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The True Cost of Fuel

By June 8, 2015June 16th, 2015Blog

The True Cost of Diesel

Dear Friends of ROUSH CleanTech,

I recently spoke to a local school board official who asked the question, “Do we really need to find a long-term alternative to diesel for our buses? The price of oil is cheap, we have a lot of reserves in this country, and the price of diesel has stabilized.” My short answer was that propane autogas is at its lowest point in 13 years so the delta between the two fuels is still dramatic even with diesel under $3.00 / gallon.

I thought about my answer for a minute and realized that we need to do a better job of educating on the hidden costs associated with all transportation fuels; some further research on diesel found:

  • Taking into account the damage done by harmful emissions, Drew Shindell, a professor at Duke University, calculated the true cost of these fuels. He took into consideration “climate damages” from greenhouse gases and calculated diesel to be $7.72 per gallon.
  • These climate damages include increased rates of premature death, illness, increased loads on the healthcare system, lowered crop yields and missed work days.
  • According to Roger Stern, an economic geographer at Princeton University, the U.S. has misallocatedmore than $8 trillion since 1976 protecting the oil flow from the Persian Gulf. That’s even more cost for imported fuel via U.S. tax dollars.
  • This isn’t even taking into account the additional costs incurred with diesel engines such as particulate traps, lost driver productivity due to regeneration, EGR systems, DEF fluid and hardware, larger volumes of oil consumption, tougher to find / retain diesel mechanics, etc.
  • Regulations for diesel emissions will become even more stringent in the coming years and vehicle technology will need to evolve to meet those standards – which means more cost and complexity.

As transportation leaders we cannot be lulled to sleep by the price we see at the pump as the fully loaded cost is significantly higher. As we approach our Independence Day let’s stay committed to using domestic sources of energy that will shape the future for generations to come.

Enjoy the start of summer and see you in July!


Todd Mouw