The Diesel Surprise

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(what, no DU forum for cars?)

The Diesel Surprise

By JONATHAN WELSH
Staff Reporter of THE WALL STREET JOURNAL
January 14, 2005; Page W1

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With all the talk lately about hydrogen fuel cells and hybrid cars, you might have missed car makers' push for another high-mileage technology -- one straight out of the Carter administration. Diesel engines are showing up in a growing range of vehicles, including some surprisingly expensive models. Mercedes-Benz, which hasn't sold diesels in the U.S. for several years, just started selling a $50,000 diesel sedan that accelerates faster than its gas counterpart. Chrysler's Jeep unit, known for primitive '80s diesels, is pitching a model with about 30% better mileage than gas. Want the most powerful Volkswagen SUV on the lot? That's a diesel, too, with a big engine and a $58,000 price tag.

For the auto industry, this is one of the more daunting attempts at an image makeover in recent memory. Diesel engines have an enduring reputation as loud, smelly and weak. Environmental groups criticize their high emission levels. Diesel fuel is carried at only about 30% of filling stations nationwide -- and now often costs more than gas. The timing, too, could hardly seem stranger: Many drivers who want higher mileage are buzzing about newer technologies, with makers from Ford and General Motors to Lexus using this week's big auto show in Detroit to preview high-tech, high-mileage alternatives to diesel. Even so, diesels are grabbing a bigger share of the market. There are now 14 diesel models for sale in the U.S., up from 11 last year. Makers sold nearly 500,000 diesels here in 2004, according to Power Information Network, up 31% from 2002. These vehicles accounted for 2.9% of the U.S. light-vehicle market in 2004 -- up from 2.2% in 2002.

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Skeptics say diesel is far from the next big thing. One big selling point of these engines, after all, is that they tend to last longer than gas engines and are more economical, typically getting about 30% more miles per gallon. But diesel-equipped cars also often bear higher price tags than their gas counterparts, negating initial fuel savings. Moreover, while diesel fuel has historically cost less than gas, lately it has been more expensive: Average gasoline prices across the U.S. are now $1.77 per gallon, compared with $1.94 for diesel, according to the U.S. Department of Energy. Few customers will feel compelled to switch to diesels or other high-mileage options, some experts say, until gas prices climb much higher. "Gasoline prices were over $2 a gallon several times last year and that didn't make people buy that many diesels," says Michael Omotoso, an analyst with researcher Global Insight. "I think the threshold is closer to $3 a gallon."


Another knock against the engines: Compared with cars that run on gas, diesels emit a higher level of pollutants. Some states have passed strict emissions regulations that crimp their sales, with California, Maine, Massachusetts, New York and Vermont banning the registration of new diesel cars. (Owners can generally register used diesels in those states.) The Union of Concerned Scientists, an environmental group, says that a small passenger car running on gasoline typically emits about three grams of polluting particulates per thousand miles driven; a comparable diesel traveling the same distance, it says, emits closer to 43 grams.

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For their part, makers say that advancements in engine technology have made the cars cleaner. They also point to new Environmental Protection Agency emissions regulations, set to go into effect next year, that could shift the momentum toward diesel. Starting in June 2006, the EPA will require refiners to produce diesel for sale in the U.S. with the same maximum sulfur level currently found in European fuel. Auto makers say cleaner-burning fuel should prompt more drivers to consider diesels -- which in turn, they say, should result in a more competitive market for diesel, which should make the fuel more widely available and cheaper.

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Write to Jonathan Welsh at [e-mail]

URL for this article (subscription only):
http://online.wsj.com/article/0,,SB110565716565625766,00.html

[Dover]

1. Just heard Willie Nelson is going to begin a company selling BIODIESEL!

He'll be selling it at truck stops mainly.

Don't Mess With Willie!