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July 14, 2016   |   Diesel Technology Forum

Policy Insider

Keep it in the Ground or America First?

Whether you stand to the right or the left of the political fence, clean diesel technology will be a key component to help realize the energy policy goals of your party’s policy platform.


This summer we will all receive a healthy dose of political news coverage thanks to the Democrat and Republican political conventions. Energy policy will play a big part of the talking points coming out of both party’s platforms along with the message points that will float across newspapers, through cable and broadcast news and across social media channels. Clean diesel technology will play to the strengths of both parties platform when it comes to energy policy. 

An America First Energy Plan

The Trump campaign has declared that America’s newfound energy reserves will be put to use in an effort to promote energy independence as well as a tool to promote strategic economic and foreign policy objectives. While America’s newfound energy reserves receives frequent attention, receiving scant attention are booming exports of clean diesel fuel. Since 2009, exports of ultra low sulfur diesel (ULSD) fuel from U.S. refineries has more than quadrupled and is now the top finished petroleum product export.

Low Sulfur Diesel Fuel Exports

U.S exports of clean diesel fuel is also a fundamental part of foreign and economic policy. The top market for U.S. clean diesel exports is Mexico, a strategic economic partner. France, the Netherlands and the U.K. – influential and longstanding allies - are also among the top 10 markets for U.S. ULSD. Growing sales of clean diesel fuel abroad earn significant export revenues for the U.S. treasury and contribute towards easing trade deficits and may even count towards deficit reduction.

One of the great benefits of the diesel platform is its inherent efficiency. Diesel fuel is the most energy dense transportation fuel and the diesel engine is the most effective technology in the market place to transform this energy density into work. Diesel passenger vehicles, on average, achieve a 20 to 40 percent improvement in fuel economy relative to a gasoline model. New and newer diesel commercial vehicles are also more efficient than previous models. As more diesel cars and newer diesel commercial vehicles enter the fleet, we can expect significant fuel savings. With growing supplies of crude oil, and more fuel efficient cars and trucks, there is the potential for more U.S. ULSD to find its way to overseas markets and earn export revenues.

Clean diesel technology is also a U.S. manufacturing success story. The Trump campaign has been quite vocal in defense of U.S. manufacturing in light of growing competition from overseas imports. Clean diesel engines and vehicles have traditionally remained a bright spot for the U.S. economy and U.S. exports. Over $46 billion of American-made diesel engines and fuel along with diesel-powered vehicles and equipment was sent overseas in 2009.  In fact, one-in-ten diesel engines manufactured in the U.S. is ultimately shipped abroad for markets overseas.

It takes clean diesel fuel to operate clean diesel engines. If the U.S. ULSD export trend continues, thank to energy supply abundance and fuel efficient diesel engines, more customers abroad may demand a U.S. made diesel engine, vehicles and equipment.

Keep It in the Ground…or At Least Most of It in the Ground

If the Republican Party’s energy policy platform is likely to rely more on domestic sources of fossil fuels, the likely platform from Democratic Party will call for less reliance on fossil fuels. The presumptive Democratic candidate has suggested that the likely energy policy platform will call for efforts to keep most of America’s newfound fossil fuel abundance in the ground. This follows from the debate between the Sanders and Clinton campaigns calling for either the complete abandonment of all fossil fuels (Sanders) to the dwindling reliance on fossil fuels as a “bridge” to complete reliance on renewable sources of power (Clinton). As Hilary Clinton heads to her party’s convention this summer, we can expect to hear messages about the need to conserve and rely less on fossil fuels.

Again, diesel technology is a key component of this strategy. Today, roughly half of all economic sectors depend on diesel engines. Diesel-powered construction, farm, mining and forestry equipment keep these sectors moving while diesel-powered locomotives, marine and ocean vessels, commercial vehicles and buses move people and freight. Thanks to decades of innovation, research and development, new and newer diesel engines that power these vehicles and equipment are more fuel efficient than previous generations. The adoption of new technologies in favor of old will see significant fuel savings that will reduce the demand for diesel fuel that has the great potential to keep more crude oil in the ground.

The fleet of commercial vehicles offers a unique case study concerning the fuel savings benefits of clean diesel technology. Today, diesel engines power the majority of the fleet of trucks and buses. Technological innovations that enabled near-zero emissions performance from diesel engines that meet the latest emissions standards established for model year 2010, also came with fuel savings benefits. The fleet of these diesel commercial vehicles that meet or beat the model year 2010 standard, about one-in-four trucks on the road, have saved 69 million barrels of crude oil.

And the future is even brighter for diesel. We are already two-and-a-half years into the first ever fuel economy rules for commercial vehicles that are expected to save 530 million barrels of crude oil between 2014 and 2018. The Obama Administration is finalizing the second phase of these rules that are expected to save almost two billion barrels of crude between 2021 and 2027. A diesel engine will still be found under the hood of most of these commercial vehicles.

One of the great benefits of the diesel platform is its capability to run on higher blends of high quality biofuels including renewable diesel fuel and biodiesel fuel. These fuels are considered advanced biofuels by the U.S. Environmental Protection Agency (EPA) that have the capacity to reduce C02 emissions by at least 50 percent. Unlike ethanol, these fuels are derived from waste agricultural products and can directly displace the use of petroleum fuels. In the case of renewable diesel fuel, this displacement can be complete as most new diesel engines are approved to operate on 100 percent renewable diesel fuel. 

In fact, the future of the diesel platform may not be tied to petroleum fuel at all but on high quality biofuels. Already, the cities of San Francisco, Oakland, Walnut Creek and other municipalities announced the successful transition to operate publicly owned fleets of diesel vehicles and equipment exclusively on renewable diesel fuel. The City of New York, with the largest public fleet in the country, announced its intention to use renewable diesel fuel when that fuel is available on the East Coast.

Clean diesel engines are already at work reducing demand for fuel and can further reduce demand when operating on high quality biofuels.  In fact, reliance on clean diesel technology may offer an insurance policy to keep more of it in the ground.

Whether you stand to the right or the left of the political fence, clean diesel technology will be a key component to help realize the energy policy goals of your party’s policy platform.

 

 



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Key Contact

Ezra Finkin
Director, Policy
efinkin@dieselforum.org
301-668-7230

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