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EPA Nonroad Diesel NPRM

EPA Nonroad Diesel NPRM. Chevron’s Perspectives. Mike Ingham WRAP Mobile Source Forum Meeting Denver July 16, 2003. Outline. Advocacy History on NPRM Perspectives on NPRM Two-Step Approach Enforcement Credit Banking & Trading Summary. Chevron’s Advocacy History on Nonroad NPRM.

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EPA Nonroad Diesel NPRM

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  1. EPA Nonroad Diesel NPRM Chevron’s Perspectives Mike Ingham WRAP Mobile Source Forum Meeting Denver July 16, 2003 Chevron Products Company - FR&ET

  2. Outline • Advocacy History on NPRM • Perspectives on NPRM • Two-Step Approach • Enforcement • Credit Banking & Trading • Summary Chevron Products Company - FR&ET

  3. Chevron’s Advocacy History on Nonroad NPRM • Began meeting with EPA OTAQ Ann Arbor in early 2001 to discuss potential nonroad fuels provisions. • Actively participated in API Diesel Issues Work Group meetings with OTAQ beginning September 2002. • Chevron Products Company President testified on behalf of API at EPA Hearing June 17 in Los Angeles. Chevron Products Company - FR&ET

  4. Chevron’s Perspectives on Nonroad NPRM • Two-Step Process • First step to 500 ppm in mid-2007* should include home heating oil (HHO), as well as Part 89, railroad & marine fuels. • Provides substantial additional sulfate PM benefits for northwest and eastern United States (HHO vol. ~15% > RR+marine vol.) • Simplifies EPA’s enforcement concerns; eliminates need for separate dye or marker for HHO • Levels competitive playing field. • However, states, not EPA, have authority over HHO. * Chevron would support mid-2006 implementation if needed. • Provides states with additional near-term air quality benefits. • Aligns with on-highway implementation, avoiding creation of “third” fuel for distribution system to handle (assuming HHO included). Chevron Products Company - FR&ET

  5. Chevron’s Perspectives on Nonroad NPRM • Two-Step Process, cont. • Support 15 ppm cap in mid-2010 for Part 89 fuels. • Aligns with 100% on-highway requirement. • Allows industry to gain experience producing diesel to 15 ppm cap. • Provides time for hydroprocessing technologies to evolve to treat more difficult diesel streams (e.g., LCO). • Don’t support 15 ppm cap for railroad & marine fuels in mid-2010. • Aftertreatment technologies requiring ULSD not yet demonstrated for railroad and marine engine applications. • Absent aftertreatment, incremental PM benefit between 500 and 15 ppm sulfur is small* and not cost-effective. • Provides essential home for downgraded 15 ppm fuel. * Reducing HHO from current level of ~2000 ppm S to 500 ppm cap yields ~6x the sulfate PM benefit of reducing rail and marine fuels from 500 ppm cap to 15 ppm cap. Chevron Products Company - FR&ET

  6. Chevron’s Perspectives on Nonroad NPRM • Enforcement • Chevron not enthused with EPA baseline proposal; unduly constrains future refinery flexibility to respond to changing market; designate & track approach preferred. • Beyond preservation of highway rule, primary concern seems to be use of HHO in nonroad fleet. • Include HHO in 500 ppm requirement, or • Require unique marker or dye* in HHO, and • Preclude production of any non-HHO 5,000 ppm fuel after mid-2007 (i.e., no credits for early 500 ppm nonroad fuel); same timing for smalls, or place enforcement burden on them if additional time granted. * Yellow dye proposed in NPRM poor choice; not visible; basic chemistry demonstrated to cause deposits in aircraft engine fuel nozzles at typical jet fuel contamination levels. Chevron Products Company - FR&ET

  7. Chevron’s Perspectives on Nonroad NPRM • Credit Banking & Trading • Chevron willing to forgo opportunity to generate credits to produce 5,000 ppm nonroad fuel beyond mid-2007 (by supplying 500 ppm nonroad fuel early) to facilitate simpler approach to enforcement, but • Chevron would like unrestricted provision to generate credits to produce 500 ppm nonroad fuel beyond mid-2010 by supplying 15 ppm nonroad fuel early. Chevron Products Company - FR&ET

  8. Summary • Chevron supports EPA’s proposed two-step process to regulate the sulfur content of nonroad diesel fuels. • However, we would like to see EPA work with the states to coordinate a 500 ppm sulfur cap for home heating oil in mid-2007. • Chevron does not support EPA’s proposed baseline approach to enforcement, we prefer designate & track. • Chevron willing to forego opportunity to generate credit to make 5,000 ppm fuel beyond mid-2007 by supplying 500 ppm early, but we would like to see more flexibility to produce 500 ppm fuel beyond mid-2010 by supplying 15 ppm fuel early. Chevron Products Company - FR&ET

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