Fleets are naturally concerned over how the Environmental Protection Agency's broad effort to cut diesel emissions between now and 2010 may affect their cost structure. However, when it comes to switching to low sulfur diesel fuel in 2006, one supplier believes fleets won't have much to worry about.
"In every case we've come across so far, in terms of switching a fleet from regular to low sulfur diesel fuel, there's been no extra costs or operational burden to speak of," said Steven Levy, director of clean fuels for Sprague Energy.
Levy said Sprague has been involved with providing low sulfur diesel to fleets for four years and hasn't experienced any operational challenges with fleets switching to the low sulfur product.
The key issue, however, will be the price of low sulfur versus regular diesel. Levy said that some fleets could actually pay less for low sulfur, depending on their fuel buying program and their location in relation to low sulfur fuel refineries. However, fleets in remote areas could experience price hikes of between five and 20 cents per gallon for low sulfur diesel.
"If you are in an area where low sulfur diesel is readily available like the Northeast and you buy on a firm fixed-price contract, you may actually pay less per gallon for low sulfur fuel," Levy said. "However, if you buy fuel on a daily basis at market price and are based say in Atlanta or Texas where low sulfur fuel isn't readily available, you will pay a higher price."
Even though low sulfur diesel, which has a sulfur content of 15 ppm versus the 500 ppm level of today's diesel fuel, has to be available in all truck stops and retail filling stations by 2006, matching refinery capacity to that demand level may prove difficult. For example, Levy said in some parts of the country, only low sulfur No. 1 diesel may be available, with only No. 2 low sulfur available in other areas.
Levy said price is really the only issue when it comes to low sulfur diesel. He said today's diesel engines can run just fine on low sulfur diesel. Low sulfur and regular diesel can even be mixed and used without harm to the engine, as long as those engines are not equipped with aftertreatment devices.
"If you have an engine retrofitted with aftertreatment systems, it will be sensitive to the sulfur content of the fuel," he said. "This is the only time you need to purge 500 ppm diesel out of vehicle tanks and fuel pumps before adding low sulfur fuel."