Economics of Manufacturing Automotive Diesel Fuel 770758
Several automobile manufacturers have announced intentions to offer diesel-powered cars and light trucks for the United States market. Petroleum refineries in the United States are strongly oriented toward gasoline manufacture, and introduction of diesel-powered cars and trucks in quantity would require a major change in product mix. To determine the impact these vehicles might have on the petroleum industry, we recently analyzed the economics of manufacturing greater amounts of automotive diesel fuel.
We found that with a favorable crude slate, a typical United States refinery could make up to 30% of total motor fuel as diesel fuel without unusual problems. Cetane quality that could be produced economically would depend on crude composition; while 45 cetane fuel would probably not be troublesome, large amounts of 50 cetane fuel would involve substantial extra costs with certain crudes. Contrary to popular opinion, switching from gasoline to diesel fuel manufacture does not yield significant saving in refinery energy consumption.
Manufacture of diesel fuel rather than an equal volume of gasoline consumes more crude oil because the diesel fuel weighs more per gallon. It also requires additional investments because some refinery facilities must be expanded. For a refinery to maintain revenue, the price of diesel fuel relative to gasoline must rise significantly if diesel fuel demand grows.