Coalition Challenges EPA Diesel Sulfur Rule

A coalition of petroleum industry trade associations representing refiners and marketers have filed a brief that asks the United States Court of Appeals for the District of Columbia Circuit to send the Environmental Protection Agency's diesel sulfur rule back to that agency for revision. The associations are concerned that the rule, as written, will lead to shortages of diesel fuel beginning in 2006.

Diesel fuel is America's primary commercial fuel; 70% of the nation's goods are transported in diesel-powered vehicles. An adverse impact on diesel fuel supply could sharply increase fuel costs, which would result in higher prices on most of the consumer goods sold throughout the nation. EPA's rule requires a 97% reduction in highway diesel fuel sulfur levels by mid-2006.

The National Petrochemical and Refiners Association (NPRA), American Petroleum Institute (API), Society of Independent Gasoline Marketers of America (SIGMA), National Association of Convenience Stores (NACS), and Antek Instruments filed a brief claiming EPA disregarded its duty to assure an adequate supply of diesel fuel in the early years of the program. The groups contend that a combination of the reduction in diesel fuel sulfur levels, the June 2006 effective date of the regulations, and a poorly designed phase-in virtually guarantee that serious supply problems will result.

SIGMA, NACS, and NPRA told the DC Circuit that EPA's regulations could result in severe financial problems for small-business marketers and distributors if and when new storage tanks and other infrastructure are built to accommodate a second grade of highway diesel fuel during the phase-in period. EPA's failure even to analyze these impacts on small businesses violates the Small Business Regulatory Enforcement Act. These three groups also argued that EPA overstepped its legal authority to regulate motor fuel when it improperly selected one particular nitrogen oxide control technology that is still on the drawing board as its basis for the 15-ppm sulfur requirement.

Petitioners also argued that EPA's selection of an inappropriate compliance test method should be reversed.

The brief requests that the rules be vacated and remanded to EPA for reconsideration. Oral argument has been scheduled for Feb 26, 2002.

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