Summary and Analysis of the 2009 

Nonroad Diesel Fuel Pre-Compliance 

Reports
EPA-420-R-09-018

November 2009

Compliance and Innovative Strategies Division

Office of Transportation and Air Quality

U.S. Environmental Protection Agency

Summary and Analysis of the 2009 

Nonroad Diesel Fuel Pre-Compliance 

Reports

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.
able of Contents 

Exe

IV

A. a

B

.

C. Comparison of 2008 and 2009 NRLM Pre-Compliance Reports..................................................................19

T

I. cutive Summary...............................................................................................................................................1

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

III. Nonroad Pre-Compliance Reporting Requirements ........................................................................................4

. NRLM Summary Data ....................................................................................................................................5

N tionwide Analysis .......................................................................................................................................5

1. Refineries and Importers – Numbers and Production.................................................................................5

2. Projected Credit Generation and Use .........................................................................................................8

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

4. Small Refiner Options ..............................................................................................................................10

. PADD Analysis ........................................................................................................................................11

1. PADD 1 ....................................................................................................................................................14

2. PADD 2 ....................................................................................................................................................15

3. PADD 3 ....................................................................................................................................................16

4. PADD 4 ....................................................................................................................................................17

5 PADD 5 ....................................................................................................................................................18
 II. Nonroad Diesel Program Overview

1

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) 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 2009 pre-compliance reports. 

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

estimates of all 15 ppm diesel fuel and 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 2009 nonroad pre-compliance reports showed that: 

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

- 23 refineries are either undecided as to their plans, or are choosing to stop 

producing NRLM diesel fuel by June 1, 2014 

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

(19 refineries said they generated high sulfur credits in 2006 and 2007, 27 

refineries plan to generate 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 is projected to grow from 2010 through 2014 

- total diesel fuel production and importation beginning June 1, 2010 is 

projected to decrease compared to the 2008 nonroad pre-compliance 

reports. 

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

fuel than what they indicated in their 2008 pre-compliance reports, although these 

plans are still subject to change. EPA expects that next year’s nonroad precompliance reports will contain more definite information on refiners’ plans to 

produce 15 ppm NRLM diesel fuel. 

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, 
 II. Nonroad Diesel Program Overview

2

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. 

Option 1 – Delay 500 ppm NRLM production 

This option allows approved small refiners an additional 3 years to comply 

with the 500 ppm NRLM diesel fuel sulfur standard. Small refiners have a 500 ppm 

NRLM compliance date of June 1, 2010, compared to a compliance date of June 1, 

2007 for non-small refiners. Small refiners may continue to produce high sulfur 

(greater than 500 ppm) NRLM diesel fuel until June 1, 2010. However, 
 II. Nonroad Diesel Program Overview

3

production of high sulfur 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 additional time to comply with the 

15 ppm NRLM diesel fuel sulfur standard. Small refiners have a single 15 ppm 

NRLM compliance date of June 1, 2014, compared to compliance dates of June 1, 

2010 and June 1, 2012 for NR and LM diesel fuel, respectively, for non-small 

refiners. Small refiners may continue to produce 500 ppm NRLM diesel fuel until 

June 1, 2014. However, production of 500 ppm 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 

The NRLM Credit Option allows approved small refiners additional time to 

generate nonroad diesel sulfur credits, compared to non-small refiners. Small refiners 

could generate “High Sulfur” credits if their refinery’s annual average 500 ppm 

NRLM diesel fuel production between June 1, 2006 and June 1, 2010 exceeded the 

refinery’s annual average NRLM diesel fuel production from 2003 through 2005 

(non-small refiners could only generate High Sulfur credits between June 1, 2006 and 

June 1, 2007). Small refiners could also generate “500 ppm” credits if their refinery’s 

annual average 15 ppm NRLM diesel fuel production between June 1, 2009 and 

December 31, 2013 exceeded the refinery’s average annual NRLM diesel fuel 

production from 2006 through 2008 (non-small refiners could only generate “500 

ppm” credits between June 1, 2009 and June 1, 2010). These credits can be banked 

for future use or sold to another refiner. 

Option 4 - NRLM Diesel/Gasoline Compliance Option 

This option is available to small refiners that elect not to use Option 3. Under 

this option, at least 95 percent of the NRLM diesel fuel produced at a small refiner’s 

refinery must meet the 15 ppm sulfur standard by June 1, 2006. Annual average 

production of 15 ppm NRLM diesel fuel at the refinery must also be equal to or 

greater than 85 percent of the refinery’s annual average NRLM diesel fuel production 

from 2003 through 2005. Small refiners choosing this option will receive a modest 

relaxation in the refinery interim gasoline sulfur standards beginning January 1, 2004. 

Specifically, the applicable refinery annual average and per-gallon cap standards 

would be increased by 20 percent through 2007. A small refiner may elect to further 

extend the duration of the refinery interim gasoline sulfur standards through 2010 by 

producing all highway diesel fuel at the refinery containing less than 15 ppm sulfur or 

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

exceed 450 ppm. 
 II. Nonroad Diesel Program Overview

4

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 standard 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 nonroad pre-compliance report was due on 

June 1, 2005 and subsequent reports are due annually through 2011, or until the 

refiner or importer begins producing or importing 15 ppm NR or NRLM diesel fuel. 

 

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 

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

and June 1, 2014 through December 31, 2014. 

 

1

 Rural areas are defined as areas of Alaska not served by the federal aid highway system (FAHS) 
 III. Nonroad Pre-Compliance Reporting Requirements

5

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, 2009. The 

information presented here will be updated with more current analyses with 

information from the annual pre-compliance reports submitted in 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 4 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 2009 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. 
 IV. NRLM Summary Data

6

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 121 122 121 120 120 117

# refineries at 100% 15 ppm 96 98 99 112 113 117

# refineries at 100% 500 ppm 10 9 5 4 3 0

# refineries with 15/500 ppm mix 15 15 17 4 4 0

 

The 2009 nonroad pre-compliance reports indicated that production of 15 ppm 

and 500 ppm total diesel fuel beginning June 1, 2010 is projected to be 4.17 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 third annual 

compliance period in the highway diesel program (July 1, 2008 through June 30, 2009) 

averaged approximately 3.89 million bbls/day. This average production and importation 

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 2009 reports with average production and importation from the third 

annual compliance period, refiners and importers are planning to produce and import 

approximately 280,000 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 400,000 bbls/day from 2010 to 2014, from 4.01 to 4.41 million 

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

NRLM diesel fuel production of 163,000 bbls/day from 2010 to 2014. Production of 500 

ppm NRLM diesel fuel decreases from 163,000 bbls/day in 2010 to 54,000 bbls/day in 

2012, as some refiners begin producing 15 ppm LM diesel fuel by June 1, 2012. 

Production of 500 ppm NRLM diesel fuel ends completely 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. Although projected total production from the 2009 precompliance reports has decreased compared to the 2008 pre-compliance reports, 

projected total diesel fuel demand from EIA’s Annual Energy Outlook (AEO) 2009 has 

also decreased compared to projected demand from AEO 2008. Total demand for 15 

ppm and 500 ppm diesel fuel calculated from AEO 2009 is 3.74 million bbls/day in 2010 

 

2

 Data from the pre-compliance reports is divided into two sections for 2014 throughout this summary and 

analysis. 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. 
 IV. NRLM Summary Data

7

and 4.16 million bbls/day in 2015, compared to projected total diesel fuel production of 

4.17 million bbls/day in 2010 and 4.41 million bbls/day in 2014.4 

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

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

they have no plans at present to produce 15 ppm diesel fuel by June 1, 2014, and 11 

refineries did not send an NRLM pre-compliance report to EPA in 2009. In 2003, these 

23 refineries produced a total of 122,000 bbls/day of diesel fuel containing less than 500 

ppm sulfur, and 136,000 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 produce heating oil 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 4,010,938 4,227,617 4,280,088 4,353,095 4,413,598 4,412,417

Total 500 ppm NRLM, bbls/day 162,808 97,273 53,541 12,379 9,379 0

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

bbls/day 4,173,746 4,324,890 4,333,629 4,365,473 4,422,976 4,412,417

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

Total (Highway + NRLM) Diesel Fuel, 

bbls/day

500 ppm sulfur

15 ppm sulfur

 

4

 AEO 2009 projected a total distillate fuel oil demand of 4.08 million bbls/day in 2010 and 4.46 million 

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

341,000 and 303,000 bbls/day respectively of distillate fuel oil (heating oil) for residential energy 

consumption (see Table 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 was calculated by subtracting heating oil demand from total distillate fuel oil demand. 
 IV. NRLM Summary Data

8

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. Nineteen refineries indicated they 

generated a total of 1,982 million high sulfur credits (1 credit = 1 gallon diesel fuel), 

mostly during the early credit generation period from June 1, 2006 through May 31, 

2007, and including 4 refineries owned by small refiners who plan to continue generating 

high sulfur credits after May 31, 2007. Eight refineries indicated they planned to use a 

total of 2,256 million high sulfur credits from June 1, 2007 through May 31, 2010. 

Twenty seven refineries indicated they plan to generate a total of 3,884 million 

500 ppm credits, mostly during the early credit generation period from June 1, 2009 

through May 31, 2010, including 3 refineries owned by small refiners who plan to 

continue generating 500 ppm credits after May 31, 2010. Seven refineries indicated they 

planned to use a total of 1,214 million credits from June 1, 2010 through May 31, 2014. 

Table 3. 

U.S. Aggregated Report Information 

Nonroad Diesel Fuel Credits 2006-2014

Year 2006 2007 2008 2009 2010 total 

# refineries generating high sulfur credits 18 19 4 4 3 

# refineries using high sulfur credits 8 7 6 5 

High sulfur credit generation, millions 724 973 126 113 46 1,982

High sulfur credit usage, millions 526 773 685 272 2,256

Year 2009 2010 2011 2012 2013 2014 total 

# refineries generating 500 ppm credits 26 27 3 2 1 

# refineries using 500 ppm credits 7 5 3 2 1 

500 ppm credit generation, millions 1,808 1,614 155 212 94 3,884

500 ppm credit usage, millions 650 436 86 41 1 1,214

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 
 IV. NRLM Summary Data

9

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

Million Credits

2006 2007 2008 2009 2010

Year

cumulative HSC generated cumulative HSC used

Figure 3. Total U.S. 500 ppm Credits 

0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

Million Credits

2009 2010 2011 2012 2013 2014

Year

cumulative 500 ppm credits generated cumulative 500 ppm credits used

3. Project Scope and Timing 

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

must also include information outlining both their timeline for compliance with the 15 
 IV. NRLM Summary Data

10

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

their pre-compliance reports. We requested that refiners 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 2008 nonroad pre-compliance reports, most refiners 

indicated they had ordered long lead time equipment like reactor vessels and were well 

into the detailed engineering and permitting stage, or did not plan to produce any more 15 

ppm diesel fuel than indicated in their highway pre-compliance reports. 

In the 2009 NRLM pre-compliance reports, refiners indicated they have plans to 

install new desulfurization capacity at 22 refineries specifically to produce 15 ppm 

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

projects to produce 15 ppm NRLM diesel fuel. Most have completed their detailed 

engineering, and are well into the procurement and construction stage. 

All 22 refineries are planning to either revamp existing hydrotreating or 

hydrocracking units, or install new hydrotreating or hydrocracking units. Twenty of 

these refineries indicated specific project scopes to produce 15 ppm NRLM diesel. Of 

these 20 refineries, 10 are planning to install a new desulfurization unit, 6 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 2 refineries did not report detailed project information. 

4. Small Refiner Options 

 As discussed previously, the diesel sulfur regulations contain 4 options which 

provide qualified small refiners with flexibilities regarding production of 500 ppm or 15 

ppm NRLM diesel fuel. Option 1 allows a refinery owned by an approved small refiner 

to delay production of 500 ppm NRLM diesel fuel until June 1, 2010. Refiners chose 

Option 1 for 9 refineries. These 9 refineries produced 37,000 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. Refiners chose Option 2 for 

7 refineries. These 7 refineries produced 22,000 bbls/day high sulfur distillate fuel in 

2003. (Options 1 and 2 are not mutually exclusive, small refiners may choose both 

Options 1 and 2.) 

Option 3 allows a small refiner to generate credits for 500 ppm NRLM diesel fuel 

produced between June 1, 2006 and May 31, 2010, and also allows a small refiner to 

generate credits for 15 ppm NRLM diesel fuel produced between June 1, 2009 and 

December 31, 2013. Refiners chose Option 3 for 4 refineries. These 4 refineries 

produced 9,000 bbls/day high sulfur distillate fuel in 2003. 
 IV. NRLM Summary Data

11

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

gasoline sulfur standards by 20 percent, provided they begin producing 15 ppm NRLM 

diesel fuel by June 1, 2006 at their refinery, and their refinery’s annual average 15 ppm 

NRLM diesel fuel production is at least 85 percent of the refinery’s annual average 

NRLM diesel fuel production from 2003 through 2005. Refiners chose Option 4 for 4 

refineries. These 4 refineries produced 11,000 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 9 37 

2. Delay 15 ppm NRLM Production 7 22 

3. NRLM Credit Option 4 9 

4. NRLM Diesel/Gasoline Compliance Option 4 11 

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 4 from 2010 to 2014, as 1 

refinery enters the diesel fuel market in 2011, and 5 refineries exit by 2014. In 2010, 25 

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. 

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 increases in PADDs 1 through 4 and decreases in PADD 5. 
 IV. NRLM Summary Data

12

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 25 44 14 26 121

# refineries at 100% 15 ppm 8 21 36 11 20 96

# refineries at 100% 500 ppm 0 3 4 0 3 10

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

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 12 26 42 14 23 117

# refineries at 100% 15 ppm 12 26 42 14 23 117

# 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 363,304 902,942 2,064,882 180,346 499,463 4,010,938

Total 500 ppm (highway + NRLM), bbls/day 8,310 47,425 68,171 8,500 30,403 162,808

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

bbls/day 371,613 950,367 2,133,053 188,846 529,866 4,173,746

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 424,205 1,023,862 2,277,361 189,465 497,525 4,412,417

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

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

bbls/day 424,205 1,023,862 2,277,361 189,465 497,525 4,412,417
 IV. NRLM Summary Data

13

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

Total (Highway + NRLM) Diesel 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. 
 IV. NRLM Summary Data

14

 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 

372,000 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 sulfur or less, and 4 

refineries reported they intend to produce some 500 ppm NRLM diesel fuel between 

2010 and 2014. Table 9 also shows that total diesel fuel production in PADD 1 is 

projected to increase by approximately 53,000 bbls/day from 2010 through 2014. 

Table 9 

PADD 1 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b

# refineries producing diesel fuel 12 12 12 12 12 12

# refineries at 100% 15 ppm 8 8 8 11 11 12

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

# refineries with 15/500 ppm mix 4 4 4 1 1 0

Total 15 ppm (bbls/day) 363,304 406,229 423,729 423,729 423,729 424,205

Total 500 ppm (bbls/day) 8,310 12,476 5,643 476 476 0

Total 15 ppm and 500 ppm (bbls/day) 371,613 418,705 429,372 424,205 424,205 424,205
 IV. NRLM Summary Data

15

2. PADD 2 

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

Table 10 shows that for 2010, 25 refineries anticipate producing approximately 950,000 

bbls/day total (15 ppm and 500 ppm sulfur) diesel fuel. Twenty one refineries reported 

they intend to produce all of their diesel fuel containing 15 ppm sulfur or less, and 4 

refineries reported they intend to produce all or some 500 ppm NRLM diesel fuel 

between 2010 and 2012. Table 10 also shows that total diesel fuel production in PADD 2 

is projected to increase by approximately 74,000 bbls/day from 2010 through 2014, 

including one refinery which enters the diesel fuel market in 2011. 

Table 10. 

PADD 2 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b

# refineries producing diesel fuel 25 26 26 26 26 26

# refineries at 100% 15 ppm 21 23 23 26 26 26

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

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

Total 15 ppm (bbls/day) 902,942 992,927 1,020,364 1,032,998 1,032,558 1,023,862

Total 500 ppm (bbls/day) 47,425 13,091 5,314 0 0 0

Total 15 ppm and 500 ppm (bbls/day) 950,367 1,006,018 1,025,678 1,032,998 1,032,558 1,023,862
 IV. NRLM Summary Data

16

3. PADD 3 

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

Table 11 shows that 44 refineries anticipate producing 2.13 million bbls/day total (15 

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

produce all of their diesel fuel containing 15 ppm sulfur or less, and 8 refineries reported 

they intend to produce all or some 500 ppm NRLM diesel fuel between 2010 and 2014. 

One refinery plans to exit the diesel fuel market in 2011, and another refinery plans to 

exit the diesel fuel market in 2014. Total diesel fuel production is projected to increase 

by approximately 144,000 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 43 43 43 42

# refineries at 100% 15 ppm 36 36 37 41 42 42

# refineries at 100% 500 ppm 4 4 2 2 1 0

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

Total 15 ppm (bbls/day) 2,064,882 2,141,855 2,148,430 2,203,762 2,271,861 2,277,361

Total 500 ppm (bbls/day) 68,171 32,803 20,199 5,000 2,000 0

Total 15 ppm and 500 ppm (bbls/day) 2,133,053 2,174,659 2,168,629 2,208,762 2,273,861 2,277,361
 IV. NRLM Summary Data

17

4. PADD 4 

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

Table 12 shows that 14 refineries anticipate producing approximately 189,000 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 3 refineries 

reported they intend to produce some 500 ppm NRLM diesel fuel between 2010 and 

2014. 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) 180,346 183,667 186,294 189,667 189,049 189,465

Total 500 ppm (bbls/day) 8,500 8,500 4,982 500 500 0

Total 15 ppm and 500 ppm (bbls/day) 188,846 192,167 191,276 190,167 189,549 189,465
 IV. NRLM Summary Data

18

5. PADD 55

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

Table 13 shows that 26 refineries anticipate producing approximately 530,000 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 6 refineries reported they intend to produce all or some 500 ppm NRLM diesel fuel 

between 2010 and 2014. Total diesel fuel production is projected to decrease by 

approximately 32,000 bbls/day from 2010 through 2014, as one refinery plans to exit the 

diesel fuel market in 2012 and another two refineries exit the market in 2014. 

Table 13. 

PADD 5 Diesel Fuel Data: 2010-2014 

Year 2010 2011 2012 2013 2014a 2014b

# refineries producing diesel fuel 26 26 26 25 25 23

# refineries at 100% 15 ppm 20 20 20 21 21 23

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

# refineries with 15/500 ppm mix 3 3 3 2 2 0

Total 15 ppm (bbls/day) 499,463 502,938 501,271 502,938 496,401 497,525

Total 500 ppm (bbls/day) 30,403 30,403 17,403 6,403 6,403 0

Total 15 ppm and 500 ppm (bbls/day) 529,866 533,341 518,674 509,341 502,803 497,525

 

5

 Alaska refineries are included in this analysis 
 IV. NRLM Summary Data

19

C. Comparison of 2008 and 2009 NRLM Pre-Compliance Reports 

Total reported production of 15 ppm and 500 ppm diesel fuel in the 2009 precompliance reports decreased, compared to the 2008 pre-compliance reports. Table 14 

shows the projected production of 15 ppm and 500 ppm diesel fuel from the 2008 and 

2009 pre-compliance reports for 2010 (from June 1 to December 31). Total production 

of diesel fuel from the 2009 reports was approximately 223,000 bbls/day less than total 

production from the 2008 reports. Most of this decrease occurred in PADDs 1 and 2, 

while reported production in PADDs 3, 4, and 5 showed little change. Projected total 

diesel fuel demand in 2010 has also decreased so that production is expected to be 

sufficient to meet demand. Projected total diesel fuel demand from AEO 2008 was 4.04 

million bbls/day, while projected total diesel fuel demand from AEO 2009 was only 3.74 

million bbls/day, a decrease of 300,000 bbls/day. 

Table 14. 

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

PADD 1 2 3 4 5 

Total 

U.S. 

2008 NRLM reports 

Total 15 ppm, bbls/day 480,001 1,028,534 2,092,135 182,284 507,592 4,290,547

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 2,145,980 189,784 518,918 4,397,118

2009 NRLM reports 

Total 15 ppm, bbls/day 363,304 902,942 2,064,882 180,346 499,463 4,010,938

Total 500 ppm, bbls/day 8,310 47,425 68,171 8,500 30,403 162,808

Total 15 ppm and 500 ppm , bbls/day 371,613 950,367 2,133,053 188,846 529,866 4,173,746

Change in reported production, bbls/day -128,864 -91,591 -12,927 -938 10,948 -223,372

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

2008 and 2009 pre-compliance reports for 2014 (from June 1 to December 31). Total 

production of diesel fuel from the 2009 reports was approximately 144,000 bbls/day less 

than the total production from the 2008 reports. Most of this decrease occurred in PADD 

1, with lesser decreases in PADDs 2, 4 and 5, and an increase PADD 3. Projected total 

diesel fuel demand in 2015 has also decreased so that production is expected to be 

sufficient to meet demand. Projected total diesel fuel demand from AEO 2008 was 4.32 

million bbls/day, while projected total diesel fuel demand from AEO 2009 was only 4.16 

million bbls/day, a decrease of 160,000 bbls/day. 
 IV. NRLM Summary Data

20

Table 15. 

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

PADD 1 2 3 4 5 

Total 

U.S. 

2008 NRLM reports 

Total 15 ppm, bbls/day 530,105 1,050,024 2,261,308 192,584 522,926 4,556,947

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

Total 15 ppm and 500 ppm , bbls/day 530,105 1,050,024 2,261,308 192,584 522,926 4,556,947

2009 NRLM reports 

Total 15 ppm, bbls/day 424,205 1,023,862 2,277,361 189,465 497,525 4,412,417

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

Total 15 ppm and 500 ppm , bbls/day 424,205 1,023,862 2,277,361 189,465 497,525 4,412,417

Change in reported production, bbls/day -105,900 -26,162 16,053 -3,119 -25,402 -144,529
 V. Appendix

21

Appendix - List of Acronyms 

bbls/day barrels per day 

bpcd barrels per calendar day 

EIA Energy Information Administration 

EPA 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 

AEO Annual Energy Outlook