The average price for on-highway diesel fuel in the U.S. for the week of April 9 was $4.148, up .006 cents from the prior week and about 7 cents per gallon higher for the same week last year.  All regions of the country are now averaging more than $4/gallon for on-highway diesel fuel. See the chart for specific, regionalized numbers.

Check out our April, 2012, newsletter online. Click here.

To access any of our newsletters, including our newsletter archive, visit the ABOUT FACTORLOADS section of our web site.

In our January (2012) newsletter, Driving to Success, we told you about the “Natural Gas Highway” being put in place by Clean Energy Fuels Corp.  The company has unveiled plans for the first 150 locations for liquid natural gas (LNG) fueling stations, and said there should be 70 stations opened by the end of the year in 33 states with the rest opening in 2013.   

On Feb. 1, Clean Energy Fuels Corp. once again made headlines when it announced, along with Navistar Inc., a program to provide natural gas-powered trucks for the same cost as diesel trucks for those customers who commit to purchasing their fuel through Clean Energy.  

Initially, Navistar will roll out medium-duty trucks for the program, but says it will expand the program to heavy-duty trucks by next year.  Navistar said it will build the vehicles while Clean Energy supplies the infrastructure so drivers can fuel them up across the country. 

Without the program, LNG-fueled vehicles typically would cost about $35,000 more than their diesel counterparts.  Once on the road, the LNG vehicles should prove less costly to operate than diesel rigs.

Clean Energy says the LNG fuel will sell for less than diesel – at least 50 cents to 60 less per gallon. LNG today is about $1.50 per gallon lower than diesel or gasoline (depending upon local markets).  Importantly, the use of natural gas fuel reduces costs significantly for vehicle and fleet owners, and reduces greenhouse gas emissions approximately 23% in medium to heavy-duty vehicles.   Also, nearly 100 percent of the LNG used here comes from North America.

Source: U.S. Energy Information Administration

The U.S. Energy Information Administration (EIA) says drivers in the northeast may face shortages of ultra-low-sulfur-diesel (ULSD) fuel if a refinery that makes more than 300,000 barrels each day is shuttered.

Sunoco Inc., the owner of the refinery, says the refinery will close this July if it cannot find a buyer. The oil company says increases in production costs and shrinking margins make the business less attractive. It has lost money over the last several years at the refinery.

With two other refineries in Pennsylvania already closed, the news from Sunoco is disheartening.  When factored in with the refineries that have already ceased operation, the third closure would mean a loss of 50 percent of the total refining capacity in the Northeast, according to the EIA.

What does this mean for drivers? It may be harder and harder to find ULSD fuel, and the potential shortages could cause price spikes.

With about 60 percent of the ULSD fuel consumed in the northeast traditionally refined in the region, industry officials are looking at solutions if Sunoco cannot find a buyer. One possibility – because of a lack of pipeline capacity – could mean bringing in refined product from the Midwest and Gulf refineries via rail.   

By the end of  the year, America may have in place many stops along a “Natural Gas Highway,” according to Clean Energy Fuels Corp., of Seal Beach, Calif., which earlier this month unveiled the route plan for the first phase of 150 new liquid natural gas (LNG) fueling stations.

Clean Energy, which provides natural gas fuel for transportation in North America, has identified 98 locations and anticipates having 70 stations open by the end of this calendar year in 33 states.

            Many of the fueling stations will be co-located at Pilot-Flying J Travel Centers already serving goods movement trucking through an exclusive agreement with Pilot to build, own and operate natural gas fueling facilities at agreed-upon travel center.  Pilot-Flying J has more than 550 locations in 47 states.

            The initial segments of “America’s Natural Gas Highway,” or ANGH, include those linking San Diego-Los Angeles-Riverside-Las Vegas; the Texas Triangle (Houston-San Antonio-Dallas/Ft. Worth); Los Angeles-Dallas; Houston-Chicago; Chicago-Atlanta; and a network of stations along major highways in the mid-west region (IL, IN, OH, MO, KY, TN, KS, OK, AL) to serve the heavy trucking traffic in the area.

Scheduled for completion during 2012 and 2013, the 150 first-phase stations coincide with the expected arrival of new natural gas truck engines well suited for heavy-duty, over-the-road trucking. Engine manufacturers and original equipment truck manufacturers such as Cummins-Westport, Kenworth, Peterbilt, Navistar, Freightliner and Caterpillar are expected to have Class-8 trucks available in engine sizes allowing for varied road and driving requirements.

“We are moving quickly to build this important network in order to support the new trucks,” said Andrew J. Littlefair, Clean Energy’s President and CEO. “Already, Clean Energy has engaged over 100 shippers, private fleets and for-hire carriers that have shared their operations to qualify the economic opportunity of operating natural gas trucks, which has helped us, in turn, plan the first phase of the natural gas fueling highway.”

Littlefair noted that the ANGH stations are in addition to the station building planned for the company’s traditional markets in transit, refuse, airport/taxi/shuttle and local/regional trucking, which activity accounted for 63 station projects in 2011.

Currently priced up to $1.50 per gallon lower than diesel or gasoline (depending upon local markets), the use of natural gas fuel reduces costs significantly for vehicle and fleet owners, and reduces greenhouse gas emissions approximately 23% in medium to heavy-duty vehicles. Additionally, natural gas is a secure North American energy source with 98% of the natural gas consumed produced in the U.S. and Canada.

U.S. average diesel prices for the week of January 9 were $3.828 per gallon (including all taxes).  That was up just over four cents from the prior week, and almost 50 cents per gallon over the price per gallon one year ago.

Prices rose week-over-week, on average, in every U.S. region, as illustrated in the chart.

*Source: US Energy Information Administration

 Fuel prices during the first two weeks of the month were trending down in most geographic areas of the U.S., according to the U.S. Energy and Information Administration, which publishes weekly assessments of fuel prices.

For the week of December 12, the highest prices for diesel were reported in California, at $4.12 per gallon (including taxes).  The lowest prices were recorded along the  Gulf Coast, at $3.79 per gallon. The overall U.S. average was $3.89, which was down almost 4 cents from the prior week, but up about 66 cents from one year ago.

Over the last several years, fuel (diesel and gas) taxes have fallen across the nation.  While that may sound like a good thing, it actually might have a negative impact on you – drivers on our nation’s highways.

That’s because the less fuel tax monies that are rolling in to state coffers has a negative impact on road construction and repairs.The Institute of Taxation and Economic Policy (ITEP) this month release its report on fuel taxes, noting these taxes “are the most important source of transportation funding under the control of state lawmakers.”The report states that, unfortunately, most state gas taxes “are built to fail.” 

 There are more than 35 states that rely on fixed-rate taxes that collect the same amount in tax annually on every gallon of fuel purchased. The rub is that while other costs are rising – such as asphalt, concrete and other transportation construction costs – the fuel taxes are remaining stagnant. In the aggregate, that means inflation is taking a big bite out of fuel taxes.In fact, the report states, “After adjusting to account for growth in construction costs, theaverage state’s gas tax rate has effectively fallen by 20 percent, or 6.8 cents per gallon, since the last time it was increased. In states that rely on the fixed-rate tax, that number increases to 29 percent, which is about 9.5 cents per gallon.            

State’s with the biggest declines in percentages of fuel tax monies include Alaska, New Mexico, Montana and Maryland.           

 According to ITEP, the trend they are seeing reflects long-term changes in how we live.  In fact, they said, the decline in the fuel tax revenues means fuel taxes are “a less significant part of families’ household budgets than they have been in 80 years.”