There's a large measure of uncertainty swirling around ultra low sulfur diesel (ULSD) right now, especially in terms of its ultimate cost and characteristics. The reason for that concern is understandable, as the trucking industry must switch to ULSD starting June 1, 2006. That's why now is a good time to hear from fleets like Silver Eagle Distributors.

Houston-based Silver Eagle is a Budweiser beer distributor that operates 155 Class 7 International tractors pulling 32-foot trailers. The company is using ULSD to power 31 of those trucks — part of a community-wide effort to reduce the city's air pollution.

Ed Pritchard, vp-fleet management, has both good and bad news for fleets waiting their turn at the low-emissions pumps. First, the bad news: ULSD is generally more expensive than regular diesel. In Silver Eagle's case, it costs an extra 12¢ more a gallon, largely because the company must bring it in from a refinery in San Antonio.

That's on the high end of the government's ULSD cost projections, though those estimates tend to be fairly broad.

The Environmental Protection Agency (EPA), for example, thinks that ULSD will cost between 8¢ and 25¢ more than regular diesel when it's first introduced. The U.S. Dept. of Energy (DOE), on the other hand, predicts a price increase of 5¢ to 7¢ a gallon in 2006.

Pritchard also says fuel economy in the fleet's ULSD-fueled trucks dropped slightly — just under 1%. It's not clear, however, that this decrease is caused by ULSD itself. It could be related to a number of issues, including the fact that the trucks have modified engines with retarded combustion timing and particulate traps to reduce emissions.

But there's good news, too, about ULSD — some of it unexpected. “First, ULSD acts no differently than regular diesel fuel. There's been no change in lubricity, and our oil drain intervals were virtually unaffected,” Pritchard says. “We discovered that the lower sulfur content of ULSD actually reduced wear metal deposits in our engine oil, so now we can look at the possibility of extending oil drain intervals, which could save us money.”

According to David Taber, a technology coordinator at Conoco Phillips' lubricant division, “The sulfur in diesel fuel is the biggest factor behind the creation of the acidic compounds that lead to corrosion. That's why reducing sulfur in engine fuel is a very positive move overall.”

Silver Eagle's experience seems to bear that out. “We have no issues to report so far,” says Pritchard, “and we don't expect to see any down the road.”

The reason on-highway trucks must start using ULSD is simple: It's a key ingredient to reaching the 2007 emissions targets set by the Environmental Protection Agency (EPA). Particulate levels max out at 0.01 g/bhp-hr., NOx at 0.2 g/bhp-hr, and NMHC at 0.14 g/bhp-hr. The PM requirement goes into effect on Jan. 1 2007, with the new NOx and NMHC levels phased-in between 2007 and 2010.

Almost all engine manufacturers agree that two things must be added to the mix to reach those lower levels: ULSD and aftertreatment devices. The important thing to remember is that the aftertreatment systems proposed for 2007 engines won't work without ULSD.

“You need ULSD so you don't poison the aftertreatment system,” explains Tom Trueblood, public affairs manager for International Truck & Engine Corp.'s green diesel technology division. “The sulfur in diesel fuel plugs up the holes in particulate filters, which stops them from working. So you need to get the sulfur out of the fuel before you can proceed with aftertreatment.” Consequently, EPA mandated the use of diesel fuel with a maximum sulfur content of 15 parts per million (ppm), versus the 500-ppm level of today's fuel.

Using ULSD alone has also been shown to significantly reduce tailpipe emissions. When the state of New York's Dept. of Environmental Conservation looked at the impact of ULSD on emissions from New York City transit buses, it found that PM levels dropped 23%, CO 29%, and total hydrocarbon emissions 76%. When the ULSD buses were also fitted with particulate filters, PM, CO and total hydrocarbon emissions dropped 90%.

For many fleets, the biggest concerns surrounding the introduction of ULSD are how much the fuel will eventually cost, whether it will be available in sufficient volume, and the likelihood of contamination during shipment to the marketplace.

One reason ULSD costs more is the hydrogen-treatment process used to remove the sulfur. According to Chuck Walker, manager for diesel fuel at Chevron-Texaco, replacing the sulfur in diesel fuel with hydrogen requires boiling base oil stocks at temperatures ranging from 500 - 600∞ F and then subjecting it to high pressure. “This is a pretty expensive process,” he says. Although most refineries already use “hydro-treating” technology to produce 500-ppm fuel, “it requires more capital investment and ongoing expense to reach 15-ppm,” he emphasizes.

According to the National Petrochemical and Refiners Association (NPRA), the refining industry can produce ULSD in sufficient quantities by 2006 and beyond — but it's an effort estimated to require between $8 billion and $10 billion of initial capital investment in refinery technology.

The concern is that the U.S. only has 152 petroleum refineries, down by 50% from 1980. Those refineries are also operating at maximum, averaging annual capacity use of 93%, which reaches 100% or more in the summer months, especially as demand for gasoline spikes, DOE says.

Still, the refining industry believes it can handle demand for ULSD without a major hitch, largely because the ability to charge a higher price makes producing ULSD very attractive.

Steven Levy, director of clean fuels for Sprauge Energy, notes that other factors could also significantly alter the price of ULSD.

“The first is geography. If a fleet is located near a bulk storage facility for ULSD, its fuel costs will be much cheaper than a fleet located farther away,” he points out. “Next is the amount of ULSD volume a fleet orders — the smaller the batch, the higher the cost.” Finally, the method of delivery will also affect price.

Another concern is how low the sulfur level has to be at the refinery gate to account for contamination further down the distribution pipeline. The National Petrochemical and Refiners Assn. (NPRA) reported that Marathon Ashland Petroleum (MAP) and Colonial Pipeline discovered a number of contamination issues when they tested ULSD shipment processes last year.

However, some refiners believe that as ULSD production ramps up, many of these contamination issues will disappear.

“Product integrity is the real issue,” says Sprauge Energy's Levy. “We've had to use segregated fuel terminals, pipelines, racks, and trucks that handle only ULSD so it won't be contaminated. Once we move to using ULSD on a national basis, all of that special handling goes away.”

The EPA has also muddied the waters a bit by mandating that only 80% of the diesel fuel produced after June 1, 2006, be ULSD, allowing the other 20% to remain at today's 500-ppm level. The EPA says it won't require 100% ULSD production until 2010 to help phase-in the new fuel, but many fear the 80/20 split will make it harder for fleets to determine whether or not they are filling up on ULSD.

“Will the EPA mandate that fuel stations indicate what type of diesel fuel is in their pumps? They haven't addressed that issue yet,” says Jim McGeehan, Chevron Texaco's manager of global heavy-duty engine oil technology. “The '07 engines are being designed to run only on 15-ppm fuel because the 500-ppm affects the aftertreatment devices. We'd like to error-proof this as much as possible.”

Running parallel to the pricing issue is concern over the characteristics of ULSD. Do cold flow problems occur at higher temperatures? Since so much sulfur has been removed, has lubricity been compromised?

“If we're doing our jobs well, fleets shouldn't see any behavioral differences between ULSD and 500-ppm fuel,” says Adam Schubert, senior research scientist for BP Oil's global fuels technology division. “Taking out that much sulfur does decrease the lubricity of the fuel, potentially increasing wear in the fuel injectors. But we're going to be using chemical additives to maintain lubricity in lieu of sulfur.”

He also says fleets will be able to use ULSD in their older trucks without any problems, so there won't be any need to purchase and store two different fuels.

“In terms of fuel performance, fleets will see no different between ULSD and 500-ppm fuel — we have the chemical technology to ensure that,” Schubert says.

Fleet experience seems to back that up. David Kerrigan, fleet services director for the City of Seattle, says: “We've been using ULSD since July 2001 and we haven't had any trouble with it.” Seattle powers 400 over-the-road vehicles with ULSD, including dump trucks, fire & rescue equipment, and utility vehicles.

“Originally, getting the fuel at the right spec was a problem, but since that was resolved, ULSD has performed just like regular diesel,” Kerrigan adds. “It's been transparent to us as users — ULSD ends up performing just like our old diesel. And that's all we care about.”

As far as cost goes, Kerrigan points out that Seattle used to pay 8¢-10¢ more per gallon for ULSD, as more fleets have switched to the new fuel, that premium has dropped to only 5¢.

Engine makers also believe there will be few, if any, issues with ULSD once the industry as a whole begins to switch over in 2006. Their optimism is based on experience they've had with fleets-primarily bus fleets-that have been using the new fuel for the past few years.

“We've been using ULSD in a number of bus fleets in California and the only difficulty we've encountered is the availability of the fuel,” says Tim Tindall, director of emissions regulations for Detroit Diesel Corp. “We've not seen any significant oil drain interval effect from using ULSD or anything like that. It's been an easy switch from an engine perspective.”

Jerry Wang, senior technical advisor - chemistry/ fuels and lubricants at Cummins Engine takes this a step further. “The reduced sulfur will benefit our EGR and pre-EGR engines by reducing corrosion and extending oil drain intervals.”

The overall outlook for the move to ULSD is positive, but there still are a number of issues that need to resolved. “We expect a greater use of additives of all kinds to compensate for the loss of natural fuel ingredients — but those fuel additives must present no harm to engines in addition to performing their intended functions,” Wang notes.

However, he emphasizes that if a single ULSD fuel spec can be settled on before 2006, fleets should notice minimal operational between ULSD and 500-ppm fuel.

Refiners also expect a few supply issues in 2006, even though-over the long run — switching to ULSD production full-time should make the fuel easier and less costly to obtain.

“Every time we switch to a new fuel, there are a few local supply glitches,” explains BP's Schubert. “But it will be easier than it is today, where we have the challenge of transporting fuel to the customer with minimal contamination. We can't use pipelines because they constantly handle higher-ppm diesel and gasoline products. Once we switch to all ULSD, that problem should disappear.”