ENCLOSURE 4 

September 20,2010 publication in the New Jersey Register of the 

adoption of amendments to N.J.A.C. 7:27-9 and the response to the 

public's comments 

Nell' .Jcrsev II' an Equal Opportunitl' Emplovcl' ,Printed on I<ecl'cled Pap{'/' and Reevclaille 

ENVIfW!I\MEJ\TAL PROTECTIOl\' 

E-mai!: records.cuslOdiaIN;;.dep.state.nj.us 

Website: W'\",>\ .state.nj.us/deplOpra 

(cllnformation concerning the types of permits required for a proiect. 

timing of permit review. and instructions for completing permit 

applications may be obtained from the individual program authorized to 

issue the type of penna required. if known. or: 

Depanment of Environmental Protection 

Office of Permit Coordination and Environmental Review 

40 I East State Street 

PO Box 40~

Trenton. NJ OR6~5-0402

(d I The Depanment publishes the DEP Bulletin. which is a semimonthly puhlication listing the construction permit applications recently 

filed or acted upon hy the Depanment. Using the DEP Bulletin. interested 

persons can determine the status of Coastal Area Facility Review Act 

(CAFRA) permits. Federal consistency activitv permits. freshwater 

wetlands individual and general permits. open water fill pern1its. NJPDES 

permits. solid waste facility permits. flood hazard area control (stream 

encroachment) permits. tidal wetlands permits. treatment works 

approvals. and waterfront development permits. The DEP Bulletin also 

includes a calendar of events of interest. a schedule of public hearings 

I. which. however. does not constitute an official notice of a hearing). and 

a list of Environmental Impact Statements acted upon. 

\. The DEP Bulletin is available on the Department's website at 

www.nj.gov/dep/bulletin. 

~. Publication In the DEP Bulletin constitutes constructive notice to all 

interested persons of Depanment actions on construction permits. 

lei Subpoenas for the production of Department records and/or 

testimony from Depanment employees must be served upon the 

Depal1ment at the following address: 

Department of Environmental Protection
 

Office of Legal Affairs
 

401 East State Street. Fourth Floor
 

PO Box 402
 

Trenton, NJ 08625-0402
 

': 1-1.5 Effect of delegation of authority 

la) No provision of Title 7 of the New Jersey Administrative Code or 

of any other rules of the Depanment which delegates any power. duty or 

authonty of tht: Department or the Commissioner to any delegee shall be 

construed to limit the power or authority of the Commissioner over the 

delegated subiect matter. Without limiting the generality of the foregoing. 

the Commissioner may take any action for which responsibility has been 

delegated to a delegee. with the same force and effect as if such 

rt:sponsibility had not been delegated. Such actions include, without 

limitation. the grant or denial of an application for a permit: revocation of 

a permit: acti~n on any other application to the Depanment: or the 

issuance or an administrative order, administrative consent order. 

directive. notice of violation. or penalty assessment. 

Ib) The election to exercise any delegated power. duty or authority 

shall be solelv within the discretion of the Commissioner. 

(CI No pr~vision of this section shall be construed as affecting any 

substantive or procedural provisions of Title 7 of the New Jersey 

Administrative Code or of any other rules of the Department except to 

the extent that any such provision delegates any power. duty. or authority 

of the Department or the CommiSSIOner to any delegee. No proviSion of 

thiS secti~n shall be construed as affecting the right of any person to an 

administrative' hearing under N.LS.A. 5~:14B-l0. or adminisuative 

review under NJ.S.A. 5~:14B-I~.

AIHWTIONS 

(a) 

CLIMATE AND ENVIRONMENTAL MANAGEMENT 

AIR QUALITY MANAGEMENT 

Sulfur in Fuels 

Adopted Amendments: N.J.A.C. 7:27-9.2 

Adopted Repeal: N.J.A.C. 7:27-9.5 

Proposed: November 16. 2009 at 41 N.J .R. 41 56( a \ 

Adopted: August 26,20 I 0 by Bob Martin. Comnmsioner. 

Department of Environmental Protection. 

Filed: August 26. 2010 as R.2010 d.203. with technical changes not 

requiring additional public notice and comment (see N.J.A.C. 

1:30-6.3 ). 

Authority: N.J.S.A. !3:1B-3(e), 13:10-9 and 26:2C-l etseq. 

DEI' Docket Number: 14-09-10/676. 

Effective Date: September 20. 20 IO. 

Operative Date: October 25, 2010. 

Expiration Date: Exempt. 

The Depanment of Environmental Protection (Depanment) is adopting 

amendments to NJ.A.C. 7:27-9, Sulfur in Fuels. to reduce the sulfur 

content of fuel oils throughout the State. The Depal1ment is also 

repealing an outdated and unused section of the rules (N.J .A.C. 7:27-9.5 l. 

The rulemaking is a revision to the State Implementation Plan (SIP). The 

Department is adopting the amendments. which apply to all liquid fuel oil 

sold. used. stored. or offered for sale in the State, in order to reduce the 

amount of sulfur oxides, particulate matter. nitrogen oxides. and other 

pollutants released into the ambient air from the combustion of fuel oil. 

This rulemaking is a part of the Department's Statewide efforts to 

reduce secondary aerosol formation. acid rain. fine pal1lculate matter. 

ozone. and regional haze. Since the publication of the proposal in the 

New Jersey Register on November ]6. 2009, three studies concerning 

sui fur in fuel oils were released that are relevant to this rulemabng. 

First. the harmful nature of fuel burning to air pollutant levels was 

illustrated by a study by the New York City Depanment of Health. 

(The New York City Community Air Survey, Results from Winter 

Monitoring 2008-2009, New York City Department of Health and 

Mental Hygiene, December IS. ~009. Ihttp://www.nvc.gov/html/doh/ 

html/eode/nvccas.shtml) ("NY Study") In this study. it was found thal 

fuel burning for space heating in New York City signifIcantly 

contributed to paniculate levels in the ambient air. Sampling revealed 

wide variations in wintertime air quality across New York City. with 

the highest levels of pollution occurring in areas with heavier traffIC 

and a greater concentration of oil-burning boilers in commercial and 

residential buildings. Specifically, concentrations of fine particulate 

matter "were greater in areas where there were more large units burning 

fuel oil in buildings (including the most polluting lypes of oil known as 

'residual oiL' or #4 or #6 oil), more total traffic and more truck traffic'-' 

(NY Study. page 8) The report also noted that "Higher SO~

concentrations were observed in areas WIth more nearhy buildings WIth 

units burning #4 or #6 heating oil and in higher population areas" (NY 

Study. page 8) The study concluded that "shifting use away from more 

polluting fuels, especially #6 and #4 oil, toward cleaner burning fuels. 

may help to reduce air pollution in neighborhoods with many large 

burnings and combustion boilers." (NY Study. page 35) Although New 

Jersey does not have the magnitude of emissions from No.4 and No.6 

fuel burning for space heating, the New York Study indicates that like 

New York. New Jersey's air quality can be expected to Improve as a 

result of combustion of cleaner burning fuels. such as those WIth lower 

sulfur content, near where oil is burned and regionally when the sulfur 

content of oil is reduced. 

Second. a study by Hart Consulting in February 2010. entitled "Ultra 

Low Sulfur Heating Oil Assessment:' concluded that production 01' 15 

parts per million (ppm) sulfur content distillate oil. also calied ultr,,-Io\\ 

sulfur distillate. will cost five to nine cents per gallon more to produce 

than high sulfur diesel. (Ultra Low Sulfur Heating Oil Assessment page 

5. available from Hart Energy Consulting. 1616 S. Voss. Suite 10()(). 

Houston. TX 77057. Terry Higgins. Director - thiggins2Dhanenergy.com) 

ICITE 4Z :\.J.R. 2244) "iEW JERSEY REGISTER, "IONDA Y, SEPTEMBER 20, 2010 
ADOPTlO"S 

C'Hart Study") These additional costs are less than the llA cents per 

gallon that the Department estimated in its Economic Impact (41 N.l .R. 

at 4162 and 4) 63). Among the conclusions of the study were that. given 

the tight market outlook. higher premiums of 20 to 30 cents per gallon for 

distillate oil would prevail if sulfur content in heating oil were 

significantly reduced without sufficient time for installing additional 

desulfurization capacity at the refineries. The Hart Study's conclusion 

regarding the need for time for refineries to install desulfurization 

capacity the four-year and six-year lead-times provided by the amended 

rules. The Department has provided time for refineries to add additional 

desul furization capacity. 

Third, a study by Kevin 1. Lindemer, LLC, for the Northeast Oilheat 

Research Alliance C'Lmdemer Study"), concluded that the United States 

refining industry does not currently have the capacity to convert all heating 

oil demand in the United States to 15 ppm sulfur content fuel: however, the 

refining industry could have the capacity within a few years. 

(http://wwv,'.nora-oilheat.org!site20/uploads/lowsstudv.pdD The announced 

distiHate upgrading projects at the refmeries to remove sulfur from fuel 

close!) match the amount of off-highway diesel fuel that wiH be needed in 

2012 to meet Federal off-road sulfur in fuel standards. The Lindemer Study 

stated that refmers will add capacity to remove sulfur from fuel only in 

response to market or regulatory requirements. Given enough lead-time, 

suggested as five years in this study. the refiners will be able to meet low 

sulfur heating oil specifications of 15 ppm fuel sulfur content. 

The United States is currently exporting ultra-low sulfur distillate. A 

short-term shift to using ultra-low sulfur distiHate as home heating fuel in 

some states would cause domestic ultra-low sulfur distillate prices to rise 

relative to the world market, and domestic heating oil prices to fall 

relati ve to the world market. A one to three cents per gallon higher cost 

for ultra-low suI fur distillate compared to home heating oil containing 

higher levels of sulfur is expected in the northeast wholesale market 

during the winter season. Price spikes could occur if insufficient time is 

provided for implementation of the introduction of ultra-low sulfur 

distillate into the home heating oil market. The Lindemer Study 

concluded that, for consumers, the higher cost of 15 ppm heating oil 

relative to higher sulfur heating oil at 2,500 ppm sulfur levels will be 

more than offset by lower furnace maintenance costs and higher fuel 

efficiency. 

Summary of Hearing Officer's Recommendations and Agency 

Responses: 

The proposed repeal and amendments to the Sulfur in Fuels rules were 

published in the New Jersey Register on November 16, 2009 at 41 N.l.R. 

4l56(a). A public hearing was held on January 5, 2010 in the 

Department's Public Hearing Room in Trenton. William O'Sullivan. 

P.E., Director of the Department's Division of Air Quality, served as the 

Hearing Officer. The comment period was set to close on January 15, 

201 O. Four commenters provided comments at the public hearing and 14 

commenters provided written comments during the public comment 

period. 

On January 20, 2010, Governor Christie issued several executive 

orders. Executive Order No. I suspended for 90 days more than 150 thenpending proposals of various New Jersey agencies. among which was the 

proposed repeal and amendments to the Sulfur in Fuels rules and 11 other 

proposals of the Department. Executive Order No.1 states that one of the 

Governor's priorities is to establish, under the direction of a Red Tape 

Review Group. a "common sense" approach to the promulgation of rules. 

The common sense principles are described in Executive Order NO.2. 

and the Red Tape Review Group was established under Executive Order 

No.3. The purpose of the suspension was to afford the Red Tape Reviev. 

Group the opportunity ,to examine the suspended rulemakings and make 

recommendations as to those proposed rules it determined are 

"unworkable, overly-proscriptive or ill-advised." 

On February 3. 20 ICJ. the Department filed for publication in the New 

Jersey Register a notice of the extension or reopening of the comment 

period on the amendments to the Sulfur in Fuels rules. and the other I ] 

suspended Department ruJemakings. to March 15. 2010 The notice 

appeared in the March 1. 2010. New Jersey Register (see 42 NJ.R. 

642Ia)\. The Department posted the notice on its website on February 4. 

20 1~. The Departmenl sought through the notice to focus any additional 

Ei\"VIRO:'\\1Ei\"TAL PROTECTlO\, 

wTitten comments submitted on the purposes of the rules revIew set forth 

in the executive orders. The Department also announced in the notice that 

it would be scheduling informal stakeholder meetings on the proposals 

and that the dates for the meetings would be posted on the Department' s 

website. The schedule of the stakeholder meetings was subsequently 

posted on the website on February 22. 20 10. 

The stakeholder meeting for the proposal to amend the Sulfur in Fuels 

rules was held on March 8. 20) O. At the stakeholder meeting. the 

Department specifical1y sought discussion of the economic analysis. 

Federal standards comparison, process improvement and compliance and 

enforcement review for the proposal. Thirty-six persons attended the 

stakeholder meeting. During the extended comment period the 

Department received an additional 12 written comments. nine of which 

were from people who did not comment during the initial comment 

period. 

After reviewing the comments received during the public comment 

period, the Hearing Officer has recommended that the proposal be 

adopted with the changes described below in the Summary of Public 

CommenL, and Agency Responses. The Department accepts the Hearing 

Officer's recommendation. 

A record of the public hearing is available for inspection in accordance 

with applicable law by contacting: 

Department of Environmental Protection 

Office of Legal Affairs 

ATTN: Docket No. ]4-09-10/676 

40 I East State Street 

PO Box 402 

Trenton, New Jersey 08625-0402 

This adoption document can also be viewed or downloaded from the 

Department's website at http://www.nj.gov/dep/rules/adoptions.html. 

Summary of Public Comments and Agency Responses: 

The Department received comments on the proposed amendments 

from the following persons: 

1. Randall Abbuhl, Weston Solutions 

2. Jim Benton, New Jersey Petroleum Council and API 

3. Maria Benyshek, Conoco Phillips 

4. Daniel Brusstar, CME Group 

5. Keith Buccanan, Sunoco lnc. 

6. Gregory M. Cohen, American Highway Users Alliance 

7. Christopher Colman. Hess Corporation and Hovensa LLC 

8. Eric DeGesero, Fuel Merchants Association of New Jerse) 

9. Charles T. Drevna. National Petrochemical 8.:.. Refiners AssocIation 

10. Michael A. Egenton, New Jersey Chamber of Commerce 

11. Paul Fiore, Service Station Dealers of America and Allied Trades 

12. M. Gary Helm, Conectiv Energy 

13. Dena Matola Jaborska, NJ Environmental Federation 

14. Christopher Len. Hackensack Riverkeeper. NYINJ Baykeeper 

15. Al Marmato. American Petroleum Institute 

16. Jason L. Mengel, Buckeye Pipeline Company. L.P. 

17. Richard Moskowitz., American Trucking Association 

18. Peter J. Pantuso, American Bus Association 

19. David Pringle. New Jersey Environmental Federation 

20. Richard Siller. Hess Corporation 

21. Thomas Sims. United States Department of Defense. Air Force 

22. Jeff TitteL Sierra Club 

23. R. Peter Weaver, International Liquid Termmals Association 

24. Raymond Werner. U.S. Environmental Protection Agenc) 

25. Sam Whitehead. Colonial Pipeline Company 

26. Bill Wolfe. PEER 

27. L.M. Ziemba. ConocoPhillips 

A summary of the comments and the Department's responses follO'\s. 

The number( s) in parentheses after each comment identifies the 

respective commenter(s) listed above. 

General comments 

1. COMMENT: The Department is commended for its working 

relationship with the regulated community and for soliciting stakeholder 

input in developing the amendments to the sulfur in fuel rules. The 

NEW JERSEY REGISTER, MONDAY, SEPTEMBER 20,2010 (CITE 42 T\.J,R, 22451
ENVIRONME]\'TAL PROTECTlON 

Department should continue this cooperative relationship. C. 3. 12. 24. 

27) 

2. COMMENT The State is commended for taking a leadership role 

In the eastern United States in being the first of many states expected to 

propose the lower sui fur fuel standards as an Important regional strategy 

to improve air quality. 112.24) 

RESPONSE TO COMMENTS I AND ., The Department 

acknowledges the commenters' suPPOrt. 

3. COMMENT: The Department should seek a consensus resolution to 

any outstanding issues with the rules that offers the environmental 

henefits while providing necessary f1exibility to the transportation and 

relinery sectors. f2. 15. 25) 

4. COMMENT: The Department should work with the oil industry and 

the New Jersey Petroleum Council in implementing the second phase of 

reductions and in the appropriate level of sui fur for No.2 heating oil. (4) 

RESPONSE TO COMMENTS 3 AN D 4: The Department has 

discussed the sulfur in fuels standards. including appropriate standards 

for the second phase of reductions. with all interested parties, including 

the transportation and refinery sectors. over the past tive years. most 

recently at a March 8. 20 I(I meeting of stakeholders. The Department will 

continue to meet With interested parties to discuss implementation of 

these rules and to seek flexible solutions and a consensus resolution. 

where possible. 

5. COMMENT: It is unclear whether the proposed sulfur in fuels and 

sulfur dioxide emission standards at NJ.A.C. 7:27-9.2 apply to kerosene 

or gasoline. The proposal states that the rules do not apply to kerosene 

and gasoline: that is, the proposed rules do not affect the very light 

fractions of distillate fuels. including gasoline and kerosene. But the 

proposed rule text itself does not appear to differentiate between the very 

light fractions. The Department should clarify whether the rules apply to 

fuel oils already covered by Federal regulation. The Department should 

add the following to the defmition of fuel oil: "Fuel Oil does not include 

fuels commonly or commercially known or sold as gasoline." (12) 

RESPONSE: In at least one place in the proposal (4 I NJ.R. 4 I57, for 

example) the Department did suggest that the sulfur in fuels rules do not 

apply to kerosene and gasoline. This is an oversimplification that may 

have caused some confusion. A more accurate and precise explanation of 

the relationship between those fuels and these rules follows. 

The rules do not apply to kerosene and gasoline to the extent that they 

are specifically exempted at N.J.A.C. 7:27-9.3(a), which provides an 

exemption for "fuel used by ocean-going vessels or in motor vehicles." 

The Department intended that statement in the rule proposal to pertain to 

fuels used in mobile sources where such fuels are already covered by the 

sulfur in fuel standards of Federal regulation at 41 CFR 80.520fd). In the 

Federal regulation. the Federal government requires the sulfur content of 

kerosene be a maximum of IS ppm if it is used. intended for use. or made 

available for use in highway vehicles with diesel engmes. in NJ.A.C 

7:27-9.2. Table IA and Table lB. NO.2 and lighter fuels, which would 

include kerosene used for other purposes. are defined by their Saybolt 

Universal Seconds (SSlJj viscosity being less than or equal to 45. Any 

liquid fuel oil having a viscosity of less than 45 that meets the definition 

of a No.2 fuel oil and lighter would be suhject to the sulfur in fuel 

standard of 500 ppm in 20 J4 and 15 ppm in 2016. if not used in a motor 

vehicle or other mobile source subject to the Federal sulfur in fuel limits. 

Kerosene would be considered as a No. 2 or lighter fuel using the 

viscosity definition in the tables. as kerosene has an SSU of 35 at 68 

degrees Fahrenheit. (http://www.engineeringtoolbox.com/kinematicvlscoslty-d 397.html) The existing exemption for mobile sources at 

".lAC. 7:27-9.3Ia) excludes any fueL including gasoline and kerosene, 

if used in motor vehicles or marine vessels. 

The Department intends that the Sulfur in Fuels rules at NJ.A.C. 7:27­

9 include the suI fur in fuel limits for kerosene that is not used in motor 

vehicles or marine vessels and not covered by existing Federal regulation. 

The level of the sulfur in fuel standards in the State and Federal 

regulations for diesel fuel and distil late heating oil will then be identical. 

Setting the State heating oil standards at the same level as in the Federal 

diesel fuel rule ensures that there \vill be no confusion as to the applicable 

level of the standard. regardless of the type of equipment or use of the 

kerosene. 

.l,()OPTIO"iS 

6. COMMENT: If the Department adopts the proposed amendment:-.. J1 

should expedite pem1it processing for permits required for reiinenes to 

comply wilh these rules. as project implementation will benefit the 

environment. provide jobs to New Jersey. and add to New Jerse\'s 

economy. The Commissioner should issue a directive to assist in the 

appropriate facility applications and permits to add refining capacity to 

the State for manufacturing and storing additional quantities of reduced 

sulfur distillate for use as heatine. oil. (21 

RESPONSE: The Departm~nt will reallocate staff as needed to 

conduct any requested pre-application meetings. to ensure that these 

permits are given prompt and appropriate attention. The Depanment will 

work closely with the regulated community to complete the permitting 

process as expeditiously as possible. 

7. COMMENT: The Department should amend the rules to exempt 

fuel used by military vehicles from the proposed fuel requirements. It 

should also define "tactical military vehicle" so as to exempt ItS use of 

fuel from the rules. The United States Environmental Protection Agency 

(USEPA) already exempts military vehicles from the Federal distillate 

fuel standards at 40 CFR 80.606 for JP-8 fuel, tbe kerosene-based fuel 

used to fuel tactical military vehicles. The exemption is necessary 

because subjecting tactical military vehicles to mOlOr vehicle diesel fuel 

standards would compromise the military readiness for ovcrseas 

deployment of tactical military vehicles, as these vehicles must be fueled 

using the same fuel that is used globally by the Department of Defense. 

(21 ) 

RESPONSE: It is not necessary to specifically exempt the fuel used by 

tactical military vehicles from the provisions of N.J.A.C. 7:27-9, as fuel 

used in this manner is already exempted. NJ.A.C. 7:27-9.3Ia). for which 

the Department did not propose amendments, provides that the provisions 

of this subchapter do not apply to fuel used by ocean-going vessels or in 

motor vehicles. A "motor vehicle" is defined at N.J.A.C. 7:27-9. I as "any 

vehicle propelled otherwise than by muscular power. excepting such 

vehicles as run only upon rails or tracks." A tactical military vehicle 

would, therefore, be considered a motor vehicle and the fuel it uses would 

be exempt from the requirements of NJ.A.C. 7:27-9. 

8. COMMENT: The Department should not revise New Jersey's SIP 

to include these rules as that would make it difficult to amend the rules 

should future implementation or marketplace conditions warrant. (2. 6. 

1D. IS) 

RESPONSE: As is discussed at 41 N.J.R. 4 J60, the Department 

proposed to amend its regional haze air quality protection plan on June 

16, 2008 (SIP for Regional Haze Proposal, September 5. 20(8) to include 

this air pollution control strategy. This strategy is also included in New 

Jersey's June 16. 2008 Fine Particles Attainment Demonstration SIP to 

attain and maintain the fine particles national ambient air quality 

standards (NAAQS). These rules, therefore. are already proposed to be a 

part of New Jersey's SIP and cannot be changed without publicly 

proposing a modification to those plans already before the USEPA. Since 

these rules are an important component of New Jersey's plan for clean 

air. the Department will be submitting this rule adoption to the USEPA 

for inclusion in appl icable SIPs. Having a rule as pan of an approved 

State SIP means that, by Federal law. the rule cannot be amended without 

Federal approval and cannot be amended to increase emissions unless a 

commensurate decrease in emissions occurs elsewhere. 

The Department recognizes the capital investment that refiners are 

required to make to lower the sui fur content of fuel. The Depanment also 

recognizes the potential effect that these rules could have on the trading 

of futures in the New York Mercantile Exchange (NYMEX) marketplace 

Including these rules in New Jersey's SIP gives the marketplace greater 

certainty. The Department will carefully consider the timing and Impact 

of any changes to these rules in the future. in order to avoid potential 

disruption to the marketplace from any uncertainty regarding 

implementation. 

9. COMMENT: The proposed amendment to require 15 ppm sulfur 

content fuel oil in 2016 is not warranted. is excessive. cannot be justified. 

is not needed to improve air quality. is tremendously costly in capital 

expense or is without well documented cause. The DepartmenL should 

carefully justi fy or examine this decision. (1-4. 6. 7. 9-12. 15-18. 23. 15) 

RESPONSE: The Department disagrees with this comment. New 

Jersey is required by the Federal Clean Air Act to attain the healtn 

(CITE 42 i'U.R. 2246) ;'liE\\' JERSEY REGISTER, :'.lO:"DAY. SEPTE.\1BER 20, 2010 
ADOPTIO"'iS 

standard for all criteria air pollutants, In the Response to Comments 15 

and 16 below. the Department notes that approximately eight million 

New Jersey residents are breathing polluted air in counties not meeting 

the NAAQS. and that sulfur in fuel oil contributes to New Jersey's nonattainment issues. Also. the Federal Clean Air Act requires New jersey to 

make progress towards achieving natural background visibility conditions 

in Federally designated Class I Areas. as discussed in the proposal at 41 

N.J.R, 4] 59. The requirement to reduce the sulfur content of fuel oil has 

been determined to be a reasonable measure by the members of the MidAtlanticfNortheast Visibility Union (MANE-VU) (including New Jersey) 

and is a component of New Jersey's SIP for Regional Haze, as discussed 

at 4] NJ.R, 4159 and 4160, The standards must be implemented to meet 

these national requirements as soon as practicable, In its Economic 

Impact (4J NJ.R, at 4164). the Department performed a cost-benefit 

analysis for these amendments and determined that the benefits exceeded 

the costs, See also the Department's Responses to Comments 47 through 

67 below for a further discussion of the costs and benefits of the adopted 

amendments, 

Regional implementation of low sulfur fuel standards 

10, COMMENT: New Jersey should adopt these rules along with other 

states, While New Jersey may be the first state in the MidAtlanticfNortheast United States to propose rules to lower sulfur in fuels, 

other regional states are expected to propose similar rulemaking. (24 i 

11, COMMENT: The Department should not adopt the proposed 2016 

limits in New Jersey. because they would be more stringent than those of 

any other surrounding state and. therefore, could disrupt the home heating 

oi I marketplace, (l 0) 

12. COMMENT: The Department should coordinate these and other 

related rules with other states, inside and outside of MANE-VU, 

including the Midwest Regional Planning Organization and the Visibility 

Improvement State and Tribal Association of the Southeast (VISTAS). so 

as to not place New Jersey sources at a competitive disadvantage. (J 0. 

12) 

13, COMMENT: New Jersey should harmonize the implementation 

schedule in the proposed rules with the State of New York to avoid 

supply problems and price spikes, as these states share the New York 

harbor area, an internationally known product hub. (4) 

]4. COMMENT: The Department should adopt the proposed 

amendments and repeal without delay, as such delay would result in a 

substantial loss of air pollution reductions region-wide, particularly 

insofar as any weakening of the proposed standards or delay in their 

implementation by New Jersey will affect action taken by other states in 

the region, thus magnifying the loss in pollution reductions. (13. 19) 

RESPONSE TO COMMENTS 10 THROUGH 14: New Jersey will 

experience the greatest improvements in air quality and regional haze if 

all states throughout the eastern United States implement the MANE-VU 

sulfur reduction strategy, This was the basis for the agreement of the 

MANE-VU states to pursue this regional reduction strategy. as noted at 

41 NJ.R, 4159. The Department agrees that the amendments should be 

adopted without delay, 

Maine's Governor signed legislation on April 5.2010 to require the 

use of 15 ppm sulfur fuel oil by January L 2018 in fulfillment of its 

MANE-VU commitment. (Public Law Chapter 604, LD 1662. 124th 

Maine Legislature) This is the first MANE-VU state to complete 

regulatory or statutory action to achieve the regional reductions that will 

benefit the air quality in the MANE-VU region. as discussed at 4] KJ.R 

4160, The Department is tracking the progress of other states in 

implementing similar regulations or legislation, Legislation introduced in 

New Jersey and other MANE-Vli states would require ]5 ppm sulfur 

content distillate oil in 2011 or by 2012, (Bills have been introduced as 

AI054 and SI414 in New Jersey. SIJ45C in New York. SI282 in 

Pennsylvania. H549 in Vermont. and H7653 and S2521 in Rhode Island,) 

The Depanment anticipates thal other states will soon follow Maine's and 

New Jersey's Icad and will enact legislation or implement regulations 

with consistent. workable timeframes and standards, Issues of supply. 

fungibility. costs. distribution and demand would best be avoided if there 

IS regional implementation of this air pollution control stralegy. 

The proposed 2016 limIts for sulfur will not be more stringent in Nev. 

Jersey than In surroundin~ states if New York, Pennsylvania and 

ENVIRO,\MENTAL PROTECTlO,\' 

Delaware (all of which are inner zone MANE-VU states, as discussed at 

4 I NJ.R, 4162) follow through on their signed MAN E-VU commitment 

The remaining MANE-VU states in the outer zone of the MANE-VL, 

strategy are expected to have similar sulfur in fuels standards in 2018, 

Air quality benefits 

15, COMMENT: The Department should adopt the proposed 

amendments because they will result in air quality and health benefits for 

millions of New Jersey residents. (24) 

16, COMMENT: New Jersey has been classified as "contributing" t~

non-attainment of the fine particulate matter air quality standard In Ne" 

York City, New Jersey residents are not, themsel ves, experiencing bad air 

quality, Therefore. the proposed amendments are not needed, (71 

17, COMMENT: The Department should adopt the proposed 

amendments because they will lead to cleaner air in states surroundmg 

New Jersey, or will directly benefit New Jersey, helping to reduce 

negative health impacts, acid rain, water nitrification and regional haze 

within the State, as well as outside it. (13, 19, 24) 

18, COMMENT: The Department should adopt the proposed 

amendments. as they would limit or prevent harmful emissions from the 

combustion of fuel oil containing sulfur, including emissions of fine 

panicles, sulfur dioxide and nitrogen oxides, and they would dramatically 

limit the harmful health effects of these emissions. (13, 19,24) 

RESPONSE TO COMMENTS ]5 THROUGH 18: The Department 

anticipates that New Jersey's air quality and the health of its citizens will 

improve as a result of adoption of the amendments, Benefits to the public 

health and welfare are the underlying basis for this adoption, The 

Department discussed this and interstate contributions to air quality at 4 I 

N.J.R. 4159 and 4160, 

New Jersey is contributing to air pollution in surrounding states, and 

these states are contributing to New Jersey's air pollution, A "nonattainment area" under the Federal Clean Air Act is not only one that 

exceeds the NAAQS, but also any area that contributes to the exceedance 

in another area. The USEPA classified 13 counties in New Jersey as 

being in non-attainment of the fme particulate standard, For some of 

these counties, the classification was based on the county's contributiOn> 

to unhealthful levels of air pollutants in New York City, while for others 

the classification was based on the county's exceedance of the fine 

particulate standard, The Department discussed this point III the proposal 

at 41 NJ.R. 4158 and within the June 16, 2008 State Implementation 

Plan for fine particles that New Jersey submitted to the USEPA, 

(http://www.nj,gov/deplbagp/sip/siprevs.htm) Because of the interstate 

transport of pollutants, it is important for New Jersey and all other 

MANE-VU states to adopt similar standards in order to obtain the full 

extent of air quality benefits to New Jersey and the region. 

]9. COMMENT: Adoption of the proposed rules will result in lower 

emissions, This will help New Jersey in the future. should the USEPA 

respond to studies showing that the current NAAQS do not adequately 

protect public health by promulgating more stringent NAAQS, The 

promulgation of NAAQS stringent enough to protect public health and 

the environment would require New Jersey to go beyond the 

requirements of the rules prior to amendment. The amendments will be 

useful if that happens. (24) 

20, COMMENT: The 500 ppm sulfur standard for home heating oil IS 

needed to effectively assist the State III complying with the current 

Federal NAAQS for fine particulate. sulfur dioxide or ozone air 

pollutants, (13.19.23.24) 

RESPONSE TO COMMENTS 19 AND 20: The Department 

acknowledges the commenters support for the rules, This rulemaking is a 

vital component of the State's strategy to meet its air quality standards 

and visibility goals, 

Although the Department is not adopting standards under the authority 

of. or in response to. the draft notices of Federal rulemaking to lower the 

sulfur dioxide NAAQS, the adopted sulfur in fuel standards will benefit 

the State's air quality and will be useful in meeting both the current and 

anticipated more stringent Federal NAAQS, On June 2, 20 IO. the USEPA 

adopted a substantially more stringent NAAQS for sulfur dioxide, These 

adopted sulfur in fuel limits of NJ .A.C. 7:27-9 will be included in future 

New Jersey SIPs now that the USEPA has made the sulfur dioxide 

NAAQS more stringent. The adopted standards would also be induded in 

NEW JERSEY REGISTER, MONDAY, SEPTEMBER 20, 2010 (CITE 42 KJ.R. 2247 i 
ENVIRONME1\'TAL PROTECTIOl" -\/)OPTIOf\S 

New Jersey's SIP for fine particulate matter if the USEPA makes the 

N.A...AQS for fine particulate matter more stnngent. 

The Department believes that it is Important for the State to Implement 

its rules IlJ advance of Federal action on fine panicles. Refiners need as 

much as four years lead time to add the necessary equipment to 

desuliurize ali fuel oil. If the Department .\~ere to wait for the USEPA to 

linalize a more stringent fme particulate NAAQS before amending its 

rules. refineries could be left WIth insufficient time to modify their 

operations to meet the standard. The modifications to the refinenes must 

be in place well in advance of the operative date of the anticipated more 

stringent NA/\QS. in order that the benefit of reductions is achieved on or 

before the deadline. Tne State must be able to demonstrate. through 

monitoring and measurement. that it is in attainment by the required date. 

Hence. waiting for the new NAAQS and then promulgating a rule at that 

lime may provide less time for compliance than the four years requested 

by the refining industry. 

21. COMMENT: The Department does not need to adopt the proposed 

amendments in order to attam the NAAQS for sulfur dioxide. As noted in 

the proposal. all areas of the State are currently in attainment of the 

NAAQS for sulfur dioxide. ( 16) 

RESPONSE: New Jersey has met the former NAAQS for sulfur 

dioxide in most areas of the State since the 1980s. It is not vet evident if 

the State is in attainment for the Federal one-hour sulfur dio~ide standard 

of 75 parts per billion that was finalized on June 22. 2010. which the 

State must meet on or before August 3. 20J O. The State's air monitors 

indicate lower levels than the new Federal sulfur dioxide NAAQS. but air 

quality modeling of major sulfur dioxide sources will be necessary to 

determine attainment or non-attainment near these sources. 

Although the adopted amendments may be a useful control measure to 

attain or maintain levels that comply with the new NAAQS for sulfur 

dioxide. the Department did not propose the amendments as part of the 

State's sulfur dioxide SIP or to attain the State or Federal health standards 

for sulfur dioxide. Rather. the Department is adopting these more 

stringent sulfur content standards to meet and maintain the health 

standard for fine particulate matter. and to make progress towards the 

State's regional haze goals. 

22. COMMENT: The Department should not adopt the 15 ppm 

standard as it IS not needed for air quality benefits. The Federal fuel 

standard for sulfur in kerosene. when used in indoor space heating. is 400 

ppm. Presumably the USEPA set the sulfur specification for indoor 

kerosene use at a conservative level for operability and air quality 

purposes, suggesting that the Department should set the sulfur content 

standard for fuel burned in furnaces and boilers at 500 ppm (a similar 

level). (7) 

RESPONSE The primary concern of the Depanment in setting the 

sulfur content standard for distillate fuel (the fuel generally used in 

furnaces and boilers) at 15 ppm is not to address indoor air quality 

concerns. but to address the formation of secondary aerosols or fine 

particulate matter in the outside air. as discussed at 4 I N.J .R. 4158. The 

formation of secondary aerosols contributes to the high levels of 

particulate found in New Jersey's air, and sulfates are the predominant 

component of this fine particulate matter. The amendments will lower the 

sulfate component of the fine particulate matter affecting New Jersey's 

outdoor air quality. 

The use of unvented. indoor, kerosene space heaters is of concern. 

regardless of the sulfur content of the kerosene. The USEPA has stated 

that. "Unvented fuel-fired space heaters that use kerosene or gas are of 

serious concern to pubiJc health officials" (Introduction to Indoor Air 

Quality. USEPA. Office of Air and Radiation. Doc. ID # 400-391003. 

Juiy 1991. page 2261. It is also recommended by the USEPA in this 

document that adequate ventila[ion must be provided when using 

unvemed. indoor kerosene heaters by bringing fresh outdoor air into the 

Iiving space. ThIS prevents the build-up of the by-products of combustion 

(potentially hannful air contammants like sui fur dIOxide) in the indoor 

environment. (page 227). The Depanment is not aware any findrng that 

400 ppm sulfur content kerosene IS safe to use in mdoor. unvented space 

heaters. 

Removing pollutants other than sulfur from fuel oil 

23. COMMENT: The Department should withdra\\ the proposed 

amendments and re-propose a 15 ppm sulfur content reouirement. while 

also requiring a lower fuel oil carbon content and inclusion of a bio-fuel 

component. New Jersey should also work on this with other Slates and the 

Northeast States for Coordinated Air Use Manaf'ement (NESCAUM). (8) 

RESPONSE: Expanding the scope of this ~rulemakmg be:ond what 

was already agreed to by the MANE-Vli members to include" bio-fueis 

component or a carbon content fuel standard is unnecessarv and would 

delay implementation of the sulfur in fuel standard in Ne\~ Jersev and 

thro~ghout the region. The Department does not Wish to dcla~' the 

emissions reduction benefits of these rules Timely adoption of these 

amendments provides the other MANE-Vl' members the assurance that 

New Jersey will implement a lower sulfur content standard. and will 

provide refiners with ample lead-time to comply with the adopted 

standards. Any delay would shorten the necessary lead-time provided to 

the refmeries and to the marketplace. 

Carbon content and bio-fuels can be addressed as a separate 

rulemaking effort if warranted after further evaluation. The NESCAUM 

states are doing such an evaluation as part of their consideration of a low 

carbon fuel standard. 

The amount of emissions reduced by the adopted amendments and repeal 

24. COMMENT: The Department should adopt the proposed 

amendments because that will reduce [Otal sulfur dim;ide emissions in 

New Jersey by an appreciable amount. (13. 19.24,26) 

25. COMMENT: The amendments should be adopted because they 

will affect the combustion of fuel oil that accounts for 10 percent of total 

sulfur dioxide emissions in New Jersey. (241 

26. COMMENT: The Department should adopt the proposed 

amendments because they would reduce sulfur dioxide from lighter fuels 

by 97 percent in 20 I4 and by 99 percent in 2016. The-proposed 

amendments and repeal would also reduce emissions of small particles. 

nitrogen oxides and carbon monoxide. (13.19) 

RESPONSE TO COMMENTS 24 through 26: The Department agrees 

that these rules will result in significant emissions reductions and 

acknowledges the commenters' suppon. The proposal at 41 N.J.R. 4162 

and 4163 stated that the amendments will result in a reduction in sulfur 

dioxide of 1.030 tons per year starting in 2014 from distillate fuel 

consumption. 220.4 tons per year starting in 2014 from residual fuel 

consumption. and an additional 294 tons per year starting in 2016 from 

the implementation of the ultra-low sulfur fuel standards for distillate oil. 

The use of fuel oil varies by season and year. by type of use. and by 

location. Distillate fuel oil is used in the northeastern United States for 

home heating. and in other parts of the country for on-road diesel fuel. 

Given these variations. the numbers in the proposal are a reasonable 

estimate of the typical reductions expected annually in New Jersey from 

the adoption of these rules. 

The Department's review of the Energy Information Agency (EIA) 

data (available at http://tonto.eia.doe.f'ov/dnavlpetipeLcons 821 dsL 

dcu-fluS a,htm) shows that in 2008 75.1 percent of the distillate and 

kerosene use in the State was covered bv Federal motor vehicle fuel 

regulation. In 2008. 68.6 percent of the di~tillate and kerosene fuel was 

for on and off-highway vehicle use. 4.5 percent railroad use. and two 

percent vessel bunkering use. This leaves approximately 24.9 percent 

of distillate and kerosene to be ref'ulated bv the Sulfur in Fuels rules at 

N.J.A.C. 7:27-9. rather than Fede;al regul~tion. The 24.9 percent 01 all 

distillate. residual. and blends of distillate and residual oil includes 

residential. commercial. and industrial heating and electric power. The 

adopted amendments are intended to conform the Slate's sulfur in fuels 

requirements to the Federal requirements for fuel used m on-road and 

off-road sources. so that all distillate fuel oil. whatever the ul[imate usc. 

will be subject to the same sulfur standards. 

27. COMMENT: The proposed amendments give only small 

incremental benefit from going from 500 to 15 ppm suI fur in fuel in 20 16 

considering that sulfur dIOxide emissions from New Jersey's coal-fired 

power plants amounted to over 45.000 tons in 200~. The Depanment 

should delay adoption of the proposed amendments unti I after reductions 

at the coal-fired electric generating units are achieved. (9) 

(CITE 42 \.'/.R. 2248) "iEW JERSEY REGISTER, \10l"DA\. SEPTE"IBER 20. 2010 
ADOPTIO\S 

RESPONSE: The Department agrees that coal-fIred power plants are 

large contributors to sulfur dioxide levels in New Jersey and within the 

United States. The Federal Clean Air Act namely the New Source 

Review provisions and the sulfur dioxide/acid rain trading program, and 

New Jersey's Air Pollution Control rules (NJAC. 7:27-10, Sulfur in 

Solid Fuels) are addressing these emissions in order to achieve significant 

emission reductions at New Jersey's coal-fired power plants in the near 

future, The Department expects that all operating coal burning sources in 

New Jersey will have state-of-the-art sulfur oxides pollution control 

equipment by 2014, making the emissions from these sources much lower 

by time of implementation of the adopted amendments. 

The benefits of both the adopted sulfur in fuel oil standard and lower 

emissions from New Jersey's coal burning sources were included in the 

estimates of the air quality bcnefits in the NESCAUM study referenced in 

the proposal at 41 NJ.R. 4162. This study showed that the region would 

attain the air quality standard in 2018 for fine particulate matter after 

regional implementation of these control strategies and lowered 

emissions from New Jersey's coal burning sources. Reducing the sulfur 

content of fuel oil from 500 ppm to IS ppm will give smaller, but still 

major emission reduction benefit. The benefits to New Jersey's air quality 

will be a result of emission reductions in New Jersey and regionally. 

28. COMMENT: A limited number of boilers now require fuel that 

contains 15 ppm (or even 50 ppm) suifur, and will realize no benefit from 

the mandated reduction in sulfur content in fuel oil. The marketplace 

already provides sufftcient fuel with reduced sulfur content for these 

boilers. Therefore, the Department 'cannot take credit for emissions 

reductions for those boilers, The reductions are present with or without 

the proposed amendments to the rules. Owners of other boilers will like)y 

switch to natural gas. In effect. a reduction to 15 ppm or even a more 

moderate 50 ppm sulfur by New Jersey will require that the vast majority 

of fuel oil consumers utilize a fuel they do not need, will cost them more. 

and will increase emissions overall. (7) 

RESPONSE: To the extent that the adopted amendments result in 

reductions in sulfur oxides and fine particulate matter. there is a benefit. 

Although boilers that already use fuel oil with a sulfur content of 15 ppm 

may not further reduce emissions, those boilers that use fuel with a sulfur 

content of 50 ppm will experience some reduction. As the commenter 

suggests, the number of boilers that already use the ultra-low sulfur fuel 

is relatively small. The anticipated emission reductions from the adopted 

15 ppm sulfur content standard are discussed in the Environmental 

Impacl4l NJ,R, at4163 and 4]64, 

Although some homeowners may switch from fuel oil to natural gas, it 

is not mandatory in New Jersey that they do so, either as a result of the 

adopted amendments or otherwise, Moreover, there are consumers in 

parts of the State that do not have access to natural gas pipelines or 

supply, so they cannot switch from fuel oil to natural gas. It is important 

that all consumers have access to low sulfur fuels. Some consumers 

consider distillate home heating oil to be "dirtier" than natural gas. due to 

the greater sulfur dioxide and particulate emissions from combustion. As 

a result of the adopted amendments. the sulfur content of fuel oil and 

sulfur dioxide and particulate emissions from fuel oil will be 

approximately equal to the sulfur content and sulfur dioxide and 

particulate emission from natural gas, providing consumers a "clean" 

alternative to natural gas. 

Fuel supply issues 

Studies concerning supply 

29. COMMENT: Before the Department adopts the IS ppm sulfur in 

fuel standard for 2016, the Department should do a study to ensure that 

an adequate supply of ultra-low sulfur fuel oil (that is, IS ppm) will be 

available in the future. (2, 3,4,6,8-12,15,16.17,20,23) 

30. COMMENT: The Department re'ties on studies to show that fuel 

supply will be adequate. These studies are no longer valid. as many of the 

proiects to lower the sulfur content of fuel used in the studies have been 

canceled by major refming entitles. One refiner could not Droduce 

additional quantities of ultra-1m... · sulfur diesel beyond its current supply. 

The refiner has one refinery in New Jersey that does not produce low or 

ultra-low sulfur diesel: its other refmery does not have the capacity to 

E,\VIRONMPiTAL PROTECTICP, 

produce ultra-low sulfur diesel beyond its current supply that is used in 

the transportation market. (7) 

31. COMMENT: The amendments, if adopted, will not lead to supply 

shortages, based on a soon-to-be released study of the National Oilheat 

Research Alliance (NORA) that shows that the United States is currentl) 

exporting 80 million barrels a year (equal to three billion gallons) of 

ultra-low sulfur heating oil to Europe and South America. This amount. if 

not exported. would more than cover the 400 million gallons of heating 

oil used in New Jersey annually, (8) 

RESPONSE TO COMMENTS 29 THROUGH 31: A Departmen1­

initiated study of future supply and availability issues is not warranted, 

based on the availabil ity of studies that have already been conducted, the 

adequacy of the current supply of ultra-lov. sulfur oil to meet the fuel oil 

demands of New Jersey. and the projection that oi I demand will decrease 

in the future. Given the long lead-time provided for implementation, 

supply and availability issues should not be of concern in New Jersey. 

Four years allows adequate time for the marketplace to avoid any supply 

and availability issues, as was suggested by the comments submItted by 

representatives of the NYMEX marketplace, 

Recent experience with implementation of Federal rules requiring 15 

ppm diesel fuel in all on-road and off-road vehicles has not presented 

significant issues of fuel supply or availability within New Jersey or 

elsewhere. Actual experience with production, availability and 

distribution of the ultra-low sulfur (15 ppm) fuel. therefore, supports the 

conclusions of the NORA study, The NORA study concluded that the 

supply of both 500 and IS ppm sulfur content distillate will be available 

in the proposed timeframe to cover the remaining 17 percent of the 

distillate fuel usage. (See 41 NJ.R. at 4162.) The Department knows of 

no additional studies that have been performed showing that the future 

supply of ultra-low sulfur diesel will not be adequate. By all accounts, the 

implementation of the Federal ultra-low sulfur diesel standards has 

occurred without causing disruption or supply issues. Oral statements and 

written comments on the rule proposal, and a recently released study by 

Hart Consulting, Inc., all indicate that disruption of supply and price 

spikes can be avoided if refmers are afforded a three to four-year lead· 

time to plan and install the desulfurization equipment needed to rem"vc 

sutfur from the remaining part of the fuel stream. This rulemaki:.~

provides sufficient lead-time for refineries to install addition;;! 

desulfurization equipment to meet demand. 

In addition to the 2008 NORA study. studies by the American 

Petroleum Institute (API) (discussed at 41 NJ,R. 4162) also concluded 

that an adequate supply of low sulfur oil would exist if suffIcient lead· 

time were gi ven for the change. While these studies are dated, they are 

not necessarily outdated. The conclusions of these reportS have been 

borne out by the experience with implementing the Federal on-road and 

off-road sulfur in fuel requirements, The recently-released Lindemer 

Study, discussed above, also concluded that adequate supply will be 

available if refiners are given enough lead-time to implement the ultra' 

low sulfur fuel requirements. The Department knows of no shortages or 

price spikes that have resulted in the transportation fuel market or the 

home heating oil market due to implementation of the Federal ultra-low 

sulfur fuel requirements, nor have the commenters provided any evidence 

that shortages or price spikes occurred as a result of implementing the 

Federal sulfur in fuels rules. 

liltra-low sulfur fuel supply issues 

32. COMMENT: Adoption of the 15 ppm sulfur content standard for 

distillate fuel oil in 20 \6 may result in fuel supply and availabil ity 

concerns, leading to price disruption and price spikes, especially from 

U.S. and foreign sources. (2, 3, 4, IS) 

33. COMMENT: Adoption of the proposed amendments will likel; 

cause 15 ppm or ultra-low sulfur distillate fuel to be 111 short supply 

because a step-change increase in demand for lower sulfur diesel will 

likely occur in 2015 when ocean-gomg vessels caliing on U.S. ports will 

be required to use fuel meeting a LOOO ppm sulfur content standard: and 

during the peak heating season, a percentage of heating oil supply is 

reliant on impons from areas that do not have the diesel desulfurizallon 

requirements of the U.S. and Canada. (2, lSI 

34. COMMENT: The Depanmem should not adopt the 15 ppm sulfur 

content standard based on an assumption that the availabilIty of fuel In 

NEW (CITE 42 N.,I.R. 22491 JERSEY REGISTER, MONDA Y, SEPTEMBER 20. 2010 
E"IVIRONME"iTAL PROTECTION 

the Gulf or Midwest will mean low sulfur fuel will also be available In 

New Jersey. Pipeline constraints and the requirements of .Iones Act 

shipping laws (that only U.S. vessels can be used In shipments between 

United States ports) can affect availability in Ne,,' Jersey. (7) 

35 COMMENT: The Depanment should not adopt the proposed 

amendments because it did not take into account ail factors concerning 

"iew Jersey's refineries and supply. These factors include lack of refinery 

capacity in the nonheast and an inabi\ny of existing refineries to be 

readily converted to make ultra-low sulfur diesel. Distillate fuel used for 

on-road transportation accounts for nearly all of the demand for number 2 

fuel In some states. so that those refiners make a higher proponion of 

ultra-low sulfur diesel for sale in those states. At one New Jersey 

refmery. Hess's Port Reading Refinery, 100 percent of all distillate output 

is used as heating oil. and at the parent company"s offshore refinery 

distillate output is about 50 percent heating oil. (7) 

36. COMMENT: The Depanment should adopt the sulfur content 

standard of 15 ppm in 20 J6. based on the positive experience of the 

Federal government in setting the 2006 on-road diesel fuel standards. 

Ultra-low sulfur diesel was introduced in all states for on-road use with 

little or no supply or price disruption. because all parries worked together 

to identi fy and fix problems early in the process. (2. 15) 

37. COMMENT: The amendments and repeal should be adopted 

because they will affect the remaining component of the distillate fuel 

market. which is a 59 billion gallon market. excluding jet fuel. Of this 

total, 76 percent must have a sulfur content of 15 ppm or less by later this 

year as a result of the Federal fuel requirements. in 2012, this will 

increase to 83 percent of total distillate use being covered by Federal 

regulation requiring a 15 ppm sulfur in fuel standard. The USEPA repons 

significant compliance with the 15 ppm Federal sulfur in fuels standard 

with 99 percent of all diesel pumps distributing ultra-low sulfur on-road 

diesel fuel through the third quarter of 2009. This provides a large source 

of supply of 15 ppm sulfur content distillate fuel. which is available to the 

home heating oil market. (8. 22) 

RESPONSE TO COMMENTS 32 THROUGH 37: As the Department 

has provided nearly six years for the regulated community to implement 

the 15 ppm sui fur in fuel standards, an adequate supply of ultra-low 

sulfur fuel should be available to meet demand. As part of its comments. 

the New Jersey Fuel Merchants Association provided data on the 

currently available supplies and usage of ultra-low sulfur oil used as onroad diesel fuel and home heating oil in the New York harbor area. The 

Lindemer Study included data of the current exports of ultra-low sulfur 

heating oil showing that adequate supplies of ultra-low sulfur diesel fuel 

currently exist to cover New Jersey's annual use of heating oil. Both 

sources of data show that current supplies of ultra-low sulfur fuel oil 

would be adequate to meet New Jersey's demand if New Jersey alone had 

a current standard for distillate oil of 15 ppm. Additional ultra-low sulfur 

fuel capacity will be needed to meet the MANE-VU regional need. 

The Department also verified the data of the New Jersey Fuel 

Merchant Association and the data included in the Lindemer Study by 

reviewing the aata currently available on the website of the United States 

Depanment of Energy. This review indicates that current stocks of ultralow sulfur diesel oil are shown to be at their highest levels ever. (See 

http://tonto.eia.doe.lwv/dnav/petJhistiLeafHandler.ashx?n=PET&s=MDO 

S3 SN.I l&f=M.) Stocks of ultra-low sulfur diesel oil in New Jersey for 

January 2010 were reported at 3.903.000 barrels or 163.926.000 gallons. 

The same webSite lists refmer sales of all other petroleum products in 

New Jersey at 437.000 gallons of distillate fuel oil per day in January 

2010 or about 13.547.000 gallons for the month of January 2010 

(calculated as 437.000 galions a day times 31 days equals 13.547.000 

gallons for January sales). This supports the Depanment's conclusion that 

the current supplies of ultra-low sui fur diesel fuei exceed the current 

demand in New Jersey for all distillate fuel. including home heating oil. 

This excess capacity would cover New Jersey's future demands for 

distillate fuel if no other state or Federal requirements for ultra-low sulfur 

distiJiate fuel were present. 

New Jersey needs to implement this type of regulation in concert with 

neighboring states. as evidenced by the results of the Lindemer Study. To 

ensure that adequate supplies exist In the future to meet the demand of all 

northeastern states. the Depanment is affording adequate lead-umes to 

ensure lhat sufficient capacity can be installed to remove sulfur from the 

ADOI'TlOI\iS 

entire distillate and residual fuel stream to cover the northeastern unlled 

SlateS market. 

The Department was provided no dala during the comment period to 

suggest that the future demand for distillate fuel oil. used as home healing 

oil. in New Jersey will increase. or that the ability of the refiner, to 

produce 15 ppm sulfur-content fuel oil will decrease from current levels 

In fact. it was suggested by the Lindemer Study that demand for home 

heating oil may decrease in the future due to new and more demandIng 

energy efficiency standards and a shift of homeowners to natural gas. It 

was suggested by this study that if the standards for an ultra-low sulfur 

fuel were not applied to the sectOr of distillate fuel used as home healing 

oiL the decline in the use of distillate fuel oil as home heating fuel would 

be greater in future years. The adopted amendments also provide for 

sufficiently long lead-time for implementation, providing approXImately 

SlX years from publication of the adoption until July 1. 2016. when the 15 

ppm standard will be operative. This provides suffiCient time for 

refineries to plan for the capacity and infrastructure changes needed to 

desulfurize the remaining distillate component of the fuel Slream. after 

removing sulfur from the fuels used in mobile sources, to adequately 

meet future demand. 

In the proposal. the Department addressed the issue of whether supp Iy 

and availability may be issues in the future. (See 41 N.J.R. at 416~.) The 

successful implementation of the low sulfur fuel standard without supply 

disruption is dependent upon the refiners adding desulfurizalion capacity 

to their facilities. The adopted amendments and repeal provide the leadtime that most refiners indicated to the Deparrment in their comments to 

this rule proposal would be necessary to avoid disruption, issues with 

supply or to complete capital projects. 

Global supply issues 

38. COMMENT: The Department should not lower the distil.late fuel 

oil standard to 15 ppm as that wi]1 create global supply issues. In contrast. 

maintaining a sulfur content standard of 500 ppm for heating oil. or 

adopting a sulfur content standard of 50 ppm. as some countries have 

done for highway fuel. will increase sources of supply. Worldwide 

demand for distillate continues to grow, espeCially for ultra-low sulfur 

distillates used as transponation motor fuels. 0, 7. 15.27) 

39. COMMENT: The Department should not lower the sulfur content 

standard of distillate fuel oil to 15 ppm as that would create gioba\ supply 

issues. At even a 500 ppm standard. New Jersey's sulfur standard would 

be the lowest mandatory standard in the world. At \5 ppm. New Jersey 

would be out of step with the rest of the giobe. The proposed reduction of 

sulfur content in heating oil to 15 ppm is by far the most restrictive 

standard for heating oil in the entire world and is thus needlessly 

burdensome. (The commenter provided a table showing sulfur content 

requirements in different fuel types in several countnes. In this table. the 

regulatory sulfur content limits range from 50 to 20.000 ppm. depending 

on the country.) A IS ppm sulfur content standard for heating oil 

drastically limits worldwide supply sources. with two predictable effects: 

higher long-term prices and much more limited ability to obtain supply 

quickly in case of a cold winter. In the winter of 1999 to 2000. shortages 

were avoided in the United States by imports of higher sulfur material. 

mostly from Russia and Eastern Europe. (71 

40. COMMENT: The Depanment should not adopt the distillate fuel 

oil standard of is ppm. as it will lessen the ability of New Jersey to 

import compliant fuel in periods of distress. A 2000 report bv the EIA, 

"The Northeast Heating Fue] Market: Assessment and Oplions," 

highlighted the importance of imports in addressing serious shortages 

caused by unusual cold periods in the northeast. During recent Gulf Coast 

hurricanes. the 15 ppm diesel standard caused substantial hardship. 

including fist fights over supply. because of limited options for supply. 

(7) 

4l. COMMENT: The Depanment should adopt the proposed sulfur in 

fuels standard of 500 ppm (but not the proposed 2016 sulfur In fuels 

standard of 15 ppm) because approximately 26 addilional countries can 

provide distillate supplies meeting the 500 ppm standard. (7) 

RESPONSE TO COMMENTS 38 THROUGH 4l: The Department 

recognizes that the adopted sulfur content standards for distillate fuei oil 

di ffer somewhat from those in some other countries. (jermany. for 

example. specifies a sulfur in fuel limit for home heating oil at 50 ppm 

(ClTE.j2 ;'>\.J.R. 22501 NEW JERSEY REGISTER, MO:"DA Y. SEPTEMBER 20.20] 0 
ADOPTJO"S 

for the purpose of fostering the use of condensing furnaces. The 

Department's actions are consistent with the sulfur in fuel requirements 

for on-road transponation fuel in Canada and the U.S. Virgin Islands. 

which will have a 15 ppm sulfur in fuel requirement for diesel fue\. These 

two countries are the largest recent suppliers of impons to thc ultra-lo\\ 

sulfur diesel market. 

The European union countries and Russia have recently lowered the 

sulfur content standard of their on-road transportation fuel to 10 ppm 

(http://www.dieselnet.com/standards/eu/fue\.phpl. lower than the 

standard of 15 ppm in the United States. Because of the shift to ultra-low 

sulfur levels in transponation fuels throughout the world. the ability of 

the refiners to meet ultra-low sulfur diesel demand throughout the world 

has shifted the market to those countries that have installed the capacity 

to provide ultra-low sulfur diesel fuel. Other countries are now imponing 

ultra-low sulfur fuel oil from the United States because of those 

countries' increased demand for ultra-low sulfur fuel oil and the United 

States' ability to provide it. (http://oilspotJ.dtnenergv.com/ 

e anicleOOI711850.cfm?x=blI.0.w) Imports of distillate fuel to the 

United States will most likely come from Canada and the U.S. Virgin 

Islands in the near future. according to EIA data on current importing 

countries to the United States and the Han Study. (Hart Study. page II.) 

(See EIA data at http://tonto.eia.doe.gov/dnav/pet/hist/LeafHandler. 

ashx~n=PET&s=MDOS3 SNJ l&f=M.) 

The results of the 2000 EIA study on the imponance of imports. 

panicularly from Russia and Venezuela. to avoid northeast heating oil 

disruptions are no longer valid. (See Comment 40.) Specifically_ the Hart 

Study states. "Imports have played a decreasing role in the NYINJ market 

coinciding with reductions in the high sulfur off-road distillate market. 

Peak seasonal winter supplies from imports have declined significantly." 

(Han Study, page II.) Most countries are now undergoing the shift to 

ultra-low sulfur diesel in their transportation sectors. For example. Russia 

has just finished its changeover to 10 ppm ultra-low sulfur diesel 

transponation fuel in 2009, in accordance with Euro Directive V, the 

European Union's emission regulations for new heavy-duty diesel 

engines. and may soon be able to provide ultra-low sulfur diesel fuel to 

the world market. Other European and Asian countries are also 

completing this shift to ultra-low sulfur diesel, and the world market for 

this product is expected to return to balance in the near future. (See 

http://wwv.•.dieselnel.com/standards/eu/fuel.php.) 

Refiners have expressed concern that if New Jersey adopts the ultralow sulfur diesel standard. they will have no market for diesel fuel that is 

off-specification (or off-spec). or does not meet the 15 ppm standard. 

Prior to the operative date of the 15 ppm standard. the refineries are able. 

for example. to market off-spec on-road diesel fuel (which has a USEPA 

standard of 15 ppm) as number 2 heating oil. But for the applicable sulfur 

content standards. the fuels are the same. The refiners can also blend the 

off-spec oil into other oils subject to a higher sulfur content standard. 

Once all fuels sold for use in New Jersey must meet the 15 ppm standard. 

such blending or relabeling for the New Jersey heating oil market will not 

be possibk. 

However. not all outlets for the off-spec fuel will be closed. The 

USEPA. through the International Maritime Organization (a specialized 

agency of the United Nations). fmalized plans on March 26. 2010. that 

would subject ships within a 200 nautical mile buffer zone around the 

United States and Canadian coastlines to stricter air pollution regulations. 

As pan of this effort. the USEPA will require ships to use fuel oil 

meeting a lower sulfur content standard of 1.000 ppm by January. 2015 

within the 200 nautical-mile zone The ships now use fuel with as much 

as 40.000 ppm sulfur. The USEPA standard for ships would provide a 

place for the refiners to market off-specification fuel after the 15 pplll 

sui fur content standard is in effect. This would also create new demands 

on the distillate oil market. and some refineries may choose to supply this 

markel. rather than invest in lower sulfur equipment for the home heatll1g 

oil market. 

Winter-time 5ulfale formalion 

42. COMMENT: The Depanment does not need to adopt the proposed 

amendments in order to address ozone levels and regional haze. because 

heating. oil is a winter fuel. Heating oil emissions do not occur in the 

summer when there are elevated levels of ozone and haze. n. 16) 

EN\'IROSME\TAL PROTECTlO\, 

43. COMMENT: Visibility impairment should not sene as the basis 

for the proposed amendments because heating oil is a winter fuel. 

Information published by NESCAUM and MAN E-VU indicates that 

during the wintenime very local emissions. trapped by inversions. are the 

main causes of the visibility diminishments in New Jersey's Class 1 area 

(a small parcel of land in the area of Atlantic City). The long.-term 

increase in particulate matter in these Class I areas is due to the increased 

use of coal-fired power generation in regions far from Nev- Jersey. which 

has caused winter and summer levels of paniculate matter to nearly 

equalize (lVer several decades. Sulfur dioxide emissions in New Jersey 

playa limited or no role in localized visibility diminishments in the area 

of concern. (7) 

RESPONSE TO COMMENTS 42 AND 43: The adopted amendments 

apply not only to home heating oiL which is used primarily (but not 

exclusively) in the winter. but also to numerous other types and uses of 

fuel oil. Distillate and residual fuels are burned during all times of the 

year. for purposes including electric generation (especiall: to meet peak 

electric demand on very hot summer days) and other commercial and 

industrial applications. 

It is incorrect to characterize the Brigantine Wilderness Area of the 

Edwin B. Forsythe National Wildlife Refuge. New Jersey's Federally 

designated Class I Area. as a "small parcel of land'" By definition and 

listing under the Federal Clean Air Act. a Class 1 area is a national park 

or wilderness area greater than 5.500 acres in size. The Brigantine 

Wilderness Area covers approximately 46.000 acres in three New Jersey 

counties, including Atlantic, Ocean and Burlington counties 

(www.fws.gov/refugesiprofiles/index.cfm).Thls is the only Class I area 

in the mid-Atlantic region of the United States and its borders are 

completely within the confines of the State of New Jersey. Improving 

visibility in the Class I area also improves visibility and lowers 

particulate levels throughout New Jersey because only by improving the 

air quality within New Jersey. and within the air being transported 

through New Jersey. will an improvement result in the air quality withlll 

the Class I area itself. The MANE-VU and NESCAUM studies of 

visibility impairment do not conclude that localized emissions are tile 

only contributor to the visibility levels found in New Jersey's Class I 

area. In fact. these studies and others conclude that the regional transf'nn 

of emissions plays a predominant role in the air pollutant levels found at 

the Class I area. Specifically. according to the Executive Summary of the 

MANE-VU report. "Contributions to Regional Haze in the Northeast and 

Mid-Atlantic united States": 

"Summenime visibility is almost exclusively driven by the 

presence or absence of regional sulfate. whereas wintenime 

visibility depends on a combination of regional and local 

influences coupled with local meteorological conditIOn;. 

(inversions) that can lead to concentrated build-up of emissions 

from local sources" (italics in original) 

According to the MANE-VU report. an "effective emissions 

management approach would rely heavily on broad-based regional S02 

control efforts in the eastern United States'" This rulemaklng will reduce 

emissions that have an impact both locally and regionally and could be 

classified as a broad-based regional sulfur dioxide control effort. 

The MANE-VU studies cited in the proposal at 41 NJ.R. 4159 shov. 

that the predominant air contaminant in New Jersey's Class I area. 

regardless of season. is sulfate. Sulfate forms from the sulfur in fuels 

combining with oxygen during combustion to form sulfur dioxide gas. 

While the transformation rate of gaseous sulfur dioxide to sulfate aerosol 

particles does diminish in winter. its transformation rate is not zero. 

Moreover. the days of worst visibility impairment do not always occur In 

the summer months. The VIEWS website (hnp://capita.wustl.edu' 

CAPlTA/CapitaReportS/PMFineAn/PMTopics PPTIPM25Formation.ppt: 

lists the transformation rate of sulfur dioxide to sulfate on a typical July 

day as 0.8 percent per hour. The transformatIon rate of sulfur dlO,;ide tc' 

sulfate on a typical January day is 0.2 percent per hour. or 25 percent 0;' 

what the transformation rate would be on a typical Juiy day. Depending on 

the quantity and iocatlon of the sulfur dioxide released in New Jersey. thi, 

transformation could and does have a localized effect upon New Jersey' s 

air quality. even in winter. 

Data collected as pan of an on-site monitoring program for air 

pollutants at the Brigantine Wilderness Area. called the IMPROVE 

NHV JERSEY REGISTER. MONDAY, SEPTEMBER 20, 2UI () (CITE 41l\.J.R. 11511 
E]'\\,IRONMEl\TAL PROTEClION 

monitoring network. show that sulfates are the predominant pollutant 

comprising particulate matter in both the wInter and summer. These data 

are SOrted by days of the hest regIOnal haze visibility levels. where a 

person can more clearly see objects at a distance. to the days of worst 

regional haze visibility levels. where a person cannot clearly see objects 

at a distance. A review of the data collected by the IMPROVE monitoring 

network show that hetween 34 to 47 percent of the 20 percent worst 

regional haze visibility days occur during the seven coldest months 

(October through April) at the MANE-VU Class I areas. 

(http://vista.clra.colostate.eduJIMPROVE) These are not the five summer 

months associated with high ozone levels. Fifty-seven to 61 percent of all 

haze is attributable to sulfates in the winter months at the MANE-VU 

sites in the northeast. meaning that sui fate is the largest contributor to 

haze and fine pmiculate matter during the winter. As stated previousl). 

sulfates are the largest contributor to haze and fine particulate matter in 

all seasons and adopting these sulfur in fuel standards will result in lower 

sulfate levels within New Jersey and New Jersey's Class I area. An 

analysis of MANE-VU data. performed by Tom Downs. Chief 

Meteorologist for Maine's Department of Environmental Protection usmg 

data from 2000 to 2003. shows that the days of worst case visibility 

impairment occurred on 39 days in the summer, 15 days in the winter. 

and 36 days in the fall and spring. The pollutant adversely affecting 

visibility levels the most. and increasing fine particulate levels during 

these worst days of visibility impairment was sulfate. 

The contribution of emissions from heating oil is much more 

substantial during winter months than the annual average contribution 

would suggest. For example. in New Jersey home heating oil contributes 

seven percent of the sulfur dioxide emissions armually from all sources. 

but contributes 25 percent of the sulfur dioxide emissions during winter. 

This is consistent with the contribution of sulfur dioxide emissions in 

other states with Class I areas that are affected by New Jersey's air 

pollution. as shown In Table 1 helow. The table shows the emissions 

from home heating oil in cold months compared to emissions from all 

sulfur dioxide sources. including. emissions from coal-fired power plants. 

Table 1 

Percent of Seasonal Sulfur Dioxide Emissions from Home Heating 

Oil (HHO) 

State Name Contribution of Contribution of 

HHO to all sulfur HHO to all sulfur 

dioxide emissions dioxide emissions in 

on an annual winter (%) 

average basis (%)
 

Maine 15 25
 

Vermont 19 32
 

New Hampshire 7 12
 

New Jersey 7 12
 

This percentage of the contribution of sulfur dioxide emissions from 

home heating oil would increase as power plants install sulfur dioxide 

controls to meet Federal and State requirements. unless fuel oil sulfur 

coment is also reduced. As sulfur dioxide emissions from other sources, 

such as coai-fired power plants, decreases, the relative importance of 

sulfur dioxide emissions from combustion of home heating oil increases. 

The adopted amendments will not only improve air quality in New 

Jersey. but also in the reg.ion. New Jersey is setting its standards in 

cooperation with surrounding states. meeting Federal Clean Air Act 

requIrements to lessen New Jersey's impact on the downwind Class I 

areas affected by New Jersey's emissions. For further discussion. see the 

proposal Summary. 41 NJ.R. at 4160. 

44. COMMENT: The rule oroposal misstates the cost-effectiveness of 

the amendments because cost-effectiveness for sulfur controls is typically 

expressed in terms of sulfur dioxide, not PM2.5. It is not accurate to 

express cost-effectiveness for sulfur in terms of particulate, particularly 

for a wintertime fuel in which localized transformation of sulfur to 

particulate is limited. (7) 

RESPONSE: Sulfur dioxide gas is converted in the atmosphere to 

ammOnIum sulfate. which IS a liquid aerosol and a fine particulate. 

Depending on weather conditions, part of the sulfur dioxide released in 

ADOI'T)O'\~

the State would he converted into fine particulate matter hy the lime it 

reaches New Jersey's borders. EvenIually. all of the sulfur dioxide 

released into the atmosphere as a gas will be converted into fine 

particulate. This is discussed in the proposal Summary. 41 1\ .J.R. at 4158. 

and the Social Impact. 41 NJ .R. at 4161. It is. therefore. appropriate to 

discuss the cost-effectiveness of controls for sulfur dioxide. not only in 

terms of sulfur dioxides effect as a gas. but also in IWOS of sulfur 

dioxides effect as an intermediate product. Including sulfuric acid. and as 

a fine particulate (for example. ammOnIum sulfate). /\Iso. sulfur dioxide 

has synergistic effects on health and welfare. when exposure to humans 

and plants occur with other pollutants. 

The estimated economic benefit of the adopted amendments that wil) 

result from avoided adverse health care episodes. as stated in the 

Economic Impact (41 NJ.R. at 4162) was developed from a NESCAUM 

study of the projected health benefits in 2018 using tbe USEPA's 

BENMAP model. The BEN MAP model. in tum. uses the results from a 

regional atmospheric photochemical dispersion model. called CMAO. to 

develop these economic beneftts. In other words. to use the BEN MAP 

model one needs to know the modeled air quality benefits of a given air 

pollution control strategy in terms of its reduction in speci fic air 

pollutants for some future year. 

The NESCAUM study used a 2018 CMAQ modeling run that assumed 

the emissions of sulfur dioxide from all liquid fuel burning sources in the 

eastern United States would be lowered to a level Similar to those in Ne" 

Jersey's adopted rule. This assumption resulted in a lowering of sulfur 

dioxide emissions in the eastern United States of 180.000 tons. The 

CMAQ modeling used equations of photochemical reactivity to predict 

the conversion of sulfur dioxide gas into fine particulate matter, also 

called PM2.5. at locations downwind of where the sulfur dioxide gas IS 

emitted. The PM2.5 predicted 24-hour concentrations for 2018 from the 

CMAQ model were used in the BENMAP study to predict the economic 

benefits of the regional ultra-low sulfur fuel strategy. The Department, 

therefore, relied only upon the economic henefit to health that will result 

from the adopted amendments' lowering of fine particulate matter 

because of the reduction in sulfur within fuel oil. 

The Department is not aware of any additional studies of the economic 

benefit that the adopted amendments will have from the reduction in 

ambient air sulfuric acid levels or from the reduction in the svnergistic 

health effects between sulfur dioxide gas and particulates. The'incl~sion

of these benefits would add to the already positive economic benefits of 

the amendments. 

See the Response to Comment 43 for a discussion of seasonal effects 

of emissions from burning of fuel oi!. 

Technical diffiCUlty of the adopted sulfur content standards 

45. COMMENT: The Department should not adopt the proposed 2016 

sulfur in fuels standard of 15 ppm because it did not consider the costs 

relating to the technical diffiCUlty of removing sulfur from different crude 

oils, as unequivocally documented in the USEPA's Regulatory Impact 

Analysis for the off-road sulfur in fuels rule (40 CFR 80.510(bl and (e)l. 

(7 ) 

RESPONSE: The technical difficulty of removing sulfur from 

different crude oils to meet a sulfur content standard of 15 ppm has been 

documented in the USEPA's Regulatory Impact Analysis for the off-road 

sulfur in fuels rule (40 CFR 80.510(b) and (e)l. The US EPA specifically 

addressed these difficulties when it developed a cost analysis for the 

Federal off-road fuel rule. Despite the acknowledged difficulties. USEPA 

adopted the fmal rule. In response to comments concerning the techmcal 

difficulty in removing sulfur from fuel. the USEPA indicated that It had 

"included the cost of improved distributors. heat exchangers and other 

ancillary items associated with successful diesel fuel hydrotreating in ou:' 

cost estimates." The USEPA assumed. as the Department ooes. that al! 

fuel produced to meet the within adopted sulfur coment standards would 

be produced using new desulfurization equipment. These new Units could 

be designed with a higher hydrogen pressure and take advantage of more 

advanced catalysts. according to the USEPA. Refiners then would have 

the ability to design the new equipment to address tne fuel compositions 

that they amicipate producing from their crude oils. (Summarv and 

Analysis of Comments: Control of Emissions from Nonroad Diesel 

Engines. EP A420-R-04-008. May 2004. Page 6-13 and 6-) 4.) 

ICITE 42 ".J.R. 2252) \EW JERSEY REGISTER. \10NDAY, SEPTE"lBER 20. 2010 
"~--,-_.. _-_._-_._~--

---- -------- -----------~-'-_.

ADOPTIONS 

Given that both the Department and USEPA analyses of costs assume 

that new desulfurization equipment will be added to the refineries. the 

USEPA-projected costs for the removal of sulfur from crude oil are 

within the Department's estimated range for removal of sulfur. as the 

Department discussed in the Economic 1mpact (41 NJ.R. at 4162 and 

4163). In the USEPA analysis (Summary and Analysis of Comments: 

Control of Emissions from Nonroad Diesel Engines. EPA 420-R-04-008. 

May 2004), the USEPA estimated that the cost to produce E 15 ppm 

distillate fuel was seven cents a gallon. The Department estimated that 

the cost to produce a 15 ppm distillate fuel was 11.4 cents per gallon. The 

Department's use of 11.4 cents per gallon to remove sulfur from fuel oil 

also assumed that new equipment would be added to the refinery to 

desuifurize crude oil and this nev,,' equipment would be designed with the 

ability to remove sulfur from the refiner's feedstock (or crude oil supply). 

Also. the Hart Study. discussed above. estimated costs at five to nine 

cents per gallon to produce ultra-low sulfur fuels. This is also lower than 

the 11.4 cents estimated by the Department. 

An averaging. banking and trading program 

46. COMMENT: The Department should have proposed an averaging, 

banking. and trading program providmg refinery flexibility, because there 

will be no remaining markets for the distillate product that may be 

slightly above a ultra-low sulfur diesel level. This would have allowed for 

a more cost-effective implementation of the new standards. (2, 15) 

RESPONSE: Banking. averaging and trading programs are more 

difficult to administer than the regulatory approach that the Department 

has chosen, wherein all refiners must meet a 15 ppm sulfur in fuel level 

by July 1,2016. A banking. averaging and trading program would require 

administrative oversight and costs to the Department and the rcgulated 

community, extensive involvement of financial planners and investors. an 

annual "true-up" of the bank and trading program, and a verification 

program, through an enforceable fuel sampling program. to guarantee that 

the sulfur dioxide credits traded are the result of real reductions in air 

pollution. This verification program could be burdensome, as it would 

rely upon sampling and testing the sulfur content of each shipment or 

with each use of the regulated fuels to ascertain compliance and the 

number of "credits" generated. The Department did not propose a 

banking, averaging, or trading program due to these complexities. The 

Department anticipates that refiners will invest the financial capital to 

install the needed desulfurization equipment to meet the lower sulfur 

standards of the adopted amendments, and will forward this cost to 

consumers over time. (See Economic Impact, 41 N.J .R. at 4163.) 

For a discussion of alternative markets for off-spec fuel oiL see the 

Response to Comments 38 to 41 . 

Costs due to increased competition 

47. COMMENT: The Department should not adopt the proposed 

amendments because lowering the distiliate fuel sulfur content standard 

to IS ppm by 2016 would place the users of distillate fuel for home 

heating in direct competition with the highway and off-road diesel fuel 

users. A separate sulfur in fuel standard for home heating oiL. distinct 

from the transportation diesel fuel standard. is needed to do this. (2, 6. 7. 

10,11. 15. 17.18.27) 

48. COMMENT: The Dcpartment should not adopt the proposed 

amendments because the amendments would drive up prices for the home 

heating oil users. cause sharp price impacts, cause seasonal price spikes. 

or create year-round supply problems that would harm both residents of 

oil-heated homes ane the operators of diesel vehicles. (4, 6. 7) 

49. COMMENT: The Department should not adopt the proposed 

amendments and repeal until it has calculated the impact upon diesel 

prices and supply that would result from the elimination of a diStinct 

heating oil market from the on-road ultra-Jow sulfur diesel market. (2. I I. 

17. ]8) 

50. COMMENT: The Department should adopt the proposed 

amendments. The proposed amendments will not create unfaIr 

comnetition hetween the home heating oil and transponation diesel fuel 

sectors as this competition already exists. Prior to 1993. heatmg oil and 

diesel fuel competed in the samc market and were the same product. 

Although heating oil and diesel fuel are different in theIr sulfur content 

due to Federal regulation. the) are traded as the same fuel on the Ne\\ 

E'\VIRO:,\MENTAL PROTECTlO,\ 

'York Mercantile' Exchange (NYMEX). Because they are traded hy 

NYMEX as the same product. in July 2008 prices for retail home heating 

oil approached $5.00 per gallon. an all-time record, despite it being a 

summer month when heating oil demand is low. Heating oil consumers 

already paj the price for competing with on-road diesel fuel: they just do 

not get the added benefits of the reduced sulfur content fueL (8. 10) 

51. COMMENT: The Department should not be dissuaded from 

adopting the proposed amendments based on the negative comments 

concerning costs. suppl). and marketability. These same negative 

comments were made in opposition to the USEPA's proposed ultra-lo\\ 

suI fur in fuel standard of 15 ppm for highway diesel use. (8) 

52. COMMENT: Adoption of the proposed rulemaking could 

negatively impact New Jersey's share of Federal highway and public 

transit funds. The Federal distribution for highway and public transit 

funding is based on total fuei sales in the State which would drop a, a 

result of this rulemaking. Drivers would buy less expensive, higher sulfur 

content fuel out of State, which could negatively impact New Jersey's 

businesses and economy. (6) 

53. COMMENT: The Department should not adopt the proposed 

amendments until it has done another cost-benefIt analysis specifically to 

assess the effect of this rulemaking will have on the price of on-road 

diesel fuel. Diesel fuel price increa~es will affect small business trucking 

firms, who will have difficulty in passing these costs on to the consumer. 

(6. 17) 

RESPONSE TO COMMENTS 47 THROUGH 53: Home heating oil 

and on- and off-road diesel fuel are essentially the same fuel. called 

distillate fuel. They may have a different sulfur content, and on and offroad diesel fuel are taxed by the Federal government: however, the two 

fuels are essentially the same. The Department does not expect that future 

competition in the marketplace between the users of ultra-low sulfur 

distillate fuel for home heating and the users of ultra-low sulfur distillate 

fuel as on or off-road diesel fuel will result in higher prices for either 

consumer. Home heating oil and diesel fuel competed in the same market 

for many years. All distillate fuel, regardless of its ultimate use. was 

marketed and traded together. It was only with the implementation in 

1993 of the first Federal sulfur content standards for highway diesel fuel 

to 500 ppm that separate markets for low sulfur diesel. meeung a 500 

ppm sulfur content standard. and distillate heating: oil at higher sulfur 

limits were created. Prior to 1993. distillate fuel could be used 

interchangeably between markets for its uses as a motor vehicle fuel and 

a, a home heating oil. Making the sulfur content of all distillate fuel 

consistent again will allow for the interchange of fuel between markets. 

This interchange can be used to avoid shonages in the marketplace. 

Distillate fuel of consistent sulfur content. regardless of its final intended 

use. could be moved between markets or imported from foreign sources 

to meet spikes in demand or otherwise increase fungibility of the fuel. 

Having separate markets. as currently exists for the distillate oil used for 

home heating and for on and off·road diesel fuel. does not necessarily mean 

large differences in price or a large reduction in the price of home heating 

oil. even though currently there are less stringent sulfur content standard, 

and, thereby, less costs associated with removing suI fur from home heating 

oiL A review of EIA data for fuel oil meeting varying sulfur content 

standards for the past six years shows decreasing price differentials over the 

last four years when annual average prices are reviewed. The data in the 

Table 2 below werc obtained from the EIA webstte. {hap:!! 

www.eia.doe.gov/oiLgas/petroleurrv·info..glance/perroieum.hunl \ 

Table 2 

Average Annual Spot Price of Differing Sulfur Content Distillate 

Fuel - 2004 to 2009 

New York Harbor Prices in (not including taxes) 

Cents per Gallon 

Year !'io. 2 Heating liltra-Lo\\ Average 

Oil with High Sulfur 11<0. 2 Difference (in 

Sulfur Content Diesel Fuel 

200~ 111.7 J15.: 3.5 

200' 162.6 167.8 5.2 

2006 180.6 194.5 13.9 

2007 203.2 2124 9.2 

(CITE 42 ~'.J.R. 2253 j I'IEW JERSEY REGISTER, MONDAY, SEPTEMBER 20. 2010 
ENVIRONMEr,TAL PROTECTJOl' 

2008 285.5 292.2 b 

2009 164.6 166.2 1.6 

This table. usmg the real price differences in the New York harbor 

market. shows that the price of ultra-low sulfur diesel was only' 1.6 cents 

more. on average annually. than the price of higher sulfur content number 

2 healing oil in 201l9. It can be presumed that. since both fuels are 

essentially the same except for their sulfur content, the only difference in 

price should be due to the varying sulfur content. As Table 2 indicates. 

significant differences in price do not necessarily follow differences 10 

fuel sui fur content. [n 2006. when the tirst Federal suI fur in on-road 

diesel fuel standards went into effect, the difference in price between high 

and low sulfur fuels was the greatest with the difference in price dropping 

steadily each year. The difference in price between ultra-low sulfur and 

higher sulfur content fuel in 2009 was onlY \.6 cents. This steady decline 

in price can be attrihuted to the extra capacity of the refiners to remove 

sulfur from fuel oils such that the U.S. is now producing ultra-low sulfur 

fuel oils beyond its current national demand as on and off-road diesel 

fuel. This excess supply of ultra-low sulfur distillate oil is currently being 

exponed to other countries. The ability of the refiners to produce this 

extra supply of ultra-low sulfur fuels has been attributed to the long leadtime afforded by the USEPA to implement the Federal on- and off-road 

diesel fuel standards. giving the refmers enough time to add the 

equIpment to remove sulfur from fuel oil. (See the Response to 

Comments 38 through 41.) According to the Hart Study. this excess 

capacity to produce ultra-low sulfur distillate fuel will disappear in 2012, 

when the fIrst phase of the Federal sulfur in locomotive and marine vessel 

fuel rules go into effect. 

New Jersey is providing close to a four-year lead time to meet the 500 

ppm standard and a six-year lead-time to meet the 15 ppm sulfur in 

distillate fuel standard with this rule adoption. This lead-time is 

appropriate in order to allow the refiners to add the desulfurlzation 

eauipment to remove sulfur from the remaining part of the distillate 

stream not being produced as on or off-road diesel fuel. As New Jersey IS 

providing this sufficient lead-time, similar to the length of lead-time 

provided by the Federal sulfur to meet the Federal diesel fuel sulfur 

standards, the Department is confident that sufficient supply of ultra-low 

sulfur distillate can be available to avoid price spikes or disruptions in the 

marketplace. 

The Department does not agree that New Jersey will lose sales of 

distillate or residual fuels to other states and. as a result. a commensurate 

share of Federal highway funding. The Federal highway funding is based 

on the sales of motor fuel. not sales of all distillate fuel oils. Tne Federal 

sulfur in fuel standards for on and off-road vehicle use are consistent 

across state lines and do not vary between States. (40 CFR gO.50 and 40 

CFR gO.510(b) and lc).) Whether New Jersey requires a lower sulfur 

standard in distillate or residual fuels in accordance with the adopted 

standards should not have an impact on sales of on and off-road diesel 

fuel in the State. 

New Jersey also will not lose sales to other States hecause all MANEYU states are expected to adopt similar sulfur in fuels standards for both 

distillate and residual fuels. Consequently, there should be no price 

differential based solely on differences in the sulfur content of fuels and a 

regional market for higher sulfur content fuels will not exist. If all States 

surrounding New Jersey implement similar sulfur content standards as 

New Jersey. consumers will be able to purchase only distillate fuel of 15 

ppm sulfur content and a residual fuel of 5.000 ppm sulfur content or less. 

regardless of the state of purchase. Fuel purchases in a given state wi II 

then be based upon other factors, like fmal sales pnce, proximity of the 

supplier to a consumer's home. or prior business relationships with the 

seller. Differences in price among states will not be based upon any 

difference in the sulfur content of the fuel. (See 41 N.J.R. at 4] 57.) 

Cost of reducing the sulfur in fuels standard from 500 ppm to 15 ppm 

54. COMMENT The Department should not adopt the proposed 

amendments until it has adequately evaluated the costs of the rule and 

done another cost-benefit analysis. (2.7.17,18.27) 

55. COMMENT The Depanment should not adopt the proposed 15 

pDm sulfur content standard based on Its projection that going from a 500 

ppm to the 15 ppm sulfur content standard will save the consumer mone) 

ADOPTI () 1\ S 

The Brookhaven National Laboratories study (referred lo in the proposal 

as the NYSRDA Report) (41 N.J .R. at 4163) considered and evaluated 

the benefits of 500 ppm heating oil versus 2.000 ppm heatIng oil. not the 

benefits of using 15 ppm heating oiL (13.19) 

56. COMMENT: The Department should adopt the proposed 

amendments and repeal because their adoption is cost-effective and will 

result in an annual health heneflt of $32 million In reduced health costs. 

which exceeds compliance costs. (\3, 19) 

57. COMMENT: The Department's analysis of costs is flawed. The 

]\!YSERDA Report, cited by the Depanment (41 K.I.R. at 41631. posited 

that the lower sulfur content level wou Id reduce cleaning intervals from 

annually to once every five years and to a very limited extent. Improve 

heat-transfer efficiency. It is not plausible. though, to assume that 

cleaning intervals would rise to 15 or 20 years at the iower 15 ppm sulfur 

content leveL The NYSERDA Report's Figure 6-2a. which shows cost 

savings by fuel oil sui fur content. bears this out, as the savings curve 

flattens out at lower sulfur levels. The study also questioned whether the 

savings would actually materialize. as people may annually ciean their 

furnaces anyway, a new visual inspection would he needed, and fire 

codes and manufacturers' warranties may continue to require annual 

cleanings. (7) 

58. COMMENT: The Department should not adopt the 15 ppm sulfur 

content standard because its cost-benefit analvsis did not adequatelv 

consider the cost difference from reducing th; sulfur in fuel st~ndard

from 500 ppm to 15 ppm. The USEPA estimated that the cost of going to 

a sui fur content standard of 500 ppm was about two cents per gallon. but 

that the cost of the next step to IS ppm was an additional five cents per 

gallon. Based on the USEPA's estimate of sales of332 million gallons of 

no. 2 oil in New Jersey in 2008. the reduction from 2000 ppm to 500 ppm 

would annually cost about $6.6 million dollars to achieve a 75 percent 

reduction in sulfur content. The reduction from 500 ppm to 15 ppm sulfur 

coment standard would cost about $16.6 million dollars per year to 

achieve an additional 24 percent reduction. The Depanment did not 

consider these costs. (7) 

59. COMMENT: The Department's analysis of costs overestimates the 

real costs to manufacture ultra-low sulfur fuels. The NORA study 

referenced in the rule proposal (41 N.J .R. at 4 J 62) stated that it will cost 

up to 8.9 cents per gallon more to manufacture ultra-low sulfur heating 

oil than the current high sulfur product. This estimate was made shortly 

after the implementation of the Federal ultra-low sui fur diesel rules. The 

study's author is in the process of deciding whether to revisit the study in 

light of the changed market since the ultra-low suI fur diesel rules went 

into effect. The real difference in costs associated with the manufacrure 

of ultra-iow suI fur fuel has not been as great as the NOltA. study 

anticipated. (8) 

60. COMMENT: The Depanment should not adopt the proposed 

amendments because a mandated ultra-low sui fur content standard is 

costly and not' needed. Distillate fuel with ultra-low sui fur content IS 

already available for those that want to use it and pay the additional cost. 

It is not necessary to mandate that all heating oil be ultra-low sulfur diesel 

to support such discretionary fuel choices by customer,. Labeling 

requirements could differentiate among the fuels of differing sulfur 

content levels and the fuel-oil providers assistance could occur. The 

NY SERDA Report supponed this voluntary-type approach. (2, 7. 9. 15. 

25) 

61. COMMENT: The Depanment should not adopt the 500 ppm sulfur 

in fuel standard in 2014 but instead adopt the 15 ppm sulfur in fuel 

standard as soon as possible. Currently, not many terminals in Nev. 

Jersey even offer 500 ppm fuel. One of South Jersey's largest heating oil 

suppliers only supplies a fuel meeting a 15 ppm sulfur content standard 

and has for the past two years. (8) 

62. COMMENT: The Depanment should not adopt the 15 porn sulfur 

content standard as it is not needed to allow for the of1eration of 

additional air pollution controls. Ultra-low sulfur fuel (15 ppm) is needed 

to enable the operation of nitrogen oxides (NOx) and paniculate controls 

on highway diesel engines and to avoid "poisoning" the catalyst in the 

control devices. This is not the case for furnaces and boilers in wbich 

heating oil will be used. as there are no reqUired control devices ior these 

units. (2.6.7,9.15) 

(CITE ~2 '\.J.R. 2254) \;EW JERSEY REGISTER.\-lO"'iDA\, SEPTE\1BER 20. 201 () 
ADOPTJO,\S 

63. COMMENT: The Department should adopt the proposed 15 ppm 

sulfur content standard because ultra-Io\\ sulfur content fuel \lill result in 

increased fuel efficiency and better heating system performance. resulting 

in increased consumer savings. both on system maintenance and redu ced 

fuel costs. This will increase service intervals and decrease fuel 

consumption. saving the consumer more than the projected three to five 

cent average difference between the two fuels. (8, 13. 19.11) 

64. COMMENT: The Department should adopt the 15 ppm sui fur 

content standard because there currently is little difference in price 

between ultra-low sulfur fuel and higher sulfur fuels, usually only three to 

five cents. Regardless of the cost to manufacture the fuel. there has been a 

near parity in the price of fuel oil meeting either the 15 ppm or 1.000 ppm 

sulfur content standard. However, from the fall of 2009 until January 

20 J O. the difference in price for these two fuels has been almost zero and. 

at times, it has been more expensive to purchase the higher sulfur. 1.000 

ppm sui fur content fuel. (8) 

RESPONSE TO COMMENTS 54 THROUGH 64: The Department's 

Economic Impact (41 N.J.R. at 4161 and 4163) included an analysis of 

the costs and benefits associated with both the 500 ppm and 15 ppm 

sulfur content standards. The Department used a cost estimate from 

NORA of 4.6 cents' per gallon to convert 500 ppm sulfur content fuel to a 

fuel meeting a 15 ppm sulfur content standard. The total cost per gallon 

to remove suI fur from fuels to meet a sulfur content standard of IS ppm 

was J 1.4 cents per gallon (6.8 cents plus 4.6 cents equals 11.4 cents per 

gallon). This maximum cost, discussed in the proposal. is within all of the 

ranges provided by the commenters, and within the range of all studies 

done to date on the costs associated with lower sulfur content fuels. Using 

these figures, the Department concluded that the benefits associated with 

the amendments and repeal outweigh the costs. 

A review of the ElA data indi cates that the current cost to remove 

sulfur from fuel and the current marketplace price are not correlated. 

Rather, market forces beyond the operational costs of the refineries to 

remove sulfur from fuel are currently influencing the price of ultra-Io\\ 

sulfur diesel (that is. transportation) fuel. The daily price of ultra-low 

sulfur diesel transportation fuel was at times in the past several years less 

expensive than heating oil. Usually, the price of fuels rises and falls with 

the cost per barrel for crude oil. For several months in early 20 10. the 

relative cost of gasoline and ultra-low sulfur diesel fuel has not risen or 

fallen with the cost of a barrel of oi'l. which points to the di fficulty in 

predicting future impacts on consumers. 

The NYSERDA Report, on which the Department relied in its 

Economic Impact, calculated savings to consumers based on consumption 

of fuel with 500 ppm sulfur compared to 2.500 ppm sulfur. (41 N..I.R. at 

4163.) The NYSERDA Report assumed that the consumer would save 

only one percent from an increase in fuel oil efficiency. The savings to a 

consumer because of increased fuel efficiency. reduced maintenance and 

less corrosive exhaust gases could be in the three to five cents per gallon 

range. thereby offsetting the cost of the ultra-low sulfur heating oil. The 

Department relied on the NYSERDA Report for the estimate of cost 

savings associated with furnace cleaning at a 58-month (approximate!,y 

five-year) interval. The Department did not base its analysis on a less 

frequent interval. Because the NYSERDA Report provided figures based 

on a 500 ppm standard in its cost-benefit analysis. the Department did not 

rely on savmgs to home heating oil consumers that would result from a 

further reduction to 15 ppm. Consumers could potentially save more on 

avoided cleanings of boilers and furnaces and increased fuel burning 

efficiency from using. 15 ppm sulfur content fuel; however. there are no 

data to quantify these savings. 

The present cost of high-efficiency condensing furnaces make these 

furnaces cost prohibitive for some. Because of the high sulfur content in 

fuel oiL resulting in a highly acidic and corrosive condensate. the 

furnaces must be constructed of more expensive stainless steel. The wi despread availability of ultra-low sulfur fuel for home heating oil us~ will 

do away with the need for stainless steel construction. making condensing 

furnaces more economical. and resulting in increased use of such 

furnaces and significant additional benefit of ultra-low sulfur heating oil 

over time. The Department is not aware of any available data on the rate 

of replacement of home furnaces with condensing furnaces or what that 

rate would be in the future if ultra-low sui fur fuel were mandated for 

home heating purposes. The benefits to the consumer could be greatcr 

E:'ITI RO~\·tE:\TAL PROTECTIO\ 

than calculated b: the Department in the rule proposal. The Depan.men 

showed the benefits from the amendments outweigh the costs. e\en In thl 

absence of such data. For further discussion of existing hl£h-d'liclenc\ 

condensing furnaces. see the Response to Comments 75 to 85 belo\\. . 

The annual average price difference between ultra-low sulfur on-road 

diesel fuel and home heating oil was t.6 cents in 200'!. (See Tabie 2 

above.) On-road diesel fuel and home heating oil are functional I: 

interchangeable. (Additional taxes are charged for on-road diesel fuel. 

precluding the sale of home heating oil as transpon.ation fueL) Thi, 

means that it would have cost the homeowner t.6 cents per gallon more 

in 2009 on average to bu: ultra-low sulfur home heaung. oil. rather than 

higher sulfur oil. This is much less than the 11.4 cents difference that the 

Department relied upon in its cost-benefit analys!s. (See 41 N.J .R. al 

4163.) 

The dollar per ton cost ratio for pollutants removed will be tp'eater 

during the second phase of reductions to 15 ppm in 1016 than in the Erst 

phase of reductions to 500 ppm. Nevertheless. the second phase of 

reductions is still cost-effective. Using the data provided by the 

commenter. the cost of reducing the sulfur content in fuel oil from 1.000 

ppm to 500 ppm would be $1.866 per ton of reduction ($6.6 miliion 

divided by 3.536 tons of sulfur reduced). The cost per ton to reduce the 

sulfur content of fuel from 500 ppm to 15 ppm would be $14.51~ perton 

($16.6 million divided by J.]43 tons of sulfur reduced). The total cost to 

go from 1.000 ppm to the final level of 15 ppm would be $4.679 per ton 

($13.2 million divided by 4.679 tom of sulfur reduced). These costs are 

less than the calculated benefits to health from the NESCAUM study of 

$20,000 per ton benefit. (See 4] N..I.R. at 4161.) Additional benefit 

would result from higher efficiency furnaces and reduced cleaning 

intervals. 

The NYSERDA Report suggested a voluntary approach to lowering 

sulfur content in home heating oil. as Comment 61 recommends. The 

NY SERDA Report predates the Federal requirement for ultra-low sulfur 

fuels in on-road and off-road engines. Accordingly. ultra-low sulfur fuels 

were not in widespread use as they are now. The three-year study was 

begun in 2001. when on-road diesel fuel had a Federally required sulfur 

content of 500 ppm. and the results were reported in June 2005. The fIrSt 

Federal milestone year for lowering the sulfur content of on-road diesel 

fuel was 2006; 15 ppm low sulfur fuel was not available to be evaluated 

in the study. At the time of the study. there were no other requirements in 

the United States for ultra-low sulfur fuels that would have made 10\\ 

sulfur oil at 15 ppm readily available in sufficient supply for use as home 

heating fuel by anyone northeastern State. Consequently. the authors 

could not have practically included an evaluation of ultra-low sulfur fuels 

when the studv started. and could not have included am 

recommendation;for ultra-low sulfur fuels in that report as it was beyond 

the scope of the study. A voluntary approach was. necessarily. the only 

option. 

As to the recommendations for voluntary use of 500 ppm sulfur 

content fuel. the authors suggested that "state mandates not be enacted 

until normal market forces expand the use of 10\\ sulfur heating oil 

without mandates that could cause price instability and supply shortages." 

In this case. the NY SERDA Repon' s authors were referring to low sulfu: 

heating oil as 500 ppm sulfur content fuel. as this was the only fuel 

available on the market at that time as transpon.ation or diesel fuel. The 

authors. therefore. were cautioning against individual state action. in light 

of the fact that the Federal re\!ulation to lower sulfur in on-road and off· 

road fuel had not yet taken effect and 15 ppm sulfur content fuel wa, not 

available in ali areas. The studv does not address the case in which man:, 

states agree to conduct a simultaneous. mandatory lowering of fuel sulfur 

content. such as the MANE-YU states have done. 

Ne\\ .Jersey and other MANE-Vli states kne\\ of these potential 

negative economic effects of state-ny-state mandates when MANE-Yl' 

proposed a lead-time for implementation of the regional agreement and 

for many states to implement a similar rule along the same limeframe\. 

The lead-time ensures that industry wi II have adequate time to prepare for 

the adopted standards. 

Impact on the refinery sector 

65. COMMENT: The Department should not adopt the proposed 

amendments. ThiS proposal, would have economically dcvastaling 

NEW JERSEY REGISTER MONDAY. SEPTEMBER 20. 2010 (CITE 42 N.J.R. 22551 
ENVIRONMEl\TAL PROTECTlO!\ 

consequences for the petroleum reEning industry. including potel1lial 

closures of the refinenes. In the case of a relatively small New Jersc~

refinery that does not process crude oil. its limited processing 

configuration means it has few. if any. options to produce petroleum 

products and remain competitive. It is highly unlikely that it could or 

would make the more than SJ on million investmel1l to produce these 

fuels. Adoption of the proposed 15 ppm sulfur content standard would 

elimll1ate highly skilled jobs 111 New .Jersey and would not create any offsetting construction jobs. (7) 

66. COMMENT: The Department should adopt the proposed 

amendmel1ls. Others have intimated that refineries may close as a result 

of having to reduce the sulfur content of healing oil. Th'ese refineries may 

well close. but not because or these new sulfur in fuel rules. Heating oil is 

simply too small a product pool tor refiners to make the big decision on 

whether to keep a refinery running. In the last generation. the number of 

U.S. refineries has fallen bv more than half. from 324 in 1981 to 150 in 

2008. Yet the total daily ~utput of United States refining industry has 

II1creased from 12.8 million gallons a day in 1981 to l5 million gallons a 

day today. The decision on whether or not to operate a marginal refinery 

will not be made based upon the sulfur content of home heating oil. (8) 

RESPONSE TO COMMENTS 65 AND 66: The Department 

recognizes that refiners are competing in a very tight marketplace and a 

few may close due to market forces. including the closing of two area 

refmenes. one in New Jersey and another in Delaware (Valero). It was 

recently reported that the former Valero refinery in Delaware City. 

Delaware. will be re-opened and operated by new owners. PBF Energy 

Panners. According to a Los Angeles Times article, the profitability of all 

refmeries has decreased in recent years due to a variety of factors. 

induding decreasing gasoline use that is a product of the economic 

downturn and changing consumer habits and preferences. This has led to 

the closing of the smaller. less profitable refll1eries. (Ronald D. White. 

"Oil companies look at permanent refinery cutbacks." Los Angeles 

Times. March I 1. 20 10. http://articles.latimes:com/2010/mar/ 11 ibusi~ess/

la-fi-refineriesll-2010marl1: Jeff Montgomery. "Bright new start for old 

refmery in Delaware City," The News Journal. June 2. 2010, 

hnp://www.delawareonline.com/article/20 I00602/BUSIN ES S/60203 58" 

GlD=wU5HLs50fC477vDWcAEDj9!sCSelvgYsx2a670S8ZZk%3Dl. 

Not all refiners are opposed to the ultra-low sulfur fuel standards. The 

new owner of the Delaware refinery stated, "We're going to come out 

publicly as the first refining company to support low-sulfur heating oiL" 

The owner expects to spend about $500 million on construction of a new 

hydrocarbon treatment system that will help the Delaware plant produce 

low-sulfur home heating oil. (http://www.delawareonline.corrv·article! 

20 I00602/BUSINESS/602035 S?GID=wU5HLs50fC477yDWcAE Dj9/sC 

SelygYsx2a670S8ZZk%3D.) Similarly. Sunoco Inc.. which has a 

refinerv in Pennsylval1la. wrote to the Department in support of the 15 

ppm standard. 

As stated in the .lobs lmpact. the net impact on jobs in this State will 

be neutral. (See Jobs lmpact. 41 NJ.R. at 4165) The Department expects 

that New Jersey refineries and other refineries that supply products to the 

State. such as in the Gulf Coast. will employ new workers to 

manufacture. install and operate the desulfurization equipment at the 

refineries. New Jersey is also expected to gain jobs in the manufacture of 

new. more fuel-efficient oil boilers and furnaces as a result of the adopted 

amendments. 

Fuel for out-of-State use 

67. COMMENT The Department should clarify the NJ.A.C. 7:27· 

9.2( a) so that there is no confusion regarding the intended meaning of the 

regulation as it pertains to fuel oil stored or blended in the Slate. As 

proposed. it may appear that the phrase "for use in New Jersey" only 

applies to the "delivered or exchanged in trade" portion of the sentence .. 

and not to fuel that is "stored. offered for sale, or sold." This would 

prohibit (albeit unintentionally) the storage, offering for sale. or sale. or 

biending of fuel with higher sulfur levels for sale to users outside of New 

Jersey. To clarify any possible misunderstanding of the intent of the 

regulallon. the Department should insert a comma in tbe first and second 

sel1lence, of NJ.A.C. 7:27-9.2(al after the word "trade" and after 

"jersey." These suggested modifications would clarify that the rule would 

ADOPTIOr-,'S 

not apply to fuel thai is slOred. oflered for sale. sold. delivered or 

exchan£ed in trade. and ultimatelv used outside ofl'ieVl .Jersey. (201 

RES'PONSE: The amended r~le appiies only \0 fuel oil ~sed. stored. 

offered for sale. delivered. exchanf!ed in trade. or sold for ultimate use In 

the State of New Jersey. The phrase with which the commenter has 

concerns is In tbe rule prior to these adopted amendmel1ls. and has not 

been changed. The Department is not aware of the regulated community's 

having difficulty interpreting the language. and knows of 110 enforcement 

action concerning the sulfur content of fuel oil stored in New .Jerse\ but 

intended for use elsewhere. Nevertheless. the Department is modifY1l1g 

N..lA.C. 7:27-9.2(a) on adoption to add the commas suggested by the 

commenter. to ensure that the intended meaning is clear and 

unambiguous. ­

l i nintended consequences or the amendments 

68. COMMENT: The Department should not adopt the proposed 

amendments. The amendments will adverselY affect climate change 

because the refining process to achieve 15 ppm'is more energy-intensl\;e. 

releases greenhouse gases and increases the carbon footpnnt oC the 

process. It will raise. rather than lower. greenhouse gas emissions. (7. 9. 

IS) 

69. COMMENT: The Department should not adopt the proposed 

amendments as they would also increase nitrogen oxide emissions in the 

ozone season. (7) 

70. COMMENT: The Department should not adopt the proposed 

amendments because implementing them is less environmentallY friendh 

than the current sulfur in fuel standards. Extra emissions will r~sult fro~

the construction of equipment and storage facilities. from re-processll1g 

off-specification fuel, and from other sources. such as the increased use 

of fuel. (16) 

71. COMMENT: The Department should not adopt the proposed 

amendments because adoption would require the importing of additional 

quantities of distillate fuel into New York harbor. causing additional 

emissions and environmental impacts from shipping and distribution. in 

part because of the closure of regional refll1eries. (7) 

72. COMMENT: The Department should not adopt the proposed 

amendments as the emission increases at refineries and elsewhere will be 

only partially offset by the use of newer. higher-efficiency fuel oil 

furnaces. This is because of the slow tum-over rate in space-heating 

svstems, which is usuallv a 20- to 25-Year timeframe. Emissions benefit.s 

v:,ill not accrue in the sh~rt term. (7, 9)' 

73. COMMENT: The Department should not adopt the proposed 

amendments because they will double the amount of carbon dioxide 

(C02) from a highly efficient refinelJ·. raise nitrogen oxide emissions in 

the summertime by 92 tons. increase carbon monoxide (CO) emissions b\ 

114 IOns per year. and increase water use hv 75 million f!allons a vear ~t

the Hess/Hovensa refinery in New Jersey. This would a~ualh i~crease

carbon dioxide emissions at two of He~s's refineries bv 1.1 8'1.000.000 

pounds annually and other refineries would have similar increases in 

emissions. (7) 

74. COMMENT: The Department should not adopt the proposed 

sulfur in fuel standards because these regulations are too stringent and 

will ultimately be counterproductive 10 the goals and intent of the sulfur 

in fuels rules to lower emissions. (7. 16.25) 

RESPONSE TO COMMENTS 68 THROUGH 74. Although refinin~

fuels to low sulfur grades requires more energy than refining fuels to ; 

sulfur content of 2.000 ppm. the additional greenhouse gas emissions 

associated with processing can be offset by reductions that accrue from 

the introduction of more efficient heating equipment made possible 0\ 

the availability of low sulfur fuel. The Department calculates that longterm reductions in greenhouse gases and other pollutants will more than 

offset the increase in emissions at the refinery. The Department 

calculated that. for the same heat output. a traditional home furnace with 

80 percent efficiency and consuming 1.000 f!allons of fuel oil annuallY 

would generate 2.520 pounds o( additio~al C02. compared tu 

condensing furnace with 90 percent efficiency. Existing condensing 

furnaces achieve an even higher than 90 percel1l fuel effiCiency. so YO 

percent is a conservative estimate. 

The NYSERDA Report indicated fuel efficiencY would increase in 

existing furnaces by one percent over the heating'season if the sulfu: 

(CITE -12 !\.J.R. 2256\ '\EW ,JERSEY REGISTER, '\10NDAY. SEPTE:\1BER 20, 2010 
T
 

ADOPTJO\S 

content of heating oil were reduced to 500 ppm from current sulfur in fuel 

levels of 2.500 ppm. (41 1\.J.R. at 4163.) The NYSERDA Report did not 

C\'aluate the fuel efficiency that would result from using a fuel that meets 

a 15 ppm sulfur content standard. as this fuel was not readily available at 

the time of the study. The authors did indicate that fuel efficiency should 

increase further with the use of a fuel that meets a sulfur content standard 

lower than 500 ppm. but did not quantify what that increase would be. 

Even conservatively assuming the efficiency of the traditional furnace 

would increase from 80 to 81 percent by using a 15 ppm sulfur content 

fuel oil due to less fouling of thc heat exchanger and consistent with the 

increase in efficiency from using a 500 ppm sulfur content fuel. the 

furnace using 15 ppm sulfur content fuel oil will emit 280 fewer pounds 

of C02 than the furnace using 2.500 ppm sulfur content fuel oil. 

The Department estimates that the additional C02 generated at a 

refinery per l.000 gallons of low sulfur fuel oil to meet lower sulfur 

content standards is 39 and 35 pounds for IS ppm and 50 ppm fuel 

content standards. respectively. The 280 pounds of C02 saved by the 

more efficient fuel burning in existing furnaces will more than offset the 

increase in C02 of39 pounds of C02 per 1.000 gallons to achieve the 15 

ppm standard. Over the long-tenn. as condensing furnaces are used more 

the benefits would be substantially higher. 

The Department does not anticipate that additional emissions will 

occur from having to ship additional fuel into New York harbor when the 

sulfur content of fuel oil changes. Fuel oil is currently being shipped Into 

New York harbor and wi1"1 still need to be transported from other sources 

out-of-state or via pipeline, to meet demand. The overall demand for 

home heating oi'l is not expected to increase as a result of a change to 

ultra-low sulfur fuel. Rather. it will decrease because the furnaces will bc 

more efficient. Also, any short-tenn emission increases due to localized 

construction activities will be more than offset by long-term regional 

reductions in sulfur dioxide and particulate. 

The Depanment also does not anticipate that higher emissions of 

nitrogen oxides in summer or any other season will occur as a result of 

the adopted amendments. The process to remove sulfur from fuel also 

removes the fuel-bound nitrogen compounds contained in the fuel. The 

lower fuel-bound nitrogen results in lower emissions of nitrogen oxide 

when ultra-low sulfur diesel fuel is burned, compared to higher sulfur 

fuels. Fuel-bound nitrogen wil] be reduced five to 10 percent in 10\\ 

sulfur fuels. resulting in proportlonately lower nitrogen oxide emissions 

from combustion of low sulfur fuels ("Low Sulfur Heating Oil: 

Evaluating the Impact on Consumers:' Consumer Energy Council of 

America. Bookhart and Zien. September, 2003, page 8, available at 

http://wv.rv.·.dbrothers.com/pdf/CECALowSul furWhitePaper9- I 2-03 .pdf). 

This reduction in fuel-bound nitrogen. as well as fuel savings due to 

increased combustion efficiencies. is expected to result in greater 

reductions in nitrogen oxides during all seasons of the year. including 

summer. 

Fuel efficiency and condensing furnaces 

75. COM MENT: The Department need not adopt the proposed 15 ppm 

sulfur content reqUIrement because no study has shown that furnaces 

require 15 ppm sulfur content fuel oil to operate efficiently. to wor~

properly. or to enable improved emission control technology. (7,23.27) 

76. COMMENT: The Department need not adopt the proposed 15 ppm 

sui fur content requirement because condensing furnaces or other. newer 

high efficiency fuel oil furnaces such as the Monitor FCX. Peerless 

Pinnacle, or equipment by the one condensing boiler manufacturer 

(Viessmann) can operate efficiently on 50 ppm sulfur fuel oiL with some 

existing condensing furnaces and boilers operating on existing levels of 

2.000 ppm sulfur in fuel. These furnaces and boilers can be used toda, 

without all users incurring the additional cost of lower sulfur fuel. (2. 6. 

7.9. 15.23.27) 

77. COMMENT: The Depanment need not adopt the proposed 15 ppm 

sui fur content requirement to improve boil er or furnace efficienc:. The 

reported manufacturer cfflciencies of the high-effiCiency boilers were 

typically between 85 and 89 percent. with condensing boilers sometimes 

reporting operations at 9' percent efficiency. Existing high-efficienc:. 

boilers were reported to have serious drawbacks and limitations. Also. 

replacement of Q non-condensing boiler with a condensing boiler rna: 

require replacement of the entire heating system and may require side· 

EI\'\'IRO\"MEl\T-\L PROTECTIO\" 

venting. rather than use of the existing vertical chimne\. which mal 

violal; building codes. Other problems -noted include the' emission or'a 

"visible plume:' which may cause moisture and nuisance issues. 

unsuitability of existing stacks. incompatibilities of sharing the staCK with 

any non-condensing appliances. and drainag.e of liquid condensate. Even 

with ultra-low sulfur or 50 ppm fuel. condensing furnaces may not wor\.. 

in many applications in 1\ew Jersey so that projected efficiency gains will 

not be realized. The USEPA reports that increasing industrial boiler 

thennal efficiency from 86 to 92 percent. the typical condensing boiler 

performance, would only reduce emissions from 85.1 to 79.5 kilograms 

of C02 per million BTU output. or about l.000 pounds per home. 

annually. (7) 

78. COMMENT: The Department should not adopt the 15 ppm sulfur 

content standard in order to get improvements in fucl efficiency in 

boilers. Ireland and the United Kingdom currently set a mimmum 

efficiency standard for new boilers at 86 percent without setting a sulfur 

in fuel standard of 15 or 50 ppm. so no "gain" in fuel efficiency will 

result from requiring the use of low sulfur fuel. These countries set the 

fuel efficiency level at 86 percent so as to nol compel the use of 

condensing boilers. (7) 

79. COMMENT: The Department should not adopt the proposed 

amendments as their promulgation will lead to less reliable heating 

systems. lmprovements in fuel efficiency will come at a cost of 

reliability, because more complex combustion systems require additional 

maintenance. (7) 

80. COMMENT: The Department should not adopt a lower sulfur 

content standard for all distillate oil. People can voluntarily purchase and 

use an ultra-low sulfur fuel now for use in a condensmg boiler. Given the 

long turn-over time of 20 to 25 years for typical boiler replacement, the 

market would slowly adjust to the increased demand for ultr~·low sulfur 

fuel in condensing boilers if done voluntarily. without requiring all 

distillate fuel to meet a lower sulfur content standard. (7) 

81. COMMENT: The Department should adopt the proposed 

amendments as they are needed to make improvements in fuel efficienc\ 

and for oil-fired condensing furnaces. While it is true in a technical sense 

that ultra-low sulfur fuel is not needed to make an oil-fired condensing 

furnace work. the newer higher-efficiency equipment is even better 

served with fuel meeting a 15 ppm sulfur content standard. as the less 

sulfur in the fuel oil. the better. Less sulfur in fuel will reduce the scaling 

on the heating system component parts that adversely impacts heatmg 

system efficiency and performance. (8. 22 \ 

82. COMMENT: The Department should adopt the proposed J5 ppm 

sulfur content standard to get improvements in fuel efficiency in boilers 

The next generation of heating oil equipment will dramatically reduce 

fuel consumption beyond what industry has already done. This next 

generation of heating oil equipment will need to run on a fuel with a 

sulfur content well below 500 ppm. (8. 13.19) 

83. COMMENT: The Depanmenl should adopt the proposed 15 pprr. 

sulfur content standard for the good of the retail heatmg oil industry 

Since the rest of the distillate pool users will be required to meet the 1

ppm sulfur content standard. there is no reason for heating oil not to be 

required to meet the 15 ppm standard. too. The retail heatmg oil industry 

would become the sulfur sink for the rest of the industry. would be 

provided no benefit. and would be needlessh harnled in its abilitv to be 

~ompetitively positIOned against other fossil-fueled heating source; (8) 

84. COMMENT: The Department should adopt the proposed 15 ppm 

sulfur content standard to allow for the use in this country 0: high· 

effIciency. foreign-designed boilers. designed for low-sulfur content fuel 

use. If a 15 ppm sulfur content fuel were used. an increased systerr 

efficiency would result from the introduction in the united States 01 

smaller heating systems with lower firing rates. European style wall-hung 

boilers have not been introduced iii the lJ nited States. since their 

manufacturers require the use of fuel with a lower sulfur content than i, 

currentlv available in the united States. (8. 13. J91 

85. COMMENT: The Department should not adopt the proposed 15 

ppm sulfur content standard. Consumers who want cleaner fuels or wish 

tn use a high-efficiency condensing furnace can switch to natural ga'. 

New Jerse\~has been steadily swit;hing [0 natural gas from fuel oil for 

the past sc~cral decades and an amplc supply of natural gas is available III 

New Jersey. (7) 

NEW (CITE 42 T".J.R. 22571 JERSEY REGISTER MONOA\, SEPTEMBER 20. 2010 
ENVIRONMENTAL PROTECTION 

RESPONSE TO COMMENTS ~5 THRCJlICJH 85 Some exisllng 

condensino furnaces can operate efficIently on I'uel oil with sulfur al 

levels higher than the adopted standards. High efticiency. oil-lired 

condenSing furnaces and boilers. however. are not commonly purchased 

IOdav bv the average consumer due to their relatively high cust. The Cl'st 

of oil-fired condensing furnaces remains prohibitively expensive due to 

the need for stainless steel or other corro'sion resistent metal parts to 

accommodate the sulfunc acid effects of the existing high sulfur content 

in fuel oil. Also. the heat exchanger needs to be larger because of the 

fouling caused by hIgh sui fur oil. The sui fur in fuel oil. when burned. 

converts into sulfur oxides. Sulfur oxides readily combine with liquid 

water in condenSing furnaces to form sulfuric acid. A low sulfur fuel will 

eliminate the creation of sui func acid in the flue gas and eliminate 

approximately half of all particulate matter created in the heat exchanger. 

One source has estimated that the need for stamless steel components in 

uii-iired condensing furnaces using existing high sulfur oil adds mure 

than $800,00 to the average price of a new condensing furnace. Using 

ultra-low sulfur fuel oil will enable manufacturers to use less expensive 

steel to design less costly. more efficient and smaller appliances. If the 

costs to purchase condensing furnaces were lower. more would be 

purchased and more fuel savings and emission reductions would occur. 

European manufacturers have developed several models of condensing 

furnaces and boiiers using ultra-low sulfur oil. Germany passed a 

resolution calling for a maximum sulfur content in home heating oil of 50 

ppm speciiically to foster the use of uil-fired condensing furnaces. It 

would foliow that IS ppm sulfur fuel will increase the life of the materials 

within the furnace. as even lower amounts of sulfuric acid would be 

formed. Although the Department is not aware of studies evaluating. the 

durability of materials using 50 ppm versus 15 ppm sulfur content fuel, it 

would make sense that the lower sulfur content fuel would result in the 

lower formation of sulfuric acid and result in lower deterioration within 

the furnace. It would also follow that \5 ppm sulfur fuel oil will allow for 

less costly materials to be used in the design of uil-fired condensing 

furnaces. The Department anticipates that as more ultra-low sulfur oil is 

available in the State, more models of condensing furnaces and boilers 

will become available. Increased availability and lower prices will 

encourage consumers to replace inefliclent, older units with efficient ones 

that use ultra-low sulfur oil. 

Not all areas of the State have access to natural gas pipelines or 

supply, so consumers in these areas cannot readily switch frum fuel oil to 

natural gas. These consumers are left with the option of spending a large 

sum on a Istainless steel) high efftciency furnace. or purchasing a 10Vo 

effJciency and higher emitting furnace. Some consumers who have access 

to both oil and natural gas are switching from home heating oil to natural 

gas because there are higher-efficiency condensing furnaces available for 

gas in an accessible price range. The adopted amendments will result in 

home heating oil having the same sulfur content and sulfur dioxide 

emissions as natural gas for home heating. Consumers who desire an 

"environmentally friendly" fuel will have the chuice of using distiliate oil 

or natural gas. 

The proposed 500 ppm sulfur standard in 2014 

86. COMMENT: The Department should adopt the proposed 500 ppm 

sulfur in fuel standard effective July J. 2014. (2-4. 7, 9.10. IS. 16,23,25. 

27) 

87. COMMENT The Department should not at this time adopt a 

suliur in fuel standard that is lower than 500 ppm. because staying at the 

proposed 500 ppm sui fur content standard would reduce the capital 

Investment necessary to meet the standard and would make it more likel,· 

that refiners would make the investments to assure a stable and 

competitively priced supply of heatIng oil. (7) 

88. COMMENT: The Department should expedite the adoption of the 

500 ppm sulfur in fuel standard. Tne Department can do this quickly. as 

the Department has already met the Administrative Procedure Act notice 

requirements with this rule proposal. Hastening the adoption of this 

standard meer;; the test of common sense administrative ruJemaking. 

serves to meet the goal of stimulating New Jersey's econom). improves 

the quality of life. and creates new investment and .lobs. (2) 

89. COMMENT: Tne Department should delay the implementation of 

the 15 ppm sulfur in fuel standard in 2016 (that is. adopt. but not go more 

\ DOPTJO\'S 

stringent than the 500 rpm sulfur content standard) and seek hroad 

consensus on the appropnate level of the second-phase standard that 

would offer slgntJlcant environmental benefit while prOViding necessar~

fle;;ibi!ity to the transportation and refining sector. (4. 23) 

90. COMMENT: The Department should not adopt a more stringent 

sulfur content standard for heating oil effective 2016. but rather continue 

the sulfur content standard of 500 ppm, This would provide increased 

tlexibilily for the supply and distribution system by allOWing elticient 

disposition of pipeline interface from jet w diesel fuel. a ionger life of the 

catalysts used in the relining process. and reduced competition WIth 

transportation for suppl ies of home heating fuel. (27) 

91. COMMENT: The Department should adopt the proposed ultimate 

sui fur coment standard of 15 ppm and not stop at the proposed 500 ppm 

sui fur content standard. because refiners will be responding (0 the greater 

demand for lower sulfur content fuel, anyway. In 2008, residential and 

commercial heating oil accounted for only ahout 12 percent of the total 

U.S. distillate use. excluding jet fuel (http://tonto.eia.doe.govidnavlQet! 

peLcons 82\dsLdcUJluS a.htm). Since there will be no other use for 

number 2 fuel oil meeting the sui fur content standard of 500 ppm. no 

refiner is going to make the significant capital investment based on the 

small demand of a largely regional and seasonal fuel to produce 500 ppm 

fuel. (8) 

92. COMMENT: The Department should adopt the proposed sulfur 

content standard of 500 ppm for distillate oil. Kerosene meeting a sulfur 

cuntent standard of 400 ppm can be used as a blend stock to enhance 

distillate heating oil supplies if the sulfur content standard were set at son 

ppm. A 500 ppm standard allows for a much greater diversity of supply. 

which can reduce long-term costs and supply disruption risks. (7) 

RESPONSE TO COMMENTS 86 THROUGH 92: The Department 

acknowledges the commenters' support for the first phase of sulfur in fuel 

reduction to a 500 ppm sui fur content fuel in 2014. Staying at a 500 prm 

sulfur in fuel level is not justified because further reductiun in the sulfur 

content of fuel is reasonable. as discussed in the proposal at 41 l\".J.R. 

4160. The 15 ppm sui fur in fuel limit is appropriate to achieve reasonable 

reductions in sulfur dioxide. based on the overall costs and benefits. The 

lower limit of 15 ppm is a proven. cost-effective comrol strategy that 

provides the greatest environmental and health benefits. Maine has 

already enacted legislation to lower the sulfur content of distillate oil to 

15 ppm consistent with the MANE-VU agreement. Other states also have 

pending actions to lower the home heating oil sulfur content to IS ppm. 

The sulfur content of kerosene for other than motor vehicle use is 

being lowered as a result of the adopted amendments. See the Response 

to Comment 5 above for further discussion of the applicability of the 

adopted amendments to kerosene. Although kerosene will have a 

standard of 400 ppm sulfur content pursuant to Federal regulation. the 

majority of kerosene. which is used for space heating or other non-mobile 

source uses. would be required to have a sulfur content of 15 ppm. 

Kerosene with a 400 ppm sulfur content could not he used as a hlend 

stock to meet the need for heating fuel with a 15 ppm sulfur content limit. 

Support for the 500 ppm standard 

93. COMMENT: There is general consensus within all stakeholder 

communities to support the Department's proposed transitlon rule to a 

fuel sulfur content standard of 500 ppm effective in 20 \4. including 

among those who would like the Department to adupt a more stringent 

standard in an even shorter timeframe. Adoption of this sulfur content In 

fuel standard of 500 ppm effective 2014 will establish economic 

certainties. establish the need for project financing and provide the 

necessalJ construction lead-time associated with refining. transportation 

and storage of products required by these rules. It would also coincide 

well with the Federal requirements for diesel fuel and marine vessels in 

2015. (2) 

94. COMMENT: If the DepaITment adopted only the 500 ppm sulfur 

content in fuel standard and did not implement a 15 ppm sulfur coment in 

fuel standard. this refiner would save $100 to S; ISO million in capital 

costs or 50 percent less in annual COSts. which is a significant savings. (71 

RESPONSE TO COMMENTS 93 AND 94: Although stakeholders 

have agreed that a lower sulfur in fuel standard is needed or acceptable, 

not all stakeholders have agreed on the level of the standard or the timing 

of its implementation. Some have commented that earlier implementation 

(CITE ~2 '\.J.R. 2251.;) :'\EW JERSEY REGISTER.\IO:\DA \, SEPTE\1BER 20,2010 
ADOPTIO:\S 

or a 15 ppm sui fur content in fuel standard is both practicable and 

necessan. 

The Depanment's anal)si, shows that 15 ppm sulfur in fuel standard i, 

cost-effective. as discussed in the Economic lmpact. 41 KlR. at 4162. 

The Depanment has detennined that all earlier implementation date j, not 

appropriate. as discussed in the Response to Comments 10i through 112 

beloVl. The Department', analysis funher shows that the capital savings 

from not implementing the second phase of sulfur in fuel oil reductions to 

J5 ppm are lower than the benefit, to society of the 15 ppm standard. For 

funher discussion of the capital costs and societal benefits. see the 

Economic Impact (41 N.J.R. at 4162). 

The sulfur in fuel levels for residual fuel oil 

95. COMMEl\T: The Department should not adopt the proposed 

sulfur content standard for residual fuel oil of 0.5 percent (5.000 ppm), 

because Europe. and maybe Canada. will have standards for these fuels at 

La percent (l0.000 ppm). Refiners do not make extremely low sulfur 

residual fuels unless it is economical to use very 10Vl sulfur crude oil 

because they would lose monev on the fuel. Thus. refiners will not invest 

to make a I~wer residual fuel 'oil that meets a sulfur specification of 0.5 

percent when they cannot export the product to Europe or Canada. They 

may invest instead to make the lighter distillates out of the distillate fuel. 

(3 ) 

96. COMMENT: The Department should adopt the proposed 

amendments to lower the sulfur content of residual fuei oil to 5.000 ppm 

or less. (5.8.12,21,22.24) 

RESPONSE TO COMMENTS 95 AND 96: The Department 

acknowledges the commenter's support for the proposed sulfur content 

standard of 5.000 ppm for residual fuel oils by 2014. for those counties 

for which there is not alreadv a lower sulfur content in fuel standard. 

While a 10.000 ppm residu~1 fuels sulfur content standard may be 

acceptable for parts of Europe or Canada. New Jersey has had a lower 

standard in its urban counties for many years. The adopted amendments 

lower the sulfur content standard for residual fuel oil to 5.000 ppm in 

some counties in New Jersey. The residual fuel oil sold in the remaining 

counties remains unchanged if the county already has a residual fuel 

sulfur content standard of3.000 ppm or 5,000 ppm. 

Fuels with a sulfur content meeting the adopted standards are current!) 

available in the marketplace. Hence. a sulfur content standard of 3.000 to 

5.000 ppm for residua] fuel is feasible. The Depanment's analysis at 41 

1'\ .lR. 4163 shows that the average price difference between J 0.000 and 

5.000 ppm sulfur content residual fuel oil was 5.05 cents per gallon. A 

regionally consistent sulfur content standard for residual oils will improve 

the market for this fuel oil. 

Other countries. such as parts of Europe and Canada. with higher 

residual fuel sulfur content standards than these adopted by New Jerse) 

are considering lowering the sulfur content of these residual fuels. as 

well. Regardless of whether these countries lower their sulfur content 

standard -for residual fuels. and depending on the economics of the timc. 

because New Jersev's sulfur standards for residual fuel are more stringent 

than those of thes~ other countries. residual fuels meeting New Jersey's 

sulfur content standards could be exported to those countries. Lower 

sulfur content residual fuel meeting New Jersey's standards could also be 

blended with higher sulfur reSidual oil to make a fuel for expon near the 

sulfur content standards of the receiving country. 

Options for meeting or not meetin!!: the 5.000 ppm sulfur in residual fuel
 

lenl
 

97. COMMENT: The Department should not adopt the proposed 

sulfur in fuel standard for residual oil (numbers 5 and 6) of 0.5 percent 

(5.000 ppm). as it would leave New Jersey refiners with no viable option 

other than export of higher sulfur residual oil. (3) 

98. COMMENT: The Department should not adopt the proposed 

sulfur in fuel standard for residual oil 01'0.5 percent 15.000 ppm) because 

removing sulfur from residual fuels is technologically difficult. ver) 

costh. ';;1d lIsually economical I) prohibitive. As a result. refiners may 

upgr;de heavy fuel oils to lighter distillates. such as highway diesel fuel 

or home heatim! oil. instead of Investing the capital to desulfunze heavy 

fuel oil. Dilution through blending i~ not a viable option as other 

properties of the fuel oil. like densit). flash point and viscosity. may be 

E\;\IRON:\1E\TAL PROTECTlO\ 

arrected. in which case the fuel would be considered to k ofT· 

specification. Also. dilution \vould s\\ell the volume of residual fuel oil to 

a level that far exceeds the size of the market. making export the onh 

viable option. (3) 

99. COMMENT: The Depanment should not adopt the proposed 

sulfur in fuel standard for residual oil of 0.5 percent (5.001l ppm). 

Blending high-valued distillate fuel with low-valued residual fuel \0 meet 

the sulfur in fuel specification will result in greater supply-demand 

tightness in the heating oil and transportation diesel market. (3) 

- 100. COMMENT:- The Depanment should not adopt the proposed 

sulfur in fuel standard for residual oil of 0.5 percent (5.000 ppm). 

Residual fuel oil use has declined steeply and reducing the sulfur content 

of this fuel does not appear to be a control measure that would be 

effective in helping the State attain the national health standard for PM, .'. 

particularly in the long run (3) 

101. COMMENT: The Department should not adopt the proposed 

sulfur in fuel standard for residual oil of 0.5 percent (5,000 ppm) as it did 

not provide sufficient information to support adopting this standard and 

additional review is needed for feasibility and cost analysis. (7) 

RESPONSE TO COMMENTS 97 THROUGH 101 Refiners are 

currently providing residual fuel oil with a 3.000 ppm and 5.000 ppm 

sulfur content for sale in several counties in New Jersey, as this has been 

the sulfur in fuel standard for those counties since 1982. The MANE-VU 

states chose the 5.000 ppm residual fuel oil standard for a regtonally 

consistent level to reasonably reduce sulfur dioxide emissions from thi, 

fuel. The Depanment's analysis at 41 N.J.R 4163 shows that the average 

price difference between 10.000 and 5.000 ppm sulfur content residual 

fuel oil was 5.05 cents per gaHon. Inasmuch as actual figures for the price 

difference among various residual fuels are currently available. a stud\ to 

determine future- costs is not needed. The actual price difference between 

the purchase price of 10.000 ppm and 5.000 ppm residual fuel can be 

used to determine future costs to affected panies. 

The adopted amendments allow the use of residual oil with sulfur in 

excess of 5,000 ppm. provided sulfur dioxide emission rates in Tables 2A 

and 2B are met. Emission rates will depend on the use of control devices. 

such as an acid-gas scrubber. In addition. viable options exist to lower the 

sulfur content of residual oil and still maintain fuel oil specifications. 

These include reprocessing the residual oil to remove more sulfur and 

blending lower sulfur residual oi1 with higher sulfur residua] oil to meet 

the 5,000 ppm limit. 

The use of residual oil use has declined nationally due to a variety or 

factors. including ease of use and environmental considerations. The 

Depanmenl has adequately evaluated and justified the lowering of the 

sulfur content of residual oil. as reflected at 4J N.J.R. 4160 and 4163. 

The reasons for lowering the sulfur content standard for residual fuel to 

5.000 ppm include co~sistency with the MANE-VU agreement and 

regional haze goals. attainment of the ftne particulate NAAQS. 

attainment of the ozone NAAQS. and maintenance of the existing sulfm 

dioxide NAAQS 

A market for off-specification residual oil. above a 5.000 ppm sulfur 

content standard. exists in the marine vessel market. New Jersey. being a 

coastal state. has a large market for bunker or marIne vessel fuel oil tha~

is mainly residual oil-Ocean-going marine vessels. located in the ocean 

and away from the United States and Canadian coast. wili still be able to 

be use r~sidual fuel oil with a sulfur content greater than 5,000 ppm. 

102. COMMENT: The Depanment should propose more stringent 

sulfur standards for residual oil in Zones 3, -1 and 6 than it has in thi, 

proposed rulemaking. These areas of the State are monitonng 

exceedances of the Federal paniculate standard. Adoption of a mort 

stringent sulfur in fuel standard of 500 ppm would result In the accrual of 

additional emission reductions. doubling the emissions savings and pubilc 

health benefits. (13. 19) 

RESPONSE: New Jersev alread\ has requirements for the lowest 

levels of sulfur in number 5'and hea~ier residual fuel oil at 3.000 ppm I~

Zones 3. 4 and 6 and has not proposed a change to these sulfur In fue: 

Emits. The Depanment detennined that a 5.000 ppm sulfur in residu8! 

fuel \evel for all other counties not already having a 3.000 ppm sulfur 

content standard in residual fuel oil is a reasonable regional control 

measure. as discussed in the proposal at 4J NJ.R. 4160 and 4163. Th~

Depanment has not evaluated rel~oving sulfur from residual fuel oil to a 

NEW (CITE 42 /o\.J.R. 2259! JERSEY REGISTER. MONDAY, SEPTEMBER 20. 2UIO 
ENVIRONMENTAL PROTECTION 

lower level. The Depanment will conllnue to monitor New Jersey's air 

quality to detemline if further measures are. needed [() attaIn the fine 

paITlculate and sulfur dioxide health standards In New Jersey. 

103. COMMENT The Depanment should not adopt the proposed 

sulfur coment standard for residual oil of 0.5 percent (5.000 ppm) as 

adoption of such a stringent standard will leave refineries with no viable 

oDlions for dIsposition of these fuels other than lor expon. The 

[iepanment should adopt instead a suI fur content standard of 7.000 ppm 

for residual oil Iw 2014. as this still represents a significant sulfur In luel 

reduction from t~da\··s levels. This level would provide l1exibilny in the 

Northeastern United States fuel market and would only marginally 

increase the need to export these fuels. This level should be set by all the 

MANE-Vl' states bv 20 l4. unless a sulfur content standard of less than 

7.000 ppm has ajre~dy been established. In which case the lower level 

should be maintained. (3) 

RESPONSE: Adoption of a residual fuel oil sulfur content standard of 

7.000 ppm sulfur level would be inconsistent with the MANE-VU 

agreement and the sulfur content standards recently established 

legislativeiv bv Maine. A market does and Will eXIst for reSIdual fuel 

m~eting a' S.l)OO ppm sulfur content standard. as discussed in the 

Response [() Comments 97 through 101. 

Sell-through 

104 COMMENT: The Depanment should adopt the proposed "sellthrough" provisions at N.J.A.C. 7:27-9.2(a) and (b). This would allow 

fuel oil that was already sold or stored in the State. and that met the sui fur 

in fuel standard in effect at the time of sale, to be used-up. rather than 

made to meet the new lower sulfur content standards. (5, 9) 

105. COMMENT: The Department should not adopt the proposed 

"sell-through" provisions at N.J .A.C. 7:27 -9.2(a) and (b). These 

Drovisions would allow the compliance deadline to be dragged out and 

~ould provide industry an opportunity to intentionally use non-compliant 

fuel beyond the six-year lead-time already afforded it by the rules. (13. 

19) 

RESPONSE TO COMMENTS 104 AND 105: These sell-through 

provisions are needed to avoid potentially severe negative economic 

consequences to the regulated community, such as the Northeast HeatIng 

Oil Reserve run bv the U.S. Depanment of Energy. The Depanment also 

wishes to avoid 'potential enforcement issues with persons. mcluding 

individual home owners. purchasing: compliant fuel prior to the deadlmes. 

as listed in Table 1B. and having that higher sulfur fuel in their 

possession after the Implementation date of the lower sulfur fuel 

standards. 

Fuel oil does not have an infmite storage-life, meaning that fuel oil 

will degrade and become unusable with time. It must be timely used or 

become useless to its owner. Therefore. industry would not intentionally 

purchase higher sulfur content oil prior to implementation of the lower 

sui fur content standards to have ample supplies of the higher suI fur 

content oil for long-term use. New fuel oil meeting the lowest sulfur in 

fuel standards will eventually be purchased to replace the existing stocks 

and the full benefit to air quality will be seen over time. 

106. COMMENT: The Department should not adopt the proposed 

amendments and repeal because it will be extremely costly to the 

Northeast Heatin~ Oil Reserve. as the fuel in the reserve currently does 

not meet either th-e 15 ppm or 500 ppm standard. Without this fuel stored 

In the reserve. there is an increased threat of price spikes and prolonged 

heating oil shortages. (7) 

RESPONSE: The Department recognizes that the new. lower sulfur 

content standards will apply to fuel in the Northeast Heatmg Oil Reserve 

and that the lower sulfur content fuel may cost more. However. the 

adopted sell-through provisions allow the Northeast Heating Oil Reserve 

to reDlace the fuel stored m the reserve as part of the normal replacement 

schedule. A representative of the United States Depanmem of Energy 

mOE). the F~deral agency that runs the reserve. indicated to the 

Depanment that the DOE sells all of the fuel In the reserve at a set 

schedule and replaces It With "fresh" fuel. The sell-through prOVISions 

allow the DOE to keep the non-compliant fuel in the reserve until its 

nonnal replacement schedule. at which time the non-compliant f'uel will 

be replaced with compliant fuel. The cost for the DOE to purchase 

replacement fuel was inc1.uded in the Depanment's Economic Impact 

-\DOI'TIOI\;S 

clllalvsis. since cenam percent of the reserve IS replaced amlUal1;' tc' 

mail~tain the reserve's readiness. The cOSt to replace the fu~1 would be Ir, 

the total Statewide fuel usage ligures in the Economic Impact at 41 J'.:.J. R. 

-1163. This analysis showed that the adoption of the amendments will 

have a positiv'e benelit to New Jersey. The Depanmem would 

characterize the resulting cost increase to the Nonheast Heating Oil 

Reserve to be slight. rather than extremely costlv. 

Timing of the implementation of the sulfur content standards 

A shorter timeframe for impleme.ntation is needed 

107. COMMENT: The Department should nOl adopt the proposed 

2016 implementation deadline for the 15 ppm sui fur content standard. 

Instead. the Department should shonen the timeframe to two years or 

earlier than the proposed 2016 date so that fuel oil would be reqUired to 

meet the IS ppm sulfur in fuel standard by 2014. by .Iune 2012. or h; 

20 II. because of the extremely positive benefits that would result. This 

would result in earlier realization of emission reductions and aIr qualil) 

benefits. (8.13.19.22) 

108. COMMENT: The Depanment should amend the rules on 

adoption to eliminate altogether the step to a sulfur content standard of 

500 ppm, as this standard will be rendered moot by market conditions 

well before 2014. Instead. the Depanment should implement a 15 ppm 

sulfur in fuel standard effective 2014 or earlier. (8) 

109. COMMENT: The Depanment should not adopt the proposed 

timing for implementation, because New Jersey's Legislature and the 

legislatures of some other states, such as New York. are considenng: 

legislation that would enact earlier implementation dates for a sulfur 

c;ntent standard of 15 ppm sui fur for fuel oil. such as 20 II. These bilis 

also create standards in fuel oil. regulating the amounts of carbon in fuel 

and requiring fuels to have a bio-fuels component. New Jersey should 

follow the lead of these states. (8. 13. 19) 

110. COMMENT: The Department should adopt the proposed 15 ppm 

sulfur in fuel standard effective in June 2012, because \[ would also better 

coincide with the timing of implementation for the Fedcral standards for 

fuel used in marine vessels, locomotives and fann equipment. 03. 19) 

Ill. COMMENT: If the Department were to accelerate the 

implementation of the first phase of the proposed schedule to lower the 

sulfur in fuels standard, it would produce supply hardships In the 

marketplace, with the potential for disruptive price spikes In the short 

term. (4) 

112. COMMENT: The Department shouid not provide the lead-tIme 

given to the refineries by the proposed phased-in implementation of the 

new sulfur fuel content standards beginning in 2014. Industry has not 

made a valid argument for such a long lead-time and is being afforded an 

eight-vear lead.:time, far exceeding the average lead-time for industry to 

c;mply with new regulatory standards. (13. 19i 

RESPONSE TO COMMENTS 107 THROUGH 112 An earlier 

implementation date for the 15 ppm standard is nol practicable for the 

entire region. The Hart Study analyzed the ability of the refiners to almost 

immediately begin supplying the entire market. including the home 

heating oil sector. with ultra-low sulfur fuel. The study concluded that the 

regional demand for ultra-low su1fur fuel could not be met without an 

in~rease in the ability of refiners to desulfurize fuel. which would take 

time to accomplish. The Depanment is persuaded by this and other earlier 

studies. as discussed in the proposal at 41 N.J.R. 4160. The Depanment 

discussed the possibility of an earlier implementation date of 2012 with 

the refmers. consistent with the signed MAN E-VC agreement. and 

concluded that successful implementation of the proposed new standards 

requires a lead-time of four years. The Department is. therefore. 

pr~viding a four-year lead-time to implement the first phase of sulfur In 

fuel reductions. Although there could be added environmental benefit lO 

implementing the lowe; sui fur content standards sooner. the lead-lime IS 

ne~ded to allow for installation of adequate capacny at the reiinenes to 

remove sulfur from distillate and residual oils. avoid price spikes. and 

avoid disruptions to the supply and distribution network. Phasing In the 

more stringent standards by staning with a reduction of the standard tl' 

50(1 ppm is reasonable to ease the transItion to the 15 ppm standard in 

2016. panicularly as this lowenng of the sui fur content is expected to 

take place over a large region of the northeastem United Slates. 

(CITE ~2 :\.J.R. 22601 :\EW JERSEY REGISTER, \10NDA Y, SEPTEylBER 20, 2010 
ADOPTJO!\S E\'VIRO!\\1E\TAL PROTEC.TIO\ 

As discussed in the Response to Comment 23 above. expanding the capacity to avoid disruptions in supply. lC1 prevent potential shonag~, or 

scope of the sulfur in fuels amendments beyond what was already agreed distillate fuel oi!. and commensurate price spikes and cost increases in the 

to by the MANE-VU states to include a blo-fuels component or a carhon home heating oil and distillal~ market. 

content fue'l standard would delay implementation of the sulfur in fuel 

standard in Ne'" Jersey and throughout the region. The Department does 

not wish to delay the sui fur dioxide emissions reduction benefits of the 

amendments. Further. timely promulgation of these amendments pro\'ide 

the other MANE-VU states the assurance thai New Jersey will implement 

a lower sulfur content standard, and will provide refmers with ample 

lead-time to comply with the proposed rule amendments. Any delay 

would shorten the lead-time provided to the reiineries and to the 

marketplace. The Department will not. therefore. withdraw or repropose 

the amendments. but will consider the issues of carbon content and hiofuels separately. 

The date for implementation of the amended standards 

113. COMMENT: The proposed implementation of the first phase of 

the sulfur in fuel reductions in 2014 would give refiners of fuel oil the 

lead-time that they need. The refining industry needs at least a three to 

four-year lead-time. or until 20\4. to implement this rulemaking. This 

lead-time is needed to be able to complete capital projects and 

mvestments necessitated by a new standard and for the marketplace to 

avoid price spikes and for completion of the project phases. include 

planning. engineering. permitting. procurement. construction and stan-up. 

The proposed time frames for implementation (that is. 2014 and 20 I 6) 

provide sufficiem lead-time to comply with the new standards. (2. 4. 5. 7. 

10. 15.27) 

114. COMMENT: The Department should not implement the 

proposed 15 ppm sulfur content standards until 201 S at the earliest. as it 

should evaluate the market's response to the first reduction (effective 

2014). and ensure more reliable capability across the regional suppl) 

chain. (2.15.16.23) 

115. COMMENT: The Department should adopt the proposed 2014 

implementation date as it is adequate to avoid marketplace disruption. 

The Department should provide this adequate lead-time and certainty to 

allow the marketplace to adjust to the lower sulfur requirements without 

disruptive price spii-.es. (4) 

RESPONSE TO COMMENTS 113 THROUGH 115: The Department 

has determined. based on its discussions with the refIners. that a three- to 

four-year lead-time is needed for the regulated community to implement 

the first phase of the reductions in sulfur content. Current studies. 

including the February 2010 Hart Study. indicate that immediate 

implementation (by 201 I) of an ultra-low sulfur in fuel standard for home 

heating fuel would lead to price spikes and economic disruption of the 

marketplace Specifically the Hart Study states. "Given the tight market 

outlook. higher market premiums. 20 to 30 cents per gallon. should be 

expected to prevail. until additional desulfuri=alion capacln' can he 

brough! on line." (emphasis added! (Han Study. page 24). Given the 

scope of the amendments to remove sulfur from the remaining fuel 

stream. a four-year lead-tune is reasonahle to implement the design. 

engineenng. and construction work to add additional desulfurization 

capacity . 

The Department has determined that four years is adequate advance 

nOllce for a reduction to 500 ppm fuel. Another four years is not required 

for refInenes to implement the 15 ppm sulfur in fuel standard. The total 

of six years for the 15 ppm fuel to take effect (an additional two years 

from 2014) is reasonahle for phasing in the 15 ppm fuel standard 111 the 

inner zone MANE-VU states. 

The Department did not extend the 2016 final deadline to comply with 

the 15 ppm sulfur in fuel standard and is not changing the le\'el of the 

final standard of 15 ppm sulfur content distillate oil in 2016. The 

Department proposed to phase in these ne\\ slandards by implementing 

an initial step of a 500 ppm sulfur content standard in 2014 as an interim 

measure to achieve the final goal of a 15 pplll standard in 2016. The 

Department's reasons for a transition step to a 500 ppm sulfur content 

distillate oil iI, 2014 were discussed in the proposal Summar). (41 N.J.R. 

at 4160) As stated at 41 NJ.R. 4160. the Department chose to phase in 

these requirements in order .. to ensure sufficient time for production and 

dlstrihution of lower sulfur fuel oil." The Department recognizes that 

refiner, needed enough lead-time to install sufficient desulfurizatlon 

Ex tensions!variances 

116. COMMENT: The Department should amend the rules to allo\\ 

smaller refineries a on~- to \\\'(I-year extension of the effective date of the 

proposed 500 ppm sulfur in fuels standard. (7) 

RESPONSE: The Department did not extend the deadhne for sma11 

refineries to comply with the 500 ppm sulfur in fuels standard. To do so 

would place larger refineries at a competitive disadvantage. Smaller 

refineries whose owners have already made the capital investment to add 

extra capacity to remove sulfur from fuel would also be placed at a 

disadvantage. The Department wishes to avoid this situation and did not 

extend the deadline based on the size of the refiner) producing fuel. 

11 i. COMMENT: The Department should amend the rules to issue a 

temporary waiver of the sulfur in fuel standards. allowing the refiner) to 

produce high sulfur numher 2 fuel oil until the next scheduled closlllg of 

the facility for maintenance (also known as a ··tum-around"). At a 

minimum. the Department should allo\\ in-State refmeries with a turnaround scheduled within one year of July 1. 20J 4. to comply with the 

current standard. as opposed to the 500 ppm sulfur content standard. until 

restart after a tum-around. Currently. one refinery has a planned turnaround III the 2015 time-frame. The timing of the proposed operative date 

of the new standards will necessitate two facility shut-downs. which is 

extremely costly and may result in increased air emissions. An extra shutdown would mean that the entire refinery would be shut-down for one 

week and cost in the low millions of dollars. Allowing refiners additional 

time within which to comply with the new standards would require the 

tracking of high sulfur distillate fuel down-stream to ensure that only 

those refineries with waivers produce and distribute the otherwise noncompliant fuel. Chain of custody requirements for all downstream users. 

similar to the requirements of USEPA"s Tier II LOI\ Sulfur Gasoline 

program. could be implemented. (7) 

RESPONSE: The Department desires to implement the standards with 

the least disruption to the market as possible. and to avoid refineries' 

having to undergo two shutdowns within a year. However. the requested 

modification is too substantial to make on adoption. Therefor~. in a 

separate rulemaking the Department will propose an amendmenl to the 

rule to extend the deadline for compliance to meet the interim July 1. 

2014 sui fur in fuel standard (500 ppm) for up to one year. The 

amendment would allow a qualifying refinery to contllluc to sell fuel oil 

that does not meet the July 1. 2014 standard. and others to continue to 

"store. afTer for sale. sell. deliver or exchange in trade for use In Ne'" 

Jersey" otherwise non-complying fuel from that refinery. (NJ.A.C. 7:27. 

9.2(a).) Similarly. persons could use otherwise non-complying fuel from 

that qualifying refinery. (N.J.A.C. 7:27-9.2(b).1 The extenSIOn would 

apply to a qualifylllg refinery in any state. 

I J 8. COMMENT: The Department should amend N.JAC. 7:27-9 to 

provide for a variance to meet alternative sulfur content standards on a 

case-by-case baSIS. iI' fuel that meets the more stringent sui fur contelll 

standards becomes unavailable. This would provide an approprlat~

compliance mechanism in the event of supply disruptions. or if supplies 

fall short of forecasts in tenns of quantities. liming. geographic location. 

or other factors. (12) 

RESPONSE: There is no need to amend the sulfur in fuels rules at this 

time to handle transient or emergency situations thai result in the 

unavailahility of fuel oil. The Department does not envision future 

shortages or' fuel. since sufiicient ti~e is provided for adequate supplies 

and refilling capacity to provide ultra-low sulfur fuel to the marketplace. 

This is evidenced hy the currently available supplies of ultra-low sulfur 

fuel (www.eia.!!ov). slUdies of the future supplIes of ultra-low sulfur fuel 

at 41 N.J.R. 4162. and the comments offered in response to this rule 

proposal that adequate lead-time will ensure !lme!)' compliance:. 

119. COMMENT: The Department should amend NJ.A.C. 7:27-9 l(I 

allow' for other averaging times for the proposed sulfur dioxide emiSSion 

standards. In the proposed Tables 2A and 2B. the emiSSion limits arc 

expressed in pounds per miliion British Thermal Units (lhs1mmBTlIl 

However. no averaging period is specified for the Ih/mmBTl' sulfur 

NEW JERSE'l REGISTER. MONDAY. SEPTEMllER 20.20](1 (C!TE 42 "'.J.R. 2261 i 
EI\'VIRONME!'iTAL I'ROTECTlOi\ 

dioxide emission standard, The rules should be amended to specify an 

averaging period that is no shorter than one calendar day. (121 . . 

RESPONSE: Specific averaging time periods are not specllled m the 

previous. or adopt~d revisions t~. i;.J.A.C. 7:27-9. Where a rule does not 

specify an averaging lime. a maximum one-hour emiSSion rate IS typically 

used. along with a corresponding stack testmg met~od and reqUIrement. 

The appropriate averaging time is speCified dunng tne perrnlnmg pr0cess 

based on a case-byccase review for any control deVice proposed to 

comply with these alternate provisions. The USEPA's new one-hour 

sulfur dioxide NAAQS reinforces the use of a one-hour averagmg ume 

for S02 emission limits. 

120. COMMENT: The Department should amend N.J.A.C. 7:27-9 to 

allow for other sulfur dioxide emission limits during transient periods of 

operation. such as start-up and shutdown periods. For sources thai choose 

to use sui fur dioxide emission controls to meet the requirements of 

kJ.A.C. 7:27·Q instead of the sulfur in fuel coment standards. the 

Department should provide reasonable exemptions from the sulfur 

dioxide emission limits dunng unit start-up. shutdown or other transient 

periods. (12) 

RESPONSE: The Department provides provisions for start-up. 

shutdown, or other transient periods under the Title V perrmltmg 

provisions at N.J.A.C. 7:27-22.6(i). The Depanment will consider 

provisions for these transient periods during the permitting process lor 

any proposed control device. 

The 15 ppm sui fur in disriliate fuei standard 

l21 COMMENT: The Department should adopt the proposed 2016 

sul fur content standard of l5 ppm. Refiners currently consistently 

produce ultra-low sulfur diesel fuel at seven ppm with few. if any, 

mistakes that would cause there to be a large amount of off-spec fuel. 

Refmers can consistently make heating oil to the ultra-low or 15 ppm 

standard. (8) 

122. COMMENT: The Depanment should not adopt the proposed step 

from a sulfur content standard for distillate fuel of 500 ppm to a sulfur 

content standard of 15 ppm because. in the case of unexpected operating 

problems. a refinery's only alternative may be to reduce throughput or 

shutdown some ponion of the refinery operations. (2. l5. 27) 

123. COMMENT: The Department should not adopt the proposed step 

from a sulfur content standard for distiliate fuel of 500 ppm to a sulfur 

content standard of 15 ppm because having an outlet for fuels meeting a 

500 ppm sulfur content standard can prevent even larger impacts on other 

products. including loss of gasoline. jet fuel and transponatlon dIesel 

production. (271 

124 COMMENT: The Depanment should not adopt the l5 ppm sulfur 

in distiliate fuel standard because the existence of multiple sources of 

distillate in the region is likely to cause exceedances of the sulfur in fuel 

standards. A sudden catalyst breakthrough in manufacturing will result In 

small sulfur spikes. Any of several complications would require ongoing 

reprocessing. resulting in several inefficiencies. increased costs.. and 

limited supply across an already constrained manufacturing and lOgIstiCS 

channels. (23) 

125. COMMENT: The Department should adopt the proposed 

amendments to lower the sulfur content of distillate fuel oil to 15 ppm by 

2016 or earlier (5.8. 12.21. 22. 24) 

RESPONSE TO COMMENTS 121 THROUGH 125: The Department 

acknowledges the support for the sulfur content standard of 15 ppm for 

distillate fuel b\ 2016. Ultra-low sulfur fuel can be made consistentl~

\,vith small amo~nts of off·spe~ fuel that would need to be re-refined. The 

refiners' experience of operating their refmeries with minimal operatmg 

issues after implementation of the Federal rules to lower on-road and offroad diesel fuel proves that the \5 ppm sulfur content in fuei standard can 

be successfulI'. met with little disruption to refinery operations. [f an 

operational iss~e does anse. the refiners have the option to blend the offspec fuel into fuel used in the marine vessel market. or reprocessmg the 

fuel to meet thr more stringent standards. Also. until all outer zone. 

MANE-VLJ stales lower the ~ulfur content of distillate fuel to 15 ppm in 

2018. off-spec 15 ppm dIstillate oil could be sold In those states. or 

blended WIth higher sulfur fuel to meet a 500 ppm sulfur in fuel standard. 

as these states ;1ay stiil be allowmg a 500 ppm distillate fuel sulfur level 

until 2018. 

.\,.[)OPTJO\S 

A :'ill ppm sulfur content in distillate fuel standard is needed 

126. COMMENT: The Depanment should not adopt the IS ppm sulfur 

in disti Ilate fuel standard. but should sel the second phase of the reduclJon 

of sulfur in fuel [(1 50 ppm or a more reasonable standard. if the State 

does move to a sulfur content slandard more stringent than 500 ppm. This 

will ensure that fuel that does not meet the Federal ultra-low sulfur 

reauirements for diesel fuel can be placed Into an allowable. though 

lin;ited. cost-effective market. (2.6.7. IS. 16.23. 25) 

127. COMMENT: The Department should not adopt the proposed 15 

ppm sulfur content standard, but should instead repropose a SO ppm 

standard for distillate oil. Even a 50 ppm standard would impose a lesser 

burden than a \5 ppm standard. While it would nOI reduce the capital 

expenditure needed to produce the fuel. it would significantly reduce 

refinerv o[1erating costs and waste generation as the' catalyst would need 

to be ·ch~nged less frequently. The catalyst would onl~ need to be 

changed everv two or three vears. rather than annually. saving one refiner 

$2 million pe~ year and another between $0.6 and $l million. (7) 

128. COMMENT: Instead of adopting the proposed sulfur content 

standard of [5 ppm for the second phase of sulfur in fuel reductions. the 

Department should stay at 500 ppm and propose a different. less stringent 

level. such as 50 ppm. This could save the refining industry a lot of 

monev compared to adoption of a sui fur content standard of 15 ppm. The 

refin;ry operating costs are significantly lower with a 500 ppm sulfur 

content standard than a \ 5 ppm sulfur content standard for three primaf) 

reasons: longer catalyst life. lower hydrogen consumption. and product 

downgrade capability. Shutdowns for catalyst change-out results In lost 

economic opportunity. (2.7.23.27) 

129. COMMENT: The Depanment should not adopt the proposed 

amendments and repeal but should instead adopt a 50 ppm sulfur in fuel 

level. [I' the Department did adopt the rule With a 50 ppm sulfur in fuel 

standard. the same reasons that support maintaining a 500 ppm standard 

would still be applicable to this standard. but to some lesser degree. 

These reasons include having more markets to sel I the fuel and greater 

abil ity to place ofT-specification fuel. (27) 

RESPONSE TO COMMENTS l26 THROUGH 129: The Department 

evaluated the 50 ppm sulfur content standard versus the IS ppm sulfur 

content standard and determined that the 15 ppm sulfur content standard 

is more appropriate for the following reasons. 

The l5 ppm sulfur content standard is consistent with the MANE-VU 

agreement. with the recently passed legislation in Maine. New York and 

(onnecticut. and with the Federal regulations for suI fur content in on and 

ofT-road diesel fuel. The Depanment will gain additional Statewide 

reductions in sulfur dioxide from adopting a 15 ppm sulfur content in fuel 

standard. rather than a 50 ppm sulfur in fuel standard. The Depanment 

estimates that a 96 ton per year reduction in suI fur dioxide will occur 

annually from using a 15 ppm sulfur content fuel. rather than a 50 ppm 

fuel. More reductions in the ambient air leveis of sulfur dioxide and 

particulate will occur if surrounding MAN E-Vll States also adopt the 15 

ppm sulfur in distillate fuel standard. 

The \5 ppm suI fur content standard is consistent with the Federal 

Clean Air Act requirement to adopt reasonable measures for regional 

haze and fine paniculate. as discussed in the proposal Summary. (41 

N.J.R. at 4159.) New Jersey, by adopting the standard at 15 ppm. is 

carrying out the Federal requirement to adopt all air pollution control 

measures determined to be reasonable. 

A l5 ppm sui fur content fuel may lead to new. more cost-effective 

desiQ'ns of high efficiency condensing boilers or furnaces, reducing 

poll~tion and increasing fuel efficiency. One trade group noted that sulfur in 

fuel oil was the "real obstacle for equipment design." An ultra-low sulfur 

content standard is expected to lead to the design in the United States of 

high-efficiencv boilers and furnaces using less costly materials than needed 

with higher'sulfur content fuels. (hnp:/!\vww.biodieselmagazine.com! 

ar1lcle.jsp?anicle id=3937&g=&page=2.) Tms would lead to a more 

widespread use of high efficiency or condensing oil-fired furnaces. 

Lowenng the sulfur content of fuel oil to 15 ppm sulfur content wili 

also be adv;ntageous to the fuel 01 I distribution mdustf) and the furnace 

m<Jnufacturing i-ndustf)'. They would be able to market fuel oil as clean 

bummg as natural gas. The fuel oii distribution industf)' will benefit from 

having"identical st~ndards for sulfur in distillate fuels regardiess of use. 

(CITE ~2 \'..J.R. 2262\ \lEW JERSEY REGISTER. \10:\DA\, SEPTEMBER 20, 2010 

... 
ADOPTIO,\S 

from a storage and transportation perspective. A standard otha than 15 

ppm is inconsistent with the existing Federal standards for on and ofl~

highway vehicles and would be more costly to store and distribute. as ty,iO 

different sulfur content fue'ls would need to be handled and stored 

separately. If the transponation diesel fuel and Number 2 fuel oil have the 

same sulfur standards. they can be stored in the same tank. with the 

required dye added to the transponation diesel fuel only when the fuel is 

distributed. The issues with handling off-specification product are 

addressed in the Response to Comments 131 through 134. 

The Depanment's cost-benefit analysis in the proposal's Economic 

Impact (41 N.J.R. at 4J63) was based on the 20J6 sulfur content in fuel at 

]S ppm. This cost-benefit analysis showed that the amendments would be 

more beneficial to the health of New Jersey's population and the 

environment than it would cost industry to implement. Although a less 

stringent sulfur content standard of SO ppm would save the refining 

industry money on purchasing and disposing catalyst and on otherwise 

producing a IS ppm sulfur content compliant fuel. the ana'lysis showed 

that a 15 ppm sulfur content standard is cost effective. 

130. COMMENT: The Depanment should not adopt the proposed 

sulfur content standard for distillate fuel oil of ]5 ppm because 

implementation of this more stringent standard will create less-expensive. 

off-specification fuel oil. Implementation of the 15 ppm sulfur content 

standard will cause the downgrading of high quality distillate to less 

valuable product by stranding slightly off-spec material. (7} 

RESPONSE: There will be sufficient alternatives for the placement of 

off-specification fuel oil. These alternatives include blending or selling 

fuel for ocean-going vessels to the large marine fuel market in Ne\\ 

Jersey or sending the off-specification fuel for reprocessing. The marine 

fuel market comprised two to five percent of the distillate fuel and 87 to 

94 percent of the bunker or residual fuel sold in New Jersey in 2007 to 

2008. This market will continue to provide a repository for the 

disposition of off-specification distillate and residual fuel oil. The 

lowering of the sui fur content of marine fuel. used within 200 nautical 

miles of the United States coastline. by 20 J5 will also be a new outlet for 

the off-specification J5 ppm fuel. 

Pipeline interface issues with t 5 ppm fuel 

131. COMMENT: The Depanment should adopt a 50 pprn sulfur in 

distillate fuel standard instead of the proposed IS ppm sulfur in distillate 

fuel standard. The pipeline interface that creates the transition material 

between ultra-lOw sulfur diesel and higher sulfur jet fuel will result in of,[­

specification fuel. unless the Depanment adopts a less stringent sulfur 

content standard. such as 50 ppm. (2, 7, 15, 16. 25) 

J32. COMMENT: The Department should not adopt the proposed 15 

ppm sulfur in distillate fuel standard. but should keep the sulfur in 

distillate fuel standard at 500 ppm instead. Fuel coming from the 

interface of high sulfur jet fuel and ultra-low sulfur distillate after 

pipeline transfers could be used as home heating fuel if the standard for 

sulfur in fuel were set at 500 ppm. This fuei could not be used as a lower 

sulfur contentjet fuel because of other speci lications that the jet fuel must 

meet. (27) 

133. COMMENT: The Department should not adopt the proposed ]S 

ppm sulfur in distillate fuel standard because on just one pipeline system 

an estimated six million barreis of off~specification jt:t fuel/ultra-1m' 

sulfur diesel interface will be generated per year, adding a significant 

burden to the distributing and refining industry. Ofi~speciflcation fuei 

will be generated with every interstate pipeline receipt and wi]1 have no 

outlet. especially once the USEPA full) implements tht: ultra-Io\\ sulfur 

diesel program in 20 J 4. This off-specification product is being marketed 

as 500 ppm diesel or heating oil. with the maiorit; being distributed as 

heating oil. With the phase-out of fuel meeting the 500 ppm sulfur 

content standard. a 15 ppm sulfur content standard for heating oil would 

force the segregation of this interface material in tankage and Its 

transponing back to the refinery, where it would have to be re-relined to 

a lower sulfur content level. This will result in lost value. unnecessary 

lransponation costs, ineffective pipeline capacit;. and redundant refmer'y 

utilization (2.8,15. ]6.23.251 

134. COMMENT The Depanment should adopt the proposed 15 ppm 

sulfur in distillate fuel level because off-specification fuels or the pipeline 

imerface materials can be blended into hcavier oils or bunker fucl. (8! 

E\'\IRO\:'1E\TU PROTECTlO\ 

RESPONSE TO COMMENTS 131 THROUGH 134 The on~

specification matenal can be used in ocean-going vessels as marine rue 'I 

and a suitable market for these fuels exists in Ne\\ Jerse\. ()f1~

specification fuels or the plpelme interface materials can be blended Into 

heavier oils or bunker fuel. Given the a\'ailability and access to pons In 

and around New Jersey and the large number of marine vessels in those 

pons. a ready outlet for off-specification fuel exists. Th~ issue of off· 

specification pipeline interface material exists in the marketplace. as there 

are many differing sulfur content fuel, currently on the market. The 

establishment of a sulfur content standard for fuels that is consistent from 

use to use and from state to state may reduce pipeline interface issues. as 

a reduction in the number of fuels with differing sulfur content standards 

will occur. 

Comments on the Gonrnor's Executive Orders 

J35. COMMENT: The Depanment should not adopt the proposed 

rulemaking as it is not consistent with the Governor's Executive Orders 

of Januar) IS, 2010. Reducing the sulfur content standard to 15 ppm 

exceeds Federal requirements and the proposal must, therefore. include a 

cost-benefit analysis. (7) 

136. COMMENT: The Depanment should adopt the proposed 

amendments and repeal because it does not add red tape or additional 

paperwork requirements to business. (13, 19) 

J37, COMMENT: The proposal provided very little analysis of the 

cost-benefit of the additional reduction in the sulfur content standard 

from SOO ppm to 15 ppm and whether this step-down imposes the "least 

burden and costs to business:' in accordance with Governor Chris 

Christie's Executive Order 2, paragraph 3d. (7) 

RESPONSE TO COMMENTS 135 THROUGH 137: The Department 

performed a cost-benefit analysis, which it included in the Economic 

Impact (41 NJ,R. at 4160). The sulfur content standards for the fuels 

covered by this rulemaking are not covered by Federal regulation: 

therefore. the adopted amendments do not exceed a Federal requirement. 

The Department is adopting the amendments to meet several Federa] 

requirements, including requirements to attain all healtb standards for 

New Jersey's air for all pollutants, as discussed at 4] N.J.R. 415g New 

Jersey is required to include rules as part of the State Implemclll3tion 

Plan in order to ensure that Federal requirements for regional h,,?e and 

fine particulate are met. as discussed in the proposal Summar) (4 i N.J .R. 

at 4 I57 and 4159). While Federal law does not specifically requ.re the 

State to adopt this sulfur in fuels strategy. it does require it to naluate 

and adopt reasonable measures to meet progress goals for region"j haze 

and to attain all health and welfare standards. This measure was 

determined to be a reasonable air pollution control strategy [n the 

NESCAUM states and the Department as discussed in the prllposa! 

Summary. (4] NJ.R. at 4160.) The Department. therefore. is adopting 

this as part of its regional haze and fine particulate SIPs. 

The Department agrees with the commenters that the adopted rules do 

not add paperwork requirements upon the users of the oil or add ne\\ 

paperwork requirements upon the refiners. 

138. COMMENT: The Governor's Red Tape Revie\\ executive orders 

have raised potentially troublesome issues for the Depanment's 

rulemaking and enforcement process. Considering the economic impacts 

of environmental regulation is a fraught process. Even the best 

economists struggle to quantify environmental benefits in dollar' ten11S: 

their best efforts, with the benefit of hindsight, tend to underappreciatt 

environmental value at the time of quantification tragically and 

repeated I) . Economists struggle with correctly finding and vaiuing th~

extemal impacts of economic transactions, discount rates and contingent 

values for natural resources: most ecosystem services are nUl captured in 

market transactions and are thus of indeterminate vaiu~. There is simply 

no economically viable way for the Depanment to sa;, for exampk. that 

15 shopping malls are of equal value to New Jersey as a self-sustaining 

osprey population. 

Cost-benefit analyses of environmental regulation. when attemptcd, 

are invariably wrong. invariahl) non-confmnable and lnvariabl; 

minimize the benefit. while maximizing the cost. Including such COSlbenefit analyses in the regulatory process is an important decision for ani 

statute. and legislatures are well aware of the imponance of deciding on 

whether panicular legislation will impel or forbid such a process 

!\EW JERSEY REGISTER, MONDAY, SEPTEMBER 20. 201 Ii (GTE 42 :\.J.R. 2263) 
C\,VIRONMENTAL PROTECTI01\ 

Inappropriately applying cost-henelit analyses is a common and fmal 

mistake many levels of government make: one that ohen puts them on the 

wrong: end of an environmental lawsuit. 

While true benetit analySIS is probably not possible. only a highly 

trained economist ~an be expected to wade through analysis of contingent 

valuation. extemaiIues and discount rates. Reasonable analysis, let alone 

accurate analysis. IS not possible for a'layperson to produce. The 

commenter's understanding is that the Depanment has not used any 

particular economic theory to generate its benefits analysis. has no 

methodology to auantify benefits. has not used economists to review the 

effects of these rules and has only one economist on staff for the entire 

department. Although it is good that the Department concludes that its 

rules are .iustified hy their benefits. a qualified economist is likely tD find 

far greater benefit than the Department has. (14) 

RESPONSE: Governor Christie's Executive Order No.2 delineates 

"common sense principles" for rtilemaking that are intended to provide 

the "opponunity to energize and encourage a competitive economy to 

benetit business and ordinary citizens:' At section Ia. the Executive 

Grder directs all State agencies to solicit the advice and views of 

knowledgeable persons from outside of New Jersey State government. 

including the private sector and academia. in advance of any rulemaking. 

At section Id. the Executive Order directs State agencies to "employ the 

use of cost/henefit analvses. as well as scientific and economic research 

from other jurisdictio~s. including but not limited to the federal 

government when conducting an economic impact analysis on a proposed 

rule."' 

The Administrative Procedure Act (APA) at N.J .S.A. 52: 14B-23 and 

24 (P.L. 1995. c. 65. effective June 5. 1995. which codifIed the substance 

of Governor Whitman's Executive Order No. 27 (1994) into the APA) 

requires State agencies that adopt. readopt or amend State regulations that 

exceed any Federal standards or requirements to include in the 

ruiemaking document a comparison with Federal law. The analysis must 

include a cost-henefit analysis that "supports the agency's decision to 

impose the standards or requIrements and also suppons the fact that the 

State standard or reauirement to be imposed is achievable under current 

technology. notwiths'tanding the Federal government's determination that 

lesser standards or requirements are appropriate." Therefore. since [994. 

in accordance with State law. the Department has included a cost-henefit 

analysis In all of its rulemakings where the rules or standards exceed 

Federal law. 

The APA at N.J.S.A. 52: 148-4(a)2 requires State agencies to mclude 

in each rulemaking a "descriplJon of the expected socio-economic impact 

of the rule." The Office or Administrative Law's Rules for Agency 

Rulemaking implement the APA and require at N.J.A.C. 1:30-5.1 (c)3 that 

a notice of proposal include "an economic impact statement which 

describes the expected costs. revenues. and other economic impact upon 

governmental bodies of the State. and particularly any segments of the 

public proposed to be regulated." Each of the Depanment's rule 

proposals contall1s such a statement. 

As required by the APA and the Rules for Agency Rulemaking. the 

Department's rule proposals also contain statements of social impact. 

johs impact. agriculture industry impact. impact on small business 

(regulatory flexibility analysis): and statements addressing the proposed 

rules' impact on smart grO\vth and the cost of housing. The Department in 

addition includes an environmental impact statement. describing the 

imoact that its proposed rules will have on the environment. 

The Department acknowledges that it has not historically provided as 

much detail in its impact analyses as an economist might. The 

Depanment endeavors to employ a practical approach to its determination 

of the costs and benefits of its rulemakings. and necessarily relies to a 

certain extent on information developed hy other sources. For instance. 

the Department may adapt and tailor to the circumstances in New Jersey 

the economic analysis for a rule performed hy another state or the Federal 

government. In addilJon. the Department conducts informal and formal 

outreach to regulated communities. environmental interest groups. the 

L.S. Environmental Protection Agenc\. other Federal and State agencIes. 

a£encies of other states. and the general public in the early stages of 

rUlemaking. This IS particularl) the case for larger. more complex 

ruiemakings. The Department will publish notice on its website or in the 

New .Ierse\ Register. and/Or use mail and electronic mail to known 

\[)OI'TlO,\S 

stakeholders. proVIding a description oJ' the rules anticipated to k 

changed and the t1meframe and means by which input will be gatheree. 

for instance. at informal meetings or by written submiSSions. or hoth 

Through outreach such as this. the Depanment obtaInS inJomlation on 

possible costs and benefits of rules that it IS developing. as well as 

suggestions for the approach the Depanment shOUld take in pursuing Its 

regulatory goals. 

Through the impact statements and Federal standards analyses Jor its 

rulemakings. the Department attempts to identifi- the anticipated costs 

and benefits thaI will result from the proposed rules. including reasonah!\ 

foreseeable indirect or secondary costs and beneiits. The Department 

does attempt to identify and describe. even if it cannot always quantify in 

dollar terms. the proposed rules' costs and beneilts in order to provide the 

puhlic with as complele a picture and/or rationale as possible regarding 

the positive and negative economic impacts of the rulemaking. 

Going forward the Depanment anticipates looking 10 the scientific and 

economic research of other jurisdictions and conducting advance 

outreach for its rulemakings \Il order to obtain enhanced insight into the 

costs and benefIts that will flow from its rules and help accomplish the 

regulatory balance contemplated by Governor Chnstie's Executive 

Orders. 

139. COMMENT: The Governor's concern that Department standards 

may. in some instances. exceed Federal standards is misplaced. The 

Federal law in most environmental matters acts as a basement. helow 

which states cannot fall. but above which they may build. The Congress 

and the USEPA are aware that they are setting national minimums. Just as 

they are aware that the states are very different. A minimum that makes 

sense in a relatively unpopulated state such as Montana. will not 

necessarily make sense in New Jersey. the most densely populated state 

in the country. A minimum in a relatively virgin state such as Oregon will 

not necessarily make sense in New Jersey. a state with legacy of toxic 

industrial pollution. In this context. it is not oniy appropriate that New 

Jersey's regulations would exceed Federal standards in a numher of 

instances. it is essentially mandatory. Any state' s environmenta', 

protection agency that is doing its Job will find instances where the 

peculiarities of the particular state make federal regulation inadequate. 

NeVi Jersey's regulations, because of the State's population density. 

industrial legacy and proximity to several huge metropolitan areas. 

should probably exceed Federal standards in many and diverse ways. The 

Depanment is uniquely positioned to use Federal standards as a starting 

point to create regulations that specifically address the unique problems 

facing New Jersey and its citizens. The Department. therefore. should not 

hesitate to exceed Federal standards when the health. safety. and welfare 

of New Jersey's citizens and its environment require it. (14) 

RESPONSE: The APA at N.J.SA 52:148-23 and 24 requires State 

agencies to include in their Federal standards analvsis a discussion of the 

policy reasons that support the agency's decision to impose a standard 

that is more stringent than a comparable Federal standard. ThIS is in 

addition to the cost/benefit analysis that the APA requires. as discussed in 

the immediately preceding response. The Legislature stated. at N.J.S.A. 

52:14B-22. "[i]t is the declared policy of the State to reduce. wherever 

practicable, confusion and costs involved in complying with State 

regulations. Confusion and costs are increased when there are multiple 

regulations of various governmental entities imposing unwarranted 

differing standards in the same area of regulated activity. It is in the 

public interest that State agencies consider applicable federal standards 

when adopting, readopting or amending regulations with analogous 

federal counterparts and determine whether these federal standards 

sufficientiy protect the health. safety and welfare orNew Jersey citizens."' 

Governor Christie's Executive Order No.2. sectior, Ie. requires Stale 

agencies to "[d]etail and justify ever) instance where a proposed rule 

exceeds the requirements of federal law or regulation. State agencie~

shall, when promulgating proposed rules. not exceed the requirements of 

federal law except when required hy State statute- or in such 

circumstances where exceeding the requirements of federal law or 

regulation is necessary in order to achieve a New Jersey specific pubii~

policy goal."' This direcrive establishes a foctl~ and approach to the 

comparison with Federal law that the APA requires all State agencIes and 

the Department to conduct for rulemaking. 

(CITE .[! '\..J.R. 2264\ "'EW JERSEY REGISTER, MO'\DAl', SEPTEMBER 20. 2010 
ADOPTlO,\S 

As the commenter points out. the conditions and circumstances or 

Ne\' .Ierse) and its citizens can be unique to the State. Consequent!). 

both the APA and Executive Order No.2 acknmdedge that there will be 

times when it is absolutel) appropriate for the Department to promulgate 

standards that are more stringent than Federal standards. either because 

New .Ierse) la\\ so requires or because doing so is necessary in order to 

achieve imponant public policy goals for the State. 

140. COMMENT: There arIC probably many instances where 

Depanment procedures could be more clear. For example. Depanment 

fomls ma) hal'e increased in complexity over the years. some 

information may be requested redundantly and some permits could. 

perhaps, be merged. The Depanment. however. should keep in mind that 

it is not a "Depanment of Environmental Pennitting:' and its miSSIOn 

should not be to smooth the path from developmental pennit applications 

to development. Central to the idea of protection is that one must often 

say ··no.·· The Depanment should not look at ··process improvement" as 

making II easlerto get to ··yes:· (14) 

RESPONSE: The Depanment undenakes various effons to assist the 

regulated community in the permit application and review process. For 

example, in accordance with N.J.S.A. 13:1D-III. the Depanment 

develops and makes available technical manuals relating to its various 

environmental permits. The Depanment also provides checklists. 

identifying the application steps and submissions required under the 

respective permitting program rules. Checklists and applications are made 

available through the Department"s website. The Department often 

assigns case managers [Q assist applicants with the permit process. and to 

coordinate permitting across various Depanment programs. 

The Department convened the Permit Efficiency Review Task Force in 

2008 and. in response to its recommendations (see http://www.state.n;.us. 

dep/pennittf/documents.html). has undenaken various initiatives to 

improve outreach for rulemaking and to streamline and improve the 

permit application and review process. The Department is committed to 

upgrading its information technology infrastructure to support electronic 

submission and processing of pernlit applications and associated reports. 

The Department is in the process of increasing its network capacity. and 

is accelerating its efforts to design and develop electronic permitting and 

reponing services. Recent efforts include. for instance. implementation of 

an electronic water use and transfer reporting program by the water 

supply program to facilitate data management. eliminate the use of paper 

forms. reduce data errors. improve tracking and reporting of data. and 

make data available in a more timely fashion. 

Process improvements that facilitate the issuance of pennits that are 

consistent with the applicable standards and that are issued in a 

coordinated and timely fashion are beneficial to the regulated community. 

the Depanment. and the environment. Streamlining permitting will 

conserve the resources of all involved and maintain proper focus on 

achieving substantive environmental protections. As the Permit 

Efficiency Review TaSK Force's recommendations and Govemor 

Christle·s Executive Orders recognize. the process of obtaining a pernl1[ 

from the Depanment should not stand in the way of development that i, 

otherwise allowable under applicable environmel1\al protection la\\ and 

standards. 

141. COMMENT: Although many of the State's environmental 

regulations could be improved. the Department ought not curtail any 

protections or delay any rules based on the Govemor's Executive Orders. 

(14) 

RESPONSE: The Department. in order to inform the reviews of 

pending proposed rules being conducted b) the Depanment and the Red 

Tape Re\'ie\.\ Group established under Executive Order No.3 Issued b) 

Governor Christie on January 20. 2010. extended or reopened the public 

comment penod for cenain pending proposals. (See Notice of extension 

or reopening of COlllmel1\ periods and informal stakeholder meetmgs for 

pending Department of Environmellla\ Protection proposals suspended 

under Executi\'e Order No. J (20 I 0 I. http:/rwww.nj.gov/der/rules; 

notices.html. 42 KJ.R. 642(a).) In accordance with Executive Order Nos. 

I and 3. the Red Tape Review Group's task is. among other things. to 

examine various proposed administrative rules and regulatioll5 b) a 

number of State agencies prior to their adoption and make detailed 

recommendations to the G0\'ernOr to rescind. repeal or amend those rules. 

Based on those recommendations. the Commissioner or the Depanment 

E\'\'I ROI'i'v1 E\'TAo L PIWTECTI 0'\ 

\I'ill deternline whether or not to proceed wilh adoption or amendment ot 

the Depanment" s affected proposals. 

The Executive Orders and the Red Tape Revie\\ process expr~sslv

recognize that some rules must be adopted in order to prevent an ad\·ers·e 

impact to public safety or security or public health: pre\enl prejudice [0 

the State with regard to receipt of funding or certifications from the 

Federal government; allo\\ State agencies to exercise their essen\lal 

powers. duties and functions: and compl) with any judicial deadline. 

Rule proposals that would result in such adverse impacts if adoption were 

delayed therefore were not suspended. Executi ve Order No.2 also directs 

State agencies to implement the "common sense principles· in all 

rulemaking while keeping in mind the core missions of the agency: public 

health. safety. wei fare and the environment: and the agenc~" s underlylllg 

regulatory objectives. In determining whether to proceed with its rule 

proposals and for all future rulemaking. the Depanment will necessarily 

take all of these factors into consideration. 

142. COMMENT: The Department·s notice and comment procedure. 

the informal stakeholder process. and the Red Tape Review Group 

process created by Governor Christie· s Executive Order No.2 do not 

comply with the rulemaking reguiremems of the New Jersey 

Administrative Procedure Act (APAI. Web posting and reliance on the 

authority of Governor Christie's Executive Order Nos. I through 3 cannot 

supersede or replace APA requirements. All 12 proposals were proposed 

pursuant to and in accordance with the API'. requirements. The 

Depanment may not - after the fact - revise these procedures. (26) 

RESPONSE: As the commenter acknowledges, this rulemaking. as 

well as the other proposals to which the commenter referred. were 

proposed in accordance with the Administrative Procedure Act (APA). 

N.J.S.A. 52:14B-1 et seq. On January 20,2010. Governor Christie issued 

a number of executive orders. Executive Order No. 1 (EO I) suspended 

for 90 days more than 150 then-pending proposals of various New Jersey 

agencies. including 12 proposals of the Department. EO J states that one 

of the Governor· s priorities is to establish. under the direction of a Red 

Tape Review Group. a "commonsense" approach to the promulgation of 

rules. The commonsense principles are described in Executive Order No. 

2 (E02). and the Red Tape Review Group is established under Executive 

Order No.3 (E03). The purpose of the suspension was to afford the Red 

Tape Reviev. Group the opponunity to examine the suspended 

rulemakings and make recommendations as to those proposed rules it 

determines are "unworkable. overly-proscriptive or ill-advised" (see EO I, 

4th whereas clause), E01 directed that the suspension be undenaken in a 

manner consistent with APA rulemaking requirements. and specifically 

exempted from suspension any proposed rulemaking. for whi ch the failure 

to adopt would adversely impact public safety or security: adversely 

impact public health: prejudice the State with respect to receipt of monies 

from the Federal government or the ability to obtain any certifications 

from the Federal government: prevent the application of powers. 

functions and duties essential to the operations of the relevant State 

agency: or adversely impact compliance with any Judicial deadline. 

Both E02 and E03 stress transparency and the involvement of 

stakeholders and the public in agency rulemaking.. which is a fundamental 

tenet of the APA. Accordingly. the Depanmen" determined It was 

appropriate both to extend the ~f~rmal com~ent penod on its suspended 

proposals and to also hold stakeholder meetings to facilitate informal 

discussion, of tile rulemaklllgs in consideration of the purposes of the 

executive orders. 

On February 3. 2010. the Depanment fi led for pub lication in the Nev. 

Jersey Register a notice of the extension or reopening of the comment 

period on the 12 suspended rulemakings to March 15.2010. The notice 

appeared in the March 1. 2010. Ne\\ Jerse\ Register (see 42 N.J.R 

M2(a)). The Depanment posted the notice on its website on February ~.

201(1 

The notice provided an additional period for pubk commem on each 

of the rulemakings beyond that required by the APA. The noltce did nOl 

chamre the coment of the original proposals in any wa). While nOl 

precl~ding addiltona'i comment on any aspect of the pending proposals 

during the extended/reopened comment period. the Depanment sought 

throu~h the nOtice to focus any additional comments submitted on the 

purpo'ses of the rules reviev. set fonh in the executive orders. The 

Department also announced III the notice that it would be scnedulin;. 

NEW (CITE 42 !'\.J.R. 22651 JERSEY REGISTER. MONDA Y.. SEPTEMBER 20. 20]0 
ENVIRONMEl\TAL PROTECTION 

stakeholder meetings on the proposals and that the dates for the meetings 

would be rosted on the Department's website, The schedule of the 

stakeholder meetings was subsequently posted on the website on 

February 22, 20 I O. The firs! of the stakeholders meetings was held on 

March 2, and the las! on March II. 2010, 

The stakeholder meeting regarding this r-ulemaking is described above 

in the introducLOry seCllon of thiS adoption. Public comments for the 

administrative recoro were accepted \0 'WTiting during the original rublic 

comment period and during the additional comment period that ended 

March 15, 20 I0 As with any rulemaking, and as contemplated by the 

APA, the Department has reviewed, considered, summarized and is 

responding in this adoption to all formally submitted comments received 

during the enurety of the public comment period. In conclusion, DEP did 

not "revise the orocedures after the fact" but, rather. supplemented the 

statutorily reqUired ruiemaking procedures in order to facilitate public 

input into the review of the rules required by the executive orders. 

143. COMMENT: The Department's web post states the following: 

"[Note: The Department prefe's electronic submissions in order to 

facilitate timely review of comments to meet the time frames for action in 

the Executive OrdersT 

The time restriction (in other words, the timeframe for action pursuant 

to Executive Order Nos 1 through 3 and the Red Tape Review Group 

review process) cannot replace or supersede the requirements of the APA. 

The March 15 deadl ine is arbitrar: and not in accordance with APA 

requirements. (261 

R.ESPONSE: The Administrative Procedure Act prescribes minimum 

notice requirements to ensure that adequate opportUnity for public mput 

on a proposed rule is provided. As indicated in the Response to comment 

145 above, the proposals for which the Department extended or reopened 

the comment period for purposes of the review initiated by the executive 

orders satisfied the notice and ['ublic comment requirements of the APA 

at the time they were originaliy proposed, The notice provided an 

additional period for public comment on each of the rulemakings bevond 

the minimum required by the APA, The March 15,2010 close of the 

additional comment period was established so that comments related to 

the purposes of the executive orders would be received within the 90-day 

timeframe lending April 20) established by Executive Order No, 1 for the 

Red Tape Review Group to conduct its review of the suspended proposals 

so that It might thereafter make its recommendations. 

J44. COMMENT: The substantive requirements of Executive Order 

Nos. 1 through 3, particularly the requirements to conduct cost/benefit 

analysis and to consider cost/benefit analysis as a basis for regulator: 

decisions. is ultra vires and not authorized by either the APA or the 

enabling authorities pursuant to which each of the 12 rules were 

proposed, (26) 

RESPONSE: The Administrative Procedure Act requires that each 

proposed ruiemaking include a description of the expected SOCil'· 

eCQnomic impact of the rule, as well as a regulatory f1exibility analysis of 

impacts on small busmesses, a jobs impact statement, an agriculture 

industry impact statement, a housing affordability impact statement, and a 

smart growth development impact statement See NJ,S,A. 58:14B-4. See 

also the Rules for Agenc\ Rulemaking, NJ,A,C 1:30-5,1. In addition, 

the APA requires that a Federal standards analysis must be included m 

each proposal and adoption, See NJ,S,A. 52:148-23. and NJAC 1:30­

5.!. Neither the APA nor the enabling authority for this rulemaking 

preclude an analysis of the costs and the benefits of a proposed rule as 

part of the APA-required impact analyses. 

145. COMMENT: The "reopening" of the public comment period and 

retroactive application of new procedures, standards. and decision critena 

established b\ Executive Order Nos. 1 though 3 is ultra vires, nol 

authorized by iav,. and Inconsistent and in violation of law, This includes 

the APA requirements as wei! as the enabling statute for each ruie 

proposal. (26 i 

RESPONSE: As indicated m Drior Responses, the procedure followed 

for this ruiemaking, including the reopening of the comment penod to 

provide additional opportunity for publtc comment and the request to 

focus the additional public comments on the purposes of the rules review 

set forth in the executive orders, is consistent with the rulemaking 

requirements of the Admmistrative Procedure Act. Seeking additional 

public input on, for example. the potential costs and benefits of the 

ADOPT) Of\S 

ruiemakings m 0 more focused wa)' as contemplated bv the executive 

orders did not resu II in new rrocedures, standards, ond decision criteri a 

being imposed, Rather. the extended comment period and stakeholder 

meetings supplemented the statutorily required rulemaking procedures for 

public comment and participation in rulemaking The commenter has not 

explained how providing an opportunity for additional rubilC comment. 

or having the Department consider those additional comments, violates 

the APA or the enabltng statutes for this or an\ of the affected 

rulemakings. Consequently, the Department is na't able to further 

specifically address this aspect of the comment. 

146, COMMENT: The Department's application of the proviSions of 

Executive Order Nos. 1 through 3 to the subject rule pro['osals would 

violate the procedural and substantive requirements of Federal 

environmental laws and the delegation agreements under which NeVI 

Jersey implements Federal laws, TI1ese laws include, but are not limited 

to the Safe Drinking Water Act. the Coastal Zone Management Act. the 

Resource Conservation and Recovery Act (RCR..A.I, [he Clean Water Act. 

and the Clean Air Act The same violations anse by the Department's 

after the fact "reopening" of the public commem procedure, as part of 

which this comment is submitted, (26) 

RESPONSE: Several of the programs for which proposals were 

suspended under Executive Order No, I and for which the Department 

reopened or extended the comment period are administered by the 

Department in conjunction with equivalent Federal programs under 

independent State statutory authonty, as allowed by the applicable 

Federal statute, Others are programs that have been delegated to the 

Department by the Federal government, again in accordance with the 

applicable Federal statute. The Department's decision to allow further 

opportunity for public commem in order to obtam comments focused on 

the directives contained in the executive orders is not barred by the New 

Jersey Administrative Procedure Act and does not violate any Federal 

environmental law related to any of the Depanmem' 5 programs that 

implement the affected rules, The Federal statutes and delegation 

agreements do not preclude the Department from seeking public input 

determined to be appropriate before taking regulator: action. Similarly. 

the Federal statutes and delegation agreements do not preclude the 

Department from considering the impacts of the rulemaking on the 

regulated public for purposes of determining the best way to implement 

the required standards, 

147, COMMENT: The "reopening" process and the provisions of 

Executive Order Nos, I through 3 violate Federal funding agreements and 

the National Environmental Partnership Performance Agreement 

(NEPPS). The Department may not substitute the proviSions of the 

Executive Orders and the Red Tape Review Group review process for the 

requirements of Federal law, regulation and funding agreements. (26) 

RESPONSE: Federal funding agreements and the National. 

Environmental Partnership Performance Svstem (N EPPS) do not 

establish requirements for the rulemaking pro~ess. NEPPS has two major 

components, the Performance Partnership Agreement (PPA) and the 

Performance Partnership Grant (PPG). The f'PA focuses mainly on 

activity commitments that the Department makes to earn the overall PPG 

from the l!,S, Environmental Protection Agenc). While some of the 

commitments may relate generally to the develDpment of rules and 

expected timeframes, neither the PPA nor PPG deals With the procedures 

for rulemaking, Accordingly, the PPA and PPG do not preclude the 

Department from seeking and considering public comments related to the 

purposes of the rules review set forth in the executive orders. 

148. COMMENT: Based on the concerns eXDressed by the commenter 

in Comments 147 through 153 above, the Department ;hould withdraVl 

this sham "reopening of the public comment process." This "reopening" 

process is not in compliance with procedural notice/comment 

requirements of applicable law, (26) 

149, COMMENT: The "common sense principles," standards, critena, 

and informal process established by Executive Uruer Nos. I through j are 

not authonzed by law. can have no legally binding effec:, and exrressly 

violate State and Federal law. Accordingly, this "proposa!" must be 

withdrawn. (26) 

RESPONSE TO COMMENTS 148 AND 149: As explained in the 

Responses to Comments] 45 and 146 above. the Department's actions to 

(CITE 42 :\..J.R. 22661 :\EW JERSEY REGISTER, VIONDA Y. SEPTLvlBER 2(), 2010 
ADOPTIO:\S 

propose and adopt this rulemaking meet the requirements of the APA. 

and do not violate the enahiing statutes or applicable Federal \all. 

150. COMMENT: The "Red Tape Reviell" process is an infonnal 

process that is not on the record. This process is not transparent and not 

authorized b) law. It ma) not be considered or reiied upon in any way for 

final agency regulatory decisions regarding the subject rule proposals. No 

in formation considered or decisions reached during that process ma) he 

considered as pan of the administrative record of the subject rule 

proposals. and none of it can be relied on as a basis for linal regulatory 

decisions b) the Departmenl. (26) 

151. COMMENT: The stakeholder process announced for this 

proposal is an infonnal process that is not on the record. This process is 

not transparent and not authorized by la"'. It may not be considered or 

relied upon in any way for fmal agency regulatory decisions regarding the 

subject rule proposals. No information considered or decisions reached 

during that process may be considered as part of the administrative record 

of the subject rule proposals. and none of it can be relied on as a basis for 

final regulatory decisions by the Depanment. The Depanment should 

withdraw this proposal and abandon this process. (26) 

RESPONSE TO COMMENTS I SO AND 151: As indicated in the 

Response to Comment 145. the process followed by the Department in 

this rulemaking. including the additional public comment period. meets 

the requirements of the Administrative Procedure Act. The 

extended/reopened comment period and the. informal stakeholder 

meetings were intended to facilitate receipt of additional public input on 

the \ 2 Depanment proposals suspended under Executive Order No. 1 in 

consideration of the purposes of the executive orders as enumerated 

therein. The notice extending and/or reopening the comment period on 

the suspended rulemakings speci fically noted that the stakeholder 

meetings were not public hearings and that testimony on the proposals 

was not going to be accepted at them. The stakeholder meetings were 

open to all. and their purpose was to facilitate informal discussion of the 

rulemakings. The stakeholder meeting regarding this rulemaking is 

described above in the introductory section of this adoption. Public 

comments for the administrative record were accepted at the formal 

public hearing. and in writing during the original public comment period 

on each of the proposals. and in "'Titing during the additional comment 

period that ended March 15. 2010. As with an) rulemaking. and a, 

contemplated by the APA. the Depanment has reviewed. considered. 

summarized and is responding in this adoption to all fOnllally submitted 

comments received during the entirety of the public comment period. 

Federal Standards Statement 

Executive Order No. 27 (1994) and N..I.S.A. 52:14B-l et seq. (P.L. 

1995, c. 65) requIre State agencies that adopt. readopt or amend State 

regulations that exceed any Federal standards or requirements to include 

in the rulemaking document a Federal standards analysis. No Federal la\\ 

establishes standards or requirements regarding the contents of sulfur in 

the fuel oil regulated b) N..I.AC 7:27-9 Although the Department's 

sulfur content standards for fuel oil are Federall) enforceable as part of 

Nel'l Jersey's State Implementation Plan. the amendments to N..J.A.C. 

7:27-9.2 and	 repeal of N..l.A.C. 7:27-9.5 are not promulgated under the 

authorit) of. or in order to implement. comply with or panicipate in an) 

program established under Federal la'" or under a State statute that 

incorporates	 or refers to Federal la\l, Federal standards or Federal 

requirements. Moreover. there is no comparable Federal standard 

exceeded by this rulemaking and no Federal regulatory scheme that might 

be perceived to be duplicated or overlapped by this rulemaking.. 

Accordingl). Executive Order NO.2 7 (1994) and P.L. 1995. c. 65 do not 

require a Federal standards analysi,. 

Full text of the adopted amendments follows [additions \0 the 

proposal indicated in boldiace \lith asterisks *thus*): 

SUBCHAPTER 9 SULFUR IN FUEL.S 

7:27-9.2 Sulfur content standards 

(a) No person shall store. ofier for sale. sell. deiiver or exchange in 

trade*,* for use in Ne\\ Jerse\'*,* tl.lel that contains sulfur in excess of the 

appitcable pans per million by weight set fonh in Tabies lA and IB of 

thi, section. except as provided in Ic). (dt and lei belol",. Fuel stored in 

E\\"IRO:\\1['\TAL PROTECTlO\ 

Ne\\ Jersey that met the applicable ma:-.:imum sui fur content standard of 

Tahles IA or 1B of this section at the time the fuel was stored in "ell 

Jersey may be stored. offered for sale. sold. delivered or e:-.:changed 111 

trade*!' for use in New Jersey*.* after the effective datt olthe applicable 

standard in Table IB 

(b) NCI person shall use fuel that contains sulfur in excess of the 

applicable pans per million hy weight set fonh in Tables lA and 1B of 

this section. except as prol'ided in (c l. (d) and (e, belo\\. Fuel stored in 

New Jersey that met the applicable maximum sulfur content standard of 

Tahles 1A or 1B of this section at the time it was stored in New Jersey 

may be used in New Jersey after the operative date of the applicable 

standard in lB. 

TABLEIA 

MAX1MUM ALLOWABLE SULFUR IN FUEL EFFECTIVE 

THROUGH JUNE 30, 2014 

Classification Parts per Million hI' Wei2"ht (ppm! 

Typical by SSll 

Grades of Viscosity at Zones 1 Zones 4 

I Fuel Oil 100°F 

'1 

Zone 1 &5 Zone 3 &6 

~o 2 &	 I Less th an or 3.000 I 3.000 2.00CJ 2.000 

I lighter I equal to 45. I I 

i	 . including gases I I I I 

3.000 'I 20,000 i 7.000 3.000 

bUI less than ro 4	 

I 

Greater than 45 

I 

145 I I I I 

I I Equal to or 20.000 I r~ 10.000 5.000 I 3.000 5. NO.6 

& I heaVIer	 grealer than 

145 

TABLEIB 

MAXIMUM ALLOWABLE SULFUR IN FUEL EFFECTIVE 

JULY 1.2014 ANDJULY 1.2016 

i 

I 

Classification Parts per Million bl'" eight (ppm) I 

I 

Typical by SSl i 

II Grades nf 

Fuel Oil 

Viscosit)' at 

100°F I Zone 

1 

Zones 

2&S Zone 3 I 

I 

Zones 

4&6 

I 

i 

I 

I , 

No. 26.: 

lighter 

Less than or 

equal to 45. 

500 500 500 

I 

SOCI I 

! 

I 

i 

IeffectIve includIng gases 

i Jul) 1. 

2014 , 

I 

I 

I 

I 

through 

Junt 3Q. 

2(16) 

NO.26.: Less than or 15.0 \5.0 15.0 15.0 

Ilghrer equal to 45. 

(effective Il1cludll1g. gases 

I .Iulv I. I 

'I 2016\ I 1 I 

I No -+ Grearer than -+, I 2.500 2.500 2.500 2.500 

I I effective hut less than 'I 

.lull' I. 145 

I 20i4 i 

II No 5. No I Equal to or 5.001) 5.000 5.000 3.000 

0& greater than 

heaVIer 145 

I effectIve 

.lull' i. 

20]4 '1 

1\iEW (CITE 42 !\.•J.R. 2267) .JERSEY REGISTER. MO'\'DA\. SEPTEVlBER 20,2010 
ENVIRONMEl\'TAL PIWTECTIOi\ ADOPTIONS 

Ie) The provisions of lal and (bi above shall not apply to fuels whose 

combustion carries sulfur dioxide emissions from any stacK or chimne\ 

intO the outdoor atmosphere that are demonstrated to the Depan:ment as 

not exceedll1g. at anv ume. those quantities of sulfur dioxide expressed in 

pounds per l~()OO.OOO BritIsh Thermal Units (BTU I gross heat input. set 

forth in Tables 2A and 2B of this section. . 

TABLE 2A
 

MAXIMUM ALLOWABLE SULFUR DIOXIDE EMISSIONS
 

EFFECTIVE THROUGH JUNE 30. 2014
 

Typical 

Grades 

of Fuel 

Oil 

Classification 

hy SSt' 

Viscosity at 

100°F 

SO, Emissions (Ibs per million BTlI) 

! I 

Zones I 

Zones 4 

Zone 1 2&5 &6 

NO.2&: Less than or 0.32 0.32 0.21 0.21 

lighter equal to 45. 

mcludmg gases I 

No Greater than 45 2.10 0.74 0.32 032 

I 

but less than 

14 ) I I NO.5. 

NO.6&: 

HeaVier 

Equal to or 

greater than 145 

2.10 1.05 0.53 I 

I 

I 

I 

0.32 

TABLE 2B 

MAXIMUM ALLOWABLE SULFUR DIOXIDE EMISSIONS
 

EFFECTlVEJULY l. 2014ANDJULY L 2016
 

C1assi fica tion SO, Emissions (Ibs per million BTlI) 

Typical oj'SSll 

Zones Zones 

Fuel Oil 100°F 1 

Grades of Viscosity at Zone 

2&5 4&6

NO.2 & Less than or 0.0530 0.0530 0.0530 i "0530 lighter equal to 45.
 

(effective mcludmg gases
 

July 1.
 

2014
 

through
 ! June 30.
 

2016\ I .
 

i I i 

NO.:' & Less !000160 I than or 0.00160 1000160 0.00160 

lighter equal to 45. 

(effective including gases I I 

julv I. I I 

20J6! I 

No I 4 Greater than 45 0.260 I 0.:'60 0.260 0.260 

(effective but less than 

i .Iulv L 145 I

I 

i 20i41 i 

NO.5. No. Equal 10 or 0530 0.530 0.530 0.320 

b!\: greater than 

HeaVier 145 

I effective 

.Iuiy !. 

I 20141 

(d) The provisions of (al and Ib) above shall not apply to fueis 

inCluded in an alternative emission conlfoi pian based on a mathemalJcal 

comb1l1ation approved b," the Department. Application for such approval 

shall be made 10 the Department in writing and must include: 

1. Certification that all source operations to be included In the 

mathematical combination are under the control or. or operated by. one 

person: 

2. Cenification that the total sulfur dioxide emissions trom the 

mathematical combination during each 24-hour Deriod will not exceed the 

quantity of sulfur dioxide expressed in pounds per million BTl' gross 

heat input set forth rn Tables 2A and 2B of this section: 

3. Certification that the total sulfur dioxide emissions from the 

mathematical combination during each 24-hour ncriod will not exceed the 

maximum total weight of sulfur dioxide that all the sources In the 

mathematical combinalJon were allowed to emit at the time nf applying: 

4. Identification of each fuel burning unit and stack to be mcluded in 

the mathematical combination: 

5. Identification of the grades of fuel to be burned in each unit the 

maximum sulfur content of each fuel to be burned in each unit. the 

maximum gross heat input rate for each unit. the higher heating value of 

each fueL and the annual fuel use and operating hours per year for each 

unit: 

6. An application for a pennit for any fuel burning unit that must be 

altered or for any fuel burning unit in which fuel is to be burned haVing a 

sulfur content in excess of the applicable limits specJfied in Tables IA 

and 1B of this section. The pennit may be a pre construction pennit and 

cenificate under N.J.A.c. 7:27-8. an operating pennit under N.J.A.c. 

7:27-22 or a facility-wide permit as defined at N.J.A.C. 7: IK-l.5: 

7. A demonstration by air quality simulation modelling acceptable to 

the Department. including aerodynamic downwash modelling. unless 

waived in accordance with the provisions of 1\.1.A.C. 7:27-9.4. that 

increases in air contaminants resulting from use of the alternative 

emission control plan wi II not cause any ambient air quality standard to 

he exceeded, or cause any allowable prevemion of significant 

deterioration ambient air increment as established by the United States 

Environmental Protection Agency to be exceeded: and In areas where an 

ambient air quality standard is already exceeded. will not cause an 

increase in ambient air concentrations greater than the threshold increases 

set forth in Table I ofNJAC. 7:27-18.4: 

8.-9. (No change.)
 

Ie) (No change.)
 

(f) If the identified grade of fuel oil does not agree with the 

classiEcation by viscosity set forth in Tables lA and IB <lnd TablES 2A 

and 2B. then he allowable parts per million sulfur by weight shall be 

detennined by the viscosity classification. 

(a) 

CLIMATE CHANGE AND ENVIRONMENTAL 

MANAGEMENT 

Notice of Extension of Chapter Expiration Date 

Pollution Prevention Program Rules 

N.J.A.C.7:1K 

Take notice that the Department of Environmental Protection 

informed Governor Chris Christie that the Pollution Prevention Program 

Rules. N.J.A.C. 7:IK. were scheduled to expire on August 24. 2010. in 

accordance with N..I.S.A. 52:\4B-5.1. 

The rules are promulgated under the authority of the Pollution 

Prevention Act. N.J.S.A. 13:10-35 et seq.. and set forth requirements to 

be followed by priority industrial facilities in the development and 

implementation of Pollution Prevention Plans. Pollution Prevention Pian 

Summaries and Pollution Prevention Plan Progress Reports. The 

Department is commencing a stakeholder process to evaluate tnis 

program. and to consider whether and how these rules must be reVised . 

By the authority vested in him pursuant to N.1.S .A. 52: 14B-5.1 d. 

Governor Chris Christie. on August 24. 2010. directed tnat the expiration 

date for N.1.A.C. 7: 1K be extended from August 24. 20 I0 to February 24. 

2012. 

(CITE .\2 --;.J.R. 2268) --;EW JERSEY REGISTER, '10NDA Y, SEPTf"IBER 20, 20]0