Editorial: ULSD and Interesting Times

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e doubt that anyone expected the national conversion to ultra-low-sulfur diesel as the primary motor fuel for the trucking industry would be completely smooth. But we also doubt that most folks thought the switchover would fulfill that old and often-quoted curse: May you live in interesting times.

For many months now, Transport Topics has been writing about the problems associated with the new fuel, including how refiners would produce it, how pipelines would transport it and how truck stops would sell it.

We’ve also written often about concerns that ULSD might push prices higher, especially in the beginning. And we’ve reported that refiners are concerned about getting enough fuel to areas at the end of the national pipelines.

Last week, we reported that fleets may take a notable hit to their pocketbooks when ULSD becomes the national norm in the fall, because it now appears that the fuel will indeed provide between 1% and 3% less mileage than the current diesel. And most fuel surcharge agreements don’t provide for compensation to fleets for lost fuel efficiency, only for higher pump prices.

That means fleets can count on paying the difference for the extra ULSD they’re going to have to burn in order to run the same number of miles.

Now comes word that a shortage of ultra-low-sulfur kerosene may hit fleet pocketbooks this winter by further raising the cost of ULSD for companies that operate in areas with low temperatures that require winterized diesel. (Click here for related story.)

Traditionally, fuel refiners have mixed small amounts of kerosene-based products into their diesel in the winter, to prevent the fuel from jelling at low temperatures.

But most kerosene contains much more sulfur than the 15 parts per million allowed for ULSD — which means refiners would have to produce special low-sulfur kerosene to mix with ULSD. This would apparently require refiners to decide between producing this low-sulfur kerosene, or producing “normal” kerosene and jet fuel.

And officials told us that means there is likely not to be enough low-sulfur kerosene to go around.

Yes, there is a work-around, namely the use of special additives to prevent jelling. But as refiners told us, these additives will cost more than using kerosene.

As Bill Joyce, who runs the New York State Motor Truck Association, said, “The best thing fleets can do now is talk to their supplier about what’s going to happen this winter.”

Ah, these interesting times.

This editorial appears in the July 31 print edition of Transport Topics. Subscribe today.