fhwa talking freight seminar series: energy issues and the impacts on freight transportation richard...
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FHWA Talking Freight Seminar Series:
Energy Issues and the Impacts on Freight TransportationEnergy Issues and the Impacts on Freight Transportation
Richard MoskowitzAmerican Trucking Associations
May 17, 2006
Background Fuel Issues
• Diesel is Essential to Trucking
• Trucking industry consumes 36.4 billion gallons of diesel
• Fuel is typically the 2nd largest expense (20-25%)
Trucking 36.4
(65% )Air 13.0
Water 2.2Rail 3.8
The Price of Diesel Fuel
• 2006 $98.3 billion
$52.2
$65.9
$87.7
$98.3
$44.7
$40
$50
$60
$70
$80
$90
$100
2002 2003 2004 2005 2006
$0.90$1.10$1.30$1.50$1.70$1.90$2.10$2.30$2.50$2.70$2.90$3.10$3.30
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
Sources: A.G. Edwards & ATASources: A.G. Edwards & ATA
250
450
650
850
1,050
1,250
Q1
90
Q1
91
Q1
92
Q1
93
Q1
94
Q1
95
Q1
96
Q1
97
Q1
98
Q1
99
Q1
00
Q1
01
Q1
02
Q1
03
Q1
04
Q1
05
$0.90$1.10$1.30$1.50$1.70$1.90$2.10$2.30$2.50
Trucking Failures National Avg. Price of Diesel Fuel
Trucking Failures vs. the Price of Diesel FuelTrucking Failures vs. the Price of Diesel Fuel
Failures only includes fleets Failures only includes fleets with at least five truckswith at least five trucks
Transition to ULSD
• 2006 Highway diesel fuel sulfur cap of 15 ppm
• What exactly is 15 ppm S ?
Why ULSD?
• Enables use of advanced emission control technology (2007)– PM Traps– EGR
• Clean Air is not free– Cost of new engines– Fuel Economy– Maintenance Costs– Engine Life (?)
X
ULSD – Refinery/Production Status
• 2005 Precompliance Report (90% ULSD)
• ULSD Dominant Fuel across all PADDs
Will ULSD be Available Everywhere?
• Potential for Product Contamination– Gasoline < 80 ppm – Jet Fuel < 3,000 ppm– Heating Oil < 5,000 ppm
• Handoffs (add 1 ppm)
• End of the Pipeline Issues
• Localized shortages could cause dramatic price spikes
Will ULSD Cost More than Conventional Diesel Fuel?
• ULSD will Cost More– EPA estimates 5 cents– Distribution costs– Dedicated tank trucks?
• Difference between cost and price
• Energy Content
Will ULSD Affect Performance ?
• ULSD energy content
• Lubricity (Additives / B2)
• Solvent Effect
• Consequences of misfueling (?)
Tank Truck Concerns
• Ensuring Product Integrity
• Liability for Product Contamination
• Sulfur Testing Concerns
• Switchloading
• Static
Potential Supply Disruptions
Catch 22 solutions
