By Tom Doggett
WASHINGTON, Oct 29 (Reuters) - U.S. oil refiners are on target to meet new federal requirements to produce cleaner diesel fuel in the next four to six years, the Environmental Protection Agency said on Wednesday.
Refiners have to cut the amount of sulfur in their diesel fuel to 15 parts per million (PPM) from the current 500 PPM.
Based on current projections for 2006, 96 percent of the 2.9 million barrels per day of highway diesel expected to be produced will meet the standard, enough to meet nationwide demand, EPA said.
"EPA's clean diesel standards are an important reason Americans can expect air quality to continue to improve in the years ahead," said EPA Assistant Administrator for Air and Radiation Jeff Holmstead.
The agency said its analysis is based on responses from 126 refiners.
The oil industry and business groups had sued EPA to block the low-sulfur requirements, arguing that the tough standard would force some refiners to close instead of making expensive modifications to their facilities. Fewer refiners could result in fuel shortages and higher prices, they said.
A federal court eventually sided with EPA, ruling that there was technology available to make diesel fuel that emitted lower sulfur emissions.
Reducing the sulfur content in diesel will allow for advanced emission control technology in diesel engines that improves air quality, helps states meet Clean Air Act goals and protects public health and the environment, EPA said.
Compared with 2000 levels, total U.S. clean diesel fuel production is expected to increase by 318,000 bpd in 2006 and 658,000 bpd in 2010, the agency said.
Production will vary by region, with output on the East Coast and the Rocky Mountain area decreasing slightly, EPA said. However, production drops in those regions will be more than offset by output increases and shipments from refiners in the Gulf Coast, Midwest and West Coast areas, EPA said.