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RE: Hart Report Predicts Clean Diesel Grow Importance

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Charles Randall

I finally got link to work on the  news release on Hart Study @ Diesel growing importance and the download:
Access the report online in PDF format : ( )
I dont think I believe the magnitude nor level of change on diesel, due to several bad assumptions by Hart.
One – Hart is using the crap Well-to-Wheels process by environmentalist which is very flawed because it takes the 70%+ emissions problems from the “wheels” decision to use internal combustion engine vs electric car back to fuel source & its processing. Environmentalist couldnt get people buy into this change so they found way to destroy fuel supply of alternate via backdoor.
Two – Hart is using past charts for declining Fuel Oil/Asphalt demand against increasing coker installations which convert this source to products (proportionally more diesel) to drive the large decrease in short time HFO to diesel. Actual charts now show increase in US & Global of HFO & Asphalt as surplus went away & price increased due demand leveraging additionally production (as charts 2006+ show) ….. also one reasons coker/refinery margins been much lower.
Another part is that with new Marine Fuel regulations like Europe less 1%HFO in ports there is built in assumptions that most vessels will switch to more available diesel than expensive & limited LS HFO. This is also not true lot vessels now have engines capable switching between diesel & 3%HFO or blending the two …… its only older ships (most now going scrap as new faster double hulled vessels with new engine replace them) or smaller ones stay in coastal areas that are making cost switch to diesel.
Third – The short term apparent growth in diesel vs gasoline in US (and countries past that exported gasoline to US) has more to do with the transportation sector growth in use of trucks & trains (NAFTA ect) for logistics and also the decline in US cars because of economy: ie jobless folks do min driving/more internet searches, unemployed drop to 1.5 vehicles compared to past 3-4 cars, unemployed teens (older folks took their jobs) cannot buy cars unless they dont go college & join lower levels workforce. And higher use of ETOH is backing out gasoline production.  None of these will persist to current levels in recovering economy (although excess levels past is likely gone for US).
Fourth – No impact has been put in this study for a global refining model based on large volume of gasoline exports into short supplied US market going back to diesel model. The rest of the world is diesel based economy & past when US was balanced on production of domestic fuels – Nearly all current major export countries EU-CIS-China-ect had to operate below min turndown rates in the 58-75% Utilization rates. When US sour crude supplies return & refining utilization is ramped back to normal 87-92% Utilizations then ALL the large new global refineries that Have to export gasoline will have to cut capacity to fit fuels in Chemical/Domestic markets.
Just too many things left out or shouldnt have been in this study that makes the change much larger and sooner that it will happen in real life.

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