Summary and Analysis of the 2008 

Nonroad Diesel Fuel Pre-Compliance 

Reports 
Summary and Analysis of the 2008 


Nonroad Diesel Fuel Pre-Compliance 


Reports


Transportation and Regional Programs Division 

Office of Transportation and Air Quality 

U.S. Environmental Protection Agency 

NOTICE 

This technical report does not necessarily represent final EPA decisions or 

positions. It is intended to present technical analysis of issues using data 

that are currently available. The purpose in the release of such reports is to 

facilitate the exchange of technical information and to inform the public of 

technical developments. 

EPA420-R-08-017


September 2008

Table of Contents 

I. Executive Summary................................................................................................................................................i
 

II. Nonroad Diesel Program Overview ................................................................................................................1
 

III. Nonroad Pre-Compliance Reporting Requirements ........................................................................................3
 

IV. NRLM Summary Data ....................................................................................................................................4
 

A. Nationwide Analysis .......................................................................................................................................4
 

1. Refineries and Importers – Numbers and Production.................................................................................4
 

2. Projected Credit Generation and Use .........................................................................................................7
 

3. Project Scope and Timing...........................................................................................................................9
 

4. Small Refiner Options ................................................................................................................................9
 

B. PADD Analysis ........................................................................................................................................10
 

1. PADD 1 ....................................................................................................................................................13
 

2. PADD 2 ....................................................................................................................................................14
 

3. PADD 3 ....................................................................................................................................................15
 

4. PADD 4 ....................................................................................................................................................16
 

5. PADD 5 ....................................................................................................................................................17
 

C. Comparison of 2007 and 2008 NRLM Pre-Compliance Reports..................................................................18
 
I. Executive Summary 

I. Executive Summary 

Any refiner or importer planning to produce or import nonroad, locomotive, or 

marine (NRLM) diesel fuel containing 15 ppm sulfur or less after June 1, 2010 is required to 

submit to the U.S. Environmental Protection Agency (“EPA” or “the Agency”) annual precompliance reports. Reports are due annually by June 1 from 2005 through 2011 under the 

diesel sulfur regulations. This report summarizes the results of refiners’ June 2008 precompliance reports. 

Refiners’ and importers’ nonroad pre-compliance reports must contain estimates of 

total highway and NRLM 15 ppm diesel fuel and total highway and NRLM 500 ppm diesel 

fuel produced or imported from June 2010 through December 2014. For those refiners and 

importers planning on participating in the credit trading program, the reports must contain a 

projection of how many credits will be generated and/or used by each refinery or importer. 

The pre-compliance reports must also contain information outlining each refinery’s timeline 

for complying with the 15 ppm sulfur standard and provide information regarding 

engineering plans (e.g., design and construction), and capital commitments for making the 

necessary modifications to produce 15 ppm NRLM diesel fuel. 

The 2008 nonroad pre-compliance reports showed that: 

- 120 refineries are planning to produce 15 ppm diesel fuel by June 1, 2014 

- 20 refineries are either undecided as to their plans, or are choosing to produce 

only heating oil by June 1, 2014 

- refiners have projected an increase in diesel fuel production from 2010 through 

2014 

- refiners are taking advantage of the flexibilities offered by the regulations (18 

refineries said they generated early high sulfur credits in 2006 and 2007, 14 

refineries plan to generate early 500 ppm credits in 2009 and 2010, small refiners 

are utilizing all of the options available to them) 

- total highway and NRLM diesel fuel (“total diesel fuel”) production and 

importation in each Petroleum Administration for Defense District (PADD) is 

projected to grow from 2010 through 2014 

-	 refiners project a slight decrease in expected production and importation of total 

diesel fuel beginning June 1, 2010, compared to the 2007 nonroad precompliance reports. 

Many refiners have developed firmer plans to produce 15 ppm NRLM diesel fuel by 

June 1, 2010 than what they indicated in their 2007 pre-compliance reports, although these 

plans are still subject to change. EPA expects that next year’s nonroad pre-compliance 

reports will contain more definite information on refiners’ plans to produce 15 ppm NRLM 

diesel fuel by June 1, 2010. 

i 
II. Nonroad Diesel Program Overview 

II. Nonroad Diesel Program Overview 

The Nonroad Diesel final rule (69 FR 38958, June 29, 2004) contains a twostep approach to reducing the sulfur content of nonroad, locomotive, and marine 

(NRLM) diesel fuel from uncontrolled levels down to 15 ppm. Beginning June 1, 

2007, refiners and importers were required to produce or import NRLM diesel fuel 

with a maximum sulfur content of 500 ppm. Beginning June 1, 2010, refiners and 

importers are required to produce or import nonroad (NR) diesel fuel with a 

maximum sulfur content of 15 ppm. Beginning June 1, 2012, refiners and importers 

are required to produce or import locomotive and marine (LM) diesel fuel with a 

maximum sulfur content of 15 ppm. 

The rule includes provisions for refiners and importers to generate credits for 

early NRLM diesel sulfur reduction efforts. “High sulfur” credits could be generated 

for early production of 500 ppm NRLM diesel fuel between June 1, 2006 and June 1, 

2007. Similarly, “500 ppm” credits may be generated for early production of 15 ppm 

NRLM diesel fuel between June 1, 2009 and June 1, 2010. “High sulfur” credits 

could be used to comply with the 500 ppm NRLM standard beginning June 1, 2007, 

while “500 ppm” credits could be used to comply with the 15 ppm NR standard 

beginning June 1, 2010 and the 15 ppm LM standard beginning June 1, 2012. For 

both high sulfur credits and 500 ppm credits, one credit is equivalent to one gallon of 

diesel fuel that meets the respective standard earlier than required. In addition, “high 

sulfur” credits can be converted into “500 ppm” credits for use in 2010 and later. 

NRLM sulfur credits may be transferred nationwide. No credit trading area 

restrictions exist such as those found in the Highway Diesel rulemaking. 

Small Refiner Flexibilities 

Additional compliance flexibilities are provided for small refiners in the 

nonroad diesel sulfur regulations. The criteria for qualification as an NRLM small 

refiner are similar to those under the Gasoline Sulfur and Highway Diesel rules. To 

qualify as “small”, a refiner must: 1) process NRLM diesel fuel from crude oil; 2) 

employ no more than 1,500 people corporate-wide, based on the average number of 

employees for all pay periods from January 1, 2002 to January 1, 2003; and, 3) have a 

corporate crude oil capacity less than or equal to 155,000 barrels per calendar day 

(bpcd) for 2002. 

The small refiner relief options provide additional time for compliance and, 

for small refiners that choose to comply earlier than required with the NRLM 

requirements, the option of either generating diesel fuel sulfur credits or receiving a 

limited relaxation of their gasoline sulfur standards. These small refiner options are 

described in more detail below. 

1
 
II. Nonroad Diesel Program Overview 

Option 1 – Delay 500 ppm NRLM production 

This option allows approved small refiners to delay compliance with the 

NRLM diesel fuel sulfur standards as follows. Instead of a 500 ppm NRLM 

compliance date of June 1, 2007, small refiners have a compliance date of June 1, 

2010. Production of high sulfur (greater than 500 ppm) NRLM diesel fuel from a 

small refiner’s refinery between June 1, 2007 and June 1, 2010 is limited to 105 

percent of the refinery’s average NRLM diesel fuel production from 2003 through 

2005. 

Option 2 – Delay 15 ppm NRLM production 

This option allows approved small refiners to delay compliance with the 

NRLM diesel fuel sulfur standards as follows. Instead of separate 15 ppm NR and 

LM compliance dates of June 1, 2010 and June 1, 2012, respectively, small refiners 

have a single 15 ppm NRLM compliance date of June 1, 2014. Production of 500 

ppm sulfur NRLM diesel fuel from a small refiner’s refinery between June 1, 2010 

and June 1, 2014 is limited to 105 percent of the refinery’s average NRLM diesel fuel 

production from 2006 through 2008. 

Option 3 - NRLM Credit Option 

An approved small refiner may choose to use the NRLM Credit Option in 

combination with the NRLM Delay Option. The NRLM Credit Option allows 

approved small refiners the opportunity to generate nonroad diesel sulfur credits for 

early production of compliant NRLM diesel fuel. Small refiners could generate 

“High Sulfur” credits for producing 500 ppm NRLM diesel fuel prior to June 1, 2010. 

Small refiners could also generate “500 ppm” credits for producing 15 ppm NRLM 

diesel fuel between June 1, 2009 and June 1, 2014. These credits can be banked for 

future use or traded to another refiner. 

Option 4 - NRLM Diesel/Gasoline Compliance Option 

This option is available to small refiners that produce greater than 95 percent 

of their NRLM diesel fuel at the 15 ppm sulfur standard by June 1, 2006 and elect not 

to use the NRLM Credit Option described above. Production of 15 ppm sulfur 

NRLM diesel fuel from a refinery using this option must be at least 85 percent of the 

refinery’s 2003 through 2005 baseline NRLM production. Refiners choosing this 

option will receive a modest relaxation in their interim gasoline sulfur standards 

beginning January 1, 2004. Specifically, the applicable small refiner annual average 

and per-gallon cap would be increased by 20 percent for the duration of the interim 

program. The interim program is through 2010 if the refiner elected to extend the 

duration of its interim gasoline sulfur standards by producing 15 ppm highway diesel 

fuel by June 1, 2006, and through 2007 if the refiner did not produce 15 ppm highway 

2
 
II. Nonroad Diesel Program Overview 

diesel fuel by June 1, 2006. However, in no case may the per-gallon gasoline sulfur 

cap exceed 450 ppm. 

Other Flexibilities 

Unlike the Highway Diesel rule, the Nonroad Diesel rule did not provide any 

specific flexibilities for refineries located in the Geographic Phase-in Area (GPA). 

Refiners located in the Rocky Mountain States (ID, MT, ND, WY, UT, CO and NM) 

must comply with the 500 ppm and 15 ppm NRLM sulfur standards within the 

compliance deadlines discussed above. NRLM diesel fuel used in rural areas of 

Alaska (a GPA state in the gasoline sulfur rulemaking) is exempt from the 500 ppm 

NRLM diesel fuel sulfur standard beginning June 1, 2007, but must meet the 15 ppm 

sulfur standard beginning June 1, 20101. This fuel is regulated under a special rule 

for Alaska which was finalized in June 2006 (71 FR 32450, June 6, 2006). 

Transmix processors distill off-specification interface mixtures of petroleum 

products from pipeline systems into gasoline and distillate fuel and are considered 

refiners by EPA. Their simple refinery configuration does not make it cost effective 

for them to install and operate a hydrotreater to reduce distillate fuel sulfur content. 

As a result, they have been provided with additional flexibility to comply with the 

diesel sulfur standards. Transmix processors may choose to continue to produce all 

of their highway diesel fuel to the 500 ppm sulfur standard until 2010. They may 

further choose to continue to produce all of their NRLM diesel fuel as high sulfur 

diesel fuel until June 1, 2010, all of their NRLM diesel fuel to meet the 500 ppm 

sulfur standard until June 1, 2014, and all of their LM diesel fuel to meet a 500 ppm 

sulfur limit indefinitely. 

III. Nonroad Pre-Compliance Reporting Requirements 

The diesel sulfur regulations require that any refiner or importer planning to 

produce or import 15 ppm NRLM diesel fuel after June 1, 2010 must submit annual 

pre-compliance reports to EPA. The first pre-compliance report was due on June 1, 

2005 and subsequent reports are due annually through 2011, or until the production of 

15 ppm sulfur NR and LM diesel fuel commences, whichever is later. 

The pre-compliance reports must contain the following information: 

1.	 Any changes in the refiner's or importer's basic company or facility 

information since registration. 

2.	 Estimates of the average daily volumes (gallon) of each sulfur grade of 

highway and NRLM diesel fuel produced at each refinery or imported at each 

import facility. The volume estimates must include both fuel produced from 

crude oil and other sources for the periods of June 1, 2010 through December 

1

 Rural areas are defined as areas of Alaska not served by the federal aid highway system (FAHS) 

3
 
 III. Nonroad Pre-Compliance Reporting Requirements 

31, 2010, calendar years 2011-2013, January 1, 2014 through May 31, 2014, 

and June 1, 2014 through December 31, 2014. 

3.	 For refiners or importers expecting to participate in the NRLM credit 

program, estimates of the number of credits generated and/or used during the 

periods above. 

4.	 Information on project schedule by known or projected completion date (by 

quarter) for each stage of the project (strategic planning, frontend engineering, detailed engineering and permitting, procurement and 

construction, and commissioning and startup). 

5.	 Basic information regarding the selected technology pathway for compliance 

(e.g. conventional hydrotreating versus other technologies, revamp versus 

grassroots, etc.). 

6. Whether capital investments have been made or are projected to be made. 

7.	 An update of the progress in each of these areas. 

We recognize that the pre-compliance reports contain preliminary information 

and that final decisions on desulfurization plans may not have been made in all cases 

as of the reporting deadline. Accordingly, the information in this summary and 

analysis is based on the best available refinery information as of June 1, 2008. The 

information presented here will be updated with more current analyses as subsequent 

pre-compliance reports are received annually in 2009 through 2010. 

IV. NRLM Summary Data 

A. Nationwide Analysis 

1. Refineries and Importers – Numbers and Production 

According to the Energy Information Administration (EIA), 140 refineries 

reported producing either high or low sulfur (or both) distillate fuels in 2003. This 

reported production includes data from four refiner/importers that are located outside of 

the continental United States (in the U.S. Virgin Islands, Aruba, and Eastern Canada) 

whose production is targeted to the U.S. market. We received 2008 pre-compliance 

reports for 129 refineries, all of which produced high and/or low sulfur diesel fuel in 

2003. The 11 refineries which did not send pre-compliance reports may be planning to 

produce high sulfur distillate fuel for the heating oil market, or may be planning to sell 

their high sulfur distillate fuel to other refineries that can desulfurize it. 

Refiners indicated that, for most of their refineries, they have made decisions 

whether or not to produce 15 ppm NRLM diesel fuel. Table 1 shows that a total of 121 

refineries reported they anticipate producing 15 and/or 500 ppm diesel fuel beginning 

June 1, 2010. The remaining 8 refineries that sent pre-compliance reports said they either 

plan to produce only high sulfur distillate for the heating oil market, or are still deciding 

whether to produce 15 ppm NRLM diesel fuel. 

4
 
IV. NRLM Summary Data 

Table 1. 

U.S. Aggregated Report Information 

Highway and NRLM Diesel Fuel Refinery Data 2010-2014 

Year 2010 2011 2012 2013 2014a2 2014b 

# refineries producing diesel fuel 121 121 123 122 122 120 

# refineries at 100% 15 ppm 99 99 103 109 110 120 

# refineries at 100% 500 ppm 6 6 4 3 3 0 

# refineries with 15/500 ppm mix 16 16 16 10 9 0 

The 2008 nonroad pre-compliance reports indicated that production of 15 ppm 

and 500 ppm total diesel fuel beginning June 1, 2010 is projected to be 4.41 million 

bbls/day, as shown in Table 2 below. The reported information does not allow for any 

distinction between highway and NRLM production. However, from EIA’s weekly 

supply estimates (http://tonto.eia.doe.gov/dnav/pet/pet_sum_sndw_dcus_nus_w.htm), 

production and importation of 15 ppm and 500 ppm diesel fuel for the second annual 

compliance period in the highway diesel program (June 1, 2007 through May 31, 2008) 

averaged approximately 3.8 million bbls/day. This average production includes all 

highway diesel fuel and nearly all NRLM diesel fuel produced in or imported into the 

U.S. during the compliance period.3 Thus, by comparing total production and 

importation from the 2008 reports with average production from the second annual 

compliance period, refiners are planning to produce approximately 600 thousand bbls/day 

total additional 15 ppm and 500 ppm diesel fuel beginning June 1, 2010. 

Table 2 and Figure 1 also illustrate that national production of 15 ppm diesel fuel 

is projected to increase by 249 thousand bbls/day from 2010 to 2014, to 4.56 million 

bbls/day. However, this projected increase is offset by a projected decrease in 500 ppm 

NRLM diesel fuel production of 107 thousand bbls/day from 2010 to 2014. Twenty six 

thousand bbls/day of the projected decrease in 500 ppm production occurs by June 1, 

2012 as some refiners begin producing 15 ppm sulfur LM diesel fuel. The remaining 500 

ppm diesel fuel production ends by May 31, 2014, when the flexibilities for small refiners 

and NRLM credit use end. 

Projected total production should be sufficient to meet future demand of 15 ppm 

and 500 ppm total diesel fuel. Total demand for 15 ppm and 500 ppm diesel fuel 

calculated from EIA’s Annual Energy Outlook (AEO) 2008 is 4.04 million bbls/day in 

2010 and 4.32 million bbls/day in 2015, compared to projected total production of 4.41 

million bbls/day in 2010 and 4.56 million bbls/day in 2014.4 

2

 Data from the pre-compliance reports is divided into two sections for 2014 throughout this report. In all 

tables and figures, data for the first five months of 2014 is labeled 2014a, and data for the last seven months 

of 2014 is labeled 2014b. 3

 The average does not include a relatively small amount of high sulfur NRLM diesel fuel produced by 

small refiners and hardship refiners. 4 AEO 2008 projected a total distillate fuel oil demand of 4.40 million bbls/day in 2010 and 4.68 million 

bbls/day in 2015 (see Table A11 in http://www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf). Both of these totals 

include 355 thousand bbls/day distillate fuel oil (heating oil) for residential energy consumption (see Table 

5
 
IV. NRLM Summary Data 

As mentioned previously, 140 refineries reported to EIA that they produced low 

and/or high sulfur distillate fuel in 2003. Nine of these refineries either reported that they 

have no plans at present to produce 15 ppm diesel fuel by June 1, 2014, and eleven did 

not send an NRLM pre-compliance report to EPA in 2008. In 2003, these 20 refineries 

produced a total of 118 thousand bbls/day of diesel fuel containing less than 500 ppm 

sulfur, and 87 thousand bbls/day of distillate fuel containing more than 500 ppm sulfur. 

We cannot tell at this time if or when these refineries might choose to produce 15 ppm 

diesel fuel, or whether they will simply choose to continue to serve the heating oil market 

indefinitely. 

Table 2. 

U.S. Aggregated Report Information 

Diesel Fuel Production 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

Total 15 ppm (highway + NRLM), bbls/day 4,308,094 4,346,837 4,487,715 4,538,350 4,539,620 4,557,232 

Total 500 ppm NRLM, bbls/day 106,571 108,436 80,113 56,208 54,274 0 

Total 15 ppm and 500 ppm (highway + NRLM), 

bbls/day 4,414,665 4,455,274 4,567,828 4,594,557 4,593,894 4,557,2325 

Figure 1. Projected (Highway + NRLM) Diesel Fuel Production by Type, 2010-2014 

0 

500,000 

1,000,000 

1,500,000 

2,000,000 

2,500,000 

3,000,000 

3,500,000 

4,000,000 

4,500,000 

5,000,000 

2010 2011 2012 2013 2014a 2014b 

Year 

T

otal (

Highw

a

y + N

R

L

M) Diesel Fuel, 

bbls/day 

15 ppm sulfur 500 ppm sulfur 

A2 at http://www.eia.doe.gov/oiaf/aeo/pdf/appa.pdf). EPA does not require heating oil to meet either the 

15 ppm or 500 ppm sulfur standard, so total demand for 15 ppm and 500 ppm diesel fuel can be calculated 

by subtracting heating oil demand from total distillate fuel oil demand. 5

 Total 15 ppm and 500 ppm production decreases slightly during the last 7 months of 2014 because some 

refineries plan to shut down for maintenance during this time. 

6 
IV. NRLM Summary Data 

2. Projected Credit Generation and Use 

Table 3 shows total reported nonroad diesel sulfur credits generated and used for 

each year of the nonroad diesel sulfur credit program. High sulfur credits are shown for 

the last 7 months of 2006 (refiners could not begin generating high sulfur NRLM credits 

until June 1, 2006), the full calendar years 2007 through 2009, and the first 5 months of 

2010. 500 ppm credits are shown for the last 7 months of 2009, the full calendar years 

2010 through 2013, and the first 5 months of 2014. Eighteen refineries indicated they 

generated a total of 1,929 million high sulfur credits (1 credit = 1 gallon diesel fuel), 

mostly during the high sulfur early credit generation period from June 1, 2006 through 

May 31, 2007, including four refineries owned by small refiners who plan to continue 

generating high sulfur credits after May 31, 2007. Nine refineries indicated they planned 

to use a total of 2,516 million high sulfur credits from June 1, 2007 through May 31, 

2010. 

Fourteen refineries indicated they plan to generate a total of 1,260 million 500 

ppm credits, mostly during the credit generation period from June 1, 2009 through May 

31, 2010, including two refineries owned by small refiners who plan to continue 

generating 500 ppm credits through December 31, 2013. Four refineries indicated they 

planned to use a total of 406 million credits from June 1, 2010 through May 31, 2014. 

Table 3. 

U.S. Aggregated Report Information 

Nonroad Diesel Fuel Credits 2006-2014 

Year 

# refineries generating high sulfur credits 

2006 

18 

2007 

18 

2008 

4 

2009 

3 

2010 

2 

total 

# refineries using high sulfur credits 

High sulfur credit generation, millions 

High sulfur credit usage, millions 

Year 2009 

724 

2010 

9 

1,038 

583 

2011 

9 

106 

944 

2012 

8 

51 

822 

2013 

4 

10 

167 

2014 

1,929 

2,516 

total 

# refineries generating 500 ppm credits 13 14 2 2 2 

# refineries using 500 ppm credits 4 3 3 2 2 

500 ppm credit generation, millions 429 539 94 97 100 1,260 

500 ppm credit usage, millions 108 167 90 29 12 406 

Figures 2 and 3 illustrate cumulative projected generation and usage of high sulfur 

credits and 500 ppm credits by year. Although Figure 3 shows that 500 ppm credit 

generation significantly exceeds 500 ppm credit usage, Figure 2 shows a projected 

shortfall in high sulfur credits beginning in 2009. EPA has talked with refiners who had 

indicated in their pre-compliance reports that they planned to use more high sulfur credits 

than they generated, and learned that they have flexibility to use fewer high sulfur credits, 

if necessary. Based on our conversations with these refiners, we believe they have 

7
 
IV. NRLM Summary Data 

sufficient flexibility to reduce their usage of high sulfur credits in order to match the 

available supply of high sulfur credits. 

Figure 2. Total U.S. High Sulfur Credits 

0 

500 

1,000 

1,500 

2,000 

2,500 

Millio

n Cre

dits 

2006 2007 2008 2009 2010 

Year 

cumulative HSC generated cumulative HSC used 

Figure 3. Total U.S. 500 ppm Credits 

0 

200 

400 

600 

800 

1,000 

1,200 

1,400 

Millio

n Cre

dits 

2009 2010 2011 2012 2013 2014 

Year 

cumulative 500 ppm credits generated cumulative 500 ppm credits used 

8
 
IV. NRLM Summary Data 

3. Project Scope and Timing 

In addition to providing diesel fuel production and credit projections, refineries 

must also include information outlining both their timeline for compliance with the 15 

ppm sulfur standard and their engineering plans (e.g., design and construction) in their 

pre-compliance reports. We requested that refineries report their progress according to 

the following five stages: 1) strategic planning, 2) planning and front-end engineering, 3) 

detailed engineering and permitting, 4) procurement and construction, and 5) 

commissioning and start-up. In the 2007 nonroad pre-compliance reports, most refineries 

indicated they were either just starting to develop their plans to produce 15 ppm 

NRLM diesel, or did not plan to produce any more 15 or 500 ppm diesel than indicated in 

their highway pre-compliance reports. 

In the 2008 NRLM pre-compliance reports, refiners indicated they have plans to 

install new desulfurization capacity at 26 refineries specifically to produce 15 ppm 

NRLM diesel fuel. Most of these refineries are generally in the middle stages of their 

projects to produce 15 ppm NRLM diesel fuel. Most have completed their front-end 

engineering design work, have ordered long lead time equipment like reactor vessels, and 

are well into the detailed engineering and permitting stage. 

All 26 refineries indicated that they would either be revamping existing 

hydrotreating or hydrocracking units, or installing new hydrotreating or hydrocracking 

units. Twenty two of these refineries indicated specific project scopes to produce 15 ppm 

NRLM diesel. Of those 22 refineries, 9 are planning to install a new desulfurization unit, 

9 are planning to revamp an existing desulfurization unit, and 4 refineries are planning to 

both install at least one new desulfurization unit and revamp at least one existing 

desulfurization unit. The other 4 refineries did not report detailed project information. 

4. Small Refiner Options 

As discussed previously, the diesel sulfur regulations contain four options which 

provide qualified small refiners with flexibilities regarding production of 15 ppm NRLM 

diesel fuel. Option 1 allows a refinery owned by an approved small refiner to delay 

production of 500 ppm sulfur NRLM diesel fuel until June 1, 2010. Option 1 was chosen 

by 5 refineries. These 5 refineries produced twenty two thousand bbls/day high sulfur 

distillate fuel in 2003. 

Option 2 allows a refinery owned by an approved small refiner to delay 

production of 15 ppm NRLM diesel fuel until June 1, 2014. Option 2 was chosen by 5 

refineries. These 5 refineries produced twenty two thousand bbls/day high sulfur 

distillate fuel in 2003. (As Options 1 and 2 are not mutually exclusive, small refiners 

may choose both Options 1 and 2.) 

9
 
IV. NRLM Summary Data 

Option 3 allows a small refiner utilizing Option 1 to generate credits for any 500 

ppm sulfur NRLM diesel fuel produced between June 1, 2006 and May 31, 2010, and 

also allows a small refiner utilizing Option 2 to generate credits for any 15 ppm sulfur 

NRLM diesel fuel produced between June 1, 2009 and December 31, 2013. Option 3 

was chosen by 4 refineries. These 4 refineries produced six thousand bbls/day high 

sulfur distillate fuel in 2003. 

Lastly, Option 4 allows a refinery owned by a small refiner the ability to increase 

its gasoline sulfur standards by 20 percent, provided that the refinery begins producing 15 

ppm NRLM on June 1, 2006 and the refinery’s 15 ppm NRLM production is at least 85 

percent of the refinery’s NRLM baseline production. Option 4 was chosen by 5 

refineries. These 5 refineries produced fourteen thousand bbls/day high sulfur distillate 

fuel in 2003. 

The number of refineries owned by small refiners, and the production of high 

sulfur distillate fuel from these refineries in 2003, are shown below in Table 4 for each 

option. 

Table 4. 

Intended Small Refiner Compliance Options by Number of Refineries and 

High Sulfur Distillate Fuel Production 

Option Description Number of 

Refineries 

2003 High Sulfur Distillate 

Fuel Production 

(thousand bbls/day) 

1. Delay 500 ppm NRLM Production 5 22 

2. Delay 15 ppm NRLM Production 5 22 

3. NRLM Credit Option 4 6 

4. NRLM Diesel/Gasoline Compliance Option 5 14 

B. PADD Analysis 

This section presents information specific to each PADD. Tables 5 and 6 show, 

by PADD, the number of refineries producing 15 and/or 500 ppm diesel fuel for 2010 

(from June 1 through December 31) and 2014 (from June 1 through December 31). The 

total number of refineries producing diesel fuel decreases by one from 2010 to 2014, as 

two refineries enter the diesel fuel market in 2012, and three refineries exit by 2104. In 

2010, 22 refineries are using flexibilities in the rules (producing 500 ppm LM diesel fuel, 

producing 500 ppm NR diesel fuel using NRLM credits, small refiner flexibilities) to 

produce some or all 500 ppm diesel fuel. However, by June 1, 2014, all of these 

refineries will only be producing 15 ppm diesel fuel and/or heating oil. 

10
 
IV. NRLM Summary Data 

Tables 7 and 8 show, by PADD, anticipated production of 15 ppm and 500 ppm 

total diesel fuel for 2010 (from June 1 through December 31) and 2014 (from June 1 

through December 31), and Figure 4 illustrates the average anticipated production of 15 

ppm and 500 ppm total diesel fuel by PADD from June 1, 2010 through December 31, 

2014. Tables 7 and 8 show that from 2010 through 2014, projected total diesel fuel 

production in PADDs 1 and 3 increases by a total of 128 thousand bbls/day, while 

projected total diesel fuel production increases slightly in PADDs 2, 4 and 5. 

Table 5. 

Projected Number of Highway and NRLM Diesel Fuel Refineries by PADD for 2010 

PADD 1 2 3 4 5 Total U.S. 

# refineries producing diesel fuel 12 26 44 14 25 121 

# refineries at 100% 15 ppm 8 23 37 11 20 99 

# refineries at 100% 500 ppm 0 2 3 0 1 6 

# refineries with 15/500 ppm mix 4 1 4 3 4 16 

Table 6. 

Projected Number of Highway and NRLM Diesel Fuel Refineries by PADD for 2014b 

PADD 1 2 3 4 5 Total U.S. 

# refineries producing diesel fuel 13 25 44 14 24 120 

# refineries at 100% 15 ppm 13 25 44 14 24 120 

# refineries at 100% 500 ppm 0 0 0 0 0 0 

# refineries with 15/500 ppm mix 0 0 0 0 0 0 

Table 7. 

Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2010 

PADD 1 2 3 4 5 

Total 

U.S. 

Total 15 ppm (highway + NRLM), bbls/day 480,001 1,028,534 2,109,397 182,569 507,592 4,308,094 

Total 500 ppm (highway + NRLM), bbls/day 20,476 13,425 53,844 7,500 11,326 106,571 

Total 15 ppm and 500 ppm total (highway + NRLM), 

bbls/day 500,478 1,041,959 2,163,242 190,069 518,918 4,414,665 

Table 8. 

Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2014b 

PADD 1 2 3 4 5 

Total 

U.S. 

Total 15 ppm (highway + NRLM), bbls/day 530,105 1,050,024 2,261,308 192,869 522,926 4,557,232 

Total 500 ppm (highway + NRLM), bbls/day 0 0 0 0 0 0 

Total 15 ppm and 500 ppm total (highway + NRLM), 

bbls/day 530,105 1,050,024 2,261,308 192,869 522,926 4,557,232 

11
 
IV. NRLM Summary Data 

Figure 4. Projected (Highway+NRLM) Diesel Fuel Production by PADD, 2010-2014 

0 

500,000 

1,000,000 

1,500,000 

2,000,000 

2,500,000 

3,000,000 

3,500,000 

4,000,000 

4,500,000 

5,000,000 

2010 2011 2012 2013 2014a 2014b 

Year 

Tot

al (

Highw

a

y + 

N

R

L

M) Die

s

el Fuel, 

bbls/day 

PADD 5 

PADD 4 

PADD 3 

PADD 2 

PADD 1 

More detailed information for each PADD is shown below in Tables 9 through 

13. 

12
 
IV. NRLM Summary Data 

1. PADD 1 

Reported totals for all PADD 1 refineries and importers are summarized below in 

Table 9. Table 9 shows that for 2010, 12 refineries anticipate producing approximately 

500 thousand bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Eight refineries 

reported they intend to produce all of their diesel fuel containing 15 ppm or less of sulfur, 

and four refineries reported they intend to produce approximately 20 thousand bbls/day 

500 ppm NRLM diesel fuel beginning in 2010. Table 9 also shows that total diesel fuel 

production in PADD 1 is projected to increase by approximately 30 thousand bbls/day 

from 2010 through 2014, including production from one refinery that enters the diesel 

fuel market in 2012. 

Table 9 

PADD 1 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

# refineries producing diesel fuel 12 12 13 13 13 13 

# refineries at 100% 15 ppm 8 8 9 9 10 13 

# refineries at 100% 500 ppm 0 0 0 0 0 0 

# refineries with 15/500 ppm mix 4 4 4 4 3 0 

Total 15 ppm (bbls/day) 480,001 487,929 508,806 529,629 529,629 530,105 

Total 500 ppm (bbls/day) 20,476 20,476 20,476 12,476 10,476 0 

Total 15 ppm and 500 ppm (bbls/day) 500,478 508,405 529,282 542,105 540,105 530,105 

13
 
IV. NRLM Summary Data 

2. PADD 2 

The reported totals for all PADD 2 refineries are summarized below in Table 10. 

Table 10 shows that for 2010, 26 refineries anticipate producing 1.04 million bbls/day 

total (15 ppm and 500 ppm sulfur) diesel fuel. Twenty-three refineries reported they 

intend to produce all of their diesel fuel containing 15 ppm sulfur or less, and three 

refineries reported they intend to produce a small amount of 500 ppm sulfur diesel fuel. 

Table 10 also shows that total diesel fuel production in PADD 2 is projected to increase 

very slightly from 2010 through 2014, although one refinery plans to exit the diesel 

market in 2014. 

Table 10. 

PADD 2 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

# refineries producing diesel fuel 26 26 26 26 26 25 

# refineries at 100% 15 ppm 23 23 23 25 25 25 

# refineries at 100% 500 ppm 2 2 1 1 1 0 

# refineries with 15/500 ppm mix 1 1 2 0 0 0 

Total 15 ppm (bbls/day) 1,028,534 1,041,259 1,045,213 1,058,391 1,058,158 1,050,024 

Total 500 ppm (bbls/day) 13,425 13,091 9,227 7,825 7,825 0 

Total 15 ppm and 500 ppm (bbls/day) 1,041,959 1,054,350 1,054,439 1,066,216 1,065,983 1,050,024 

14
 
IV. NRLM Summary Data 

3. PADD 3 

Reported totals for all PADD 3 refineries are summarized below in Table 11. 

Table 11 shows that 44 refineries anticipate producing 2.16 million bbls/day total (15 

ppm and 500 ppm sulfur) diesel fuel in 2010. Thirty-seven refineries reported they 

intend to produce all of their diesel fuel containing 15 ppm sulfur or less, and seven 

refineries reported they intend to produce some amount of 500 ppm diesel fuel. One 

refinery plans to enter the diesel fuel market in 2012, and one refinery plans to exit the 

diesel fuel market in 2013. Total diesel fuel production is projected to increase by 98 

thousand bbls/day from 2010 through 2014. 

Table 11. 

PADD 3 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

# refineries producing diesel fuel 44 44 45 44 44 44 

# refineries at 100% 15 ppm 37 37 39 41 41 44 

# refineries at 100% 500 ppm 3 3 2 1 1 0 

# refineries with 15/500 ppm mix 4 4 4 2 2 0 

Total 15 ppm (bbls/day) 2,109,397 2,125,285 2,228,880 2,242,663 2,243,878 2,261,308 

Total 500 ppm (bbls/day) 53,844 55,980 42,559 30,889 30,889 0 

Total 15 ppm and 500 ppm (bbls/day) 2,163,242 2,181,266 2,271,440 2,273,552 2,274,767 2,261,308 

15
 
IV. NRLM Summary Data 

4. PADD 4 

Reported totals for all PADD 4 refineries are summarized below in Table 12. 

Table 12 shows that 14 refineries anticipate producing 190 thousand bbls/day total (15 

ppm and 500 ppm sulfur) diesel fuel in 2010. Eleven refineries reported they intend to 

produce all of their diesel fuel containing 15 ppm sulfur or less, and three refineries 

reported they intend to produce some amount of 500 ppm diesel fuel. Table 12 also 

shows that the projected total diesel fuel production in PADD 4 remains relatively 

constant from 2010 through 2014. 

Table 12. 

PADD 4 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

# refineries producing diesel fuel 14 14 14 14 14 14 

# refineries at 100% 15 ppm 11 11 11 13 13 14 

# refineries at 100% 500 ppm 0 0 0 0 0 0 

# refineries with 15/500 ppm mix 3 3 3 1 1 0 

Total 15 ppm (bbls/day) 182,569 184,771 190,222 193,071 193,358 192,869 

Total 500 ppm (bbls/day) 7,500 7,500 3,399 500 500 0 

Total 15 ppm and 500 ppm (bbls/day) 190,069 192,271 193,621 193,571 193,858 192,869 

16
 
IV. NRLM Summary Data 

5. PADD 56 

Reported totals for all refineries in PADD 5 are summarized below in Table 13. 

Table 13 shows that 25 refineries anticipate producing 519 thousand bbls/day total (15 

ppm and 500 ppm sulfur) diesel fuel in 2010. Twenty of these refineries indicated they 

expect to produce all of their diesel fuel containing 15 ppm sulfur or less, and five 

refineries reported they intend to produce some amount of 500 ppm diesel fuel. Total 

diesel fuel production is projected to remain relatively constant from 2010 through 2014, 

although one refinery plans to exit the diesel fuel market in 2014. 

Table 13. 

PADD 5 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b 

# refineries producing diesel fuel 25 25 25 25 25 24 

# refineries at 100% 15 ppm 20 20 21 21 21 24 

# refineries at 100% 500 ppm 1 1 1 1 1 0 

# refineries with 15/500 ppm mix 4 4 3 3 3 0 

Total 15 ppm (bbls/day) 507,592 507,593 514,595 514,596 514,598 522,926 

Total 500 ppm (bbls/day) 11,326 11,388 4,452 4,517 4,583 0 

Total 15 ppm and 500 ppm (bbls/day) 518,918 518,982 519,047 519,113 519,181 522,926 

6

 Alaska refineries are included in this analysis 

17 
IV. NRLM Summary Data 

C. Comparison of 2007 and 2008 NRLM Pre-Compliance Reports 

Total reported production of 15 ppm and 500 ppm diesel fuel in the 2008 precompliance reports changed very little, compared to the 2007 pre-compliance reports. 

Table 14 shows the projected production of 15 ppm and 500 ppm diesel fuel from the 

2007 and 2008 pre-compliance reports for 2010 (from June 1 to December 31). Total 

production of diesel fuel from the 2008 reports was fourteen thousand bbls/day less than 

total production from the 2007 reports. A large decrease in reported production for 

PADD 1 was mostly offset by increases in reported production for all remaining PADDs. 

Table 14. 

Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2010 

PADD 1 2 3 4 5 

Total 

U.S. 

2007 NRLM reports 

Total 15 ppm, bbls/day 562,357 1,026,871 2,056,162 181,784 496,094 4,323,268 

Total 500 ppm, bbls/day 267 6,207 81,355 6,500 11,326 105,656 

Total 15 ppm and 500 ppm , bbls/day 562,624 1,033,078 2,137,518 188,284 507,420 4,428,924 

2008 NRLM reports 

Total 15 ppm, bbls/day 480,001 1,028,534 2,109,397 182,569 507,592 4,308,094 

Total 500 ppm, bbls/day 20,476 13,425 53,844 7,500 11,326 106,571 

Total 15 ppm and 500 ppm , bbls/day 500,478 1,041,959 2,163,242 190,069 518,918 4,414,665 

Change in reported production, bbls/day -62,147 8,880 25,724 1,785 11,498 -14,259 

Table 15 shows the projected production of 15 and 500 ppm diesel fuel from the 

2007 and 2008 pre-compliance reports for 2014 (from June 1 to December 31). Total 

production of diesel fuel from the 2008 reports was five thousand bbls/day greater than 

the total production from the 2007 reports. A large decrease in reported production for 

PADD 1 was offset by increases in reported production for all remaining PADDs, 

primarily PADD 3. 

18
 
IV. NRLM Summary Data 

Table 15. 

Projected Production of (Highway + NRLM) Diesel Fuel by PADD for 2014b 

PADD 1 2 3 4 5 

Total 

U.S. 

2007 NRLM reports 

Total 15 ppm, bbls/day 607,820 1,035,090 2,194,391 192,084 522,571 4,551,957 

Total 500 ppm, bbls/day 0 0 0 0 0 0 

Total 15 ppm and 500 ppm , bbls/day 607,820 1,035,090 2,194,391 192,084 522,571 4,551,957 

2008 NRLM reports 

Total 15 ppm, bbls/day 530,105 1,050,024 2,261,308 192,869 522,926 4,557,232 

Total 500 ppm, bbls/day 0 0 0 0 0 0 

Total 15 ppm and 500 ppm , bbls/day 530,105 1,050,024 2,261,308 192,869 522,926 4,557,232 

Change in reported production, bbls/day -77,715 14,934 66,917 785 355 5,275 

19
 
V. Appendix 

Appendix - List of Acronyms 

bbls/day barrels per day 

bpcd barrels per calendar day 

EIA Energy Information Administration 

EPA (or, “the Agency”) U.S. Environmental Protection Agency 

FR Federal Register 

LM Locomotive and Marine 

NR Nonroad 

NRLM Nonroad, Locomotive, and Marine 

PADD Petroleum Administration for Defense District 

ppm parts-per-million 

ULSD Ultra Low Sulfur Diesel 

20