A strict sulfur limit for marine fuels is starting in 2020.  US refiners say they have been preparing for the International Maritime Organization’s 0.5% sulfur cap for a dozen years by making billions of dollars of investments to their plants. They also think US oil producers are well positioned to meet new global demand for lower-sulfur fuels.

Despite the industry’s confidence, Gulf Coast refiners are nevertheless skittish about one major wild card.  The January 1, 2020 implementation date comes right in the middle of President Donald Trump’s re-election campaign, and this White House has shown a particular sensitivity to pump prices and their impact on voters.  Trump administration sources told the Wall Street Journal in October that the White House was considering ways to delay the IMO’s 0.5% sulfur cap beyond the long-scheduled January 1, 2020, implementation date. The story alone sent the stock market value of five US refining companies down by a combined $11 billion – hence their skittishness.

Within weeks of the story, trade groups for refiners, oil and gas producers, LNG exporters and steelworkers created the Coalition for American Energy Security to educate White House officials and members of Congress about IMO 2020 and what US industries were already doing to prepare… “The American energy industry is ready to dominate the global market for these new fuels, and timely implementation is critical to achieving that objective.”  said Ken Spain, spokesman for the Coalition for American Energy Security..

Excerpts from Insight from Washington: US refiners worry about White House wild card as IMO 2020 nears, S&P Global The Barrel, Mar. 11, 2019