New Diesel Regs Could Affect Waste Haulers' Bottom-Line

Brook Raflo

During his final weeks in office, President Bill Clinton published a flurry of controversial rules designed to protect public health and the environment. Among them was a new rule from the U.S. Environmental Protection Agency (EPA), Washington, D.C., which the agency predicts will cut diesel emissions drastically during the next seven years.

Published in December, the rule calls for a 97 percent reduction in diesel fuel sulfur content by 2006 and a 90 percent reduction in diesel engine particulate emissions by 2007.

This rule will reduce 2.6 million tons of smog-causing nitrogen oxide emissions each year, as well as decrease particulate emissions by 95 percent, according to the EPA.

"As a result, [the regulations] will prevent 8,300 premature deaths, 5,500 cases of chronic bronchitis and 17,600 cases of acute bronchitis in children," the EPA predicts. Additionally, "the action will prevent 1.5 million lost work days, 7,100 hospital admissions and 2,400 emergency room visits for asthma every year."

Diesel manufacturers such as the National Petrochemical and Refiners Association, Washington, D.C., are calling the new rule "unprecedented" and are gearing up to negotiate for less stringent requirements with members of the new presidential administration.

Meanwhile, waste industry representatives have adopted a wait-and-see attitude.

"Certainly, our industry is not against cleaner air," says Ed Repa, director of environmental programs for the Environmental Industry Associations, Washington, D.C. "Right now, we're just looking at what the costs will be. We have to react to what the manufacturers and regulators do, but this ultimately could drive up the cost of garbage collection."

Echoing Repa's cost concerns, Waste Management Inc.'s Fleet Vice President Vince Fortuna predicts diesel fuel prices could increase by as much as 8 cents per gallon. That cost is significant, he says, considering that Waste Management's fleet of 40,000 garbage and recycling vehicles consumes nearly 250 million gallons of diesel fuel per year.

And, Fortuna's estimates are based on the assumption that fuel manufacturers will meet the required sulfur reductions by 2006, a feat that some in the refining industry say is impossible - or perhaps cost-prohibitive - to achieve.

"There is by no means a universal view that the new 2007 standards can be met in the time required, and there also are concerns about the availability of cleaner fuel," says Allen Schaeffer, executive director of the Diesel Technology Forum, Herndon, Va.

Refining industry representatives warn that the rules could prompt some refiners to stop making diesel rather than pay to upgrade facilities. Such a decrease in the fuel supply could further raise the price of diesel, they say.

In addition to fuel cost increases, the EPA estimates these standards will raise the cost of new trucks by $1,200 to $1,900 per vehicle. But the American Trucking Associations (ATA), Alexandria, Va., contends that new trucks' prices will increase by as much as $8,000 per vehicle.

This is because the engine technology for drastically reducing particulate emissions is very new, Waste Management's Fortuna says. Meeting the new requirements will rely on three technologies currently in development, he adds.

First, Fortuna explains, refiners must produce an ultra-low-sulfur-content diesel. Next, engine manufacturers must develop a catalytic converter to prevent nitrous oxides and particulates from escaping into the atmosphere. Finally, engine manufacturers must develop an exhaust gas recirculation system that includes the necessary filters, he says.

But these technologies increase engine temperatures in all areas of operation, Fortuna says. "We have no idea what increased engine temperatures will do to the lifecycle of the engine."

For this reason, Waste Management plans to reduce the amount of time between preventive maintenance checkups, which means more annual maintenance and increased costs.

Another unknown is the availability of lubricants for these new engines. "Lubricants needed for 2006 still are in the pilot phase," Fortuna says.

In 1999, Chicago-basedInternational Truck and Engine Corp., announced its "green diesel" technology, which combines ultra-low-sulfur fuel and a continuously regenerating particulate trap.

"The technology in our green diesel engine will ... help us meet the 2007 standards," International's Vice President of Engineering, Patrick E. Charbonneau, told Waste Age's sister publication Fleet Owner magazine in Nov. 2000.

Equally confident in his company's selective catalytic reduction (SCR) technology, Chuck Salter, executive director of engine engineering at Mack Trucks Inc., Allentown, Pa., told Fleet Owner, "We imagine SCR will be a principle solution for reaching 2007 [nitrous oxide and particulate matter] emissions levels."

In addition to these and other large companies working on new diesel technologies, many new businesses are springing up to take on the challenge - and reap the profits - of the new standards.

"It's going to become a very lucrative business," Waste Management's Fortuna says.

But how much these developments will affect waste haulers' bottom-line still is unknown.

Much will depend on the Bush administration's commitment to enforce the rule, says EIA Federal Relations Director Bill Sells.

"[The EPA under President Bush] must figure out what its priorities are and decide how many people it will assign to enforce the diesel regulations," he says.

Bush spokesman Ari Fleischer told ABCNews the new administration has paid close attention to the regulations President Clinton enacted prior to leaving office.

"We will review each and every one of them," he said.

Meanwhile, to help businesses make the transition to cleaner diesel fuel, the EPA offers a voluntary diesel retrofit program described at www.epa.gov/otaq/retrofit/.