Stricter sulfur rules stressing Oklahoma refineries

Monday, November 29th 1999, 12:00 am

By: News On 6

TULSA, Okla. (AP) -- New rules on reducing sulfur expected next month from the Environmental Protection Agency will cost Oklahoma refineries millions of dollars and could force some to shut down, say state energy leaders. The quest for cleaner air will cost both oil companies and consumers. Refineries will have to comply with the federal mandate to reduce sulfur in gasoline and consumers may have to pay up to 10 cents more per gallon of gasoline because of the refineries' costs.

The EPA's new rules are expected to require refineries to lower the sulfur content in gasoline to one-tenth of its current level by 2004. Along with planning for reducing and removing sulfur from gasoline, Bartlesville-based Phillips Petroleum Company is working to develop patented technologies to reduce the sulfur in gasoline. Phillips said its S Zorb can remove sulfur from gasoline with little loss of octane and gasoline volume. But oil companies are expecting sulfur to be a costly prospect, regardless of whether new technology can provide help. "In the case of low-sulfur gasoline, it's going to take money," said Dexter Sutterfield of the Department of Energy's National Petroleum Technology Office in Tulsa.

Sutterfield said some refineries may be forced to shut down in the face of the stricter rules. "They've got to make an investment decision," he said. Jerry Thompson, senior vice president of Tulsa-based Citgo Petroleum Corp. and chairman-elect of the National Petrochemical and Refiners Association, said it will cost Citgo between $300 million and $400 million to comply with the EPA plan. He said the costs should raise the price at the pump by about 5 cents per gallon. Sutterfield said some costs could rise up to 10 cents per gallon. Thompson said the cost to consumers could be less if the EPA would impose a more reasonable sulfur limit of 150-parts-per-million instead of the anticipated 30-parts-per-million and if automakers would further improve exhaust systems.

Thompson also said four years isn't enough time to test and develop technology needed to meet the proposed limits. He also pointed to emerging technology that would lower the costs of taking the sulfur out of the gasoline. "Given adequate time for this new technology to be proven commercially, the cost would be lower," he said. The EPA targeted sulfur because it hurts the performance of catalytic converters designed to cut automobile pollution by more than 90 percent. The EPA said reducing sulfur content from 330 ppm to 30 ppm would be equivalent to removing 54 million vehicles from the country's highways.

NPRA spokeswoman Julie Rosenbaum said the 30 ppm standard should be applied only in areas that have significant air pollution. She said the small refineries that serve areas where the air is clean should not be forced to comply with the limit. "They don't need to spend millions of dollars to change theirrefineries for gasoline that really won't have any impact on their area," she said.

Sunoco Inc. produces about 85,000 barrels of gasoline a day at its Tulsa refinery. The gasoline contains about 80 ppm sulfur, said Sunoco spokeswoman Jayme Cox. The cost to bring the refinery into compliance is estimated at about $10 million. Technologies that minimize the loss of octane are important because the federal government also wants to remove a methanol-based additive known as MTBE, which is used to make cleaner fuel. MTBE increases octane levels, but new research shows it has contaminated drinking water supplies and could cause health problems in humans.

Lower octane levels may cause engines to falter. Sutterfield said the technology needed to produce gasoline with lower sulfur levels is being tested and developed. "A lot of it is not commercially proven," he said. "Just howgood it will be and what it will cost is up in the air."