Pagoda SL Group
Off Topic => Way Off Topic => Topic started by: scoot on August 07, 2008, 11:52:27
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Why is diesel expensive compared with gasoline? It seems like it would take less refining, etc. I'm sure there is a simple obvious answer, I just have no idea what it is... Thanks, Scott
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In the UK it's taxed higher
It was cheaper and went further so the manufacturers bowed to public demand and started producing really good diesel engines which sold really well
And then HM Govt went and upped the duty. Over $9 a gallon here now - mind you, so is unleaded
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Scoot:
It is less expensive to refine, but we don't have the refinery capacity to produce enough, so it's supply/demand. Historically it has been cheaper. It does contain more energy per unit, hence the better mileage figures than gas.
Rick
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quote:
Originally posted by bogeyman
Scoot:
It is less expensive to refine, but we don't have the refinery capacity to produce enough, so it's supply/demand. Historically it has been cheaper. It does contain more energy per unit, hence the better mileage figures than gas.
That's kind of what I figured.... is our inadequate capacity associated w/ the low-sulfer requirements that we have now? Do you think our capacity to refine diesel is going to increase? Thanks.
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It has to do with the original design of the refinery, they are either primarily gas or primarily diesel. The "cleanup" costs are not significant. When we decide to start building more refineries in the USA, we should start to see more price parity. The current Bluetec diesels are great cars. We could save consumption significantly if we went more toward the european 50/50 mix of gas vs diesel cars.
Rick
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I understand that there are two types of diesel offered in the US, on road and off road. The off road is much lower in price. When crude oil prices went up so did fuel. Did diesel prices have anything to do with the introduction of low sulfur diesel?
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Hauser:
Off road doesn't have the federal tax added.
Rick
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quote:
Originally posted by bogeyman
The current Bluetec diesels are great cars. We could save consumption significantly if we went more toward the european 50/50 mix of gas vs diesel cars.
I have heard that Honda is going to start selling Diesels in the US within a year or two.
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The farm industry here uses diesel with a dye added
That's not got the full levy of taxes.
However, farmers are finding their tanks getting emptied!!
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That thar fossil stuff comin outa ground-crude, coal, gas, peat, etc- has on average about 2% sulfur content. Refineries were mandated many years ago to remove sulfur from gasoline-so they built, you guessed it, de-sulfurizing units for gasoline. Recently they were mandated to remove sulfur from diesel fuel and, amazingly the built de-sulfurizing units for diesel. Now gas and diesel engines can burn fuels without sulfur which would contaminate the catalysts burning the remaining about 1/3 of the fuel. That's why the exhaust is so hot.
And this killed the old sulfur producers. Was there a government bailout for them. All their worker got laidoff?
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There is a finite amount of "energy" in a barrel of crude oil. Diesel fuel, though it requires less refining effort, supplies more energy than other petroleum products, i.e., gasoline, kerosene, etc. We are now seeing diesel prices that more accurately reflect the amount of energy provided per gallon as compared with other refined products. As much as many will hate to admit it, diesel fuel has previously been underpriced relative to other petroleum fuels. That oversight has now been corrected.
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At this moment in time we are actually seeing somewhat of a correlation in price to energy content.
Gasoline has about 115,000 BTU/gallon
Diesel has about 138,000 BTU/gallon
(average numbers; you'll see slightly different depending on source; I've seen gas at 125,000 and #2 diesel at 140,000)
That means diesel has about 20% more energy content per gallon, give or take.
Today gasoline around here is at about $3.75 a gallon. If priced according to energy content, we should see about a 20% price differential, with diesel at $4.50 And, give or take, that's kind of what is happening at this moment in time.
Similarly, the energy content of E85 is about 82,000 BTU/gallon, and you should see a price differential down, and we do around here, but it is at such few stations I can't recall what the price is. I did observe recently it was significantly lower in price, and of course yields less MPG.
Whether all this really has anything to do with energy content is anyone's guess. These are just a few facts and observations.
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We were in New Zealand this Spring, and saw that diesel was fifty cents a liter cheaper than regular gas. I believe the difference is made up by some sort of road tax, though.
Joe
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Since when did we start paying for fuel based on its power capacity? Sure we pay more for 92 octane than 88...but thats because the octane to heptane ratio is higher which costs more money to produce. What we are paying for there is the increased octanes ability to withstand higher levels of compression prior to combusting, not the fuels latent energy.
I think they charge more for diesel because they can.
I wonder what the actual refining numbers are gas vs diesel considering that nearly all shipping, commercial vehicles, farm equipment and some sea vessels run on it.
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quote:
Originally posted by seattle_Jerry
Since when did we start paying for fuel based on its power capacity?
Jerry,
Perhaps we have paid for energy content in our fuels; perhaps not. ejboyd suggested it as a possibility, and at least today, there's a correlation--but whether the correlation is actually due to the energy content; a peculiar set of taxes, the confluence of the stars or whatever is anybody's guess. Yours is as good as mine or ejboyd's. Keep in mind that today the "liquid fuels" we can buy for our cars are somewhat correlated in the order of energy content. Diesel is most expensive; followed by gasoline, and E85.
Who knows what tomorrow will bring? If we had the same percentage of diesel cars on the road as they do in Europe, we might see a whole different picture of fuel pricing. Remove ethanol subsidies, another picture emerges. If we have a very cold winter, another scenario will show up too.
For those of you who might be NPR fans, "Science Friday" host Ira Flato has asked the exact same question. I'm not sure he has received a plausible answer yet!
All I know is I have to fill two tanks today! ;)
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There was an interesting thing on NPR last week about corn. Someguy has a book out about it.
He was talking about various university studies where producing fuel from corn at best estimate provides us with slightly more energy than it took to produce it and other studies that got more indepth showed that a net loss was possible under some conditions.
I'll have to get the book and read the studies. Its more about being a political solution than an actual energy solution.
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A lot of natural gas trades on btu content.