The high price of diesel fuel

The high price of diesel fuel

I just returned from the TMC Annual Meeting with enough information to write three or four columns. If you haven’t attended a TMC meeting, I’d recommend it. The information taken back to your fleet will be well worth the expenditure.

I just returned from the TMC Annual Meeting with enough information to write three or four columns. If you haven’t attended a TMC meeting, I’d recommend it. The information taken back to your fleet will be well worth the expenditure.

I had originally intended to write about another subject, but an off-hand remark made by one of my colleagues, Ken Claar, of the Lubrizol Corp., sparked this column. Ken drives approximately 75 miles (one way) to work every day. When fuel costs began increasing, he bought a diesel-powered vehicle because of its inherently better fuel economy. He reasoned that the diesel-powered vehicle would soon pay for itself.

Two separate items are forcing Ken to re-evaluate that decision. First, his diesel-powered vehicle doesn’t get the fuel economy he expected. Second, the high price of diesel fuel in the Midwest is reducing his savings significantly.

Many late-model diesel engines don’t get the fuel economy of earlier engine designs. Not much can be done about that given current emissions regulations. Schneider National, Inc. recently estimated that it experienced a 5 percent fuel economy penalty between 2002 and 2007 engine designs. Much of this difference is due to the use of exhaust gas recirculation (EGR) to reduce NOx emissions. NOx emissions are generally reduced by EGR and/or retarded injection timing, both of which serve to reduce fuel economy. This regulatory approach is driven by Califor-nia’s concerns over photochemical smog.

Recently, considerable attention has been focused on global warming. Years ago several independent scientists voiced concerns over global warming. Most nations responded by placing limits on the amount of greenhouse gases (CO2) emitted to the atmosphere. The United States did not.

Engines operating to minimize CO2 emissions are more efficient (better fuel economy) than engines optimized to reduce NOx emissions. Europe learned this years ago. European OE’s have been developing selective catalytic regeneration (SCR) for years to maximize fuel economy. Perhaps our newly elected legislators will influence the United States to follow suit. Improved fuel economy helps us reduce our dependence on foreign crude oil.

Let’s take a closer look at the high cost of diesel fuel in the Midwest. In the Midwestern United States, diesel fuel sells at a 20 to 40 cents-per-gallon premium over gasoline. Agricultural equipment, home heating oil and diesel trucks all utilize the same middle distillate from the refinery, so they determine diesel fuel demand.

Refiners tell us that increased agricultural and diesel truck usage has placed a strain on the Midwestern system. But, until recently, we had a very mild winter, so home heating oil demand must have been down. And why should the Midwest be any different than the rest of the country?

I think we are seeing higher diesel prices for two reasons. Nationwide, someone has to pay for the conversion to ultra low sulfur diesel (ULSD) fuel. Guess who? In the Midwest, fuel marketers have traditionally refined sufficient diesel fuel to supply their users without resorting to regular pipeline movements of product. The increased demand for diesel has forced fuel marketers to schedule occasional pipeline movements of diesel fuel to keep up with the demand. Of course, they wait to schedule a delivery until they can be assured they will make a sufficient return (profit) on their investment. In the meantime, this creates an artificial shortage and prices go up.

I wouldn’t expect immediate relief. It will take years for this situation to stabilize. Only then will we know the actual cost differential between low sulfur diesel and ULSD fuel. Mean-while, why purchase a diesel-powered vehicle for a premium of $2,000 if you are only going to save $200 per year in fuel costs? A 10-year payback isn’t attractive to end users.

You May Also Like

Panelite releases new guards, deflectors, sunvisors for Peterbilt 589

Coming to market after a year of development, Panelite says the components fit the Peterbilt
589, and match its style.

Panelite-Peterbilt-589-new-fender-guards-bug-deflectors-sunvisors

Stainless steel accessory manufacturer Panelite has released several new products designed specifically for the new Peterbilt 589. Over the past year, Panelite says its engineers worked to design and develop fender guards, bug deflectors, sunvisors, cab and sleeper panels along with air cleaner light bars for the Peterbilt 589.

"Panelite products are designed to withstand North America's weather and the challenging conditions drivers encounter from coast to coast," said Colin Thur, national sales manager, truck OEM for High Bar Brands, Panelite's parent company.

Commercial tire market cautiously recovering from 2023 challenges

To better understand commercial tire expectations for the remainder of the year, we spolke with Pierluigi Cumo, VP of B2B products at Michelin North America.

Michelin-truck-tires
Phillips takes two awards at Penske Supplier Conference

Phillips Industries was awarded both the 2023 Best Performing Supplier – Components Award, and the 2023 Best Innovation Supplier Award.

Phillips-two-awards-2024-penske-supplier-conference-600
SAF-Holland to build specialty fifth wheel manufacturing plant

After nearly 50 years and 3 million fifth wheels produced, SAF-HOLLAND will move production from Wylie, TX to the new facility, once complete.

SAF-HOLLAND-TX-fifth-wheel-plant-rendering
Dayton Parts offers new aftermarket products for Freightliner, Mack, Cummins and Hino applications

A new DPF differential pressure sensor, engine oil dipsticks and fuel injector wiring harnesses designed to match OEM spec.

Dayton-parts-releases-2-sensor-dipstick-harnesses

Other Posts

K&M Tire hires new executive vice president

In his new role, Jon Zurcher is expected to work with current leadership to strengthen and build on the company’s strategic plans.

KM-tire-Logo
Why fuel filtration science matters

Fleetguard shares the story of filtration science leading to a biodiesel solution with a seven-time increase in performance.

The trucking life of the internal combustion engine going forward

A glimpse into the fossil-free future of truck engines that run on everything from biodiesel to natural gas to hydrogen.

volvo-fuel-cell-1400
Bendix: Air disc brake production has doubled since 2018

Commercial ADB adoption rates in Class 6-8 vehicles are now up over 50% according to Bendix.

Bendix-Bowling-Green-ADB-air-disc-brake-doubling-production