Where Has All The Diesel Gone? Long Time Passing…

For anyone who isn’t aware of it, there’s a growing shortage of “Diesel Fuel”.

In quotes because some other fuels are made using the same or similar parts of the crude oil feed. From home heating oil (also a #2 oil, but less well filtered), to #1 oil AKA Kerosene, jet fuel, lamp oil, and winter Diesel. Yes, a bunch of detailed specifications vary a little between all of those. Jet fuel has fewer things that form a waxy deposit if very cold as it gets very cold at high altitude. Also most ring compounds are catalytic opened to reduce smoke. Lamp oil is a bit heavier with fewer light ends so it doesn’t evaporate out of lanterns as much.

But they all start as the part of crude oil heavier (longer chains) than gasoline and lighter (shorter chains) than lubricating oils. Essentially, a barrel of crude has some natural gasoline, light oils, heavier oils, and tars in it. Refineries separate these, polish the molecular mix for specific properties, and ship out the products.

With some special gear (cat crackers / reformers), you can change how much of each you get by a modest degree; and at more cost with some loss of total energy available. (That is, running a hot refinery uses up some energy at each step). So there are practical limits to how much vs efficiency.

In the USA, we have mostly gasoline cars. The average refinery run makes a little too much Diesel compared to the gasoline desired. In Europe, many cars are Diesels. So many that, added to the trucking and ship demand, the typical refinery run makes too much gasoline compared to the Diesel demand. To balance things out, the USA ships some Diesel to Europe and they ship excess gasoline here.

Enter the European embargo on Russian Oil…

Suddenly they need a LOT of Diesel to replace what they were getting from Russia.

So Biden & Co. decide to ship a bunch more of our Diesel to them. Jacking up prices and causing shortages here. All to spit at Russia.

https://fortune.com/2022/05/17/diesel-prices-threaten-inflation-us-infrastructure/

Runaway diesel prices threaten to do a lot more than make inflation worse—American infrastructure is at stake
BY
TRISTAN BOVE
May 17, 2022 12:58 PM EDT
High gasoline prices are hitting Americans hard, with the national gas price average sitting at $4.48 per gallon on Monday, up nearly $1.50 from a year ago.

But it’s even worse for drivers who rely on diesel fuel.

The national U.S. average price for diesel is now $5.56, its highest on record. In the U.K. diesel prices are now over £1.80 a liter, a record high for that country.

The average driver in the U.S. doesn’t rely on diesel, as it’s commonly used by truck drivers and heavy farming vehicles. But sky-high diesel prices could not only aggravate an inflation problem that is already hurting U.S. consumers—they could have dire implications for U.S. infrastructure, and the fate of the global supply chain.
[…]
Everything from trucks and trains to farming and construction equipment tend to rely on diesel rather than regular gasoline. Around 75% of all commercial vehicles registered in the U.S. are powered by diesel, as are the vast majority of both large and medium-sized long-haul trucks.

These are the same trucks that carry food and most other products around the U.S., and as diesel prices surge everywhere, signs are emerging that this infrastructure is beginning to break down.

Global consequences
The U.S. supply chain infrastructure is heavily reliant on diesel, and high prices for the fuel are starting to wear it down as trucking companies struggle to deal with the expenses.

But it’s not just the U.S.—the diesel price surge is a global problem, and right now, there simply isn’t enough to go around.

While the diesel problem is hitting U.S. truck drivers hard, Europe is bearing the brunt of the price surge, as almost half of European passenger cars run on diesel, as well as all trucks and freight trains.

Prior to Russia’s invasion of Ukraine, Europe imported roughly two-thirds of all its external crude oil, which is refined to make diesel, from Russia. These imports are beginning to be drawn down, and European countries are turning to higher imports from the U.S. to satisfy the supply gap.

The U.S. is shipping more diesel to Europe than it has in years, fuel which would have otherwise gone to resupply truck stops.
[…]
Helping Europe minimize the impact of its diesel shortage is crucial to bringing global prices down, but shipping more of the fuel abroad means that U.S. truck operators are in for a shortage of their own.

Currently running about $1/gallon more than gasoline when historically it was close to parity. About $3/gallon more than when Trump was in charge and oil was promoted instead of vilified.

https://www.eia.gov/energyexplained/diesel-fuel/use-of-diesel.php

In 2020, distillate fuel consumption by the U.S. transportation sector, which is essentially diesel fuel, was about 44.61 billion gallons (1.06 billion barrels), an average of about 122 million gallons per day. This amount accounted for 77% of total U.S. distillate consumption, 16% of total U.S. petroleum consumption, and on an energy content basis, about 27% of total energy consumption by the U.S. transportation sector.

So that’s about $44 billion added cost to everyone in the USA just from the Russian Embargo JUST in Diesel fuel, and $88 Billion from the Biden anti-oil policies. $132 Billion combined. Per Year. I make that about $400 per person. $1600 for a family of 4. Don’t drive a Diesel? You still pay it in higher prices for everything hauled in trucks, ships & trains.

Now figure the impact from higher gasoline prices and jet fuel… 16% Diesel… so 84% in other stuff. As a first approximation, call it 84/16= 5.25 times. Call it just 5x. $2000 per head. ($2400 Total) Or $8000 for a family of 4. ($9600 total) How many families have a spare $10 Grand PER YEAR kicking around to toss at Biden Oil Policies & Russian Embargo politics?

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About E.M.Smith

A technical managerial sort interested in things from Stonehenge to computer science. My present "hot buttons' are the mythology of Climate Change and ancient metrology; but things change...
This entry was posted in Economics - Trading - and Money, News Related, Political Current Events. Bookmark the permalink.

22 Responses to Where Has All The Diesel Gone? Long Time Passing…

  1. E.M.Smith says:

    Looks like we lost some refining capacity too:

    https://ussanews.com/2022/05/16/americas-diesel-stockpiles-are-rapidly-dwindling-fuel-rationing-on-the-horizon/

    Rousseau added that diesel fuel inventory levels and production have plummeted due to a decrease in refinery capacity nationwide. Several refineries, which process crude oil and turn it into diesel, have closed in recent years largely due to the COVID-19 pandemic-induced recession in 2020, he said.

    Seven refineries, which processed a total of about 806,000 barrels of oil per day, have shut down over the last three years, leaving the U.S. with 124 operating refineries, down more than 10% since 2016, according to the EIA.
    Total U.S. operating refinery capacity fell 4.5% between 2020-2021 to 17.7 million barrels per day, its lowest level since 2013.

    Meanwhile, bans on Russian fuels in the U.S. and Europe amid the Ukraine crisis has put even more pressure on the American energy industry which has sought to fill the gaps in the global supply chain. Although the U.S. is a net exporter of distillate fuel oil, it imported 77,000 barrels of the product from Russia in February.

    “A lot of countries won’t accept Russian fuels anymore. So, that has caused a need for more diesel around the world and the U.S. is a major exporter of refined products. So U.S. diesel exports are up,” Rousseau told TheDCNF. “So, you have less capabilities, you got more exports and so what that’s doing is it’s drawing down the inventory levels in the U.S.”

  2. Fweedom Fwies says:

    It stops any trucker convoys as well.
    Hat tip to the Gray Champion truckers in Canada.
    The kamikaze mission by Biden’s handlers to destroy America once and for all in four years will continue.

  3. Ossqss says:

    Is it just me,,,, or does everything in the USA seem to be happening “self-inflicted” backwards?

  4. Terry Jackson says:

    Yep, and i saw that US Crude Production has dropped by about 2 Million Barrels per Day from 2020. The Fauxi lockdowns drove fuel consumption way down, and many of us got refunds from the auto insuring carriers due to much reduced driving. Now consumption is rising, supplies are falling , the price (always the great allocator) is exploding.

    Any given refinery is optimized for a specific crude slate. Changing to different slate takes time and money. All crude reservoirs deplete over time. The future is not bright.

  5. Graeme No.3 says:

    And the European obsession with Global Warming cum Climate Change/Disruption/ Emergency/ etc. has lead them to reduce their own production of oil and gas. Coupled with the output reduction from French nuclear and their beloved wind turbines they, à la Oliver Twist, want more.
    The various governments must be hoping next winter will be mild and slow to start, or the peasants will be revolting.

  6. H.R. says:

    When I bought my diesel truck to tow the larger trailer, I commented that I was puzzled why diesel was almost at parity price-wise with gasoline. It was an oddity I hadn’t seen in years.

    When I was young, diesel was cheaper than gas. Then it went to being higher than gas by about 30 to forty cents per gallon.

    cdquarles to the rescue, he recalled that the crossover in price was due to the new requirement for low sulphur diesel in the early ’70s. The parity I was seeing came about from a spike in demand for gas and some problems on the production side with gasoline. Diesel was having no problems at the time.

    Well, it seems to me that the spread had gone back to about the usual for a while, but recently I’m seeing the spread now widening due to the factors mentioned in E.M.’s post.

    I’m just bringing all this up again to reinforce the point that supply (and production capacity) and demand still rule the fuel market, and it takes a gubbmint to really screw up the prices. “Big Oil” doesn’t have a lot of say in the matter of price.

  7. H.R. says:

    @Ossqss: No, it’s just you. Our Mr. Mensa-7-D-chess Biden is 100% MAGA in everything he does…

    … Okay, okay… y’all can stop laughing your asses off now and come up for a breath of air. Of course I was kidding. I just thought you could all use a belly laugh in these dark and insane times where the GEBs are doing their best to k!ll us all off.

  8. Ossqss says:

    @HR, but, butt, buttt, there is less work involved to make, diesel. Oh well, people still don’t see the overall scenario……… engage> ……

    https://www.iea.org/data-and-statistics/data-browser/?country=WORLD&fuel=Energy%20supply&indicator=TESbySource

  9. Richard Hill says:

    Irony is that the Europeans promoted diesel for years, for efficiency reasons, lately fear of NOx pollution has caused the govts to discourage use of diesel cars. Expect the current demand trend to drop off sooner or later.

  10. Russ Wood says:

    South Africa closed two of its five refineries because they were unable to produce low-sulphur petrol. Two others burned down and now the last is about to be closed. It’s becoming not so much “where are we going?” but rather “HOW are we going to get there?”

  11. E.M.Smith says:

    @Richard Hill:

    The Average age of cars (at least in the USA) has steadily risen to about a dozen last time I looked. I’ve been shopping for a “New Car” with the spouse. The current crop has a “design point” largely shared across many vendors that we find “annoying” (to put it mildly). So we’ve basically decided we’re just going to keep what we’ve got. IF we need a different vehicle: Nothing newer than 2008.

    Why?

    First off, the “drive your car via a tablet that glows at you in the dark” is just wrong. We spent about 10 minutes trying to figure out how to turn off the radio in a new Subaru. Give me knobs and buttons, please. Then I’m not keen on ANY light source in my eyes when driving at night and you MUST use the tablet to get some tasks done. Finally, I’m not interested in a car where I need to read a long manual on the operating system to know how to control the AC, start the engine, or adjust the radio…

    Second: They have made the cars horribly complicated, especially to repair. To replace the fuel filter in the 2008 ML CDI costs about $150. You must disassemble the entire air intake plenum just to find it, and then there’s a sensor on it that must be CAREFULLY transplanted to the new filter (yes, electronics involved in the fuel filter…). Just as ONE example. Electronics have a limited lifetime (usually the electrolytic capacitors internal corrosion ends them in about 10 years) and the manufacturers do NOT stock parts for 11 year old cars… So essentially this crop of “computers with wheels” will expire and be trash, like it or not.

    So to the extent folks in the Rest Of World figure this out too, it could take a while for the fleet to “roll over”…

    Yes, I know I’m swimming up stream on this as most folks will just buy what’s on offer. But is what it is.

    The car I’m most keen on keeping “forever” is my all mechanical Diesel. Anyone with a machine shop can make parts…

    The ones least of interest? The two newest ones with engine management computers and integrated electronics.

    Shopping for? Older Diesel Truck. I’m figuring that in a year or so I’m going to swap the Mercedes ML CDI for something more long term maintainable without requiring a bunch of electronics, sensors, etc. to function. A “beat up old fishing truck” kind of thing.

    @Russ Wood:

    Interesting… California has a couple shut down and some converting to make “Bio Diesel” but still off line now. I wonder how many folks around the world all simultaneously made the same decision that “Demand is down due to Mah-Covid so let’s do maintenance / conversion / shutdown now.”

    @H.R.:

    What got me looking into this was that, historically, Diesel went up in Winter as the #2 Heating Oil market sucked on the same #2 oil supply, but dropped under gasoline in Summer as heating oil demand ended. But this year, winter ended and prices went UP well beyond gasoline. “Something is up” thinks I…

    For several decades I’ve driven my Diesels mostly in Spring / Summer when fuel was cheaper, and my Gas cars in Fall / Winter when Diesel was more dear. This mattered a lot more when I was working on contracts all over the place and doing (sometimes) 50,000+ miles a year…. Now not so much; but the habit remains.

    Right now the Diesel is fully fueled up and has a 500+ mile range. It is “mostly parked” as the “escape the hurricane” car for now. Once we have a final home bought, it is the tow vehicle for hauling stuff to the house. But not being used as a “daily driver” despite having the best MPG of the “fleet”. That $1 / gallon premium wipes out the benefit.

    Right now the “daily driver” is the spousal wagon. But with a range of about 300 miles, it is a less than ideal “escape the ‘cane” car as it would need a fill up before exiting Florida… and we all know how available gasoline can be with everyone stopping in Ocala for gas as they head to Georgia…

    I’m hoping that the Russian Oil / Diesel will be redirected to somewhere like China which will then displace their demand from the Middle East and eventually the displacement will ripple back to here; and things can normalize again. (Fuel is fungible after all… and it WILL be produced and sold). But that will take time. Perhaps a couple of years. We’ll see.

    Until then, with Europe sucking on the American Fuel teat, the Diesel cars are for special needs only for me. Sigh.

    @Graeme No. 3:

    I’ve watched the UK do some really silly things with their electric generation capacity, but not been tracking their motor fuel decisions. Hopefully they are not blowing up their oil refineries too…

    Did notice the move to demonize Diesel Cars in London. Just incredibly stupid. THE most efficient motor possible. Anything else will increase total fuel used.

    @Ossqss:

    Yup, it’s just you. ;-)

    IMHO, it isn’t “self inflicted” it is “Inflicted by Puppets Of GEBs for their gain”. Soros want’s to take down the $US as his final “victory”. The Euro-GEBs want the return of Feudal Empire Control, so working to ban freedoms and expand Nova-Roma Empire EU / NATO. This is not something the population wants. Gates, Zuker-face, etc. just want the giant money flows and power.

    THE big question is just: “Will it get bad enough for The People; that the average folks are willing to embrace the necessary corrective action?”. So far, nope.

    IMHO it is a war of Elite vs Peon but most of the Peons have not realized it yet.

    @Terry Jackson:

    Yeah, we were “making up for it” some by buying Russian products, but now have suddenly shut that off too.

    Shutting in new exploration means an inevitable decline in supply as fields have a decline rate once in production. This is a deliberate act to damage the oil sector, IMHO.

    I suspect that TPTB will only realize it was a horrible mistake when the damage has gone critical. That will be about 2 years after it is too late to recover in less than several years. A 1/2 decade plus of “Aw Shit” will make for a very grumpy population and they will be stuck trying to “ride that tiger”. Generally that pattern has not worked out well for “those in charge”. TPTB think that having their Puppet Proxies (like Biden & Camel-A) will shield them. I think it will not be fully effective as “wars are like that”… But “we’ll see”…

  12. philjourdan says:

    @Ossqss – it is also cheaper to make premium gas than regular gas, yet it costs more- economies of scale.

  13. Tonyb says:

    Quite why makers insist on impossibly complicated cars, coupled with large in your face screens that are very distracting to the driver,, I don’t know

    When looking at New cars here in the UK it was very noticeable they became less complex and dash mounted screens disappeared, when you dropped down from top of the range to middle range

  14. cdquarles says:

    To back up phil’s comment, you can buy 100% gas here. It costs roughly the same as premium, but it has a lower octane content. Gas here is over $4 a gallon. Diesel is over $5 a gallon. This is also refinery maintenance time then they start making fuel oil for the winter. Add in the other stupidity …
    and there you are. Oh, that reminds me, E85 used to be the least costly. That’s no longer the case. E85 and E10 are roughly the same price here. One additional factor is that a year or two ago our state government passed a phased gas tax increase, so add that to it for this year and next year as well, if I’m not mistaken.

  15. E.M.Smith says:

    Just filled up on ethanol free. 89 octane where super is 93. Both the same price.

    The ’89 wagon sputters at idle on 10% ethanol. Runs much better on real gas.

    Mostly sold in high humidity places with boats. On long standing, in boats where humidity over water is near 100%, the water absorbes into the fuel and then separates out a water ethanol layer that won’t run the engine. Folks don’t like that, so pay extra for gas that is free of that vexation.

  16. Power Grab says:

    Is it possible the trend towards screen-based control of everything is meant to reduce the cost to manufacture devices? Does it take less metal if you don’t have to have a dedicated button or hardware switch to make the device do stuff?

  17. Simon Derricutt says:

    Power Grab – yep, it’s cheaper to add a microcontroller and a few pushbuttons than to add a switch for everfy function and find space to put them. Screens are down to a few dollars, and the microcontroller much less than a dollar, and momentary “oil-can” type push buttons are cents each. Get rid of the mechanical switches, and use a touchscreen, and you not only save money but can sell it as being more modern than a large row of single-function switches. You can also add in new functions in the software – no change to the assembly routines.

    Of course it’s a bad idea to have a lit screen at night that you have to look at often. Not the salesman’s problem though.

    These days most of the capacitors can be ceramic, and with correct board design they’ll outlast the car. For some designs it works out cheaper overall than using electrolytics, but mostly not since surface-mount electrolytics cost less in general but have a shorter life.

    Odd that they only do this in the high-end cars. Then again, it’s sold as being an advantage, so stuffing them in the cheapest models (to save money building them) would affect sales of the high-end ones.

  18. E.M.Smith says:

    @PowerGrab:

    IMHO, it is 2 things.

    For some things, electronics can substitute for elegant (read expensive engineers) design. I put a relatively simple piezoelectric squirter in my injection port, then just play around with various electrical pulse width and duration to meet power vs economy vs pollution goals. Stuff most engineers can do and little machinist time needed. Fairly cheap and flexible compared to precision designed “mechanical computer” controls precision machined. Pretty much all automatic transmissions are replacing their fluidic controls with electronic, for example.

    For other things, it is an explosion of “features”. Instead of an on off switch on the wipers, you get a transistor connected to sensors and the computer. Now it can auto-on in rain, change speed with rain rate, go very slow, etc. You just need to add a panel to the already in place management computer. .. and then the customer gets to deal with it when it rains if they don’t like the defaults.

    Then you get the interaction of those 2. A cheaply designed more complicated car with difficult to find and use controls hidden in menus… but think of all the labor saved getting rid of precision machinists, expensive engineers, and folks installing wiring harnesses to the now missing switches and levers….

    I decided this was a problem when one car had me searching how to turn on the headlights…

  19. Power Grab says:

    @ EM re:
    “… but think of all the labor saved getting rid of precision machinists, expensive engineers, and folks installing wiring harnesses to the now missing switches and levers….”

    Yeah. But I keep wondering: Doesn’t that make it a race to the bottom insofar as growing the economy is concerned?

    At what point does one say, “I think we’ve thrown enough people out of work. Let’s let humans do the constructive stuff for a while!” …or… “Now that we’ve got minimum wage raised, let’s stop paying idle people so much to sit around doing nothing.”

    My kid was idle yesterday because so many of the workers called in sick. In order to get more workers, they’re paying more than the company ever used to pay, and my kid got a raise because of that, but sitting idle doesn’t earn you anything. :-/

  20. another ian says:

    Fits here

    “Epic, Simply Epic – During Senate Energy Committee Hearing, Interior Secretary Haaland Questioned About Real Time Press Release Shutting Down Oil and Gas Exploration, The Secretary Has No Idea
    May 19, 2022 | Sundance | 15 Comments
    ~ The Great Pretense of Biden ~ ”

    https://theconservativetreehouse.com/blog/2022/05/19/epic-simply-epic-during-senate-energy-committee-hearing-interior-secretary-haaland-questioned-about-real-time-press-release-shutting-down-oil-and-gas-exploration-the-secretary-has-no-idea/

  21. another ian says:

    Model errors bite again

    “Team Biden Quietly Admits Math Error Behind Long Delays in Oil, Gas Permits”

    https://www.dailysignal.com/2022/05/20/team-biden-quietly-admits-math-error-behind-long-delays-in-oil-gas-permits/

  22. another ian says:

    A truckers boycott of California and other places?

    http://www.smalldeadanimals.com/2022/05/22/its-probably-nothing-126/

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