BY THE time farmers are harvesting this year's fall crops, they will have an expanded menu of petroleum products from which to choose. If they are lucky, they'll be able to order à la carte.
The new products, ultralow-sulfur diesel (ULSD) fuel and reformulated engine lubricants, are specifically designed to meet federal emissions rules for heavy-duty on-highway trucks built after January 1, 2007. Despite this relatively small group of vehicles, all market segments will be affected because some refiners might stop producing their current blends in favor of the more expensive varieties mandated by the EPA. Others could offer dual product lines for awhile, but that will boost the complexity and expense of inventory and distribution.
All of the changes — especially the prices — are clouded in uncertainty. The new fuel, however, is fairly straightforward. In fact, it's not even really new. ULSD fuel, which can contain no more than 15 parts per million (ppm) sulfur, has been available for quite some time, but only in limited quantities in certain areas. By year's end, it will replace today's “normal” on-highway fuel, the sulfur content of which cannot exceed 500 ppm. Refinery officials say ULSD is more expensive to make — an extra $0.03 to $0.10/gal. seems to be the most popular range of estimates — and consumers should expect those increased costs to be reflected at the pump.
Farmers can continue using the higher-sulfur, and presumably lower-priced, fuel in their field equipment until 2010, when ULSD is mandated for all diesel-powered vehicles. Increasingly, though, the trick will be in finding the higher-sulfur fuel. Refineries won't have much incentive to keep producing it unless they're selling to a significant number of off-road users, whether in ag, construction or mining.
Those same market conditions will also determine which companies continue to offer the existing lineup of premium engine lubricants, classified as CI-4+ by the American Petroleum Institute. By late fall, the oil industry will switch to the CJ-4 classification. The change, not surprisingly, is more than alphabetic. The forthcoming products, developed during the past three years, are built on a reduced additive package, featuring (among other things) a lower total base number, or TBN. The TBN is basically a chemical mixture that neutralizes acids resulting from combustion.
For operators using fuel other than ULSD, lower TBN could result in more frequent oil changes, says Jim McGeehan, global manager of engine oil technology for Chevron. “We think the drain intervals for on-highway trucks might stay the same as they are now,” he says, “but that probably won't hold true for farm equipment running on fuel with a higher sulfur content.” He suggests that CI-4+ lubes would be a better choice in such circumstances.
Bob Theisen, manager of technical services at CHS, which markets energy products under the Cenex brand, agrees. “I'm sure the new oils will work well in all diesel engines,” he says. “At this time, though, I don't see any advantages they'd offer to offset their higher costs in off-highway engines. Plus, the combination of higher fuel-sulfur levels and lower amounts of TBN in the oil could shorten drain intervals.” He says CHS, as in the past, will offer fuels and lubricants to accommodate the diverse needs of its customers.
That would be good news for Dan Piper, energy manager at Frontier Co-op in Lebanon, IN. Piper carries Cenex products, and he doubts that his customers have much interest in ULSD or reformulated lubricants. Given a choice, he says, Frontier will stay with its current petroleum lineup until there is genuine demand for something else.
Piper's ideas might change in the coming months, however. He has scheduled two meetings for area farmers in February and March, inviting his CHS representative to come in and discuss the new fuel and oil.
Good information is key in marketing premium products, says Bruce Larson, vice president of Farm Oyl. “We've found that a good portion of buyers will opt for higher quality if the value is apparent,” he says. “This is true even if the prices are higher.” Larson says Farm Oyl executives haven't fully determined their strategy for handling CJ-4 and ULSD, but he expects those decisions to be made soon.
Officials at Citgo haven't mapped out their approach yet either. But Mark Betner, Citgo's heavy-duty-product manager, says he expects separate lines for on-highway and off-highway customers. Still, Betner is enthusiastic about the next generation of oil — for all diesel applications. He says people are getting too wrapped up in the pricing issues when they should be focused on the performance advantages of CJ-4.
“Engine lubricant adds just pennies to a farmer's overall business expenses,” he says. “Ounce for ounce, we pay more for bottled water in this country than we do for oil. It's true, the new products will cost slightly more than what we're using now, but they'll also help people save fuel, which is a much bigger expenditure.”
Altering the balance
Betner's views on economy might not be universally shared among his colleagues at other companies, but it's likely that they all agree with him on one topic: aftermarket oil additives.
“If customers are dumping additives into their crankcases, they are more than 99% likely to remove their oil's warranty,” he says. “Furthermore, they're not improving anything. I don't care what's being advertised, no aftermarket mixture will ‘help’ a high-quality, certified engine lubricant. Today's oils are delicately balanced blends, and anything altering that balance runs a good chance of hurting performance more than helping it.”
McGeehan at Chevron concurs: “We go to great lengths to formulate these products, running them through a whole series of testing procedures. The chemistry of additives can have complex reactions to varying levels of [petroleum] components. Once you start adding things, you essentially void our warranty. You're flying on your own.”
A safer, more reliable way to ensure optimum lubricant performance is to rely on the advice of oil suppliers, either local, regional or national. A great deal of information is also available on the Internet and in printed literature. During the next few months, oil companies will be dispatching their gurus to countless meetings at co-ops and other distributor outlets, detailing the pros and cons of CJ-4 and ULSD. Farmers would be well served to attend. Maybe by that time, someone will know exactly how much more the new products will cost.
MODERN OIL categories began in 1947, when the American Petroleum Institute and several other groups started setting engine-oil standards. Before then, oil was rated only on its viscosity. The earliest categories involved just a few performance tests, but the standards have been raised with each new category. To be approved for the forthcoming category, CJ-4, oils will undergo at least 16 tests, some developed by the API, others by individual engine manufacturers. Oil that passes these tests is then licensed and carries the category designation on its packaging.
In the current alphanumeric jargon, C means compression ignition, and 4 stands for four-stroke. The middle letter, J, changes with each new level of performance.