July 15, 2009
Diesel And Hybrid Cars Seen As Cost Effective

Several diesel and hybrid cars beat regular gasoline counterparts in operating costs.

An annual study by IntelliChoice.com shows most 2009 model-year hybrid and “clean diesel” vehicles deliver a lower cost of ownership compared to their gasoline-burning counterparts. The company concluded that clean diesel technology — included in the survey (.pdf) for the first time this year — could be a “game changer” in North American, especially if the Obama Administration adopts a tax program to encourage use of the fuel.

The most surprising result: The VW Jetta TDI diesel beat the Toyota Prius for first place in money saved. Whether a Jetta TDI purchased today will cost less to operate than a Prius purchased today depends on a few factors:

  • Non-fuel operating costs. Note that diesel engines last a long time. But Toyota wins overall on quality against VW.
  • Whether you drive more city or highway miles. The Prius is going to win in lots of stop-and-go traffic. The Jetta will shine on the highway.
  • The relative costs of gasoline and diesel fuel.

The last point is the one I find hardest to call. Just a quarter mile from where I sit in SoCal the Shell station is selling diesel for 20 cents a gallon less than gasoline. But in the summer of 2008 the price of diesel soared over that of gasoline and at that same Shell station diesel briefly cost 96 cents more than gasoline per gallon. I saw an even larger premium for diesel in Michigan last year. The economic downturn has suppressed trucker demand for diesel by more than car driver demand for gasoline. But what will be the relative prices of gasoline and diesel 1, 2, 3, 4 years from now? I don't know.

In Morgan Downey's excellent book Oil 101 (which covers the basics of the oil industry) I learn from chapter 7 that 22% of US oil refinery output goes to diesel versus 27% worldwide. So there's some room for expanding diesel fuel output. But there are limits to how much of a barrel of oil can get turned into diesel. What I'd like to know: how much of America's car fleet can be switched to diesel? Other governments pushing diesel already cause US refineries to export diesel and import gasoline during some (all?) periods of time. So I see signs of limits for diesel supply on a global level already.

Share |      Randall Parker, 2009 July 15 12:26 AM  Energy Transportation

Nick G said at July 15, 2009 9:43 AM:

Good question. I have the general impression that with the right equipment (and some inve$tment), a refinery can turn just about any fraction of the oil into another.

OTOH, gasoline seems a bit more convenient, and I like the idea of having an electric drive-train. Prius PHEV conversion started at $10k, and is now at $7k. When it goes to $5k, and gas is at $5, conversion will pay.

Fat Man said at July 15, 2009 7:15 PM:

I have an unsourced note on the ratio between Gasoline and Diesel:

For simplicity, most refiners wishing to hedge their price exposures have used a crack ratio usually expressed as

X:Y:Z X = barrels of crude oil, Y = barrels of gasoline and Z= barrels of distillate fuel oil, and X=Y+Z.

Widely used crack spreads have included 3:2:1, 5:3:2 and 2:1:1. the 3:2:1 crack spread is the most popular of these

The 3-2-1 ratio approximates the real-world ratio of refinery output—2 barrels of unleaded gasoline and 1 barrel of heating oil from 3 barrels of crude oil.

However, the Europeans use more Diesel than the US because they have more diesel cars and use more truck transport of freight, US refiners export Diesel to Europe and import gasoline from there. The respective prices will vary not only with the crack spread but with demand in the respective markets and currency value fluctuations.

diesel gordon said at July 16, 2009 3:03 PM:

All volkswagen issues aside, I know many TDIs that just don't seem to die. My friend's rabbit tdi just won't go away. I can't imagine a hybrid lasting that long without needing very expensive battery replacements.

Engineer-Poet said at July 17, 2009 9:51 PM:

It's my understanding that gasoline direct injection (GDI), with the charge-cooling effect and consequent increase in feasible compression ratio, has reached rough parity with diesel efficiency.  If you used the same bag of tricks (turbocharging, Atkinson cycle, unthrottled engine) you'd get about the same efficiency using either fuel.  (The truth is likely to be more nuanced than this, as I've not studied the issue in depth.)

This means that we don't need to prefer one engine technology over the other.  What we need to do is push efficiency, period.  This push SHOULD start with at least $2/gallon in additional fuel taxes, but we all know that's not going to happen soon enough if ever.

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