NPRA 2007 Annual Meeting
PADD 3 ULSD Refinery Status
96.4%
0%
0
7
5
No Diesel
53.8%
0%
0
230
6
No ULSD, But ULSD Projects Pending
13.1%
26.3%
124
412
6
Mainly 500 ppm Diesel
11.8%
77.9%
316
237
8
>50% ULSD
0.3%
98.0%
571
485
14
All ULSD
Percent >500 ppm of Dist. Fall 2006
Percent ULSD of Distillate Fall 2006
ULSD Production Fall 2006 (MB/D)
Diesel Production Fall 2004 (MB/D)
No. Refin-eries
ULSD Production Relative to Total Distillate
Note: ULSD–ultra-low sulfur diesel;  Fall period – August through October                                 Source: Form EIA-810
SA number of years ago, when we began to look at the challenge facing U.S. refiners to produce ULSD, we speculated whether refiners would de-sulfurize the easier projects first, leaving the more challenging feedstocks to later as ULSD demand grew.  But looking at individual refineries, that does not seem to be the case.

SThe first group of refineries on this chart have already converted their total distillate pool to ULSD.  The second group has converted almost all of their diesel pool to ULSD, but is still producing some high sulfur distillate.  These facilities may not do much more in the short term.

SThe third and fourth groups of PADD 3 refiners above produce still produce substantial LSD.  Moving to the higher ULSD production may be costly, but will likely be no more challenging than projects experienced by some refiners already at full ULSD production.

SThus, we do not anticipate a huge hurdle in moving to full ULSD.  However, there still may be more challenges further down the distribution chain.  We have not yet tested the system’s ability to handle large contamination issues, for example, particularly when diesel product is in a region where large volumes of heating oil are not used.