by Dan Schafer
One of the most nostalgic events associated with an odour for this writer still often comes to mind with the smell of diesel smoke. It calls to mind a picture of the Exeter train station (in Devon, England) and the writer as a little boy hurrying with Mom and Dad to catch the train. No doubt there were decisions about what connections needed to be made, but the little boys mind was full of the adventure of travelling by train. He let Mom and Dad worry about which train to get on and off of.
Now as an adult I realise that not every person makes such romantic connections with that odour. And even if they could all be convinced that it was an agreeable odour, likely they would need more than that to be convinced to begin burning it in their car. But our task here is to ask if there is an economic argument to convince more of us to start doing that.
To set the scene, let us first review where we have been. Recently the main issue we have been concerning ourselves with is how can we become less dependent on volatile oil supplies. We have touched on pricing (i.e. higher) at the pump, which would make alternative energy sources more viable. Interestingly the market has done that job for us, though without the benefit we might have had if we had beat it to this result. That is, we are now paying high prices anyway, but we should have been able through pricing to so reduce demand for oil, that the producers would not have the leverage over us they now do. We also looked at alternative sources of oil like the Canadian tar sands. And most recently we started looking at transportation use of energy and what we could do to reduce it. Last issue we asked whether hybrid cars were the answer. We concluded affirmatively that they were not only able to save on energy use but also for many drivers leave more money in our pockets to put our kids through school or pay off our mortgage.
Now in this issue I would insert an emendation. If in last issue we had been comparing a hybrid vehicle with a similarly equipped diesel model instead of with the gasoline (petrol) one we did, the answer, though perhaps still coming down in favour of the hybrid, would not be as definitively so.
Diesel fuel powered vehicles tend to get 30% more miles per gallon or kilometres per litre than their gasoline powered equivalents. This comes from both the fact that diesel fuel has a higher energy content per volume than gasoline and because the technology of the diesel engine which is inherently more efficient. Because of this efficiency, diesel burning cars also produce less CO2, carbon dioxide, the global warming pollutant.
In light of the diesels efficiency, why do not more folks who buy a new car buy diesel rather than gasoline powered? For those of us who call North America home it might be surprising to learn that in Europe, in fact, more than half of all new cars sold are diesels. We might also be surprised to learn that Henry Fords manufacturing heirs in the UK make thousands of diesel cars. In fact, 27% of Ford UKs units sold are diesels, and in France more than 60% of new cars sold are diesels.
The trouble in North America was that we tried diesels 20 years ago, and got a bad taste in our mouth. (Try not to add smell in our nose and sound in our ears as well.) We discovered they were smoky, slow-responding, noisy engines that only die-hards would endure. That view has had trouble fading away. That is partly because the west side of the pond sees so few of the new generation that are quiet, have spunk and burn clean. One of the reasons so few are seen is that we have voted in draconian emission standards that have ignored the environmental strengths of the diesel and legislated against its weaknesses. So much so that five American states wont permit diesel car registrations. That is not to say that something should not have been done to solve the emissions problem. The legislation which requires clean diesel -- gradually lower sulphur content -- could have been initiated long ago instead of waiting for autumn 2006. Therefore North Americans are in a sort of Catch-22 situation where first, they dont see the benefits of diesel technology and therefore arent interested in its benefits. Secondly their own clean air standards keep them from a technology that has more potential to advance clean air as well as energy efficiency and consequently leave more money in their pockets.
The good news for North Americans is that Low Sulphur Diesel will start to be available in mid 2006. Legislation affecting refiners took place June 1 and wholesalers and retailers September 1. That means that most available diesel powered cars should be able to be sold and driven anywhere in the U.S. and Canada this year. Europeans have had Ultra Low Sulphur Diesel available since 2005. Now there is not much reason not to consider diesel when we are ready to buy a new car, except that in North America there is relatively limited choice. This brings the question, Are North American manufacturers up to the challenge? Or will they again prove to have had their heads in the sand?
Practically, it is true that there is some price premium to be paid for diesel over gasoline power. That is, it can cost US $800 to $1,000 more to buy a similarly equipped diesel. But for comparison purposes we have ignored that, because diesels are also generally capable of considerably more miles than their gasoline equivalents. And that should make them, from a capital investment point of view, cheaper in the long run.
In the graph, therefore, we compare only the savings that diesel efficiency can make. We had to look at UK data, because it is extremely difficult in the North American market to find a popular model that differs only in whether its power train uses diesel or gasoline. However we have still used, as in the last article, U.S. sized gallons for our miles per gallon figures. Also, as in that article, we have used an increasing price for fuel, this time for the U.S. leaving out what seems our obsolete $2.20 per gallon price. And, although we are comparing two fuels, we have used only one price schedule since in the U.S., Canada, Australia and the U.K. diesel and gasoline are historically very close in price. Although in some countries in Europe, diesel faces a more favourable tax structure and is therefore cheaper at the pump.
From the graph we can see with the model we have chosen, even the average US driver 15,000 miles per year could save US$2,250 over five years if the fuel price the first year averages $2.80 per US gallon. The same UK driver should save US$5,210. We can see it gets better if we have to drive more than 15,000 miles per year.
Analysing, then, our conclusions in this article and the last (Are Hybrid Cars the Answer?), we could say, in absolute terms, perhaps hybrid power is the better or maybe hybrid power using diesel as partner to the electric motor is even better yet. But there is an appropriate technology conclusion that takes into consideration what we can really convince one another to do. For example, if for one of us, buying a new car at all is quite a financial stretch, to advise that one to commit himself to an extra $2,000 to $4,000 on the price of that purchase to buy a hybrid is probably not really helping him invest wisely. Extending ourselves beyond our resources is both dangerous and wrong, even if in an ideal world we would be financially ahead. So rather than draw an idealist conclusion and then settle for only token efforts practically, or worse, perhaps financial disaster for the unwise, we should encourage what really will be of practical help. Shooting for the moon, and instead landing on a high mountain, is still a gain. But if our missed shot means more likely coming down in the drink or somewhere worse, then we should aim for something we can reach. In our case, if we insist on convincing buyers to go for hybrid and only convince 100 or if we suggest they could also opt for diesel and we convince 10,000, the net gain in saved resources both financially and environmentally is greater by aiming at the easier target.
Whichever car we buy we should research carefully, but it seems giving the diesel option a fair consideration is sound advice.
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