EIA urged to watch sulfur rule for uneven effects

The US Energy Information Administration (EIA) should monitor upcoming 2020 limits on sulfur in marine fuels for potential outsize effects on Alaska or on the world economy, senator Lisa Murkowski (R-Alaska) says.

Murkowski, chairman of the Senate Energy and Natural Resources Committee, said such a step is warranted in part because she is concerned about the "interplay" between the International Maritime Organization's (IMO) sulfur rules that will apply on 1 January and the potential for a global economic slowdown. Other concerns are economic dislocations and unexpected market dynamics, she said.

Murkowski, in a letter to EIA yesterday, said is being vigilant about how the IMO standards could affect Alaskans living in rural and remote areas. She said none of her concerns were "conclusive reasons" to oppose implementing the rule, which are widely expected to reduce air pollution and benefit US refiners that have invested billions of dollars on compliance.

"It is my hope that your agency closely monitors implementation of IMO 2020 with a careful eye to unintended consequences and disparate impacts," Murkowski said.

The White House last year briefly flirted with the idea of seeking a softer transition to the rules, which would set emission limits that could be met by using bunker fuel that is 0.5pc sulfur, down from 3.5pc. President Donald Trump's administration has since appeared to back off the proposal amid strong opposition from US refiners, along with resistance from the IMO to any delay.

Murkowski's letter seems to be an effort at "due diligence on behalf of Alaskans" rather than an effort to delay the rule, a refinery industry source said. Fuel in remote regions of Alaska can cost far more than in populated areas. Gasoline prices averaged $5.36/USG in January in the interior parts of Alaska and reached $10/USG in a town only accessible by airplane, according to a state report.

The Coalition for American Energy Security, which is backed by refiners that support timely implementation of the rules, said the IMO sulfur standards would offer economic and environmental benefits across the US, including in energy-producing states such as Alaska.

"To fully realize these benefits, America must stay the course and stick with timely implementation of the IMO 2020 standards that will come into force in the next few months," the coalition said.

EIA did not respond to a request for comment.