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A broad coalition of petroleum industry trade associations representing refiners and marketers have filed a brief which asks the U.S. Court of Appeals for the D.C. Circuit to send the Environmental Protection Agency's (EPA) diesel sulfur rules 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.
The National Association of Convenience Stores (NACS), National Petrochemical and Refiners Association (NPRA), American Petroleum Institute (API) and Society of Independent Gasoline Marketers of America (SIGMA) filed a brief claiming the EPA disregarded its duty to assure an adequate supply of diesel fuel in the early years of the program.
The combination of the huge 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.
Diesel fuel is America's primary commercial fuel -- 70 percent 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-percent reduction in highway diesel fuel sulfur levels by mid-2006.
Reflecting their small business membership, SIGMA, NACS and NPRA told the D.C. 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. The EPA's failure even to analyze these impacts on small businesses violated the Small Business Regulatory Enforcement Act (SBREFA).
NPRA, SIGMA and NACS also argued that EPA overstepped its legal authority to regulate motor fuel when it improperly selected one particular NOx control technology that is still on the drawing board as its basis for the 15 parts per million 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. An oral argument has been scheduled for February.