future price hikes

vwdsmguy

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My newspaper says that because of 2020 lower emissions requirments [less sulfur] that prices will go up 20 to 30% and there maybe a scarcity of diesel fuel. Most affected will be ocean ships which use bunker fuel [one step above crude]. I've heard it said that 50 of these container ships put out more pollution than all the worlds cars combined. Ships could be required to clean up their stack emissions or use a lower sulfur fuel.
Anyway truckers and us will pay much more per gallon.
Anyone else have something else to add to this?
 

phaser

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Interesting article addressing cargo ship emissions:

"So yes, the 15 biggest ships produce more sulfur oxide pollutants than all the cars in the world, because they run on completely different fuels. A ship produces more carbon dioxide emission per mile and per gallon of fuel than a car. Ships in general, however, have the lowest emission levels of any other method of cargo transport , producing fewer emissions per ton of freight per mile than barges, trains or trucks."

Complete article: http://sparrowmarine.com/is-it-true...rld-produce-more-pollution-than-all-the-cars/


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turbobrick240

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Interesting article addressing cargo ship emissions:
So yes, the 15 biggest ships produce more sulfur oxide pollutants than all the cars in the world, because they run on completely different fuels. A ship produces more carbon dioxide emission per mile and per gallon of fuel than a car.
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Anecdotally, the Sevmorput emits practically zero carbon(nuclear). The Russian nuclear ice breakers as well. While bunker fuel has more carbon per gallon than gasoline or diesel, it contains less per ton.
 

Lightflyer1

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I don't really see how this is connected to our cars that already use low sulphur fuel. Ships have 0 in common with our cars. As long as over the road trucks and other work trucks using diesel fuel are around we should have little to worry about IMO.
 

vwdsmguy

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Diesel going up in price

I think the price hike will be due to increased demand for cleaner fuel. This could justify a price increase [supply vs demand] - you know. Will this effect the value or demand for our cars?
 

kjclow

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Since diesel fuel is already hydrotreated to reduce the sulfur, requiring reduced sulfur gasoline should have no effect on the supply/demand curve of low sulfur diesel fuel. The sulfur reduction step is taken on the refined fuel, not the crude oil itself.
 

Lightflyer1

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Diesel fuel has already had this "cleanup" done around 2007. Gasoline is next in line with better more costly emissions equipment similar to current diesel technology to some extent. Diesel emissions are already ahead of gasoline in this regard.
 

Matt-98AHU

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I don't really see how this is connected to our cars that already use low sulphur fuel. Ships have 0 in common with our cars. As long as over the road trucks and other work trucks using diesel fuel are around we should have little to worry about IMO.
The point other articles I've read make is that ships moving away from bunker fuel and into the middle distillates with lower sulfur means these boats will now be competing with over the road vehicles for the same fuel.

There is an aside to this that says ships can still use bunker oil for fuel if they use exhaust scrubbers, but the few companies that have approved scrubbers available for retrofit do not have the capacity to make a huge dent in all the ships that would require such a retrofit to continue using bunker oil by 2020. Ergo, it's a near certainty that many ships will in fact be competing with over the road vehicles for the same diesel fuel and other similar distillates with less sulfur.
 

oilhammer

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There are just too many to list....
This has been talked about for well over a decade now. I very much doubt anything drastic will happen, and it certainly will not happen overnight. Also, most people's cost for ULSD is going to be spread out with increased shipping costs. It may end up being a good thing, as maybe they'll work to put the MUCH more fuel efficient means of transporting goods about, trains, back into use and get some of these damn trucks off the roads. :mad:

When your diesel car gets 50+ MPG, it really isn't a huge concern anyway. At least I am not too worried. My electric rate at my house dropped 6%, that will easily offset any fuel price increases we are likely to see in the next few years.
 

kjclow

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My company is looking at expanding our use of rail. Not because of fuel prices but because of driver shortages. We can ship by rail and have same day delivery to most of our customers. That seems to be what many of the drivers are requesting. No more coast to coast hauling.
 

Rodmiser

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And next gasoline fuel will get sulfur reduction. higher PRICE.

And at 55,000 miles the 2015 TDI will get all new rubber hose. Cost about $400.00

just to keep the DPF working.
 

itsmejerry

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My company is looking at expanding our use of rail. Not because of fuel prices but because of driver shortages. We can ship by rail and have same day delivery to most of our customers. That seems to be what many of the drivers are requesting. No more coast to coast hauling.

I listen to Road Dog Trucking Channel on Sirius/XM, and one of the recurring themes is the Driver Shortage for Over-the-Road trucking now.



In some places the freight costs are starting to outweigh the cost of the merchandise being shipped, as companies are now having to pay a much higher price to even get their goods on a truck. If you look at the major interstate highways, it seems that there are far more Semi-Trucks on the roads now.

Rail traffic has hit it's limit now, and trucks are being used to handle what used to be shipped by rail.



What does this all mean? An increased demand for Diesel Fuel in the US.



I wonder if the VW Emission scandal might have been politically motivated, at least partially to cut diesel cars out of the "demand" side of Fuel supplies.
 

kjclow

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Talking to one of my Canadian customers last week. They were told that for every driver today, there are 12 loads available. The more restrictions on the load, the higher the cost of hauling it. One of our trucking firms tried to hit us with a $20,000 surcharge for hauling $40,000 (5000 gallons) worth of liquid material from central PA to Vancouver, BC. I have no idea what we actually paid but do know the customer got his product.
 
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turbobrick240

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I wonder if the VW Emission scandal might have been politically motivated, at least partially to cut diesel cars out of the "demand" side of Fuel supplies.
In a word- no. The cheating tdi's use an inconsequential amount of fuel as compared to trucking. They basically have no impact on demand or pricing.
 

TornadoRed

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The point other articles I've read make is that ships moving away from bunker fuel and into the middle distillates with lower sulfur means these boats will now be competing with over the road vehicles for the same fuel.
If ships are moving away from bunker fuel, then refiners will have an incentive to produce more ULSD (or at least LSD) and less bunker fuel. So I don't foresee any shortages of diesel fuel anywhere, except maybe in some Third World markets.
 

Matt-98AHU

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If ships are moving away from bunker fuel, then refiners will have an incentive to produce more ULSD (or at least LSD) and less bunker fuel. So I don't foresee any shortages of diesel fuel anywhere, except maybe in some Third World markets.
Well, I wouldn't say shortage, but certainly an increase in demand for a product generally yields an increase in price until things level out.

Not saying we should expect to have a lack of fuel, just that we might be paying more for it for awhile during the adjustment period.
 

Lightflyer1

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There should be a decrease in demand with dieselgate, and with VW and other companies exiting the market for diesel cars. Maybe they will offset each other.
 

Powder Hound

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If ships are moving away from bunker fuel, then refiners will have an incentive to produce more ULSD (or at least LSD) and less bunker fuel. ...
Yes, but you also have to consider that bunker fuel, aka 'resid' is a thick tarry like substance which is used for asphalt, roofing tar, and other heavy thick products which do not flow at normal temperatures. To crack that stuff into light and middle distillate products requires a lot of hydrogen input as well as expensive catalysts. It isn't something they (refiners) are really interested in pursuing, at least, not until the prices rise enough to make it profitable. And in today's economy, that is a long way off.


Cheers,


PH
 

kjclow

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Forcing that junk back through the cracker will also cause an increase in the areas where it's sued today, like road asphalt and shingles. I don't have a clue how high the price of diesel or gasoline would have to be to make cracking bunker oil economical. For distillate fuels, the price swing for more profit by cracking to gasoline is less than a dime. That's based on a worldwide traded commodity price index.
 

eli

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There is a stink to the onslaught of articles about boaty mcboatface's new diesel requirements and price increases for on-road diesel fuel.

Smells like someone who went way too long on diesel is funding a PR/ad agency to create and hype authoritative-sounding-yet-speculative fake-news articles about diesel future price increases.
 

Geordi

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My next-door neighbor is a marine guy, out for a few weeks at a time on a (IIRC) fuel tanker.

He said that there is ALREADY a requirement that any ship within 200 miles of any US coastline has to be using #2 diesel instead of bunker oil. Since he works in the Gulf, 99% of the time they are on diesel. He said that the pricing for the heavy sludge was something like $1/gallon... And that the bulk rate for the #2 diesel is like $3 a gallon, obviously MASSIVELY increasing their cost at the many-tons-per-mile that they consume.

HOWEVER - these articles are making a false equivalency. The IMO is requiring "low sulfur FUELS" not "low sulfur DIESEL" as the new order. So it very well may not be actual #2 diesel stocks and other middle-distillates that the ships take. They are already set up with heating systems to boil their fuel so it will even flow, if there is a way to reduce the sulfur in that stuff and not triple (or more) the cost... They will certainly pursue that b/c of the volume they have to utilize!

There's a LOT of hair-on-fire predictions right now, but since so much of the commerce of the globe relies on #2 diesel, I predict the oil industry will have to respond by developing an alternative product for the ships - something they should have been doing already as this is not a new requirement - and the overall market may blip, but not spike like predicted because it WILL crash the world's economy, and that's no good for anyone.
 
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