Thursday, July 26, 2007

Diesel Prices: Not Higher, Just High

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Let's face it, almost everything material that we have came to us on a truck. And most trucks, especially large trucks, run on diesel fuel. Diesel in 2007 is "greener" because it is Ultra Low Sulfur Diesel. That means it has 97 percent less sulfur in it by law then the fuel used in prior years. Less sulfur, less particulate emissions. It is just not renewable unless you think on the multi-million year scale. So, though we may never personally drive a diesel vehicle, we need diesel fuel to keep going. Otherwise, supermarkets run out of milk or meat and the pharmacy runs out of drugs.

Diesel fuel is not the same as gasoline. Different set of hydrocarbons. Different physical properties. They are specialized fuels for the engines they are used in. Not interchangeable. A big difference: gasoline evaporates quickly; diesel fuel does not. Another difference: diesel has about 11 percent more heat energy (BTUs) in every gallon.

So here's a graph showing the latest news on diesel fuel prices: Looks like a cross-section of the Grand canyon, doesn't it? At this time 2 years ago, diesel prices were $2.40 a gallon and then they peaked at about $3.20. Zoomed further after Hurricane Katrina. Last year, prices were already high and then they rapidly dropped off, partly due to the fact that the hurricanes we prepared for did not come. This year we are not quite as high but US refineries are struggling to keep production up. Even today, there is word of explosions at a TX liquified natural gas (LNG) facility. And the hurricane season approaches . . .

[Source: US DOE EIA]

 

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