in 1978.

Unless you live on mars you’ve probably noticed the soaring cost of fuel. A recent report from the Energy Information Administration projects that gasoline demand will drop in the U.S., but even so prices are still climbing. Why is it happening and why are diesel prices going up faster then gas? I’ve been looking into some articles to find some answers.

This blog post from Eric Johnson over at Desert Biofuels Initiative sums up what is going on with links to even more information.

According to the Energy Information Administration:

Based on projections of weak economic growth and record high crude oil and product prices, consumption is projected to decline by 190,000 bbl/d in 2008 [...] After accounting for projected increases in ethanol use, U.S. petroleum consumption is projected to fall by 330,000 bbl/d.

So if demand is falling, why are prices rising dramatically?

World oil consumption is projected to grow by 1.2 million bbl/d in 2008. Almost all of the growth in 2008 is expected to come from the non-Organization for Economic Cooperation and Development (OECD) countries, led by China, Middle East oil producing countries, and Russia, as well as Brazil and India [...]

more than offsetting any decline in demand in the US.

Bummer for us. Of course, it’s also great for us. Fuel prices are starting to more directly affect individual driving decisions, consumer vehicle preferences, and therefore auto manufacturer’s vehicle production. Business Week reports:

Ford Motor (F) is cutting its production of its one-time cash cows, pickups and SUVs, to instead increase production of smaller and more fuel-efficient cars.

And the New York Times reports:

With technical and environmental hurdles overcome — and facing tougher mileage standards that call for a 35 m.p.g. average by 2020 — automakers are rushing in with clean-diesel cars.

Nice.

[Desert Biofuels Initiative]

While it is great we’re going to be seeing new clean diesels on the market soon with higher MPGs than most gasoline cars are they going to be a success? As of this writing Diesel is around a dollar more per gallon than regular unleaded and its price is rising faster than gasoline. Gasoline and diesel are made from the same raw ingredient. So why is this happening? Here’s a good article explaining why from the New York Times.

“U.S. overall petroleum demand, including demand for gasoline, has flattened,” he said. “However, in the U.S., demand for diesel has remained strong.”

He added: “This follows a long-term trend here and around the world. Over the past five years, U.S. demand for highway diesel has been rising at triple the rate of gasoline.”

Part of the American demand for transportation fuel is met by refineries in Europe, a link that usually helps keep prices down. But demand for diesel is rising in Europe as passenger car ownership and use there grow; many of those newly purchased vehicles are diesel-powered, a choice that had been encouraged by tax policy there.

As a result, production at European refineries is geared toward processing crude oil to meet the demand for diesel. That produces surplus gasoline, which the refineries export to the East Coast of the United States, experts said. That does nothing for diesel supply here.

A related problem is that while American demand for gasoline and demand for diesel are fluctuating separately, the supply is linked.

Each 42-gallon barrel of crude oil yields about 19 gallons of gasoline, according to the Energy Department, and about 10 gallons of diesel fuel and heating oil combined. (The two are chemically similar.) Refineries can crack the big hydrocarbon molecules found in the heavier part of the crude oil feedstock into diesel, gasoline or other products, and thus have some flexibility, but there are limits to how much the ratios can be adjusted.

Read the full article at [nytimes.com]

Maybe it is time to start home-brewing biodiesel like I suggested in a earlier article on this site, but be sure you have a secure source of free or cheap used oil. It seems that demand for this waste product is on the rise and some home-brewers are stooping low and are stealing it. Check out this article over at msnbc.com about biodiesel pirates stealing used cooking oil.

SAN FRANCISCO - A few years ago, drums of used french fry grease were only of interest to a small network of underground biofuel brewers, who would use the slimy oil to power their souped-up antique Mercedes.

Now, restaurants from Berkeley, Calif., to Sedgwick, Kan., are reporting thefts of old cooking oil worth thousands of dollars by rustlers who are refining it into barrels of biofuel in backyard stills.

“It’s like a war zone going on right now over grease,” said David Levenson, who owns a grease hauling business in San Francisco’s Mission District. “We’re seeing more and more people stealing grease because it lets them stay away from the pump, but it’s hurting our bottom line.”

Full article at [msnbc.com]

Do you think this might end up being good for us? Is it going to drive Americans to conserve and innovate to find a solution? I think it might, and can’t wait to see where we go from here. What do you think? Leave a comment and let us know.

Maybe we won’t have to wait until 2010 to get a car that doesn’t run on gasoline. The Th!nk City electric car is going into production in the US and should be popping out cars soon. The perfect combo might be solar panels for your house and this electric car for your commute.

This could be it: the Th!nk City electric car, a four-seater with 110 mile range and top speed of 65 mph, priced under $25,000, made from 95% recyclable materials, and available in the U.S. in 2009.

The Th!nk City electric car is the product of Norwegian firm Th!nk Global, an auto manufacturer backed by Silicon Valley funding who has plans to assemble the cars in Southern California. In contrast to Tesla’s limited release of 300 cars per year, the Th!nk City is designed for mass production to the tune of 30-50,000 units within a few years. Th!nk already produces about 10,000 of these cars in Europe annually. [Gas 2.0]

Th!nk’s Website.

AzSustainably’s founder and your loyal blogger, James Towner, was recently quoted in a great story in the Phoenix Business Journal. Although the wording of one of his paraphrased statements was a bit skewed (they made it sound like he was supporting the use of food crops in biofuel as opposed to his intended point of stressing the need for waste-veggie oil bio to decrease the demand on food crops) they covered the topic well and discussed some important points. Hopefully the points James brought up as far as various ways restaurants (and any businesses or individuals) can conserve will be well received and will encourage businesses to be more mindful and know that there are options that can be beneficial financially, of benefit to their image, as well as good for the environment. Thanks, James! Nice work.

Click here to read the article: “From fat to fuel” from the Phoenix Business Journal

Not since the Ghostbusters have we seen a business turning to emergency response vehicles as part of their brand identity. PC911, a Las Vegas based mobile IT service company, uses retired ambulances to rush to computer emergencies across the Nevada desert. While the Ghostbusters used dangerous nuclear accelerators to do their job, PC911 is turning to a safe and often overlooked alternative fuel to save money and reduce damage to the environment.

Chad Stone, founder of PC 911 (http://www.pc911lv.com), is running the company’s ambulances on used vegetable oil. Chad launched his company in 2005 and found that ambulances would be perfect for hauling everything needed for mobile computer repairs. However, the soot from the diesel engine bothered Chad and he took steps to make his ambulance fleet cleaner. It costs $1,200 to convert each one to run on vegetable oil, but the company saves quite a bit of money due to decreased diesel fuel usage. Also, by using retired ambulances, the company keeps its costs lower and keeps the ambulances on the road instead of in a junkyard.

PC 911 is also involved in other actions to help the environment and the community, including participation with Cell Phones for Soldiers.

Look for this green and community oriented company to be in the Valley of the Sun soon. PC911 is currently looking for a Technician and Senior Technician to fix sick computers all across Phoenix.