The report comes from environmental news service Greenwire, citing preliminary industry data presented by agency officials.
The supply projections, released last week at an EPA conference in Chicago, are based on information submitted by refiners as part of the implementation of the heavy-duty engine/low-sulfur diesel rule.
The new standards, promulgated at the end of the Clinton Administration and upheld unanimously in May 2002 by a federal appeals court, are a key component of EPA's long-term plan to help urban areas as they strive to meet federal deadlines for reducing ground-level ozone.
The new diesel fuel and engine standards drive industry concerns that the fuel may not be commercially available even as companies make significant investment in the low-emission engines. Earlier this summer, several individual trucking companies suggested EPA push back the upcoming deadline.
Under the new regulations, U.S. diesel fuel manufacturers must, by 2006, cut sulfur from today's rates of 500 parts per million to a new 15 ppm threshold in at least 80% of domestic supplies. In 2007, tight pollution controls take hold for large truck and bus engines, which in turn must use the clean fuel. While EPA has set a 2010 deadline for all fuel to meet the low sulfur requirements, it has set up a series of flexibility protocols to assist the industry and avoid any major supply problems.
Last week, EPA said the industry data is showing that the domestic diesel fuel supply will have upwards of 95% compliance in 2006, a positive development according to environmentalists attending the conference.
The refining industry faces a range of design, engineering and investments issues as it works to meet the fuel standards, Slaughter said. Meantime, it is preparing for even more work once EPA releases a final standard in April 2004 calling for similar tight air pollution standards for non-road engines.