Wednesday, November 22, 2006

Cost of Diesel Dampens Hopes

While the price of diesel fuel is not directly related to gyroscopically stabilized transportation, it does raise questions about efforts to improve the fuel efficiency of the transportation system and reduce dependence on foreign fuel.

My wife and I own a diesel-powered Jeep Liberty which we like a lot, but the high price of diesel in the U.S. is really making it hard to justify. We regularly see diesel sold for a premium of around 35 cents per gallon over regular unleaded gasoline. In rough terms this means a diesel vehicle has to get 26 miles per gallon versus 22 for a gasoline model, or 35 versus 30. In other words, the economic incentive to use deal just isn't there is diesel is priced significantly higher than regular gasoline.

In thinking about this problem I visited the EPA site fueleconomy.gov which has a cool feature that let's you compare vehicles. I commared a diesel Jeep with a gasoline Jeep, and at first it seemed the diesel was a better deal. But then I noticed the figures that the EPA used for fuel costs. They were not what I am seeing at the pump. Fortunately, and this was a smart move by the site designer, you can input your own numbers. That produced the following:

The diesel is $60 a year cheaper. Hardly enough incentive to overcome the downsides (such as searching for a gas station that carries diesel).

Maybe the new rules on diesel fuel will improve matters and the price will be equalized, but right now there seems to be a pause in diesel production as manufacturers switch over to the new designs (for an explanation, see here and also here).

That means you can't buy 2007 Jeep Liberty diesel right now. But Jeep Grand Cherokee diesels will turn up in showrooms later this year. Sadly, if diesel/gas pricing does not move closer to par, the economic incentive to buy them will not be there when they do.

5 comments:

allenfre said...

I heard that the Jeep began offering a Mercedes-Benz diesel option in the Grand Cherokee back in 2007.

Dan said...

I think part of the issue is that you're comparing the Liberty, probably the worst example in recent history of a diesel automobile for the comparison -- virtually no difference in fuel economy for the higher price of diesel, and a one-year engine to support over the life of the car.

When I calculate my Jetta TDI vs. Jetta gasoline or Honda Civic gasoline vehicle, it crushes it.. 15% cheaper in fuel, and 1/3 less oil used and carbon footprint. By making biodiesel, it drops even more dramatically. I also have little trouble finding diesel. YMMV.

Dan Houser, CISSP, CISM, etc.

digger derrick trucks said...

Diesel works out better economy for all users and therefore is much better accepted among all users.

Tom Willer said...

Diesel will always work better and diesel has a higher energy density.
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