As anyone who has bought diesel lately knows, there is a shortage of diesel vs. gasoline coming from refineries world wide right now, causing a large price differential.
Various reasons for it right now, but as of today, a preponderance of EV's replacing gas engines is not significant enough to matter.
But the more I learn about crack spreads etc., the more it seems that if we do somehow succeed in adopting EV's to replace passenger vehicles, the lower demand for gasoline is going to make diesel even more scarce, unless we find some replacemente use for the surplus gasoline coming out of refineries. Such as figuring out a viable way to power over the road trucks, and trains and construction equipment and tractors etc. with gasoline like we did a long time ago. Or natural gas, or extension cords and go Electric.
It seems to me that this problem is only going to get worse going forward.
Is there any indication that the political class has given this issue any consideration in their grand plans for electric cars?
Lots of other markets will also be affected, including asphalt, because EV's still need paved roads.
In the past, I've brought up the looming shortage of Sulphur and all the related products if we phase out fossil fuels, and as we currently transition away from sour oil and gas to sweet.
In most cases I would say let the free market sort this one out for itself. And without the interventions, subsidies and mandates of governments it would. In the free market, if EV were to capture some noteworthy market share, The price of gasoline would get so cheap, as refineries give it away to keep producing the volume of diesel required to make the world go round, that EV's would become completely cost uncompetitive, and the pendulum would swing back. But this is not the free market.
If the price incentive is there, can a refinery substantially increase the diesel to gasoline ratio of their output with the same input, or is that fixed?
Various reasons for it right now, but as of today, a preponderance of EV's replacing gas engines is not significant enough to matter.
But the more I learn about crack spreads etc., the more it seems that if we do somehow succeed in adopting EV's to replace passenger vehicles, the lower demand for gasoline is going to make diesel even more scarce, unless we find some replacemente use for the surplus gasoline coming out of refineries. Such as figuring out a viable way to power over the road trucks, and trains and construction equipment and tractors etc. with gasoline like we did a long time ago. Or natural gas, or extension cords and go Electric.
It seems to me that this problem is only going to get worse going forward.
Is there any indication that the political class has given this issue any consideration in their grand plans for electric cars?
Lots of other markets will also be affected, including asphalt, because EV's still need paved roads.
In the past, I've brought up the looming shortage of Sulphur and all the related products if we phase out fossil fuels, and as we currently transition away from sour oil and gas to sweet.
In most cases I would say let the free market sort this one out for itself. And without the interventions, subsidies and mandates of governments it would. In the free market, if EV were to capture some noteworthy market share, The price of gasoline would get so cheap, as refineries give it away to keep producing the volume of diesel required to make the world go round, that EV's would become completely cost uncompetitive, and the pendulum would swing back. But this is not the free market.
If the price incentive is there, can a refinery substantially increase the diesel to gasoline ratio of their output with the same input, or is that fixed?
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