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US senators urge White House to stay out of IMO 2020 implementation


Senators say US refiners are ready to meet new demand

IMO 2020 rules cap sulfur at 0.5%, from current 3.5%

  • Author
  • Meghan Gordon
  • Editor
  • Valarie Jackson
  • Commodity
  • Oil Shipping
  • Topic
  • IMO 2020 US Policy

Washington — Fourteen Republican US senators urged the White House on Monday to let tougher international marine fuel sulfur standards take effect without interference in January, arguing that US refiners and the US trade balance both stand to benefit.

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The White House last fall was reportedly considering ways to delay the International Maritime Organization's 0.5% global sulfur cap on marine fuels on concerns that it would cause US retail gasoline and diesel prices to spike in the middle of President Donald Trump's re-election campaign. The rule takes effect January 1 and lowers the sulfur cap from the current 3.5%.

"Any attempt by the United States to reverse course on IMO 2020 could create market uncertainty, cause harm to the US energy industry, and potentially backfire on consumers," the senators said in a letter to Trump.

The letter was signed by senators from top oil and refining states Louisiana, Oklahoma, and North Dakota.

The Trump administration cannot likely delay the rule, short of building an unlikely majority coalition supporting delay ahead of the IMO's Marine Environment Protection Committee meeting in May. The panel already rejected a proposal for a soft rollout of the standards in October.

But Trump does hold a few tools that he could use for domestic messaging purposes if prices spike: releasing fuel from the 1 million barrel Northeast Home Heating Oil Reserve or ordering an emergency crude oil drawdown from the Strategic Petroleum Reserve.

S&P Global Platts Analytics expects the IMO 2020 spec change to be the "most disruptive event to hit the refining sector in decades," requiring a major shift in the structure of global bunker fuels and initially displacing about 3 million b/d of HSFO. Analysts expect middle distillates cracks to surge and gasoline cracks to stay firm.

The Coalition of American Energy Security has been lobbying lawmakers on the issue on behalf of oil and gas producers, refiners, shippers, and trade unions.

The letter was signed by Senators Bill Cassidy and John Kennedy of Louisiana; Jim Inhofe and James Lankford of Oklahoma; John Hoeven and Kevin Cramer of North Dakota; Roger Wicker of Mississippi; Rob Portman of Ohio; Shelley Moore Capito of West Virginia; John Boozman and Tom Cotton of Arkansas; Rick Scott of Florida; Todd Young of Indiana; and Mike Rounds of South Dakota.

-- Meghan Gordon,

-- Edited by Valarie Jackson,