The U.S. oil industry locked horns with environmental regulators last week over a new proposal to make diesel burn cleaner. The Environmental Protection Agency (EPA) proposed this spring to reduce the sulfur content in diesel by 97 percent, starting in 2007, as a way of cutting back on toxic emissions. But at a hearing on the green diesel proposal, oil industry representatives said the EPA was going "too far too fast" and that the rule could cause fuel shortages and surging prices similar to those now experienced by consumers of gasoline in the Midwest.
Oil industry representatives estimated the EPA's proposal would cost U.S. refiners roughly $10 billion in upgrades and new equipment and would likely knock out 30 percent of current diesel production.
They compared the proposal to a new EPA anti-smog requirement for gasoline commonly blamed for record high prices
in the Midwest, which have soared as much as 50 cents higher than the national average of $1.64 a gallon.
The EPA said it is accepting written statements on its proposal until August 14, at which point it will close its hearing and beginning drafting an official regulation.