Monday, March 10, 2008

Lets Talk Fuel

I spent some time thinking about how to begin this entry with something snappy to grab the attention of the reader. I could’ve used the old standbys, like Henry Ford would sell you a car in any color, as long as it was black, or bash Al Gore, something about Willie Nelson, but in the end, nothing really fit.

Here’s the rub. Diesel isn’t going to cut it. And there is a lot that goes into that statement, and I need some time to explain.
I know most people think that switching from gasoline to diesel is going to help cut down green house gases, and get far better fuel economy, which is true to a point, but Newton’s theory and that whole “equal and opposite reaction” mess isn’t dead yet..

Most everyone who reads this already knows the higher acceptance of diesel vehicles in Europe compared to the US. The last numbers I saw had about 48% of passenger vehicles in EU powered by oil burners, versus 5% here. So, you could think, “Well, they are quieter now, get great fuel economy, and are gaining acceptance, these will be easy replacements for gasoline in the US.” Not exactly. Europe has the infrastructure to support diesel vehicles far better than we do. Essentially, there are two ways of refining crude: ion cracking and ion catalyzing. One is better for producing a large amount of diesel and the other produces more gasoline. Guess which one we don’t have. So, as more and more people buy compression ignition engines, we hold to that old supply v demand line from economics, and the cost goes up.

How much? Well, the affects of China and India growing up and getting their driver’s license can already be felt at the pump, with gas being just over $3/gallon and diesel edging near $4 in New Mexico and Indiana. I would expect California to be over $5.

“But wait, what about Bio fuels?” Other than the fact that if all of the corn production in the US was converted to biodiesel and ethanol production, a lot. Turns out we can thank some of the recent E-Coli breakouts to bio fuel. As bio-diesel and ethanol production have ramped up, so has the cost of corn. This has led some stockades to use distiller’s grain. This is what is left after the products for bio-diesel and ethanol are extracted. It still contains most of the nutrients of the original corn, but not exactly, and for reasons unbeknownst to me, can cause higher levels of E-Coli in cattle. So, the price of gas drops slightly because we are less-dependant on foreign oil, but now our burgers may kill us. Tough call.

Side note: the other major reason for increased E-Coli reports has been the crackdown on immigration. As experienced workers at slaughterhouses are deported and replaced by their meth smoking, trailer dwelling counterparts, improper meat handling practices become commonplace and the chance of contamination goes up.


Let’s go back to the issue of cost. Diesel engines are expensive to manufacture compared to gasoline variants. A diesel option in a ¾ or 1 ton truck will run you around $6,000 on top of the base price of the small V-8. So, consider this scenario: a car is offered with a gasoline engine which will manage 30mpg. The vehicle is available with a diesel engine which will achieve 45mpg. Consider the price of regular unleaded is $3.13/gallon and $3.93/gallon for diesel. This is $0.087/mile for the diesel versus $0.104/mile for the gasoline. Sounds good, but if the diesel engine is a $3,000 premium, it will take right around 160,000 miles before you break even. $3k is actually pretty low, considering the precious metals found in diesel particulate filters. I believe a replacement DPF for an on-highway pickup will run somewhere around $1,500 if damaged. That’s just a filter!

I guess my point of all this is that diesel engines, shy of a BIG shift in the cost of fuel, are not an economic alternative right now. If you are in the market and are considering a diesel, consider it for its stump pulling power or reliability, not for its economy. However, if you really want to just be green about things, the diesel will consume nearly 1,800 gallons less than the gas engine over 160,000 miles, and that should make you feel good, just not in the wallet.

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