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Originally Posted by Red Bread
There was a good article in one of the US car magazines a few months ago about why it's unlikely that we'll ever get a significant portion of our cars and trucks onto diesel. The gist of it was that our refineries, which are all forty plus years old were setup to crack oil into roughly 90% gasoline/10% diesel, while Europe's refineries crack at close to 50/50. So our issue is that 18 wheelers already use just about all of the available diesel and an influx of cars using it would be left at the pump with no flow.
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That doesn't sound right. To quote from a September article in the Houston Chronicle,
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The companies that buy barrels of oil and turn them into gasoline and other fuels have suffered from waning consumer demand for years, closing some refineries and reducing operations at others.
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Diesel powers about 3 percent of U.S. passenger vehicles, said Allen Schaeffer, executive director of the Diesel Technology Forum, a nonprofit industry organization. Industry consultants expect the CAFE regulations will help push their market share to 8 percent by 2025.
That could be a boon for U.S. refiners, which now produce about twice as much gasoline as diesel fuel. Marathon Oil Corp. completed a $3.9 billion expansion of its Garyville, La., refinery in late 2009 and better equipped it to produce diesel. "When we look at the need for diesel, not only in the U.S., but the Far East, China and Central America, we feel very positive," said Robert Calmus, a spokesman for Marathon Petroleum Corp., the new refining company spun off from Marathon Oil earlier this year. Other U.S. refiners, including Valero, are eyeing growing diesel demand overseas for exports. Shell and Saudi Refining are expanding the diesel export capacity of their jointly owned Port Arthur refinery, said Tom Purves, vice president of manufacturing for the project.
Sweetening the pot, diesel has been commanding a larger profit margin than gasoline, noted Roger Ihne, a refining industry consultant for Deloitte. While the CAFE rule is expected to increase diesel use by light-duty vehicles on U.S. roads, it also requires that buses, commercial trucks and other big vehicles improve diesel fuel efficiency up to 20 percent by model year 2018.
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