Wednesday, October 26, 2005
Trickle-Down
With all the news articles around about diesel's spike in cost, a recurring theme seems to be that even though your average joe is enjoying the reduction in gasoline prices, they are going to get bitten in the butt by the time the holidays roll around. All of our precious consumables, of course, are shipped around the country almost exclusively by trucks, and these trucks are powered almost exclusively by diesel fuel. A jump in the price of diesel fuel but not gasoline might at first seem like a vindication of those who prefer gas cars and light trucks, because they're paying less at the pump. But you must remember the bigger picture.
For the sake of argument, we'll say diesel costs $1 more per gallon. And we'll say that gas costs $2.50, making diesel $3.50. That means that gas costs 28% less than diesel. It has been shown in many different places that diesel engines are on average about 30% more efficient than gasoline engines. So, the $1 premium is essentially aligning the two technologies in terms of "bang for your buck". Your V10 F350 will likely still cost more per mile than your neighbor's powerstroke excursion. Just not as much more.
Also, this is a unique set of circumstances that I believe represents something close to the end of the spectrum. It's fall, meaning heating oil production takes precedence as cited in one of the articles I link to on this page, and there have been a lot of hurricanes lately, which crippled oil production in the gulf. From what I can tell, the price gap cannot get much wider than it is right now. So, even in the worst-case scenario, buying a diesel vehicle does not mean sacrificing cost-effectiveness. This, I believe, isn't even the best selling point for the technology.
After all, regardless of what's going on in the Gulf, your local McDonalds will still be throwing away waste oil that you could throw in your 2005 Jetta TDI and drive for pennies on the dollar.
But getting back to my original point, those people that are snickering at diesel owners won't be snickering all the way to the toy store, because their kids' favorite Micro machine still got to the store in a Freightliner. ¶ Posted By james 6:40 PM
For the sake of argument, we'll say diesel costs $1 more per gallon. And we'll say that gas costs $2.50, making diesel $3.50. That means that gas costs 28% less than diesel. It has been shown in many different places that diesel engines are on average about 30% more efficient than gasoline engines. So, the $1 premium is essentially aligning the two technologies in terms of "bang for your buck". Your V10 F350 will likely still cost more per mile than your neighbor's powerstroke excursion. Just not as much more.
Also, this is a unique set of circumstances that I believe represents something close to the end of the spectrum. It's fall, meaning heating oil production takes precedence as cited in one of the articles I link to on this page, and there have been a lot of hurricanes lately, which crippled oil production in the gulf. From what I can tell, the price gap cannot get much wider than it is right now. So, even in the worst-case scenario, buying a diesel vehicle does not mean sacrificing cost-effectiveness. This, I believe, isn't even the best selling point for the technology.
After all, regardless of what's going on in the Gulf, your local McDonalds will still be throwing away waste oil that you could throw in your 2005 Jetta TDI and drive for pennies on the dollar.
But getting back to my original point, those people that are snickering at diesel owners won't be snickering all the way to the toy store, because their kids' favorite Micro machine still got to the store in a Freightliner. ¶ Posted By james 6:40 PM
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