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to maintain diesel customer relationships in commercial fueling operations. A great many oil dealers are involved with wholesale diesel and even retail diesel. Tim Cheyne, Integer's director—emissions, launched the DEF forum with an overview of Integer's perspective on the future of SCR/DEF as a primary emissions reduction technology in an envi- ronment of the California Air Resources Board's and the Obama Administration's ever tightening emission standards. He noted that there should be nothing surprising through 2020 and CARB's Phase 1 requirements. The market should be robust during that timeframe with some newer engines using twice as much DEF to meet envi- ronmental standards. Improvements in truck aerodynamics have, in fact, already provided tremendous gains in efficiency lessening the requirements on engine emission technologies. He expects the industry to break 1 billion gallons of DEF in the next 3 to 4 years. Currently, the adoption rate among Class 7 and Class 8 trucks is about 30% as the U.S. truck fleet continues a gradual turnover to the new engines. Beyond 2020, there will still be a place for SCR, but he noted the question mark will be the intensity of that solution. More techno- logical advances have to take place to further cleanup the technology for Phase 2 requirements. This is particularly the case with an engine cold start where you see the most NOX emissions. DEF pricing in North American DEF market received a specific focus in a presentation by Integer analyst Rebecca Hayward. Pricing generally involves raw material costs, logistics throughout the sup- ply chain, the location of blending facilities, the level of competition in different retail channels, and the cost of oil relative to the role it plays (as refined fuels) supporting the entire logistical process. She noted that the primary market driver was urea cost and that the generally do follow the NOLA Index with 1 to 2 month lag time. However, local markets have their own issues that can dramatically impact pricing. High horsepower (>751) is an exciting application area for DEF distributors where volumes can be exceptional. Carlos Sustaita, high-horse power account executive, Cummins Inc., discussed the ramifications of the Tier 4 emission requirements in a range of non-road applications. These applications include stationary, such as power generation; mobile, where the equipment moves one site to another as required; circuit runs, that include mining haul trucks and commuter loca- tions; and long distance, which would include barges and freight locomotives. In the mobile realm, a fracking operation typically has 15 to 20 pressure pumps that run 18 hours per day with DEF being approxi- mately 4% of the diesel consumed. That could require 2,400 to 5,500 total DEF gallons per week. In the circuit run applications, a small site might use 2,200 gal- lons per week; a medium operation might require 7,900 gallons per week; and a large operation might require 21,000 gallons per week. Filling contamination is commonly a concern in these rougher environments. Colder climates can also cause some concerns. The panel discussion: "Development of DEF in the Non-Road Sector" continued the high horsepower discussion more broadly. DEF supply to the non-road sector is experiencing the biggest growth, as more end-users adopt SCR equipment complying with Tier 4 final standards. Until now the sector has relied on drums and totes for DEF supply but, like the commercial vehicle sector, trends show that the move to bulk supply is increasing. This panel featured moderator Fabricio Cardoso, Integer senior analyst; Norm Winkler, National Sales Director, Titan Chemical Transfer Solutions; Stig Uhlen, National Sales Manager - West, Blue Sky DEF; Luke Van Wyk, General Manager, Thunder Creek Equipment; and Carlos Sustaita, High-horse Power Account Executive , Cummins Inc. As previously noted, the non-road applications typically come with enhanced contamination concerns (though one panelist noted truck stops are not necessarily the most pristine of environments). Off-highway systems can have more frequent fill requests than high- way systems because of DEF tank sizing can often be more closely matched to the fuel filling cycle leading to more nozzle interactions and a greater concern of contamination. The utility of adopting closed-systems was discussed. As the panelists noted, agricultural cooperatives and agriculture in general have begun to develop an infrastructure for DEF but the market has been slowed by lower revenues and extended equipment lifecycles in that sector. The 9th Integer Emissions Summit & DEF Forum USA 2016 is scheduled for Oct. 25-27, 2016, in Chicago. www.fueloilnews.com | FUEL OIL NEWS | DECEMBER 2015 33 BUSINESS OPERATIONS l F O N