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TEXAS LOW-EMISSION DIESEL’ COSTLY TO FIRST FLEETS, BUT PRICE LIKELY TO COME DOWN WITH MORE SUPPLY
by Jack Peckham 2005-04-25
 

Detroit – Emissions-sensitive fleets using the first supplies of low-aromatics, high-cetane, ultralow sulfur “Texas Low Emissions Diesel” (Tx-LED) in east Texas paid hefty premiums for it last year. But prices seem likely to decline with more widespread availability of Tx-LED fuel supplies later this year and next, as Texas refiners and blenders must convert to this fuel by October (see Diesel Fuel News 3/14/05, p10).

According to a paper by Texas Dept. of Transportation (TxDOT), University of Texas, Southwest Research Institute and Eastern Research Group (SAE 2005-01-1724) to Society of Automotive Engineers World Congress here, some TxDOT fleets paid up to 44 cents/gallon premium for Tx-LED last year, compared to ordinary diesel fuel.

However, fleets buying in much larger barge volumes from Valero’s Corpus Christi refinery would pay only about a third of that premium, the study shows.

Only the largest highway contractors operating in metro Houston could buy such large volumes, however.

Still, large increases in Tx-LED fuel demand would lead to economies in shipping, by enabling dedicated barge transport, the study found.

Old diesel engines with certain pump seals are vulnerable to leaks when switching to a lowaromatics, ULSD version of Tx-LED, the study found. So, additional maintenance costs would be incurred.

Adding fuel-cost premiums and maintenance premiums, the cost per ton of nitrogen oxides (NOx) reduced from Tx-LED would vary from a low or $10,654 to a high of $14,080/ton if adopted widely by construction fleets in metro Houston, the study found.

Tx-LED in construction vehicles would cut NOx emissions an average 5.5%, the study showed. Particulate matter (PM) reductions averaged 9.3%. -- Additization Scheme Deadlines Coming Soon

Meantime, Texas refiners and blenders intending to use a certified additive that enables terminal blending to make Tx-LED from ordinary EPA low-sulfur diesel fuel had better move quickly, an additive supplier warns.

Rationale: It takes about 60-90 days from first order to final installation of terminal additization equipment for Texas Council on Environmental Quality (TCEQ) certified Tx-LED fuel with the Oryxe “ORYXE LED” additive.

“To ensure supply, you need to work something out with us by June 1 to make sure we’ve set up incremental supply” and arrange for additization equipment installation, Orxye president Kevin McGlensey told us. “Right now, it takes about 90 days to spec a system and get it.”

Some refiners will make their own certified versions of Tx-LED fuel, a CARB-like fuel of at least 48 cetane. But other refiners may prefer the flexibility of a terminal additization scheme, which could enable either continuous or occasional blending depending upon Tx-LED market demand.

So far, no other additive company has yet supplied data to TCEQ as required to trigger the mandatory test protocols from “Tx-LED” certification, TCEQ revealed at a recent workshop. While Oryxe expects that some other additive company probably will try to compete in this special market, it hasn’t happened so far – and likely won’t happen before the Oct. 1, 2005 deadline for Tx-LED diesel in most of east Texas.

It’s not easy to come up with an additive that meets Tx-LED requirement to cut NOx by at least 5.7% while not increasing other criteria pollutants. Example: While biodiesel can cut PM emissions, “NOx goes up,” McGlensey points out. – Jack Peckham