The US EPA has approved Arizona state regulators’ draft permit for a proposed $2.5-billion oil refinery in Arizona, according to the state’s Department of Environmental Quality.

This would be the first refinery built in Arizona and the first new refinery in the United States in nearly 30 years.

Expected output from the refinery, owned and operated by Arizona Clean Fuels, will be approximately 150,000 barrels per day of motor fuels, including approximately 85,000 barrels per day of motor gasoline, 35,000 barrels per day of diesel fuel and 30,000 barrels per day of jet fuel. Arizona Clean Fuels estimates that to be approximately one-half of the gasoline, diesel and jet fuel demand for the state of Arizona.

The refinery was designed to produce lower sulfur fuels. Gasoline will contain less than 10 ppm (parts per million), versus the current sulfur content of 30-ppm and 180-ppm gasoline coming into Arizona. The EPA’s standard is 30 ppm (refinery average). (There is a relatively complex rule set around refinery averages, corporate averages, and production caps that allows for some higher sulfur-content gasoline—hence the 180-ppm.)

The diesel will be ultra low-sulfur, with a sulfur content of less than 15 ppm.

The refinery will use ethanol as its default oxygenate rather than MTBE.

Arizona Clean Fuels is negotiating with PEMEX for a supply of crude oil from Mexico and the construction of a terminal and pipeline to carry crude to the refinery from a Mexican port on the Gulf of California.

The proposed ACF refinery is located about 100 miles southwest of Phoenix—close enough, but not too close.