Sylvie Willis
Diesel fuel is a commonly used energy source in the United States, powering freight and delivery trucks, cars, trains, buses, boats, and vehicles used for agricultural, military, construction, and industrial purposes. In October 2022, diesel stocks in the US reached their lowest levels since 2008, causing concerns about potential shortages. However, experts reassured the public that the country was not on the verge of running out of diesel fuel, and the situation was primarily driven by low stockpiles, increased demand, and higher prices.
| Characteristics | Values |
|---|---|
| Diesel fuel stocks in the US | Reached their lowest levels since 2008 in October 2022 |
| Comparison of diesel and gasoline prices | Diesel fuel is generally priced higher than gasoline per gallon or liter |
| Reasons for higher-priced diesel | Shutdown of refineries in the Gulf of Mexico, diversion of refining capacity to gasoline production, and a recent transfer to ultra-low-sulfur diesel (ULSD) |
| ULSD | A type of diesel fuel with lower sulfur content that is more expensive to produce than regular diesel |
| MK-1 diesel | A type of ULSD with lower aromatics content (sold in Sweden) |
| Fuel tax on diesel | Higher than on heating oil due to fuel tax laws |
| "Untaxed" diesel | Available for non-road use in agriculture, recreation, and utility vehicles; using it for taxed purposes can result in fines |
| Biodiesel taxes | Vary between states; some states like Texas have no tax on biodiesel |
| Diesel production in the US | The US produces most of the diesel it consumes, primarily in the form of ULSD |
| Diesel exports and imports | Exported 0.33 billion barrels in 2021, primarily to Canada; also imported a small proportion of its diesel consumption |
| Diesel transportation | Transported via pipelines, barges, trains, and trucks |
| Diesel efficiency | More efficient than gasoline, resulting in lower carbon dioxide emissions |
| Diesel supply concerns | Short-term regional shortages are possible, but the US is not expected to run out of diesel fuel |
| Diesel price trends | Prices have been decreasing due to increased domestic oil production and decreased global demand for crude oil |
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Diesel fuel prices
Several factors have contributed to the low stockpiles and high prices of diesel fuel in the United States. Firstly, the shutdown of refineries in the Gulf of Mexico and the diversion of refining capacity to gasoline production have impacted diesel fuel availability. Additionally, the transition to ultra-low-sulfur diesel (ULSD) has caused infrastructural complications. The ULSD production in 2021 amounted to 1.63 billion barrels, with 0.33 billion barrels exported, and a small portion imported, mainly from Canada.
The competition for energy with Europe, due to the reduction of Russian gas imports amid the Ukraine conflict, has also played a role. This has resulted in the rerouting of ocean tankers carrying diesel to Europe. Moreover, seasonal maintenance, the lingering effects of the COVID-19 pandemic, and the closure of unprofitable refineries have reduced U.S. refinery capacity.
On the demand side, there is increased demand for diesel fuel, particularly in the agricultural, industrial, and transportation sectors. Diesel engines are widely used in freight and delivery trucks, trains, buses, boats, and construction vehicles. The efficiency of diesel engines, which produce less carbon dioxide per mile than gasoline vehicles, also contributes to the demand.
However, diesel fuel prices have been experiencing a downward trend recently. This can be attributed to increased domestic oil production and weakening global demand for oil, particularly in Europe and Asia. As a result, diesel prices are projected to average $3.85 for the rest of 2014, a significant drop from the year's average of $3.89.
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Diesel production
Diesel fuel is a fuel oil used to power compression ignition engines, a form of internal combustion engine invented by Rudolf Diesel in 1892. Diesel fuel is commonly used in freight and delivery trucks, trains, buses, boats, and vehicles designed for agricultural, military, construction, and other industrial purposes. Diesel fuel is also used in oil and gas extraction equipment, although some locales use electric or natural gas-powered equipment.
The United States produces most of the diesel that it consumes, with around 1.63 billion barrels (68.35 billion gallons) of ultra-low-sulfur diesel (ULSD) produced in 2021, and around 0.33 billion barrels (14.04 billion gallons) exported. The U.S. also imported a small proportion of the diesel it consumed in 2021, primarily from Canada. Diesel fuel is generally simpler to refine from petroleum than gasoline, but additional refining is required to remove sulfur, which can contribute to higher costs.
In October 2022, stocks of diesel fuel in the U.S. reached their lowest levels since 2008, sparking concerns over potential shortages. However, experts confirmed that the U.S. was not on the verge of running out of diesel fuel, as the country produces more diesel every day. The low stock levels were attributed to factors such as seasonal maintenance, the lingering effects of the COVID-19 pandemic, and competition with Europe for energy due to the war in Ukraine.
The low diesel fuel stock levels have resulted in higher diesel fuel prices, particularly in the Northeast region of the U.S. where stocks are the lowest. The increased demand for diesel fuel, coupled with a decrease in worldwide demand for crude oil, has contributed to fluctuating diesel prices in the U.S.
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Diesel engines
In the United States, diesel fuel is typically distilled from petroleum, although historically it contained high quantities of sulfur. Due to the health risks associated with sulfur in the air, the Environmental Protection Agency passed regulations requiring manufacturers to lower the sulfur content of their fuels. This resulted in the production and use of ultra-low-sulfur diesel (ULSD), which has driven up costs due to the additional refining required and infrastructural complications.
The United States produces most of the diesel that it consumes, with the majority being ULSD. In 2021, the U.S. produced around 1.63 billion barrels (68.35 billion gallons) of ULSD and exported approximately 0.33 billion barrels (14.04 billion gallons). The diesel is transported from refineries and ports to terminals across the country using pipelines, barges, or trains, and then delivered to service stations and businesses by truck.
While diesel fuel stocks reached their lowest levels since 2008 in October 2022, experts assert that the U.S. is not on the verge of running out of diesel fuel. The low stock levels have resulted in higher diesel fuel prices, particularly in the Northeast, where competition from fuel oil for home heating during the winter drives up costs. The decrease in U.S. refinery capacity due to the closure of some unprofitable refineries and the cutoff of Russian oil imports have also contributed to the low stock levels.
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Diesel supply
The United States produces most of the diesel it consumes, with a small proportion imported, primarily from Canada. Diesel fuel is transported from refineries and ports to terminals using pipelines, barges, or trains, and then delivered to service stations and businesses by truck.
In 2021, the US produced around 1.63 billion barrels (68.35 billion gallons) of ultra-low-sulfur diesel (ULSD), with around 0.33 billion barrels (14.04 billion gallons) exported.
In October 2022, stocks of diesel and other distillate fuel oils reached their lowest levels since 2008, according to the Energy Information Administration (EIA). This sparked concerns about potential shortages. However, experts confirmed that the US was not on the verge of running out of diesel fuel, as the EIA's figures did not account for ongoing diesel production. While the supply was low compared to historical standards, it was not expected to result in a complete shortage.
The low stock levels have contributed to higher diesel fuel prices, particularly in the Northeast, where stocks are the lowest, and diesel is in competition with fuel oil for home heating during winter. The decrease in stock has been attributed to several factors, including seasonal maintenance, the lingering effects of the COVID-19 pandemic, and increased demand due to competition with Europe for energy in the context of the war in Ukraine.
In contrast, some sources indicate that US diesel prices have been dropping over the last few weeks due to increased domestic oil production and decreased worldwide demand for crude.
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Diesel imports
The United States produces most of the diesel it consumes. In 2021, the US produced around 1.63 billion barrels (68.35 billion gallons) of ultra-low-sulfur diesel (ULSD), while around 0.33 billion barrels (14.04 billion gallons) were exported. The US also imported a small proportion of the diesel it consumed in 2021, primarily from Canada.
The US also sources diesel from Saudi Arabia, Mexico, and other European countries. In 2023, the US imported more than 863 million gallons of biobased diesel, the second-highest volume of combined biodiesel and renewable diesel imports ever recorded. Spain, Italy, and Canada supplied 63% of US biodiesel imports in 2023, with Spain and Italy shipping record volumes of biodiesel for two consecutive months.
The US has some of the largest and most advanced refineries in the world, which play a critical role in the production of diesel fuel. These refineries are located in states like Texas, Louisiana, and California, and they meet domestic demand while also contributing significantly to the export market.
Despite substantial domestic production, the US continues to import diesel to meet its demand. The transportation of imported diesel to the US involves complex logistics, with tankers carrying large quantities across oceans, and pipelines and trucks distributing the fuel throughout the country.
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Frequently asked questions
No, the US is not running out of diesel, despite some reports. In October 2022, the US had 25 to 25.9 days' worth of diesel in its stores, but this figure does not account for ongoing diesel production.
Diesel stocks are low due to seasonal maintenance, the lingering effects of the COVID-19 pandemic, and the US's competition with Europe for energy, as Western countries reduce their dependence on Russian gas.
Low diesel stock has led to higher diesel prices, especially in the Northeast, where diesel competes with fuel oil for home heating in the winter.
Governments can act to help expedite the transport of fuel. For example, the governors of South Dakota, Iowa, and Nebraska have issued emergency waivers of hours-of-service rules for truckers transporting fuel.
Diesel fuel is used in freight and delivery trucks, some cars, trains, buses, boats, and vehicles designed for agricultural, military, construction, or other industrial purposes.
