Diesel Fuel Supply and Demand

[WAckerman]

I am happy hearing the news that there more and more vehicles to be offered with diesel engines in them. I do however have a couple questions in regard to the fuel, its sources, and its costs. I am in no way trying to rain on anyones parade, I am just curious if I understand our energy situation correctly (especially how it pertains to diesel vehicles).



If I understand the production of diesel fuel correctly, diesel is essentially a by-product of gasoline production. My first question is, can more diesel fuel be extracted from a barrel of crude oil if diesel fuel is all you are after?



If the answer to the above question is no, then as people all over the world (especially this country) realize the benefits of diesel vehicles, it would seem to me that the cost of our diesel is going to skyrocket. As more people want diesel, the more it will cost... right? I have seen diesel rise above the cost of Premium Unleaded in Utah much to my surprise.



I was told when I purchased my 05 a few months ago that i could run B5 bio, but that if I was to run anything higher (ie B20 or B100) that DC would void my warranty. I read here on the TDR that the reason for this could be that Bosch is calling the shots on Bio. In my mind at 5% i don't see the benefit (cost of B5 here is almost exactly the same as #2, and I would have to drive out of my way to get it). Now, I would more than willingly drive out of my way and I would even pay slightly more to support American farmers who were producing BioDiesel, if I knew that all the money was going to them, but if 95% of my tank of fuel purchase price is still rolling over to some D*** OPEC country then what is the point? I would like no better than to give the finger to OPEC and Russia who think they can strong arm the world...



I guess I just don't see how we can reduce our dependancy on foriegn oil, unless we have a true commitment from the automakers. I read the article that the Montana Gov. is running a synthetic diesel powered Ram, and that is truely amazing! I would love to see mass producded synthetic diesel! Bring it on!



Anyway, I'm sorry for the long post. I am excited to hear everyone else's opinions.

 

[wxman]

My first question is, can more diesel fuel be extracted from a barrel of crude oil if diesel fuel is all you are after?

The answer is apparently "to some extent" based on references I've run across:





"…Within the refinery, the ratio of petrol to distillate can be varied in two ways. First, the crude oil mixture fed to the refinery can be richer in naphthas to maximize petrol or in middle distillates to maximize diesel. Second, heavy oil can be processed to lighter products. Typically, petrol and middle distillates comprise 40% of the barrel. Nearly 60% of the barrel consists of heavy residual fuel oils. These are catalytically cracked (FCC), hydrocracked, and thermally cracked (visbreaking and coking) to convert a portion of the residual oils to petrol and middle distillates. The primary tool is the FCC. The severity of the FCC, termed conversion, is variable. As the conversion is increased, the ratio of petrol to fuel oils is increased... . "



http://www.unep.org/PCFV/Documents/PubGraboskiReport.pdf (page 18)





"…One obvious method of increasing LCO [light cycle oil - middle distillates derived from heavy residual oils] yield is to reduce the FCC unit cracking severity so that conversion declines. At the lower conversion, yields of heavy products (light cycle oil, heavy cycle oil, and clarified oil) will increase while yields of light products (gasoline, LPG, and gas) and coke will decrease. The cracking severity can be reduced in several ways - reducing catalyst activity, lowering reactor temperature, and reducing the catalyst/oil ratio are three common ways…. "



http://www.refiningonline.com/EngelhardKB/crep/TCR5_42.htm





Based on a graphic from the EIA, straight distillation of crude oil yields as much or even more "middle distillates" (from which diesel fuel is made) than naphthas (from which gasoline is made).



By the way, the EIA claims that supply of diesel fuel will NOT be an issue even under a "high growth" (of diesel vehicles) scenario:



http://www.eia.doe.gov/pub/oil_gas/petroleum/presentations/2005/dflvehicles/index.html





I agree with you on biodiesel. However, if the U. S. uses 60 billion gallons of diesel fuel per year, you'd need a capacity of 3 billion gallons of biodiesel just to make all our diesel fuel B5. We're not at that capacity yet. Hopefully more biodiesel plants will come on line soon. We'll probably have to use more that soybeans as a fuel stock though. Biodiesel from algae is probably the most promising:



http://www.csmonitor.com/2006/0111/p01s03-sten.html





One other interesting possibility that, if true, could address two big problems at once:





"Green Power Inc. Announces Successful Demonstration of Waste-to-Fuel Technology Creating NanoDiesel"



http://www.theautochannel.com/news/2006/08/02/016912.html

 

[SBall]

I've also wondered about the future price of diesel if demand should rise in our country. Considering that the typical yield of diesel and distillates from a barrel of crude oil is 9. 2 gallons, while the typical yield of gasoline is 19. 5 gallons, it sure seems that unless the process is tweaked, you'll see a lot more gasoline than diesel from a barrel of your basic crude oil.



Consider this too ... If EVERYBODY wanted to burn diesel, then according to the laws of supply and demand, gas prices would plunge. If everybody wanted to burn gas, then diesel prices would plunge. I personally wouldn't doubt that there's some collusion between our government and the european nations that would explain why the U. S. is focusing on gasoline for our transportation sector, and the europeans are adopting diesel more and more. (We're burning the gas while they're burning the diesel). This would explain why europe is able to export gasoline to the U. S. easing our price pressure at the pump, and why the U. S. has been known to export distillates to to other countries in return. (Anything to reduce our trade deficit)!



If we can promote the growth of Coal to Liquids in this country like Sasol has done in South Africa, then maybe the EPA will eventually allow us to buy some of those neat clean diesels from Honda, BMW and the like. This would build up the supply of diesel and home heating oil to meet the expected demand growth, hopefully stabilizing the price.

 

[wxman]

Considering that the typical yield of diesel and distillates from a barrel of crude oil is 9. 2 gallons, while the typical yield of gasoline is 19. 5 gallons, it sure seems that unless the process is tweaked, you'll see a lot more gasoline than diesel from a barrel of your basic crude oil.

That's the point I was trying to make in my previous post. It takes considerable processing ("refining") to obtain the proportions needed to satisfy market demand:





"... One barrel of crude oil, when refined, produces about 20 gallons of finished motor gasoline, and 7 gallons of diesel, as well as other petroleum products... . " ( http://www.eia.doe.gov/kids/energyfacts/sources/non-renewable/oil.html#How formed )





"…Distillation separates the crude oil into unfinished products. However, the products do not naturally exist in crude in the same proportions as the product mix that consumers demand. The biggest difference is that there is too little gasoline and too much heavy oil naturally occurring in crude oil. That is why conversion processes are so important. Their primary purpose is to convert low valued heavy oil into high valued gasoline…. " ( http://www.exxonmobil.com/Europe-English/Files/Simple_Guide_to_oil_refining.pdf (page 3))





The bottom line is that it appears that the process could easily be changed to produce more diesel fuel and less gasoline (and use less energy in the process).

 

[WAckerman]

Great posts guys! Thank you! Thanks for posting your links, Wxman!



Nanodiesel! Thats great! What an idea!