FTC asks: Is diesel the fuel of the future?

By 2008, all major automobile producers expect to have a large number of new diesel-powered cars for sale in the United States, according to the Federal Trade Commission.

Manufacturers expect consumers to gravitate toward diesel because it offers greater mileage, and diesel-powered engines produce more torque and have greater acceleration than gasoline-powered engines, according to the FTC’s “Gas Column,” published May 2 on its Web site. Diesel-powered cars typically have a higher resale value than gasoline-fueled cars, the column noted, and they also have greater longevity.

But there are drawbacks, too. For one, diesel emits more pollutants than gasoline. Here are excerpts from the column:

Diesel-fueled automobiles and light trucks have traditionally been only a niche market in the United States. In 2005, diesel vehicles made up just 3.2 percent of the U.S. automobile and light truck market.

Although diesel returns better mileage than gasoline – typically 20 to 40 percent more – it also puts more pollutants into the air than does gasoline, in the form of particulate matter and nitrogen dioxide (a contributor to smog). In the early 1980s, U.S. automakers sold diesel cars, but they were slow and loud and produced smoky emissions, and sales were minimal. Since then, U.S. car manufacturers have stayed away from diesel. In recent years, however, Europeans have turned to diesel-powered automobiles in large numbers. Almost half of the new cars sold in Europe are diesel. The higher-quality diesel mandated in Europe has resulted in new engine technology that produces higher mileage and lower pollution than traditional gasoline engines achieve.

Now change is coming to the United States. Since October 2006, new regulations from the Environmental Protection Agency have resulted in a reduction of 97 percent in sulfur from diesel fuel, all the way down from 500 million parts per million (“ppm”) to 15 ppm. As of last October, 80 percent of highway diesel fuel sold in the United States must meet this new ultra-low-sulfur standard, and that number will rise to 100 percent by the year 2010. This ultra-low-sulfur fuel will cut overall emissions in the current fleet of diesel-powered cars by 10 percent. And with engines designed to run with the new fuel being put in service during the 2007 model year, overall emissions will be cut by up to 95 percent from the levels produced by older-technology engines.

Automakers are gearing up to take advantage of this opportunity to design and sell new diesel-powered cars in the United States. Because of their familiarity beneficiaries of this new fuel, but U.S. automakers are not far behind. By 2008, all major automobile producers expect to have a large number of new diesel-powered cars for sale in the United States. There are a number of reasons why the manufacturers expect consumers to gravitate toward diesel. In addition to the greater mileage, diesel-powered engines produce more torque and have greater acceleration than gasoline-powered engines. Diesel-powered cars typically have a higher resale value than their gasoline-fueled counterparts, and they also have greater longevity. With proper maintenance, a diesel engine should last more than 250,000 miles. Diesel engines also have the potential to use biodiesel, which is expected to be a growing renewable source of energy produced from domestic resources.

These changes have not come without a cost. New technology diesel engines may cost $2,000 more than a comparable gasoline engine. Diesel fuel is no longer a lower-quality fuel produced just as a byproduct of gasoline refining, and ultra-low-sulfur diesel fuel requires many sophisticated processing steps and higher-quality components similar to those needed for low-polluting gasoline. The Department of Energy’s Energy Information Administration estimated in 2001 that refineries would invest between $6 billion and $9 billion to meet the new standards, and that the added cost would be between 4.7 and 7.3 cents per gallon a time when fuel costs were significantly lower). Meanwhile, demand for diesel has been growing both in Europe and in the United States. Diesel consumption in the United States increased from 88.6 million to 97.6 million barrels per month between 2004 and 2006, and imports of diesel into the United States grew from 1 million to 2.04 million barrels per month between those years. Higher quality and stronger demand have tended to make diesel more expensive at retail, relative to the price of gasoline.

In addition to the automotive benefits from the switch to ultra-low sulfur diesel, consumers as a whole can also expect substantial health benefits. Particulate emissions can be inhaled and cause lung damage, and also are linked to (atwith low-sulfur diesel, European companies will be the first heart attacks and premature deaths. Some have argued that the adoption of ultra-low-sulfur diesel, with its dramatic reduction in such emissions, is the most important advance in public health coming from improved fuels since the phase-out of leaded gasoline in the early 1990s. The EPA expects that the switch to ultra-low-sulfur diesel will result in annual savings of $150 billion in health care and welfare-related costs, and will reduce premature deaths by 20,000 per year.