Oil refiners to sue EPA over recent Clinton rule

The National Petrochemical & Refiners Association (NPRA) said on 23 January that it will challenge the outgoing EPA’s final diesel sulphur rule in federal court which proposes to cut sulphur in diesel fuel to 15 parts per million (ppm) compared to current levels of 500 ppm (see related story). The NPRA, which represents 98% of US refiners, believes that previous EPA administration, headed by Carol Browner, exceeded its authority in issuing the diesel rule, which it says, threatens consumers with cost increases and significant shortages in supplies. The impact, it says, would be felt across the national economy, since diesel trucks transport the vast majority of America’s products.

Former President Bill Clinton introduced the strict regulation last month, which is to take effect in 2006, but the NPRA says that a recent analysis by marketeers the Charles River Associates showed that the rule would lead to a 12% average supply shortfall nationwide. The association says that oil refiners support efforts to improve the environmental performance of diesel, but want “a more reasonable and balanced approach than EPA’s rule”. It says that new regulations have already forced the closure of one Midwestern refiner and more could follow suit. This month, Premcor USA Inc. shut its 80,000 barrel per day refinery in Blue Island, Illinois, saying it did not generate the capital needed for investments needed to make cleaner-burning fuels.

“NPRA is taking this action to prevent future diesel shortages,” said NPRA President Urvan Sternfels. “We can see today in the California electricity market what happens when policymakers take continued supplies of energy for granted. Unfortunately, the former EPA did just that in its diesel rule.”

“NPRA also welcomes the decision of the Bush Administration to review the diesel rule and we hope that necessary revisions in the rule can be achieved. But we must pursue every possible remedy, including legal action,” Sternfels concluded.