Ready for urea?

June 1, 2007
Just when you thought it was safe to plunge back into the truck-buying water, along comes another scary creature. A further tightening of emissions rules takes effect in 2010.

Just when you thought it was safe to plunge back into the truck-buying water, along comes another scary creature. A further tightening of emissions rules takes effect in 2010. That means anyone planning to buy trucks in the next two-and-a-half years should be thinking about how long they would hold them and what they'll be seeing at trade-in time. In fact, now is a good time to think about how long to keep the vehicles you bought in 2006. Do you get ready to place a big order in 2009, or try to keep your '06 trucks running until you are confident about the 2010 models?

It's a tough calculation, partly because truck makers have not all announced how they'll meet the new standards. In the run-up to the '07 rules, refiners, engine makers and truck OEMs managed to converge on a single solution, involving ultra-low-sulfur diesel fuel, new engines and aftertreatment systems. Despite the complexities, the new fuel arrived in time throughout the country and the new engines are consuming it without any apparent indigestion.

In contrast, engine manufacturers have not settled on a single way to meet the EPA 2010 standards. Freightliner, Mack and Volvo Trucks North America have announced they will use catalytic converters with selective catalytic reduction (SCR). As of this writing, other manufacturers have not said what they will do, although announcements could come shortly.

SCR injects a mist of urea — a liquid mixture of ammonia and water — into a truck's exhaust system. Trucks would have to add a 4- to 5-gal. tank to hold urea, a dispensing system, wiring and sensors. EPA will probably require anti-defeat devices so that SCR-equipped trucks would be unable to run without urea.

SCR is a less dramatic change in onboard technology than the conversion to 2007 engines was. But the availability and cost of urea remain questionable. Urea is used mainly for fertilizer, but also as a source of nitrogen in cattle feed, as an essential ingredient in urea-formaldehyde resins for building products, and as a raw material for various chemicals.

The cost of natural gas is an important determinant of where urea is produced. For several years, the United States has had high natural gas prices and falling production, which has driven down urea production by one-third since 1999. Currently, the U.S. imports about half the urea it uses, a percentage that is likely to rise as large natural-gas producers such as Qatar add petrochemical production facilities. But worldwide demand for natural gas, both as fuel and as feedstock for petrochemicals, is growing rapidly.

Thus, truck operators could add substantially to demand for urea at a time when domestic production is shrinking and the cost of natural gas needed to produce urea may be entering a period of greater volatility. How much truckers add to demand and how quickly their demand rises depends on how many SCR-equipped trucks are sold.

That, in turn, will depend in part on how easy it is for truckers to buy urea. Truckstops must decide if there will be enough demand to warrant installing separate underground tanks and pumps, or if they want to sell only small containers that drivers could use to top off their onboard tanks. Centrally fueled fleets must also be willing to invest in urea storage and dispensing equipment and to find distributors to keep them stocked.

The bottom line: Given the time it takes to manufacture and install a nationwide network of tanks, pumps and other equipment, 2010 appears to be right around the corner. Certainly, it is none too early to start identifying the steps needed to line up timely supplies of equipment, contractors to install it, urea and — oh, yes — trucks to use it.

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