ppm sulfur standard for NRLM diesel fuel and their engineering plans (e.g., design and
construction) in their pre-compliance reports. We requested that refiners 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
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IV. NRLM Summary Data
construction, and 5) commissioning and start-up. In the 2009 nonroad pre-compliance
reports, most refiners indicated they had completed their detailed engineering and were
well into the procurement and construction stage, or did not plan to produce any more 15
ppm diesel fuel than indicated in their highway pre-compliance reports.
In the 2010 NRLM pre-compliance reports, refiners indicated they have plans to
install new desulfurization capacity at 21 refineries specifically to produce 15 ppm
NRLM diesel fuel. Most of these refineries are generally in the final stages of their
projects to produce 15 ppm NRLM diesel fuel. Most are well into the procurement and
construction stage, and some are into or have completed the commissioning and start-up
stage.
All 21 refineries are planning to either revamp existing hydrotreating or
hydrocracking units, or install new hydrotreating or hydrocracking units. Of these 21
refineries, 9 are planning to install a new desulfurization unit, 7 are planning to revamp
an existing desulfurization unit, and 5 refineries are planning to both install at least one
new desulfurization unit and revamp at least one existing desulfurization unit.
4. Small Refiner Options
As discussed previously, the diesel sulfur regulations contain 4 options which
provide qualified small refiners with flexibilities regarding production of 500 ppm or 15
ppm NRLM diesel fuel. Option 1 allows a refinery owned by an approved small refiner
to delay production of 500 ppm NRLM diesel fuel until June 1, 2010. Refiners chose
Option 1 for 9 refineries. These 9 refineries produced 37,000 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. Refiners chose Option 2 for
7 refineries. These 7 refineries produced 22,000 bbls/day high sulfur distillate fuel in
2003. (Options 1 and 2 are not mutually exclusive, small refiners may choose both
Options 1 and 2)
Option 3 allows a small refiner to generate credits for 500 ppm NRLM diesel fuel
produced between June 1, 2006 and May 31, 2010 in excess of their refinery baseline
production, and also allows a small refiner to generate credits for 15 ppm NRLM diesel
fuel produced between June 1, 2009 and December 31, 2013 in excess of their refinery
baseline production. Refiners chose Option 3 for 4 refineries. These 4 refineries
produced 9,000 bbls/day high sulfur distillate fuel in 2003.
Lastly, Option 4 allows a small refiner the ability to increase their refinery
gasoline sulfur standards by 20 percent, provided they begin producing 15 ppm NRLM
diesel fuel by June 1, 2006 at their refinery, and their refinery's annual average 15 ppm
NRLM diesel fuel production is at least 85 percent of the refinery's annual average
10
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IV. NRLM Summary Data
NRLM diesel fuel production from 2003 through 2005. Refiners chose Option 4 for 5
refineries. These 5 refineries produced 18,000 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
9
7
4
5
2003 High Sulfur Distillate
Fuel Production
(thousand bbls/day)
37
22
9
18
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 4 from 2010 to 2014, as 1
refinery enters the diesel fuel market in 2011, and 5 refineries exit by 2014. In 2010, 27
refineries are using flexibilities in the rules (producing 500 ppm LM diesel fuel,
producing 500 ppm NR diesel fuel using NPvLM 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.
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 increases in PADDs 1 through 4 and decreases in PADD 5.
11
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IV. NRLM Summary Data
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
11
9
0
2
2
25
20
1
4
3
43
32
4
7
4
15
11
1
3
5
25
20
2
3
Total U.S.
119
92
8
19
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
11
11
0
0
2
26
26
0
0
3
41
41
0
0
4
14
14
0
0
5
23
23
0
0
Total U.S.
115
115
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 15 ppm and 500 ppm total (highway + NRLM),
bbls/day
1
313,328
5,673
319,000
2
922,541
26,834
949,375
3
1,857,510
100,340
1,957,850
4
170,493
13,039
183,532
5
483,814
32,715
516,529
Total
U.S.
3,747,684
178,602
3,926,286
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 15 ppm and 500 ppm total (highway + NRLM),
bbls/day
1
363,277
0
363,277
2
1,031,688
0
1,031,688
3
2,202,372
0
2,202,372
4
189,534
0
189,534
5
507,334
0
507,334
Total
U.S.
4,294,205
0
4,294,205
12
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IV. NRLM Summary Data
Figure 4. Projected (Highway+NRLM) Diesel Fuel Production by PADD, 2010-2014
0)
LL.
8
0)
Q
re
-o
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I
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5,000,
4,500,
4,000,
3,500,
3,000,
2,500,
2,000,
1,500,
1,000,
500,
000
000 -
000 -
000 -
000 -
ooo -
ooo -
ooo -
ooo -
ooo -
0
• PADD 5
D PADD 4
D PADD 3
• PADD 2
D PADD 1
2010 2011 2012 2013 2014a 2014b
Year
More detailed information for each PADD is shown below in Tables 9 through
13.
13
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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, 11 refineries anticipate producing approximately
319,000 bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Nine refineries reported
they intend to produce all of their diesel fuel containing 15 ppm sulfur or less in 2010,
and 2 refineries reported they intend to produce some 500 ppm NRLM diesel fuel
between 2010 and 2014. Table 9 also shows that total diesel fuel production in PADD 1
is projected to increase by approximately 44,000 bbls/day from 2010 through 2014.
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 15/500 ppm mix
Total 1 5 ppm (bbls/day)
Total 500 ppm (bbls/day)
Total 15 ppm and 500 ppm (bbls/day)
2010
11
9
0
2
313,328
5,673
319,000
2011
11
9
0
2
350,062
9,214
359,277
2012
11
9
0
2
362,562
4,256
366,818
2013
11
10
0
1
362,562
714
363,277
2014a
11
10
0
1
362,562
714
363,277
2014b
11
11
0
0
363,277
0
363,277
14
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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, 25 refineries anticipate producing approximately 950,000
bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Twenty refineries reported they
intend to produce all of their diesel fuel containing 15 ppm sulfur or less in 2010, and 5
refineries reported they intend to produce some 500 ppm NRLM diesel fuel between
2010 and 2014. Table 10 also shows that total diesel fuel production in PADD 2 is
projected to increase by approximately 82,000 bbls/day from 2010 through 2014,
including production from one refinery which plans to enter the diesel fuel market in
2011.
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 1 5 ppm and 500 ppm (bbls/day)
2010
25
20
1
4
922,541
26,834
949,375
2011
26
22
1
3
1,000,045
17,598
1,017,643
2012
26
22
0
4
1,021,745
11,224
1,032,969
2013
26
25
0
1
1,039,474
4,915
1,044,388
2014a
26
25
0
1
1,038,834
4,752
1,043,586
2014b
26
26
0
0
1,031,688
0
1,031,688
15
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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 43 refineries anticipate producing 1.96 million bbls/day total (15
ppm and 500 ppm sulfur) diesel fuel in 2010. Thirty two refineries reported they intend
to produce all of their diesel fuel containing 15 ppm sulfur or less in 2010, and 11
refineries reported they intend to produce some 500 ppm NRLM diesel fuel between
2010 and 2014. One refinery plans to exit the diesel fuel market in 2011, and another
refinery plans to exit the diesel fuel market in 2014. Table 11 also shows that total diesel
fuel production in PADD 3 is projected to increase by approximately 244,000 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 1 5 ppm and 500 ppm (bbls/day)
2010
43
32
4
7
1,857,510
100,340
1,957,850
2011
43
33
4
6
2,060,786
38,658
2,099,444
2012
42
34
2
6
2,059,594
37,491
2,097,084
2013
42
39
2
1
2,092,397
17,000
2,109,397
2014a
42
40
1
1
2,184,872
14,000
2,198,872
2014b
41
41
0
0
2,202,372
0
2,202,372
16
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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 15 refineries anticipate producing approximately 189,000 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 4 refineries reported
they intend to produce some 500 ppm NRLM diesel fuel between 2010 and 2014. One
refinery plans to exit the diesel fuel market in 2014. Table 12 also shows that total diesel
fuel production in PADD 4 is projected to increase by approximately 6,000 bbls/day 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
15
11
1
3
170,493
13,039
183,532
2011
15
10
1
4
176,695
13,541
190,236
2012
15
10
1
4
183,523
5,971
189,494
2013
15
13
1
1
189,776
610
190,386
2014a
15
13
1
1
189,120
610
189,730
2014b
14
14
0
0
189,534
0
189,534
17
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IV. NRLM Summary Data
5. PADD 5
Reported totals for all refineries in PADD 5 are summarized below in Table 13.
Table 13 shows that 25 refineries anticipate producing approximately 517,000 bbls/day
total (15 ppm and 500 ppm sulfur) diesel fuel in 2010. Twenty refineries reported they
intend to produce all of their diesel fuel containing 15 ppm sulfur or less in 2010, and 5
refineries reported they intend to produce some 500 ppm NRLM diesel fuel between
2010 and 2014. Table 13 also shows that total diesel fuel production in PADD 5 is
projected to decrease by approximately 9,000 bbls/day from 2010 through 2014, as one
refinery plans to exit the diesel fuel market in 2012 and another refinery plans to exit the
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 1 5 ppm and 500 ppm (bbls/day)
2010
25
20
2
3
483,814
32,715
516,529
2011
25
20
2
3
489,260
32,715
521,976
2012
25
20
2
3
487,594
32,715
520,309
2013
24
20
1
3
504,736
11,215
515,952
2014a
24
21
1
2
506,989
6,215
513,204
2014b
23
23
0
0
507,334
0
507,334
' Alaska refineries are included in this analysis
18
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IV. NRLM Summary Data
C. Comparison of 2009 and 2010 NRLM Pre-Compliance Reports
Total reported production of 15 ppm and 500 ppm diesel fuel in the 2010 pre-
compliance reports decreased, compared to the 2009 pre-compliance reports. Table 14
shows the projected production of 15 ppm and 500 ppm diesel fuel from the 2009 and
2010 pre-compliance reports for 2010 (from June 1 to December 31). Total production
of diesel fuel from the 2010 reports was approximately 247,000 bbls/day less than total
production from the 2009 reports. Most of this decrease occurred in PADDs 1 and 3,
while reported production in PADDs 2, 4, and 5 showed smaller decreases.
Table 14.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2010
PADD
2009 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 1 5 ppm and 500 ppm , bbls/day
2010 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
363,304
8,310
371,613
313,328
5,673
319,000
-52,613
2
902,942
47,425
950,367
922,541
26,834
949,375
-992
3
2,064,882
68,171
2,133,053
1,857,510
100,340
1,957,850
-175,204
4
180,046
8,500
188,546
170,493
13,039
183,532
-5,014
5
499,463
30,403
529,866
483,814
32,715
516,529
-13,337
Total
U.S.
4,010,638
162,808
4,173,446
3,747,684
178,602
3,926,286
-247,160
Table 15 shows the projected production of 15 and 500 ppm diesel fuel from the
2009 and 2010 pre-compliance reports for 2014 (from June 1 to December 31). Total
production of diesel fuel from the 2010 reports was approximately 118,000 bbls/day less
than the total production from the 2009 reports. Most of this decrease occurred in
PADDs 1 and 3, while reported production in PADDs 2, 4 and 5 showed slight increases.
Projected total diesel fuel demand in 2015 has also decreased so that production is
expected to be sufficient to meet demand. Projected total diesel fuel demand from AEO
2009 was 4.16 million bbls/day, while projected total diesel fuel demand from AEO 2010
was only 3.80 million bbls/day, a decrease of 360,000 bbls/day.
19
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IV. NRLM Summary Data
Table 15.
Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2014b
PADD
2009 NRLM reports
Total 1 5 ppm, bbls/day
Total 500 ppm, bbls/day
Total 15 ppm and 500 ppm , bbls/day
2010 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
424,205
0
424,205
363,277
0
363,277
-60,929
2
1,023,862
0
1,023,862
1,031,688
0
1,031,688
7,826
3
2,277,361
0
2,277,361
2,202,372
0
2,202,372
-74,989
4
189,165
0
189,165
189,534
0
189,534
369
5
497,525
0
497,525
507,334
0
507,334
9,810
Total
U.S.
4,412,117
0
4,412,117
4,294,205
0
4,294,205
-117,913
20
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V. Appendix
Appendix - List of Acronyms
bbls/day
bpcd
EIA
EPA
FR
LM
NR
NRLM
PADD
ppm
ULSD
AEO
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
Annual Energy Outlook
21
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