1. ULSD does not have the same cold-flow properties as #1 fuel. ULSD will still require winter blending. Be reminded that if you are blending in a #1 fuel into a load of ULSD, then the #1 must be ULSD also. This may cause some disruption depending on the supply of #1 ULSD fuel.

2. You are not required to sell 15-ppm on-road diesel fuel until June 1, 2010. However, you may have no choice as 15-ppm ULSD will be the only on-road diesel available at terminals.

3. Even if you choose to supply 15-ppm ULSD, you are not required to do so by October 15, 2006. The only significance of the October 15 deadline is that after this date the 20% downgrade limitation applies. In other words, you can only downgrade 20% of 15-ppm on-road to 500-ppm on-road. Any 15-ppm used to turn over 500-ppm tanks after October 15 will count against your downgrade limitation.

4. There is only one way to downgrade under the ULSD regulations. A downgrade only occurs when you change 15-ppm on-road ULSD to 500-ppm on-road diesel. Everything else is a re-designation to off-road fuel.

5. Retailers and wholesale purchaser-consumers who sell both 15-ppm on-road and 500-ppm on-road at the same location are exempt from the downgrade limitations. Downgrade as much as you like.

6. Re-designation occurs when you change either 15-ppm on-road or 500-ppm on-road to any off-road fuel. Under the ULSD regulations re-designation can be done without limitation by any party. However, tax issues and market demand will limit how often you can re-designate on-road diesel to off-road diesel.

7. All shipping papers and bills of lading must have the new product description language for diesel fuels required under the regulations. Receipts to ultimate consumers, including delivery tickets for home heating oil customers are not required to have the new language descriptors.

8. Most terminal operators will not reveal the actual sulfur content of the fuel you receive at the rack. The most they are likely to reveal is that the fuel meets the 15-ppm standard even though it could actually be 8-ppm fuel. Consequently, you won’t know your margin of error for sulfur contamination when you load at the rack.

9. Always label dispensers with the appropriate labels. Labels must match sulfur content. The EPA and RFGSA will be sampling to find dispensers and labeled incorrectly.

10. Product layering can occur if your diesel storage container has less than 60% ULSD according to studies done by Marathon Oil.

11. Reports from various sources suggest that USLD is more prone to microbial growth due to its low sulfur content. Bacteria was historically not able to thrive in high sulfur fuel.

11. 2007 engines have to work harder to heat ULSD. This can cause problems with mileage and has already been known to cause filter issues. Some filters have been found to have a high amount of asphaltine, or black suit, due to higher degrees when heating the fuel.

12. EPA, IRS and RFGSA inspectors may:

• Perform retail inspections, take samples and perform testing. (tank and nozzle samples)
• Inspect and take samples at other points (terminals and transports).
• Review Designtate and Track reports - check for non-matching hand-offs and failure to meet balances.

13. The regulations do not specify frequency of sulfur testing. You are not required to test, but if you don’t, you are not allowed to raise a defense in an EPA enforcement action.

14. Testing every batch of diesel fuel for sulfur content is not required. Once a month testing or even less frequently may be acceptable if you have a strong quality assurance program in place that insures against downstream contamination while the fuel is in your custody.

15. PMCI has the tools available to help you comply: a written Fuel Quality Assurance Plan and fuel testing services to document your diligence in complying with the phase in of ULSD.