Is diesel going to be gone ?

[Tractorat]

I havent filled up in at least several weeks. But, I just heard on the news that a lot of gas stations are out of diesel, and that with $4/gas, it might be wiped out.





TRat

 

[ACoyle]

Please read post #8 in this thread. https://www.turbodieselregister.com...-topics/132354-crazy-texas-diesel-prices.html

TMTT coves it pretty well.

 

[TAbbott]

The simple answer is no. Without diesel, virtually every interstate train and bus as well as almost every other heavy duty vehicle in the country would stop. There would be no back-up generators for hospitals or anything else. If there was no supply of diesel at any price, our economy would grind to a halt almost immediately. Not gonna happen... .

 

[EBung]

Yeah they will wipe out diesel. Right! So we are going to ship all our food,coal,natural gas,UPS,Mail ETC with a gas burner? Not gonna happen. Just wait and see cause if things stay the way they are this country is gonna end up like Russia did 20 years ago... . Broke! with no way out. Washington WAKE UP and please quit shipping our diesel to China.

 

[Cummins Cowboy]

I for one am pretty surprised diesel continues to go up the way it has, I see nothing that warrants the . 80/gal more than gas price it costs around here, we are out of the cold season, so no heating oil demand, I have almost parked my truck since the first of the month, I have filled up 3 times in the last month, and my tank is almost full now, so figure I have used a little more than 2 in a month, compare that to 5 normally, I am sure others are doing the same thing, I would think there would be a serious slowing in diesel demand. demand for gas should be out pacing it

 

[AABEN]

Jest thank diesel comes off before gas!! diesel should be less money. It cost less to make it. So why are thay holding us up???

 

[KevinSmith]

Unfortunatly that is no longer true. ULSD requires more refining to make than gas. The old stuff took hardly any refining in comparason.



And(just playing devils advocate here) When fuel was 30 cents a gallon what was the average wage? Fuel is about the same ratio of the hourly wage that it was then. By and large the oil companies are posting a 10% profit margin. Though it would be nice to have a company trim itself down and lower the price most companies that post a 10% profit are considered marginal investments at best. If the oil companies did drop as an investment then the portfolios that we all have our retirement accounts in would drop. Until we become oil independant and build more refineries the prices will not go down.



Just my 0. 02 cents

 

[bigdaddydieseldan]

Without diesel the real world would come to a screeching halt all h**** would break loose no diesel that's funny :-laf:-laf:-laf:-laf:-laf

 

[Tractorat]

The problem Im wondering about would be the availability for diesel for the likes of you and me. As diesel gets to $6, $8, $10 +++ a gallon, maybe something will be done for the trucking industry railroads, etc. But you and I (well at least I) wont be buying diesel at that price, at least not very much. So, I can see where the individual gas stations might stop carrying it. Just not enough volume to justify keeping it in the tank.

 

[Cummins Cowboy]

Unfortunatly that is no longer true. ULSD requires more refining to make than gas. The old stuff took hardly any refining in comparason.



And(just playing devils advocate here) When fuel was 30 cents a gallon what was the average wage? Fuel is about the same ratio of the hourly wage that it was then. By and large the oil companies are posting a 10% profit margin. Though it would be nice to have a company trim itself down and lower the price most companies that post a 10% profit are considered marginal investments at best. If the oil companies did drop as an investment then the portfolios that we all have our retirement accounts in would drop. Until we become oil independant and build more refineries the prices will not go down.



Just my 0. 02 cents

say what, didn't the oil companies post record profits for a US corporation?? they have been making 30-40 billion a shot, thats a little more than a marginal profit, its record profit, keep in mind this is after expenses. 40 billion is more money than most can fathom,



fuel and oil are at all time records when adjusted to inflation, diesel is . 80 more than gas for no reason that makes sense to me.



I am not bashing big oil, the real problem is the tree hugger wackos, investors see that oil aint gonna get any cheaper so, why not jack up the price of crude,

 

[wxman]

According to a petroleum analyst:



"A substantial gap has developed between the prices for heating oil and natural gas. Why has the price of distillates increased?



The answer to this question has to first start with what has been happening in the downstream market in the U. S. and Europe. Since 2002, world demand for the middle of the barrel has increased twice as fast as demand for gasoline.



This has led to what we believe is a somewhat unbalanced product market (and probably not sustainable over the very long-term) where the middle of the barrel (distillates) are priced higher than gasoline. From a pure production cost outlook, distillate should be cheaper than gasoline. We are not getting the historic relationship in pricing between the middle of the barrel and gasoline because the Europeans and other world refining centers are running full tilt to meet distillate demand, which is also yielding substantial volumes of gasoline components in excess of local demand. These gasoline components are then sold into the U. S. market.



Note that we at EPRINC don't view distillate as selling at a premium to gasoline, but gasoline being discounted to distillate. Of course, both statements are accurate, but how you look at this problem is important for understanding how the market is likely to shift over time. Over time we would expect the Europeans to reconfigure their refineries to reduce gasoline, and increase distillate output, but this will require substantial capital outlays. This is one reason why the price spread between natural gas and heating oil has opened up so much over the last few years. "



http://www.eprinc.org/pdf/O&E_Jan08_EPRINC_Q&A.pdf (page 2)

Unfortunatly that is no longer true. ULSD requires more refining to make than gas. The old stuff took hardly any refining in comparason.

While it's true that ULSD requires more refining than the higher sulfur fuel, gasoline (reformulated gasoline - RFG) still requires much more "refining" than ULSD, based on data from UC-Davis ( http://www.its.ucdavis.edu/publications/2003/UCD-ITS-RR-03-17-MAIN.pdf ):





RFG requires 0. 170 BTU-process/BTU-RFG - ultra-low sulfur diesel (USLD) with 5 ppm S by weight requires 40% more energy to produce than does conventional diesel (CD = 0. 058 BTU/BTU – page 93 [110 of 444]) with 5000 ppm S by weight (page 96 [113 0f 444])



RFG = 0. 170 BTU/BTU; ULSD = CD X 1. 4 (40%) = 0. 058 X 1. 4 = 0. 0812 BTU/BTU; 0. 170/0. 0812 = 2. 09 (page 96 [113 of 444])



Per unit volume = 2. 09/1. 12 (12% more energy per unit volume than gasoline) = 1. 866 = 86. 6% MORE energy required per gallon.



Gasoline has to be more or less "manufactured", since there's very little "naturally-occurring" gasoline in a barrel of crude oil ( The Oil Drum | Refining 101: The Assay Essay ), and that's unsuitable for vehicle use because of low octane (around 70). "Naturally-occurring" middle distillate is much more abundant in a barrel of crude (20%-30%).



It is my understanding that a significant amount of the middle distillate is "cracked" to gasoline:



"…All refineries do essentially two things. First, they separate crude oil into its component fractions of propane, butane, gasoline, kerosene, diesel, various "gasoils", and heavy fuel oil or asphalt. Then, after separation, some of these fractions are processed further to convert them into other products or improve their quality. The workhorse for much of this in most refineries, particularly in the US, Europe and Japan, is the fluid catalytic cracking unit, or "cat cracker", an expensive piece of hardware using updated versions of a 60-year old technology to turn diesel and gasoil into gasoline. "



The sudden spike in diesel fuel cost this past February is still a mystery to me since major oil refiners have been producing ULSD since October 2006, and Europe/Asia have had high demand for diesel for many years.



One last point... at least two oil refiners have announce that they plan to increase diesel fuel output relative to gasoline (although that will likely take a few years):



"…the expansion [Marathon, Garyville, LA, refinery] will also result in an increased percentage of diesel in the product mix…"

Free Preview - WSJ.com



"…Wrapped up in this strategy is Mr. Morris' investment in equipment to boost diesel production. The output for most U. S. refineries is one-third diesel, two-thirds gasoline. At Alon's California plants, the output will be the opposite…. " The Dallas Morning News: Think diesel » Royal Dutch Shell plc .com