I don't claim to understand fully the various steps in this train of thought, and I doubt that there's anybody who understands all of them fully, but here goes…
Science
Crude oil is a mixture of various different types of hydrocarbon molecules. The smallest/lightest are CH4 (methane gas), there is no precise chemical formula for petrol, which "constitutes the largest fraction of product obtained per barrel of crude oil. The hydrocarbons in gasoline have a chain length of between 4 and 12 carbons." Next is diesel, which "consists of hydrocarbons of a chain length between eight and 21 carbon atoms", and so on, all the way down to the heavy stuff used for heating oil
Heating oil "is one of the “left-over” products of crude refining. It is often less pure than other refined products, containing a broader range of hydrocarbons. Because of its contaminants, fuel oil has a high flash point and is more prone to autoignition. It also produces more pollutants when burned."
Technology
There are different methods of splitting up crude oil into its constituent parts, known as refining, which in turn means a combination of distilling, fractionating and cracking, different kinds of crude oil have different mixes of the various kinds of hydrocarbon atom and different methods of refining produce different results etc.
But by and large, for every three or four litres of petrol, you get one litre of diesel.
The environment
As a rule of thumb, the lighter the original molecules, the cleaner the stuff burns, so methane burns away to CO2 (carbon dioxide) and H20 (water) which are more or less harmless and the heavier stuff like heating oil churns out the most soot. Diesel molecules are heavier than petrol molecules, so generate more soot or 'particulates' in the modern jargon, which is unhealthy to breathe in as is widely documented.
The Kuznets Curve
Initially, new industrial processes tend to be very polluting. The polluters don't care and governments in developing countries are loath to tax pollution because economic progress always comes first. With the benefit of hindsight, the UK was a developing country for these purposes until fifty years ago; having got a fair bit of industrialisation behind it, PR China is now at the cusp where the population are starting to care more about air quality than just economic growth (the Kuznets Curve).
Taxes on pollution
We would therefore expect the tax on diesel to be higher than on petrol. As a result of a complete policy foul-up, diesel duty used to be lower than fuel duty in the UK, but once they realised that they had messed up the rates were aligned (it's a tax on road use rather than a tax on pollution). Interestingly, in Germany, apparently because of the haulage and farming lobby, diesel duty is lower and diesel is about twenty percent cheaper than petrol.
Capitalism and waste
Initially, factories and oil extractors don't care about recycling or minimising waste. As the economy grows, raw materials become more scarce and labour and power become more expensive. As technology develops, people find ways of reducing waste or putting by-products to some sort of productive use.
A few examples: the average miles per gallon of cars on the road has doubled over the past fifty years and the life expectancy of cars has doubled too. Bauxite is plentiful, but it takes huge amounts of electricity to turn it into aluminium, so recycling rates for aluminium are approaching 100% in developed countries (melting down cans for re-use uses one-tenth as much electricity as refining bauxite). Even two-thirds of steel is recycled. When trees were plentiful, sawdust was just discarded or burned; nowadays, a lot of it is used to make chipboard or mdf, which is a higher value use than just burning it for heat, and so on.
Efficient use of by-products
So what would happen if everybody got a 'conscience' and deciding to switch from diesel to petrol, assuming they don't want to run their cars on vegetable oil (there isn't enough to that to go round anyway)?
That would push up the price of petrol and mean that a larger amount of crude oil has to be refined, but they would still be left over with one part diesel for every three or four parts petrol.
Having gone to all that bother extracting and refining, it makes no sense to throw the diesel away. So the price of diesel would fall relative to petrol and some people would then ignore their 'conscience' and stay with diesel anyway, thus restoring the three- or four-to-one ratio between petrol and diesel use.
The economy is dynamic
There are no wild swings in the relative price and quantity of diesel vs petrol, because it is a dynamic process where the two opposing effects constantly cancel each other out.
Taxes on pollution (2)
To a large extent, it is futile taxing diesel more heavily than petrol even though the usual suspects are crying out for it. The tax is borne by the end consumer and assuming the end consumer is prepared to pay roughly the same for either, if petrol duty is cut and diesel duty increased, all that means is that the pre-tax price of petrol will increase relative to the pre-tax price of diesel by an equal and opposite amount to the tax differential.
The German example mentioned above runs slightly counter to this. The article explains that the pump price saving is largely cancelled out by the fact that diesel cars are more expensive to buy and the annual road tax is higher, maybe chuck in the fact that most people prefer petrol engines.
Not an individual of mental adventure
44 minutes ago
31 comments:
I seem to remember it was our old friend Gordon Brown who increased the tax on diesel compared to petrol using the excuse that it had more energy and provided more MPG. He wanted the treasury to cash in on the trend towards diesel which had been cheaper, as it still is in most of Europe, and was giving rise to more diesel cars and hence lower tax revenues.
You also need to remember that the two are not entirely interchangeable, diesel is far more practical for larger engines so lorries, trains, ships etc would not be easily convertable.
W42, agreed on lorries and ships etc.
At a flat tax per litre, diesel is still cheaper in terms of tax per mile travelled, whether that is the optimum tax point, I do not know. Given the way things are going, I would expect diesel duty to go up more than petrol duty, but we will see...
"deciding to switch from petrol to diesel" I think you mean diesel to petrol.
Pollution issues and the effect on health tend to be much more uncertain than activists claim, but at least these are real issues unlike the global warming drivel.
Its a competative market and so duties being an expense for all producers alike raise the market retail price don't you think
AKH, well spotted and I have amended. Soot in densely populated areas is actually an issue - greatly over-hyped, but an issue nonetheless.
D, yes of course. The consumer bears the tax. But what if there is a tax differential between A and B but no consumer preference for A or B? The final selling price of A and B must end up the same, but as the tax is different, so by simple subtraction, the net of tax price must be different.
Downward pressure from competition makes the one with the lower duty have a lower retail price
D, don't waffle. Do you mean "competition" between producers who can choose to produce A or B, or "competition" between finished products A and B, where consumers have zero switching costs between A and B?
As the producers of A seek to attract sales of A and consumers of A have the choice of many producers of A no one producer of A can charge super profits. As this applies to all producers of A the producers of A as a whole cannot charge super profits. And so the market price of A is close to the costs incurred in producing A, and the market price of B is close to the costs incurred in producing B.
As duty is one of those costs , and where the other costs of producing A or B are the same, the market price of A or B is lower if the duty on A or B is lower.
Excellent analysis, Mr MW.
Technology is making diesels cleaner anyway. 'DPF's', NO injection, etc etc. And diesels are more thermally efficient than petrol, currently. (They run higher compression ratios).
The thing is once you have dealt with the pollution externality then it is a fact that it is better for the market to decide what's best.
Relative to this topic is vehicle weight. The next big savings in vehicle efficiency powered by ICE's is weight reduction.
The emissions of diesel vehicles are carcinogenic - poison. Diesel emissions emit soot. Later vehicles have filters on the exhausts. In short diesel is filthy. Internal combustion is a series of explosions. In continuous burning, as in oil boilers, it is slightly cleaner. The visible emissions of diesel soot can be seen on London's newer buildings. Buildings only 20 years old near me are blackening up. Dark streaks can be seen on the exterior. We also breathe this filth in. Diesel engines are heavier and much noisier adding to noise pollution. The added weight needs uprated suspension and brakes to cope adding extra cost and emissions in the manufacture. Also extra tyre and brake pad wear - the rubber and pad dust ends up in the air.
On a wider issue the hybrid (electric motor traction, petrol genset) technology to vastly reduce emissions has been with us for decades. Why haven't we seen it introduced wholescale in cities? Buses, taxis, utility and delivery vehicles, which will number millions could all have been hybrids a long time ago.
We now have a few series-hybrid cars, the BMW i3 is the obvious example of 100% electric traction, a battery set with a small petrol genset as a range extender.
Wankel engines are used in about half the drones flying about. When they are run at a "constant speed" at their most efficient "sweet spot" they are superior in fuel consumption to piston engines being one third of the size & weight, super smooth with a far higher power/weight ratio, so ideal for planes and small cars. To have it run at a constant speed it has to be in a function like a generator set, as they run at constant speeds. Hey presto! the series-hybrid. The Wankel genset is so small can be under the luggage tray in a hatchback. Mazda have a prototype hybrid car with electric traction motors and a Wankel genset. In 2013 the world's first series-hybrid plane with an electric powered propeller flew for the first time using a Wankel engine in the genset. And the best is yet to come. The prototype Liquid Piston rotary engine is a far superior design again. Also, in a series-hybrid arrangement a genset range extending engine is a part time engine promoting longevity
It is all here but we do not see it on the roads. And London is still one of the World's most polluted cities and keeps getting fined for it. That is happens when the people vote in an idiot for mayor.
Christian Wolmar for mayor!
I'm sure that part which is distilled for diesel is also used to make tens of thousands of other useful products. These organic chemists are clever. Raising the cost of diesel will simply lower the price of the other products. Even if it's simply burned to produce electricity.
@Ben Jamin'
The Shah of Iran stated that "oil is too valuable to burn". He had big a point.
@Lola
A litre of diesel contains more energy than a litre of petrol. When both are used in a piston/crankshaft internal combustion engine powered vehicle 80% of the energy in the tank is wasted. So nit-picking that one is a few percent more economical than another pales into insignificance when looking at the big picture.
We have to stop burning this stuff in piston/crankshaft internal combustion engines ASAP, for a multitude of reasons.
"Wankel engines are used in about half the drones flying about. When they are run at a "constant speed" at their most efficient "sweet spot" they are superior in fuel consumption to piston engines"
AFAIR from my engineering studies, diesel engines are also far more efficient when running at a constant, slow speed. Thus comparing a constant speed rotary engine with a variable speed reciprocating engine is a diagonal comparison. It is a great mystery to me that, despite the technology having been around for more than sixty years, almost none of the hybrid vehicles on the market are diesel-electric series hybrids. Also AFAIR from my engineering studies, because diesel burns so much more slowly than petrol, it burns less efficiently in a high-revving engine, which is what gives rise to all the carbon produced. In a series hybrid, the engine can run at its optimum speed, i.e. not very fast, which gives the diesel fuel time to burn completely before it's chucked out of the exhaust.
Din you are covering old ground incorrectly - the tax is borne by whoever is less price sensitive - and still not understanding the post.
Do you not understand that for every three litres petrol they get one litre diesel? The two products are largely interchangeable (I am assuming anyway). So while "fuel duty" is borne by the consumer almost entirely, is it not reasonable to assume that the final selling price would end up the same for both?
L, JB, let's not get bogged down in technicalities, that's beyond my ken.
JB, yes, diesel fumes are unhealthy, we know that. I don't get why you speak in favour of Wankel engines but then speak out against ALL internal combustion engines.
BJ, yes, that is another possible outcome.
"Raising the [tax on} diesel will simply lower the price of the other products."
Exactly and good point.
B, good question, I hope that somebody can answer it.
> Mark
The products are being sold for what it costs to produce them plus a small margin.
And so the duty on each product varies the price of that product , and so the the final selling price is different.
BTW, concerning heating oil, the stuff you refer to is heavy grade heating oil, burned in industrial sized boilers at factories and the like. Domestic heating oil is either roughly the same fraction as diesel, which is why it is marked to discourage people filling up their cars with it, or kerosene, a lighter fraction, which is basically the same as paraffin.
Din, do you not understand the basic concept that a tax is borne by whoever is less price sensitive - supply or consumption? Let's assume price and quantity of petrol is fixed and diesel is a by product. So the output of diesel is 1/3 of whatever the output of petrol is, hence in fixed supply? Therefore, the extra tax on diesel must be borne by the supplier?
B, yes, there are endless sub-categories of what crude oil is made up of, I was just looking at petrol v diesel.
@Bayard
Wankel engines are about one quarter of the size and weight with substantial knock-on effects. They have a far greater power/weight ratio than a large heavy diesel lump. Wankel engines driving the wheels directly, revving the engine up and down as we do when driving, are inefficient, hence high fuel consumption. At a "constant speed" at their most efficient "sweet spot" they are superior in fuel consumption to piston engines. Hence why they are suited to a series-hybrid vehicle. That is easy to understand. There are great advances like lazer ignition etc, in Wankel engines. The small size is a great advantage in vehicles.
Diesel-electric series hybrid is used in diesel-electric trains and has been since before WW2. Not new.
@Mark
So the title implies keep burning filthy diesel fuel for economic reasons. We should be phasing filthy diesel out in vehicles for a multitude of reasons, like health, making buildings black, noise pollution, exhausting the supply of crude which is better suited to making products than burning, etc. We should be promoting engines and vehicles that do not waste 80% of the energy in a tank and are cleaner. We should be using more efficient engines to use a part time engines, gensets, on vehicles. Part-time engines uses less fuel because they are off much of the time. If we have to use internal combustion, they should be as clean as possible and used as little as possible. There is a superior alternative to diesel fuel and engines. The technology is here and is is not gazing at clouds.
Playing about with taxes to keep a filthy fuel in widespread use is not progress for anyone. Fuel was so cheap in the USA in the 1950/670s because of low taxes, vehicle makers did not bother improving their engines, with the result cities were hellish places.
JB, you are labouring the point a bit. Diesel fumes are unhealthy. I get that.
If you actually bothered reading what I write you will see that I am all in favour of high taxes on fuel, it is one of the few good taxes.
But you have failed to address the question of what they are supposed to do with all the diesel which is left over as a by-product of making petrol. BenJamin was the only one who addressed the point.
And don't just say "Well ban all use of fossil fuels" that is not a realistic option.
JB, yes, I know what a Wankel engine is and I also know a bit of its history and how its development was plagued by problems with rapid seal wear. If that problem has been solved, then hurrah. However, you don't address the point that in a series hybrid, the engine, rotary or reciprocating, will be running at a constsnt speed and will be more efficient than the same engine running at a variable speed, nor the level of pollutants that a slow-running diesel engine puts out.
"But you have failed to address the question of what they are supposed to do with all the diesel which is left over as a by-product of making petrol."
Burn it in jet engines. One of the great advantage of the jet engine over the petrol piston engine in aviation is that you are not up there with thousands of litres of very inflammable fuel.
Yes i get the point about tax burden , but what price and usage dynamic do you have in mind, in the post you say the tax is borne "by the end consumer" and in the comments "by the supplier."
If were the case that after a diesel duty rise the effect of people moving over to petrol returned the prices of petrol and diesel to their previous ratio then the new ratio of usage would be that there were now more people using petrol and less people using diesel, and so the diesel tax rise would not be futile in its aim.
@mark
Wiki:
"The major products from hydrocracking are jet fuel and diesel, but low sulphur naphtha fractions and LPG are also produced. All these products have a very low content of sulphur and other contaminants.
It is very common in Europe and Asia because those regions have high demand for diesel and kerosene. In the US, fluid catalytic cracking is more common because the demand for gasoline is higher."
It is simple, we use a cracking method, fluid cracking like in the USA, that does not produce lots of diesel bi-product. It is technical thing.
We have to move away from burning diesel fuel in internal combustion engines (explosions) as the emissions are filthy. Emissions in "continuous burning" is cleaner. We have boilers in power stations that use continuous burn and create steam that turn turbines.
Using taxes to keep diesel in common use in vehicles is not a bright thing to do.
More background info:
Cruising is big business around the world. The lines are accused of ruining the environment and are sensitive to this image. They are starting to use in the ships bio-fuel engines burning diesel and LPG. Some are moving to 100% LPG burning. Modern cruisers only have gensets with the propellers turned only by electric motors. LPG is much cleaner and no black smoke is seen being pumped out of the funnels. Most cruising is generally not far from land. Waste heat from the engines is used to create fresh water from salt water. Sewage is pumped ashore for treatment.
Cheap dirty heavy diesel fuel can be burnt out at sea, but not in coastal waters like the Channel. They switch to cleaner more expensive fuels in coastal waters.
B an JB thanks, that all sounds very sensible. So it's a technology thing more than a tax thing.
@Bayard
Techie only here.
Rapid apex seal wear is not a problem with Wankels being solved 45 years ago. Apex seal "lifting" is a problem. Gaps can develop between the apex seal and engine housing in light-load and/or low speed operation when imbalances in centrifugal force and gas pressure occur. Mazda changed the shape of the troichoid housing slightly to solve. But, running the engine at sustained higher revolutions eliminates apex seal lift off. This points to constant speed applications such as electricity generation. Perfect for a series-hybrid.
Any engine running a constant speed is more efficient and lasts longer. Ships engines give the best "mpg" because of this. A diesel piston/crankshaft engine running at any speed constantly is dirty. So we have a "cleaner" Wankel a quarter of the size & weight of a diesel for the same output power with a superior power/weight ratio.
Note:
Toyota are developing a one free moving piston engine (the piston is the only moving part). The German NASA are developing a two piston version. Electrical coils are in the cylinder lining and piston and produce electricity as the piston moves up and down. Ideal for series-hybrids (why Toyota are interested) and that includes ships, trucks, trains and buses. The mpg is phenomenal to the current antiquated crocks on offer. It is also very small, light and very smooth to current piston engines.
Vested interest keeps us poisoning ourselves.
@Mark
Vested interest and taxation have kept the status quo in propulsion units and fuel usage. Corporations will not change a money making line. They will only change when forced to.
We have had vastly superior alternatives to the filthy engines we use for a long time, one of the points I am trying to make. A Wankel genset is just a step up not a vast leap. It will still keep the corporations in business making the units and selling the petrol, although less of it. If corporations see a threat they will pull out all the stops to halt something. Look at Ralph Nader in the USA on poor car safety. Instead of spending millions in R&D making new cars safer, they spent those million trying silence or ridicule Nader. The USA in the 1970s introduced tight emission regulations, which the US auto giants said no one could meet. They spend a "fortune" fighting emissions controls on engines. Bosch in Germany without too effort solved with a fuel injection system, which they all could have done using those millions and probably produce a superior system. Auto and oil corporations are not to be trusted having a poor track record.
Corporations will not invest the money in R&D to take us to the next level in propulsion technology never mind a quantum leap. Everything they do is adding a knob onto the same old crock and making it shiny. Go to the Science museum and look at a cutaway of a Model T Ford engine. It looks inside just like a modern engine. We have only added knobs onto it.
No one in power does anything meaningful to advance matters. OK, Ken Livingstone introduced pollution/congestion charging which sort of helped. Idiot Boris cancelled expansion of the pollution zones of course. Because of significant "kerbside" pollution (when vehicles are idling) from cars in Tokyo, Toyota started the current hybrid run of cars (19 years ago), which has still a way to go to be mainstream. Just little bits here and there.
Using taxation to keep the status quo is really retrograde.
JB. Using taxation isn't retrograde in itself. What you are trying to is to price in externalities. But I agree that dealing with vested interests is always vexatious.
Going back to the engineering, the ICE/electric generator combination is already being well looked at. I was reading that Jag had an XJ running with a tiny (1200cc?) petrol engine with generator that looked promising. I think the engine was from Lotus.
Agreed, it is the speeding up and slowing down of the ICE that doesn't help. If you can get them running at a constant speed at the 'sweet spot' it can be really efficient.
A friend's son was working at somewhere like Ricardo for his industry gap year some years ago and he was telling then that they had got really efficient and clean petrol engines working.
Then there's fuel cells.
I am really looking forward to all this innovation - bring on autonomous cars. And this from a true petrol head...
"No one in power does anything meaningful to advance matters."
Good. Initiatives by politicians usually end up achieving the diametrically opposite result to that intended. Look at hybrid cars. Because the move to hybrids was politically generated, we have ended up with clunky parallel hybrids instead of series hybrids, which is what we would have had if the initial aim was a more efficient, more powerful car with the best torque/speed response.
OK the main point is that Mark saw diesel fuel being "wasted" as a by-product of the cracking process. Use another cracking process and all is solved.
Taxation is powerful; it can change the whole order of a society.
I don't want to labour on the techie side in an economics forum, but....
@Lola
Jaguar were using a prototype XJ running on electric motors with a 1200cc 3 cylinder Lotus petrol engine with a generator that looked promising. Lotus were to get this on general sale to any maker who wanted to go hybrid, arranging manufacture in Spain. I have not kept up with the progress. The Jag initially had a turning turning the generator. More trivia: The Jag has not been in production, but one prototype was fitted with a normal engine/g-box for specific use in the latest James Bond film in the race around Rome. The Aston it diced with was designed only for the Bond film and not on sale.
The gensets as range extenders have to produce enough to propel the vehicle as normal when the battery bank is dead in cars that say use motorways a lot. So a substantial genset is needed. Even when running with a dead battery bank the mpg is excellent and better than we get now. The BMW i3 EV has an optional range extender genset derived from an oldish BMW bike engine. It is a get you home unit with much reduced performance with batteries dead. The bike engine is really not suitable. But a great pointer to the future.
Audi and a few others, and especially Mazda of course, are homing in on the Wankle because of its very small size, weight, smoothness, etc, as a range extender. Range extenders are only part time engines, so in the overall running of a car per ann, even if its mpg is poorer than current, it does not matter as the running cost will still be lower than what we have now. But range anxiety is a problem is selling EVs. The reality is that a small city car only needs be a full EV - more electric street chargers as EV become common will greatly aid - they are all around where I live. But the human mind does not work logically at times and is partially in panic mode. It looks like the Wankel may have met its niche in autos after all this time - the high constant speed keeps the apex seal tight against the housing by centrifugal force. BTW, about 5 companies in the world make Wankels, they are far from dead. Liquid Piston in the USA have a superior rotary Wankel type of design being funded by the US gvmt. Hopefully that will see the light of day sometime.
https://www.youtube.com/watch?v=0e785YnDmq0
The auto companies and R&D people look at engine efficiency differently - warped. If a car is returning say 40mpg if they take that to 48mpg, a 20% improvement, they go ecstatic claiming great leaps in efficiency. The big picture is that 80% of the fuel in the tank is wasted the engines are so inherently inefficient in basic conceptual design. That extra 8mpg is piddling around the edges. Raising efficiency is reducing the tank wastage say from 80% to 60%. That would give around 80mpg.
@Bayard
Battery and supercapacitor technology has moved on. Series-hybrid cars are feasible for sure and they will be cheap to run as well. No large auto companies, with maybe the exception of Toyota, is doing any real meaningful R&D on series-hybrid. They do a small bit here and there to say they are sort of eco.
Supercapacitors can absorb about 90% of braking energy and give back off immediately. Batteries charge slow and give off the charge slow. Trains use supercapacitors as do buses in Shanghai for the past 7 years or so. duel Battery trains have been trialed last year in Essex. They have electric pickups as normal and a battery bank to run from electrified track onto unelectrified track (used in Tokyo right now). To electrify a track is horrendously expensive with ugly overhead wires. These supercapacitor/battery trains can be charged from the 3rd rail or overhead wire pickups and at the terminals, and also at stations for a few minutes each time along the way, and claw back braking energy. Trains at stations can use grid power to pull away rather than the batteries, preserving the stored energy.
The Wrexham to Bidston, Birkenhead, line (Borderland Line) is rife for battery trains. The Welsh want the slow diesel line to be incorporated into the Merseyrail metro under full electrification to give fast direct access into Liverpool's prime city centre quarters and airport access. DfT say the cost is too much for the 27 mile line. Trains with tanks of diesel cannot run in the Birkenhead/Liverpool city centre metro tunnels. Battery/supercapacitor trains are the answer.
All this technology is interchangeable with road vehicles and even ships & boats. Then there are the Stirling engines with cleaner "continuous" burning, not dirty explosions, again running at constant speeds as a genset - probably better for buses and trucks. Swedish, French and Japanese submarines use Stirling engines.
Techie mode off.
JB, thanks for the update on the techie stuff. My big gripe is why is this technology not on the roads now? As we have both pointed out, diesel-electric series hybrids have been running on the railways for decades. All the technology was around thirty years ago to build a series hybrid car: I remember being taught about it at university. Now we have supercapacitors, Li-ion batteries and brushless DC motors and the bloody cars are still not yet in production.
"Taxation is powerful; it can change the whole order of a society."
but not necessarily in the way that was intended and I think that hybrid cars are an example of this. Now the normal route for automotive technological advance is for the top end of the market to get it first. ABS, turbochargers, electric windows, power assisted steering, servo brakes, you name it, they all first appeared in top of the range models and then gradually became standard features. The manufacturers bring out a new feature to convince rich car buyers with plenty of choice to buy their make of car. With hybrid cars it was different. The manufacturers weren't trying to convince the buyers of their cars so much as the bureaucrats who had mandated a tax cut for hybrid cars. Thus what was important was that the car had an electric motor in it, not that it performed any better in any way shape or form. Thus we ended up with what were basically IC cars with an electric motor stuck in on top of everything else.
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