ALEXANDRIA, Va.—In the popular culture of the U.S., cars are sleek, sexy and use gasoline. Trucks, locomotives and farm equipment are not, and they use diesel. In recent years, Americans has seen the emergence of more sophisticated, efficient and low-emission diesel vehicles, but no one expects them to supplant the average driver’s gasoline-fueled car.
According to Fuels Market News, the U.S. Energy Information Administration (EIA) forecasts that the vehicle miles traveled (VMT) by trucks will grow at rates more than twice the rate forecast for light-duty vehicles. The VMT for commercial light trucks is expected to grow at 1.4% per year from 2018 to 2050, and the VMT for freight trucks of over 10,000 pounds will grow at 1.3% per year from 2018 to 2050. But the VMT growth rate for light duty vehicles is forecast at only 0.6% per year.
At these rates of growth, the demand for commercial light trucks will grow from 97 billion VMT in 2017 to 156 billion VMT in 2050. The demand for freight trucks of more than 10,000 pounds will grow from 290 billion VMT in 2017 to 445 billion VMT in 2050.
Many experts believe that demand for petroleum-based fuels will decline sharply before the year 2050. In the near term, that fuel will be mainly diesel.
The past three decades have brought enormous change, and the coming decades could bring even more momentous change. When compared to many other world regions, diesel in the U.S. appears underutilized. It currently accounts for 21% of U.S. fuel demand, while gasoline accounts for 47.9%. Only the Middle East, where fuel oil still occupies a large share of the demand barrel, has a lower percentage share of diesel. Europe’s demand barrel is heavily weighted toward diesel, at 45% of demand. Africa relies on diesel for 42% of its oil-based fuel requirements.
Pricing plays a big role in the demand for diesel. In countries with high taxes on fuel, diesel’s share can grow disproportionately large. Some government policies have encouraged diesel use at the expense of gasoline use. Diesel may be considered a “productive fuel,” contributing to economic growth and activity, whereas gasoline may be viewed as a consumer fuel, a luxury or a fuel that contributes to traffic congestion. Diesel may also be relied upon for electric power generation when power grids are inadequate.
Diesel’s role in the demand pattern has changed significantly. The oil price shocks of the 1970s cut first into demand. Diesel’s share stabilized at 18-19% of demand during the 1980s until the year 2000. From 2000 until 2007, diesel demand grew at an average rate of 1.7% per year, and diesel’s share of demand also recovered to the neighborhood of 20-21%. The year 2008 brought the Great Recession and fuel demand collapsed. Between 2007 and 2009, diesel demand dropped by 565,000 barrels per day. The share of diesel in the demand pattern fell from 21.2% in 2007 to 20.2% in 2009, and its share is currently in the vicinity of 21%.
In the decade after the Great Recession, most diesel demand was restored. The EIA reports that diesel demand dropped from 4.196 million barrels per day (mbpd) in 2007 to 3.631 mbpd in 2009, then it increased gradually and averaged 4.076 mbpd during the first three quarters of 2019.
According to EIA forecasts, diesel demand will decline slowly between 2020 and 2034, when it will level off at 3.87 mbpd. After 2042, demand is forecast to grow modestly once again, reaching 3.97 mbpd in the year 2050. Over the long term, the diesel market is forecast to shrink at 0.1% per year. However, the EIA forecasts that demand for motor gasoline will decline at the much-faster rate of 0.8% per year during the same period. Therefore, the EIA forecast indicates that diesel’s role in the fuel mix will increase relative to gasoline over the next three decades.