[sustran] Canadian series on cars

[Craig Townsend]

 From the Vancouver Sun newspaper online edition, 21 May 2001

Canada's fuel among the worst: Sulphur blamed for foul auto emissions
Paul McKay Vancouver Sun


Can we have our cars and clean air too? In this 12-part series, a look at 
reinventing our wheels.
Canadians spend nearly $150 million each year for anti-pollution devices 
that are factory-installed on all new cars, mini-vans, pickup trucks and SUVs.

The devices are designed to cut smog-triggering tailpipe emissions by 90 
per cent compared with those of two decades ago. But they are being 
sabotaged by a chemical enemy lurking in almost all gasoline sold in 
Canada. So are the catalytic converters and pollution sensors in millions 
of older vehicles.
The impaired emission devices are allowing millions of tonnes of "fugitive" 
auto pollutants to silently escape tailpipes each year -- adding an extra 
threat to Canadian cities already beset by smog and related health damage.

The saboteur is sulphur. It's a common ingredient in the crude oil that is 
refined to make gasoline. The more sulphur per litre of gas, the more it 
disables pollution control devices. The longer a car runs on high sulphur 
gas, the more irreversible the damage.

And sulphur levels in Canadian gas are among the highest in the world.

"It's poisoning the catalyst. It's preventing it from doing its job," says 
Ron Solman, a retired professional engineer who helped develop emission 
testing and fuel-efficiency standards for the federal government.
"Canadians are already paying the price. They are already having their air 
quality damaged more than was intended."

Perversely, sulphur does the most damage to ultra-sensitive, 
state-of-the-art emission equipment. Once that happens, it is likely 
irreversible. Then vehicle owners may pay again through reduced fuel 
economy, replacement parts, or failed emission tests in provinces where 
they are mandatory.

"When you buy a new vehicle, not only are you expecting a certain level of 
emission performance, you are expecting certain fuel economy," Solman says. 
"Because of sulphur, you may not get the fuel economy you think you've got.

"It may be only a per cent or two less, but over 18 million vehicles and 
more than 30 billion litres burned every year, that's a lot of fuel."

This may be news to motorists, but it is no surprise to auto-makers, oil 
industry executives or government regulators in the U.S. and Canada. 
Numerous technical studies have identified sulphur as the arch-enemy of 
catalytic "after-burners" designed to destroy a host of harmful pollutants 
in engine exhaust.

"Sulphur is known to be the ultimate culprit in raising across-the-board 
emissions -- hydrocarbons, nitrogen oxides, particulate matter or toxics," 
says Mark Nantais of the Canadian Vehicle Manufacturer's Association. "All 
the data point in one direction: elevated emissions of each of these 
pollutants."

After an epic battle pitting U.S. oil refiners against auto makers and 
regulators, California banned the sale of gasoline with an average sulphur 
content higher than 30 parts per million in 1996. In many urban regions of 
the U.S., gasoline with 50 ppm is mandatory to reduce urban smog.

Countries like Japan, Thailand and Taiwan have similar legal limits, while 
Britain, Sweden, Denmark and Finland have reached those levels with a 
combination of regulations and taxes. In some cases, the transition took 
mere months.

Yet Canada's gasoline isn't slated to reach the 30 ppm sulphur content 
level until 2005 -- a full decade after provincial environment ministers 
asked the federal government to impose national gas standards matching 
sulphur limits to the best available auto-emission equipment. An unlikely 
alliance of Canadian auto-makers, medical associations and 
environmentalists backed them up.

They all wanted cleaner air. Instead, they got better catalytic converters 
-- and increasingly dirty fuels that disable them.

Our 17 million cars, minivans and pick-up trucks burn some of the filthiest 
fuel on the planet at a rate of 100 million litres per day. Canada's 
average national sulphur content exceeds 300 ppm -- 10 times the 30 ppm 
design limit for the newest emission controls. In Ontario, the largest 
gasoline market, the sulphur average exceeds 400 ppm.

Last year, all new passenger vehicles sold in North America were made with 
anti-pollution devices designed to meet California's tough tailpipe limits 
and run on low-sulphur (30 ppm) fuel. They have zero tolerance for high 
sulphur gas.

"The newer vehicles have technology to ensure less pollution. In order to 
do that, you have to have no-to-low sulphur," says Beatrice Olivastri, of 
the Ottawa-based environmental group Friends of the Earth. "So if you as a 
consumer have spent extra dollars to get a car that is fuel efficient and 
contributes less to smog, you're not going to get your money's worth unless 
you can also get low-sulphur fuel. The two have to go together."

Adds Nantais: "All the evidence, both auto and oil company studies 
conducted in the U.S., shows that low-emission vehicles deliver the optimum 
benefit when they have low-sulphur gasoline. Half the cars tested at 40 ppm 
exceeded the emission standards."

But that is not even close to the sulphur levels in Canadian gasoline. Last 
summer, an Esso refinery in Ontario shipped regular gas with 900 ppm 
sulphur. A Petro-Canada refinery produced premium grade gas with 600 ppm 
sulphur.

U.S. tests on catalytic converters in the late 1990s found that at 600 ppm, 
hydrocarbon pollutants increase by 46 per cent, carbon monoxide increases 
by 86 per cent and nitrogen oxides increase by 156 per cent compared to 
emissions at 30 ppm. The pollution occurs roughly in proportion to the 
sulphur levels. On a model-by-model basis, the catalytic converters in U.S. 
and Canadian vehicles are identical.
"You have to get down to about 30 ppm to get minimal effect on the 
catalyst," Solman says. "If people are buying a vehicle that they think is 
going to give them and their kids a better [air quality] break, that 
promise isn't being met because they can't get the fuel."

Canada's biggest oil refiners have been defying the world-wide trend to 
cleaner gasoline for more than a decade. The national sulphur average 
increased by 40 per cent from 1988 to 1998; the Ontario average increased 
by 141 per cent during the same period. Most gas refiners have improved 
only modestly since then.

"We had a lot of discussions with the oil companies and they continued to 
resist," laments Nantais. "Their position has been: unless it is regulated, 
they shall not move."

The country's two biggest suppliers of high sulphur gas are Imperial Oil 
(Esso) and Petro-Canada. They account for more than half the gasoline sold 
in Canada, and operate seven of the worst high-sulphur refineries.

Both have relied on increasing volumes of cheaper, high-sulphur crude 
during the past decade, and both have made minimal investments to date for 
sulphur-reduction refinery upgrades. Company fuel content reports filed 
with Environment Canada show there are often high sulphur levels in even 
their premium blends.

Esso and Petro-Canada officials interviewed by The Vancouver Sun flatly 
deny that sulphur damages current catalytic converters, and say their 
companies will spend hundreds of millions to reduce sulphur to 30 ppm 
before 2005. They stress all their gasoline contains sulphur well below the 
current national guideline of 1,000 ppm.

By buying cheaper "sour" feedstock and saving costs on stripping the 
sulphur at refineries, Imperial and Petro-Canada can squeeze extra profits 
from sales at the pump. Petro-Canada has about 2,000 gas stations and fuel 
supply outlets. Imperial markets its gas through 2,500-stations in the Esso 
retail chain, and major outlets like Canadian Tire.

Last summer, a Canadian Tire outlet in Toronto had the highest sulphur 
levels, 800 ppm, among 48 cross-Canada gas station samples obtained by The 
Sun. Based on reported refinery sulphur levels for last summer, Esso was 
the probable source of the gas at that outlet.

The refiner's crude may be sour, but the profits are sweet.

Last year, Imperial Oil reported net earnings of $1.4 billion -- the 
highest in its 120-year history and nearly triple net earnings in 1999. 
Petro-Canada reported net earnings of $893 million, nearly four times its 
1999 profit of $233 million. Its previous most-profitable year was 1997, 
when it earned $306 million.
The Irving Oil refinery in New Brunswick provides a startling counterpoint. 
The refinery added sulphur-removal technology as part of a recent 
$1-billion refinery upgrade. Blending with low-sulphur crude allows it to 
sell 30 ppm gas in the Maritimes and the U.S. eastern seaboard. It also 
supplies three MacEwen gas outlets in Ottawa.

"Why is it that Irving Oil can step up to the plate, using off-the-shelf 
technology? They are the largest independent refinery in Canada," Nantais 
says. "Where are the others?"

In 1999, the Chretien government enacted a regulation forcing Canada's 
refiners and importers to clean up their act by 2005.

A panel of medical experts, who prepared a 1998 report for Environment 
Canada, concluded that reducing the sulphur content to 30 ppm would prevent 
1,352 premature deaths, 1,537 hospital admissions, 58,429 acute respiratory 
cases for children and two million days of acute asthma problems in seven 
Canadian cities over the next two decades.

Their report estimated the savings in lower health costs to be $5 billion, 
and stressed that the prevention benefits from improved air quality would 
be far greater for the national population.

"If everybody had access now to low sulphur gasoline, at 30 ppm, it would 
be the equivalent of removing two million vehicles from our roads," Nantais 
says.

A second expert panel pegged the capital costs for all oil refinery 
upgrades to meet a 30 ppm national average at $1.8 billion, with further 
combined annual operations costs of $119 million. Due to low profitability 
and tight competition, it warned, up to three unidentified Canadian 
refineries might close rather than finance upgrades.

The combined refinery upgrades would increase the price of gas by a penny a 
litre.

Despite this, Canada's oil lobby continued to oppose the sulphur limit 
advocated by car makers, the Ontario Medical Association, some cities and 
environmental groups. The refiners refused to endorse any conclusions in a 
1998 report on the issue to Environment Canada, contending there was no 
scientific or medical basis for the 30 ppm limit.

Petro-Canada, in which the federal government is still a major shareholder, 
ranks as Canada's second-dirtiest gas vendor. It told Environment Canada: 
"We do not believe the stated benefits [by medical experts] are defensible. 
[The company] is concerned about the possibility of prematurely investing 
tens of millions of dollars in sulphur reduction with dubious economic 
benefits and no clear justification."
Nantais says every member of the Ottawa-based Canadian Petroleum Producers 
Institute has so far rejected a proposal to join the auto makers in a 
campaign to market low-sulphur gasoline. (Irving Oil did take up the offer, 
but is not a member of the Institute).

Following a filing by Friends of the Earth under federal access to 
information laws, Imperial Oil, Petro-Canada, Shell Canada and Sunoco 
sought a court ruling to prevent the public release of data about the 
sulphur levels in gas they sell. "I believe that disclosure of Imperial's 
sulphur content reports will generate negative publicity about Imperial as 
a responsible corporation, and about the quality of Imperial gasoline, and 
that this negative publicity will prejudice Imperial's competitive position 
in the retail market," Imperial vice-president Roger Purdue said in a 1998 
affidavit. "Sulphur in gasoline has no impact on engine performance and its 
contribution to smog is negligible."

Petro-Canada manager Giorgio Grappolini said his company's sulphur content 
reports to Environment Canada should not be made public because they 
"contain competitively sensitive information that is of strategic value to 
competitors of Petro-Canada and to suppliers, contractors, or contractors 
with whom Petro-Canada does business."

The companies later withdrew the court challenge and acceded to public 
disclosure of the sulphur-content reports they must file annually to 
Environment Canada. They are not independently verified.
The oil refiners have also rejected as impractical proposals to have 
sulphur levels in their gasoline posted at their pumps.

"If people knew that the anti-pollution equipment in their car is being 
poisoned, and they had a choice from company to company, then they could 
move the marketplace by choosing low sulphur fuel," says Olivastri, of 
Friends of the Earth. "This is the kind of competition we would like to see."

The stalemate tactics by the oil refiners didn't win the war, but they did 
delay the day of regulatory reckoning by seven years.

Now their deadline is 2005. If Canada's oil refiners fail to produce 
gasoline with an average sulphur content of 30 ppm, it cannot be sold here. 
Both Esso and Petro-Canada say they will achieve that sometime in 2004.

Dr. David Bates, a former dean of the University of British Columbia and 
air pollution adviser to the Canada/U.S. International Joint Commission, 
says that deadline is far too lenient.

"Three years ago we made a recommendation to the IJC, which passed it on to 
the government, saying the sulphur in fuel should be immediately reduced. 
I'm amazed that it is still that high. I am astounded that Canada has been 
so reluctant to take this stand," Bates says.

"When it got down to it, it was one cent a litre when the oil industry 
produced its final costs. Now the reality is: for new vehicles you must 
have the sulphur level down to 30 ppm."

In the meantime, some four million new vehicles are projected to be sold in 
Canada between now and 2005. All of them will have pollution-control 
devices acutely vulnerable to damage from high-sulphur gas.
Car manufacturers say they -- and millions of older vehicles -- may be 
permanently damaged by the time clean gas comes to most Canadian gas pumps.

"The more fuel you use, with a higher concentration of sulphur, over time 
it builds up more and more," Nantais says. "And it's quite conceivable that 
these problems don't kick in until just after the warranty expires. So the 
consumer gets stuck with the bill."

________________________________________________
Craig Townsend
Institute for Sustainability & Technology Policy
Murdoch University
South Street, Murdoch
Perth, Western Australia 6150

tel: (61 8) 9360 6293
fax: (61 8) 9360 6421
email: townsend at central.murdoch.edu.au