tag:blogger.com,1999:blog-3575804792126536975.post874203498451491086..comments2023-11-02T00:33:00.040-07:00Comments on Sowell's Law Blog: Peak Oil and US Energy PolicyRoger Sowellhttp://www.blogger.com/profile/15390264574157209871noreply@blogger.comBlogger4125tag:blogger.com,1999:blog-3575804792126536975.post-74408311779606398122011-03-27T09:55:09.370-07:002011-03-27T09:55:09.370-07:00@ Verity Jones, yes, European refineries in genera...@ Verity Jones, yes, European refineries in general produce less gasoline and more diesel compared to US refineries. The reason is the US has much more "Cat Cracking" capacity, more formally known as Fluidized Catalytic Cracking process. Europe has more Hydrocracking capacity, which is used to produce diesel fuel instead of gasoline. <br /><br />In fact, Europe has an excess of gasoline production and exports gasoline to the USA, primarily into the New York market.Roger Sowellhttps://www.blogger.com/profile/15390264574157209871noreply@blogger.comtag:blogger.com,1999:blog-3575804792126536975.post-27773030746138310312011-03-27T09:44:43.621-07:002011-03-27T09:44:43.621-07:00Thank you. That is very clear. I was indeed missi...Thank you. That is very clear. I was indeed missing the knowledge of refinery configuration. <br /><br />I believe diesel consumption in Europe is proportionally higher than in the USA. That leads me to wonder if refineries there are configured differently.Verity Joneshttp://diggingintheclay.wordpress.comnoreply@blogger.comtag:blogger.com,1999:blog-3575804792126536975.post-85920118519031973332011-03-27T08:37:11.321-07:002011-03-27T08:37:11.321-07:00@ Verity Jones, thank you for the kind words. We ...@ Verity Jones, thank you for the kind words. We will very much, perhaps desperately, need our domestic oil someday. <br /><br />The post is an abstract of a fairly long speech, and each paragraph could be expanded to provide more details. Regarding not using diesel fuel in the US, that is not obvious so here is my thinking. <br /><br />US refineries are constructed and configured to yield, on average, 30 percent diesel by volume for each barrel of crude oil as feedstock. Thus, if diesel demand in the US increases 1 million barrels per day, our refineries must increase crude oil consumption by 3.3 million barrels per day. <br /><br />There is also the possibility of importing the excess diesel fuel, that is, weigh the make-or-buy decision and choose the most economic option. <br /><br />In contrast, gasoline represents about 60 percent of the refineries' output. Therefore, 1 million barrels per day increased gasoline demand requires only 1.6 million barrels per day of crude oil. <br /><br />From an energy policy viewpoint, and to reduce importing of foreign oil, we therefore should do all we can to minimize diesel fuel consumption. We should encourage diesel hybrid drive systems on stop-and-go truck fleets. We should discourage automobiles that use diesel. <br /><br />The EPA did discourage diesel-powered automobiles for years, perhaps unwittingly. (The EPA's wit-content is yet to be proven, in my opinion.) By refusing to allow diesel engines in cars because they did not meet EPA's very stringent emissions requirements, diesel demand in the USA has been lower than it would have been otherwise. <br /><br />Now, however, diesel engine manufacturers produce engines that meet EPA's requirements. The only thing holding back increased vehicle sales is the high price of diesel cars.<br /><br />Diesel substitutes, such as DME from GTL you mention, are another option to be considered. Where such homegrown substitutes are economic, they represent an attractive investment opportunity. <br /><br />Finally, shale gas certainly impacts a national energy policy. Natural gas is used widely in local fleets such as buses and delivery vehicles. Such vehicles formerly ran on diesel, thus CNG contributes to reducing oil imports at a 3.3 to 1 ratio. NG can also be used as GTL feedstock.Roger Sowellhttps://www.blogger.com/profile/15390264574157209871noreply@blogger.comtag:blogger.com,1999:blog-3575804792126536975.post-45681163057536078032011-03-27T04:41:15.326-07:002011-03-27T04:41:15.326-07:00I broadly agree with what you've said.
"...I broadly agree with what you've said. <br /><br /><i>"The most important aspect of a National Energy Policy is not to be short-sighted, but instead focus on the long view. It is far better to import oil from countries with ample supplies, than to deplete our domestic reserves. We will need those domestic reserves when our imports are cut off, and we face a prolonged military conflict such as World War II. Restrictions on domestic oil drilling are, therefore, very much in the nation’s best long-term interest."</i><br /><br />Wise words. Keep the oil and it can be used at home with increased efficiency in the future. <br /><br />I am puzzled about one statement: <br /><i>"It is crucial that we not encourage diesel fuel for vehicles."</i><br />It is not obvious to me why that should be and I would appreciate if you could elaborate a little. Do you mean simply diesel as alternative to gasoline, because of the increased mpg but more expensive verhicles?<br /><br />Might that not conflict with the potential of GTL production of DME? My understanding is that DME is a relatively direct diesel substitute. <br /><br />One last question - would you care to comment on the contribution of shale gas to your title? (The word verification for this comment was "frackbr" - how appropriate!)Verity Joneshttp://diggingintheclay.wordpress.comnoreply@blogger.com