The standard for new emissions standards. Diesel Engine School Bus Retrofit Technology Workshop Maryland Department of the Environment April 29, 2004

ULSD – The Road to 2006 By 2006 the U.S. EPA standards for sulfur content in on-highway diesel will be reduced from 500 ppm to 15 ppm at refiner level; phase in for end user Refiners, engine manufacturers, marketers, retailers and end users have begun strategizing how this new mandate will affect their industries Throughout the supply chain there must be adaptations to accommodate this lower sulfur fuel

EPA Regulations for On-Highway Diesel ppm on-road diesel Sulfur content reduced from 500 ppm to 15ppm All diesel will be ULSD 80% ULSD 20% 500 ppm Phase in: Fungible product June 06 In 2007, all new diesel equipment manufactured must run on ULSD. All diesel vehicles manufactured prior to 2007 may run on either LSD or ULSD to Sep 06 Marketers/ Retail

Drivers of ULSD Meets community and public interest group objectives –Health organizations initiatives Achieve immediate emission reductions –With or without emission control devices Lowest overall cost option for reducing emissions –Unlike other alternative fuel options, ULSD has no infrastructure or fleet changes/modifications –If end user operates an on-site fueling facility, no upgrades or modifications necessary to tank, piping, or dispenser

National Availability of ULSD Sprague Other Suppliers Manchester Boston New York New Jersey Philadelphia Washington, D.C. Ann Arbor Cleveland Atlanta Birmingham San Diego Los Angeles Portland Seattle Houston

Current Users of ULSD Heavy, medium and light duty vehicles Transit and school bus fleets Municipal & private transportation fleets Construction equipment Power generation equipment Marine

How Did Sprague Become Involved? 2000 New York City Transit Authority demonstration program –One depot –200 buses –Buses used ULSD base fuel only & ULSD with particulate filters Program test resulted in NYCTA converting 18 depots from 500 ppm diesel to ULSD, with no change in infrastructure or engine modifications –End result: 4,400 buses operating on ULSD had immediate reduction in emissions (e.g. immediate reduction utilizing ULSD and even greater reduction with buses operating on ULSD with particulate filters)

KEY: PM = Particulate Matter CO = Carbon Monoxide THC= Total Hydrocarbons ULSD Base Fuel Only ULSD with DPF Retrofit ** THC76%92% CO29%94% PM23%88% *Society of Automotive Engineers, Inc : Performance and Durability Evaluation of Continuously Regenerating Particulate Filters on Diesel Powered Urban Buses at New York City Transit with Detroit Diesel Series 50 Engine. ** 99% reduction in PM particle counts across all size ranges, including the smallest particles. ULSD Proven Emission Reductions*

End User Concerns

Operability No measurable difference in vehicle performance Easy to switch from engine perspective ULSD may be used in older trucks – no need to store two fuels Fuel Performance Currently refinery production of ULSD does not meet engine manufacturers lubricity specifications Fuel meets/exceeds engine manufacturers specifications using lubricity additive Supply & Distribution Transporting fuel to end user with minimal or no contamination is a challenge Requires segregated product at fuel terminals, pipelines, racks and delivery trucks At this time cannot use commercials pipeline for transportation of ULSD End User ULSD Concerns

Price –Optimize delivery quantity –Aggregate usage Supplier –Experienced in supply and delivery of ULSD or non- fungible products –Reliable and consistent supply (multi-refinery sources) –Multi-terminal network –Fungible vs. segregated system –Multiple segregated delivery transport fleet –Emergency Supply Plan

End User Concerns Supplier (contd) –Product winterization –Quality Control Program –Meet engine manufacturers fuel specifications Lubricity (SLBOCLE vs. HFFR) Type of lubricity additive Lubricity insurance Sulfur testing standards and enforcement to insure product integrity Future federal and local legislation 500ppm vs. 15ppm Financial resources