It’s not exactly clear why diesel has jumped higher than other fuel prices, but one thing is for sure: Diesel’s original intention was to create an engine that did not require dependence on foreign petroleum sources, or the corporations that controlled them.
Many people point to several key economic reasons for the rise in prices this season:
1) Diesel prices are impacted by the demand for heating fuels (distillates) so it has a seasonal fluctuation.
2) About 95% of production in the Gulf region is still not back on the market. This is probably related to the fact that over half of the Gulf platforms and a good number of drilling rigs aren’t running yet, not to mention 10 or so refineries are closed in LA and TX. Altogether this is apparently an impact of about 10% of total US production.
3) Speculators aren’t stupid and they find ways to increase demand in order to contribute to the rise in prices and get better returns on their investment.
That’s all fine and dandy on some level, but it reminds me of the letter from Shuster to the Energy Secretary back in 2000 when prices were doing something similar:
“We have received numerous reports regarding the alarming spike in diesel fuel prices, the most dramatic of which has New England customers paying 40 cents more per gallon than they paid just one week ago. By any account, diesel fuel prices appear to be rising out of control.”
No Hurricane to blame back then. Quite the opposite, a Congressman wrote the US Attorney General because “we believe to be price gouging and manipulating of consumers”.
Again, that corresponds to Diesel’s own description and prediction of petroleum-based engery corporation behavior back in the 1800s — the very reason his engines will run on oil or fats from just about any source including fish, meat, vegetables, etc..
Moreover, as we know today, the market was in fact being manipulated in 2000 and consumers were being, please pardon my french, screwed by Enron:
“U.S. Rep. Jay Inslee announced this evening that he will offer an amendment next week to energy legislation in the U.S. House of Representatives that will help provide refunds to consumers and the Snohomish County Public Utility District (PUD) for high rates resulting from energy market manipulation”.
One last thing to consider is that the US military relies heavily on petroleum diesel production and has done a great deal to enhance/modify diesel engines for everything from ships to motorcycles (not to mention advances in trend analysis and condition based maintenance), but for some odd reason they haven’t done much to change the source of the fuel to something domestically and more sustainably produced (like B20 or even B5, which is working quite well in Europe).