How the World Works is feeling a little stupid today. Remember my post from Monday, exploring why diesel was so much more expensive than gasoline? Robert Bryce, the author of "Gusher of Lies: The Dangerous Delusions of 'Energy Independence'" and occasional contributor to Salon, sent me an e-mail reminding me that he had explored this question in detail, more than two years ago, for Salon. Oops.
At the time diesel cost only $3.12 a gallon, pretty similar to what gasoline cost. But here's the opening line of the original article.
If Americans are hurting from $3 gasoline, wait till they feel the pain of $4, or even $5, diesel fuel.
Bryce nails the story. There's not a line in the piece that doesn't hold up today, two and a half years later, which is a hard thing to do when writing about energy.
Bryce also goes into much more depth than I did on the then-brand-new government mandate for ultra-low-sulfur diesel (ULSD), which significantly raised manufacturing costs for refiners. The United States, noted Bryce in his e-mail, can't import ULSD to satisfy domestic demand, because very few foreign refineries are capable of producing it. The opposite is actually true: New diesel regulations abroad are creating increased demand for American ULSD, which contributes even more to price pressure.
"In fact, industry analysts are saying that for the foreseeable future," wrote Bryce in a follow-up e-mail, "the Europeans will need to import clean diesel. And because their gasoline demand is much less than that of the U.S., they will be exporting gasoline -- with much of that coming to the U.S. market. Therefore, it's likely that gasoline prices will stay below those of diesel for a long time to come."
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