DEF—What the New Regulation Means for YOUR Business.

Does your business use diesel powered vehicles? If so, pay attention. An upcoming 2010 (that’s in six months folks) Federal Regulation affects YOU.
As you may or may not know, ALL 2010 model year vehicles with a diesel fuel powered engine will have some new requirements. The EPA’s “Clean Diesel Rule” mandates diesel engines eliminate 90% of the currently allowed emissions of Nitrogen Oxide (a.k.a. NOx).

Engine Manufacturers have two technologies to choose from when it comes to solutions to this undoubtedly very expensive problem: 1)Exhaust Gas Recirculation (EGR) and 2) Selective Catalytic Reduction (SCR)–Think Betamax v. VHS. SCR is winning standard in this battle and most diesel engine manufacturers have already committed to it like Ford, Dodge, and GM.

So what does this mean for business owners and mangers that use diesel powered vehicles in their day to day business activity? Work and Expense. Implementing a new technology into a production is always expensive the first couple of model years, but the SCR equipped vehicles will require “Diesel Exhaust Fluid” (DEF) to operate properly and stay in compliance. You thought fuel was expensive? You ain’t seen nothin’ yet.

SCR equipped vehicles will consume about 1 gallon of DEF for every 50 gallons of diesel fuel burned. How much does a gallon of DEF cost? If it’s purchased in the small consumer packaging or the highly marketed “totes”… as much as $8 per gallon. I’ve heard numbers thrown around like “$35” per gallon, but I’m just not seeing that. $8/gallon feels about right. Large 18-wheelers may see some relief because they will conserve fuel, but this new regulation certainly isn’t going to save anyone any money. This is a direct new cost. Businesses with smaller diesel trucks, such as ground support vehicles at airports, work trucks that are utilized by my construction and paving clients, car dealerships, delivery companies (FEDEX, UPS), and municipal and county government vehicles will be affected just to name a few.

So, what’s the best way to save money? My advice—install an underground storage tank and buy in bulk from the manufacturer. You will save about $5/ per gallon on DEF if it’s bought in bulk. Yes, installing an underground storage tank is expensive but in the long term the upfront expense will pay for itself quickly when you calculate the cheaper per gallon price of DEF.

Or better yet, form a partnership with other local companies that are affected by this regulation and install one underground storage tank that everyone in the partnership uses. I suggest this business structure quite a bit when consulting to corporate aviation departments looking to install fuel farms. All of the businesses involved in the partnership will save money and break even on the initial tank installation MUCH faster.

In the end, DEF is going to be a household name next year and there’s no way around it. Start strategizing now on a method and plan to keep your cost as low as possible.
For more information on DEF or on installing an underground storage tank log on to www.desconsultants.com or email me at rlynch@desconsultants.com.

IS YOUR AVIATION FACILITY ON EPA’S RADAR?

New Painting Regulation Impacts Small and Mid-Scale Aviation Facilities—Fines & Penalties Could Be Severe

Which Facilities Does the Rule Affect?

Any aviation facility that engages in painting of aircraft, aircraft parts, or ground support equipment or that uses paint strippers containing methylene chloride is affected.

What is Methylene Chloride and how do you know if you facility uses it?

Methylene Chloride is a chlorinated solvent that is widely used in chemical paint stripper formulations. The best way to determine if your facility uses methylene chloride is to review the Material Safety Data Sheets (MSDS) for all of your paint stripping compounds; the presence of methylene chloride should be indicated in the section on hazardous ingredients.

What Does the Rule Require?

The upcoming regulation requires that all affected facilities comply with the following standards:

1. Implement a written Best Management Plan illustrating the facility’s approach to reducing the use of paint strippers that contain methylene chloride;
2. Ensure that all painters successfully complete a certification course every five years;
3. Implement new filtration systems and enclosed paint spray booths or similar enclosures;
4. Utilize high transfer efficiency paint spray guns; and
5. Utilize specialized machines to clean paint spray guns.

What Are The Compliance Dates?

New and reconstructed sources that began operating on or after September 17, 2007 must be in compliance upon startup. Existing facilities (in operation prior to September 17, 2007) have until January 10, 2011 to comply with all the requirements of this regulation.

How long will it take to implement the required changes at your facility?

Taking a proactive approach is generally more budget friendly than taking a reactive approach. Evaluations, equipment design, ordering, and installation — not to mention your painters’ training and certification could take in excess of six months. Keep in mind that as the deadline approaches, inventories typically become exhausted.

What Are The Reporting and Record Keeping Requirements?

Affected facilities must submit an Initial Notification Report and an Initial Compliance Report. Additionally, annual reports may also be required. There are numerous record-keeping requirements associated with these new standards, including records of the painter training certifications. These records must be maintained in a designated format for at least five years and must be available for unannounced inspections by the EPA.

What are the financial impacts if your facility does not comply by the set date?

It’s not uncommon for a rule of this nature to command fines of up to $27,500 per violation, per day. “Economic Benefit of Non-Compliance Fines” can also be assessed; meaning, EPA will estimate how much money a facility saved by not complying with the rule and add back that amount to the initial fine.

ccuddy@desconsultants.com

www.desconsultants.com