Confusing US Diesel Fuel Waivers Could Put Many Engines At Risk

Fuel laws aren’t set in stone, as they tend to shift in order to control emissions. For instance, fuel laws quietly started prioritizing the cleaner ultra-low sulfur diesel (ULSD), which made emission control more robust. Today, ULSD is mandatory for newer diesel engines since it drastically reduces emissions from vehicles running on diesel. However, the recent rise in fuel prices has led to federal and state lawmakers to implement a series of relief measures, which, while helpful, have introduced a great deal of confusion and may even unwittingly put modern engines at risk.

For example, residents in Texas and Alaska received exemptions in form of waivers that allows states to supply diesel fuel with a sulfur content of 500 parts per million (ppm). This is a massive shift considering that the standard ULSD diesel can have a sulfur content of just 15 ppm. According to Allen Schaeffer of Engine Technology Forum, the move will decrease operating cost. Yet, Schaeffer also warned that diesel fuels are not “interchangeable,” meaning that learning about engine requirements can help people circumvent equipment damage, while abiding by all regulatory requirements so they don’t run into compliance issues.

Low-tier engines can handle 500 ppm of sulfur if the owner’s manual allows it. In contrast, newer engines (think Tier 4 and Tier 4 Interim engines) could suffer degradation, which may lead to a drastically decreased lifespan of certain components when using fuel that exceeds their 15 ppm sulfur content limit. This may not lead to instantaneous damage to the vehicle, but will rather cause degradation with continuous use.

Key reasons why diesel fuel is more expensive than regular gas are the more complex diesel refining process and the sheer fact the demand of diesel often exceeds the supply. Naturally, to alleviate the excessive toll on consumers, a federal order was introduced to temporarily allow vehicles to use red-dyed or off-road diesel – a variant exempt from usual highway taxes, but one that is almost chemically identical to regular diesel. 

Generally, getting caught with red diesel on a public roadway is illegal because it falls into the area of tax evasion, as the red dye indicates that a person didn’t pay highway taxes because this fuel is intended for off-road use only. The federal highway tax is $0.244 per gallon, so cutting it could, at least in theory, provide immediate relief from excessive diesel costs.

However, some experts like Tom Kloza of Gulf Oil believe the impact of such measures would be marginal. Kloza explains that the wholesale diesel price will remain unchanged, with the main effect being the reduction in tax revenues. In addition to mixed impact on supply, the federal order also made matters a lot more confusing for citizens. 

For instance, there’s no clarification on whether the taxes are waived permanently or just deferred. This is important because operators that take advantage of the waiver won’t know if they’ll owe money to the federal government later. It may also lead to compliance issues due to various legal discrepancies between individual states, which may become a problem for drivers who cross state lines.