AM-02-43 Optimizing Profitability Through the Practical Use of the Tier 2 Average Banking and Trading Program

Description:

With the adoption of the Environmental Protection Agency's Tier 2 Motor Vehicle Emissions Standards and Gasoline Sulfur Control Requirements, the industry as well as the motoring public is sure to see a significant impact on the way gasoline is produced and delivered to the marketplace. The 10-fold reduction in sulfur content, from over 300 PPM to 30 PPM, is arguably the biggest technological challenge our industry has faced to date. This report is intended to give you and your company an overview of the rule, with a particular focus to Part 80 - REGULATION OF FUELS AND FUEL ADDITIVES. The EPA classifies producers of gasoline into several different categories: Refiners, California Gasoline, GPA Gasoline, Small Refiners, Blenders, Foreign Refiners, and Importers. Although the rules and regulations apply to all but California gasoline, research fuels, racing fuels, and a few other minor exceptions, the focus of this report will look primarily at the standard Refiner definition. The sliding timetable approach at phasing in the new ultra low sulfur gasoline does offer some flexibility and relief to all operators. It also adds additional complexity and creates significant administrative challenges. Considering that the majority of gasoline in the national pool comes from the standard Refiner, the EPA phase-in of the rule applies to those producers chronologically first. Consequently this sector of the industry is the primary focus of this report. This approach is not intended to under emphasis the small and GPA facilities, but instead to establish a basic foundation of understanding. This basic knowledge is necessary to fully comprehend the total impact of the rules upon the operations of all companies.