Environmental improvements carry a cost
The U.S. trucking industry is marking yet another step in a long line of environmental improvements as it began the transition to ultra low sulfur diesel (ULSD) fuel June 1.
The Environmental Protection Agen-cy mandated that by June 1, 80 percent of the on-road diesel fuel refined or imported must be ultra low sulfur diesel. Retail outlets have until Oct. 15 to comply with the ULSD rules. The new fuel standard reduces the amount of sulfur in on-road diesel by 97 percent and will support smokeless diesel engine technologies hitting the market in 2007.
“The trucking industry recognizes the critical role that ultra low sulfur diesel fuel plays in ensuring future diesel emission reductions,” says ATA President and CEO Bill Graves. “The industry remains concerned, however, that the transition could create fuel supply disruptions and operational challenges.”
The transition to ULSD could cause fuel supply and availability disruptions because it is easily contaminated during transport through a complex system of pipelines and fuel terminals that also transport high sulfur products like home heating oil or jet fuel. Transitioning to ULSD also initially may decrease domestic refining capacity. Increased imports are expected to make up for the shortfalls. This would further increase U.S. dependence on foreign energy.
According to the ATA, the trucking industry is committed to meeting the 2007 emission reduction standards of the U.S. Environmental Protection Agency. But ULSD will force the industry to spend more money on fuel that is less efficient at a time when current fuel prices already are hitting historic levels. ULSD, for example, is expected to add about 5 cents to the production and distribution of every gallon of fuel, while reducing fuel economy by up to 1 percent.
The U.S. trucking industry currently is on pace to spend $98.3 billion on fuel in 2006—$10.6 billion more than it spent in 2005. The American trucking industry, which transports nearly 70 percent of all freight tonnage in the United States, requires a reliable source of energy. ATA has called for the expansion of U.S. refining capacity and the establishment of a single national diesel fuel standard. Access to reserves in Alaska’s Arctic National Wildlife Refuge and other offshore exploration also are viewed as critical components of a viable long-term comprehensive national energy plan.
On average, fuel accounts for about 25 percent of a carrier’s operating costs, and the failure of many independent trucking companies can be directly traced to rising fuel costs.