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June 12, 2017   |   Diesel Technology Forum

Policy Insider

Sparking Economic Growth One Engine at a Time

Evidence suggests that the production of diesel technology, that includes engines along with the vehicles and equipment they power, generates significant economic gains.


Last week, President Trump traveled around the country raising awareness of America’s infrastructure needs. The stock of locks, bridges, dams, roads, railways, highways, ports and air ports, drinking and waste water, and even the electrical grid were all built decades ago – even a century ago – and must be repaired and expanded to facilitate a modern economy. When completed, these projects will help streamline economic activity and expand employment. These projects will also be responsible for sparking economic development and boost jobs across the country. Behind much of this expansion will be diesel technology. A fleet of diesel-powered equipment will be needed to get the job done and the manufacture of this equipment will generate growth and employment on its own.

If you have taken a trip by car, by air, by rail or another mode, you probably noticed quite a lot of potholes or experienced traffic jams and travel delays.  Poor infrastructure probably played a role in your delay. The American Society of Civil Engineers gives our stock of infrastructure a D+ rating. Clearly, expanding infrastructure that was built decades ago, sometimes a century ago, will greatly help move people and goods while making sure that infrastructure meets modern needs.

Repairing and expanding this enormous inventory of must-do projects will require a fleet of construction equipment to dig and build and a fleet of trucks and vehicles to haul material and deliver products. The overwhelming majority of this equipment and vehicles are powered by diesel technology. In 2016, almost 750,000 diesel engines were manufactured in the U.S, and the production of this technology will greatly help communities across the country by expanding employment and sparking economic development.

Top 5 States for Diesel Engine Manufacturing

#1

NC

296,100

#2

MI

152,500

#3

NY

77,225

#4

OH

77,225

#5

MD

36,600

 

Evidence suggests that the production of diesel technology, that includes engines along with the vehicles and equipment they power, generates significant economic gains. Producing and servicing diesel engines directly generates more than $183 billion in annual economic activity and 1.25 million jobs according to the most recent analysis. Workers in the diesel technology sector typically earn a wage 60 percent higher than the national average. 

Looking at just the construction equipment industry, the Association of Equipment Manufacturers recently concluded that the production of diesel-powered equipment will offer many Americans a well paying job and benefit communities across the country. The manufacture of equipment 1.3 million jobs and $158 billion in economic value. In fact, the average wage in the industry exceeds the national average paying workers about $78,000 per year.

More demand for this technology by way of a national public works investment program will greatly help support economic development for many communities across and offer well paid jobs to workers in these communities. We all benefit when these projects are complete by reducing congestion delays, delivering commerce on time and getting workers to work on time.

Withdrawal from the Paris Climate Accord, But Not from Efficiency
While the U.S. has withdrawn from the Paris Climate Accord, policies underpinning diesel’s contribution to the commitment still stand, along with manufacturers’ commitment to making diesel engines, fuels and equipment more sustainable.

On June 2nd, President Trump withdrew the U.S. from the Paris Climate Accord that would have the U.S. reduce C02 emissions by 26 to 28 percent below 2005 levels by 2025. After the announcement, 10 states and the District of Columbia announced that they intend to follow the commitment and reduce greenhouse gas emissions and formed the U.S. Climate Alliance to advance collaboration. 

These states represent about 1/3 of total U.S. GDP and population and are home to about 1/4 of commercial vehicles and passenger vehicles in the U.S. That breakdown is below. Meanwhile, many U.S. municipalities participating in the C40 cities (12 cities) and the Compact of Mayors (134 cities) stated their commitment to reduce greenhouse gas emissions despite the announcement from the Trump Administration. 

While the U.S. has withdrawn from the Paris Climate Accord, policies underpinning diesel’s contribution to the commitment still stand.  Today, three out of four commercial vehicles on the road are powered by a diesel engine, and 99 percent of the large Class 8 trucks responsible for most fuel use and greenhouse gas emissions from the commercial vehicle fleet, are powered by a diesel engine.

These future vehicles are still covered by recent final EPA and NHTSA regulations to reduce greenhouse gas emissions and increase fuel economy, known as Phase 1 and 2 rules. When fully implemented, Phase 1 and Phase 2 fuel economy standards for commercial vehicles are expected to:

2014 and 2018: Save 530 million barrels of crude and 270 million tons
2021 and 2030: Save 2 billion barrels of crude and 1 billion tons of C02

Engine and vehicle manufacturers are developing next generation technologies to reduce fuel consumption to meet the demands of their customers and to meet these standards. Other emerging technologies, including autonomous driving technologies, may also contribute to fuel savings and greenhouse gas emission reductions. 

Policy leaders in Washington, DC and in states across the country are soon to consider policies to maintain and expand infrastructure. Projects that alleviate congestion and speed the flow of traffic, including commercial vehicles, will reduce congestion related fuel use that will also contribute to fuel savings and greenhouse gas emissions.

Innovations in Fuel: Low-carbon Renewable Diesel Fuel
The diesel engine’s inherent energy efficiencies is enhanced when the engine utilizes advanced biofuels including biodiesel and renewable diesel fuel that reduces demand for traditional fossil fuels and greenhouse gas emissions. Almost 3 billion gallons of biodiesel were used in 2016 and consumption of this advanced biofuel continues to expand.  A growing list of municipalities and business on the West Coast announced their use of renewable diesel fuel in all diesel engines and the vehicles and equipment they power. Other large municipalities and business across the country continue to express their intention to use more of the fuel when it becomes more broadly available.

Breakdown of the U.S. Climate Alliance & Vehicle Populations:

 

State

GDP

Population

Commercial Vehicles

Passenger Vehicles

WA

476,550

7,288,000

         317,635

          6,578,046

OR

229,837

4,093,465

         189,046

          3,617,500

CA

2,656,080

39,250,017

      1,366,529

        30,621,730

CO

330,319

5,540,545

         235,511

          5,058,381

NY

1,494,981

19,745,289

         489,532

        11,650,795

CT

266,597

3,576,452

            99,027

          3,022,445

HI

84,889

1,428,557

            30,111

          1,171,426

MA

516,483

6,811,779

         180,906

          5,181,234

RI

58,527

1,056,426

            27,792

              844,391

VA

500,833

8,411,808

         260,021

          7,429,903



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Key Contact

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

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