Neg Regs increases diesel fuel costs: ultra-low sulfur diesel will be required soon, raising costs even more at pumps.

• Author: Bradner, Mike

The world is changing for fuel distributors and retailers this year, and for Alaska refineries who sell their products in the state. New rules for ultra-low sulfur diesel are coming into effect. Big changes are in store for the entire fuel distribution chain, from the refinery to the retail filling station.

Separate tanks and hoses will be needed for ultra-low sulfur diesel that will be required and a whole new set of record-keeping rules are mandated for distributors and retail stations. The consumer also will have to pay more for the new clean fuels on top of higher costs caused by record crude oil prices. Just how much more isn't known yet, however.

Diesel used for on-road transportation will be affected first, but fuel used in off-road equipment and eventually in marine engines also will be impacted.

Jet fuel and aviation gasoline aren't covered by the new rules, at least yet. Nor is heating oil. But odds are that the new environmental rules will eventually be extended to these fuels, too.

Rural Alaska has a special exemption from the new regulations until 2010, but for parts of Alaska connected to the highway system, including communities served by the state ferry system, the rule goes into effect this year.

What's driving all this? The U.S. Environmental Protection Agency has been working on the new rules since 2001, and they are mainly intended to reduce soot in diesel exhaust that today is the major contributor to air pollution in major cities.

Air pollution from gasoline engines has been greatly reduced in the U.S. but diesel-powered heavy trucks and buses remain as major contributors to urban air pollution. Federal environmental and health agencies also have confirmed that soot from diesel exhaust causes cancer in humans.

Alaskans might reasonably argue that air pollution from diesel is less of a problem in the state's smaller communities, but the Alaska Department of Environmental Conservation says the possibility of harmful effects from diesel exhaust shouldn't be discounted. That's particularly so in small villages where the diesel-fueled power plant is in the middle of the village and winter temperature inversions prevent quick dispersion of local air pollution.

Alaska can't be separated from the new EPA rule as it was from an earlier EPA rule requiring low-sulfur diesel, which has a sulfur content of 500 parts-per-million, because the rule applies to engines, not fuels. The federal agency requires require new-model 2007 diesel engines made for heavy trucks and buses to have pollution-control equipment that is extremely sensitive to sulfur. No diesel with sulfur content greater than 15 ppm can be used or the...