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$4 Billion Golden Oppoerunity

Europe's Dirty Diesel Car Fleets

Politics / Environmental Issues Nov 09, 2012 - 05:21 AM GMT

By: Andrew_McKillop


Best Financial Markets Analysis ArticleThe World Health Organization's cancer research institute (the IARC based in Lyon, France) issued its strongest-ever warning on the almost totally certain causal linkage between ingesting and inhaling diesel fuel residues from diesel fulled cars and vehicles, and cancer of the lungs, stomach and intestines in July 2012. This news was given a two-day whirl on government and business-friendly media before being dumped. The subject is "too sensitive".

In France and Germany, around 65% of the private car fleet is now dieselized and diesel car sales in Europe, even during recession, run at around 30 billion euros a year. The same media which trashed the  Diesel = Cancer death story also give regular and large space to reports of consumers and drivers flocking to "ecological low CO2" diesel cars which run on fuel costing fewer pennies per litre than gasoline in the majority of European countries - even if the fuel stinks and causes cancer. After all "cancer only affects other people" and business is business, when it isn't also sacred.

The WHO's cancer institute, which has issued repeated warnings on the cancer risk of diesel fuel since 1988 felt able, in 2012, to offer hard-edged estimates based on evidence collected and collated for over 25 years, on the diesel death toll in its home base country, France: about 43 000 dead every year.

Cancer and other tobacco-related deaths in France are estimated by the same institute as about 55 000 every year. The stark difference is that in Europe, every legally sold packet of cigarettes must carry strident health warnings. When will every diesel fuel pump at every filling station carry huge notices screaming: DIESEL KILLS ? We can also ask when every diesel car will be impossible to start until the driver has read the health warning flashing on the dashboard panel, with its offer of pay-as-you-go telephone hotline advice from pyschologists to help the driver kick his cancerous habits.

The economic rationale and energy policy drive for dieselizing Europe's car fleets was a top-down elite theme invented by the European Commission, starting in 1982. The rationale is so simple that most European political deciders quickly got the message and, later on, put aside all the trifling details of cancer risks from diesel. Their friends controlling the media made a point of dumping any diesel unfriendly news as quickly as possible.

In the early 1980s following the Iranian revolution, oil prices spiralled to around $48 a barrel in 1982 (about $125 in dollars of 2012). This was for light, low sulphur "sweet" crudes but heavy, high sulfur, high heavy metals content dirty crudes such as Saudi Arabia's Berri and Kuwait's Lower Fars were priced at !0%, even 15% less. Importing these heavy dirty crudes, and extracting diesel and middle distillates, instead of light distillates like gasoline became "the ideal path" for European Commission energy mandarins.

To be sure this needed massive refinery changes and investment, and the huge growth of Europe's diesel car fleets, so Commission advice to member state government was to price diesel fuel at least 15% less than gasoline. This had the added bonus for consumers that 1 litre of diesel fuels contains about 10% more energy than 1 litre of gasoline, explaining exactly why a diesel car gets more miles per gallon than an equivalent size and weight, gasoline-fuelled model. More miles for fewer pennies - but more cancer deaths for everybody ! At the time when the Great Plan was launched, the early 1980s, diesel engined cars were somewhat exotic and higher priced than equivalent gasoline models, but European carmakers, often with state research funding support, quickly worked on removing this price hurdle: Europe's dieselization strategy was on the rails - or rather the roads.

To be sure the WHO issued its the first major alert on diesel fuel and cancer as early as 1988, but the media stayed rock-solid in its slavish support to government-backed themes trickling down "from on high", with an almost total exclusion of any information able to "turn off" support for diesel cars from average penny-wise but cancer-stupid motorists thirsting for cheap fuel.

Throughout the long period from the early 1980s to now, European Commission pro-diesel propaganda was stolidly directed at individual consumer citizens. Government-friendly media made sure and certain average car owners and users stayed blissfully unaware that Diesel = Cancer.

Today as we know, some of the most-alert (they say "smart") European member governments like the French government have latched on that diesel = cancer offers a new way to raise taxation on car users especially in cities. Current French government talk about the national diesel car fleet - that the French government operated to bring about for over 30 years - now includes proposals for higher charges and tolls on diesel vehicles, higher taxes on diesel fuel, and possible outright bans on diesel cars in city centres, given "supporting justification" by the proposed use of new taxes and revenues from diesel car users, to help finance the car industry's shift to producing (and selling!) all-electric cars.

The economic case for diesel car fleets as we saw above, was simple. However, since at latest the mid-1990s and more since 2000, the price spread for light sweet/heavy high sulphur crudes has shrunk to small single-digit dollar levels. Refinery technology offers no way out of breaching the ultimate limits of light/heavy distillate yields from any crude, shown in Europe by the inability of the refining industry, after 30 years of "dieselizing effort" to meet Europe's demand for the diesel fuel of its now massive diesel car fleet (over 75 million cars and light vehicles on a total EU27 fleey of about 215 million).

Europe is now forced to import diesel fuel to cover the deficit, often at a premium price, from the US and Asia, while it exports surplus gasoline to the US and Africa, often at a price discount. Adding high local operating costs, taxes, charges and environmental regulations, the European refining industry is now just one more Lame Duck industry - uninterested, to say the least, in further growth of local diesel fuel demand.

Diesels were always dirty - finding out they are cancerous, also, is no real surprise. The deliberate squashing of media cxoverage of the proven cancer link can however be considered criminal. The upstream criminals responsible for a European-wide total of about 100 000 cancer deaths, every year, from mass dieselization of car fleets, can be identified - at the European Commission's energy directorate. One day, they can be brought to account before the law.   *****

By Andrew McKillop


Former chief policy analyst, Division A Policy, DG XVII Energy, European Commission. Andrew McKillop Biographic Highlights

Co-author 'The Doomsday Machine', Palgrave Macmillan USA, 2012

Andrew McKillop has more than 30 years experience in the energy, economic and finance domains. Trained at London UK’s University College, he has had specially long experience of energy policy, project administration and the development and financing of alternate energy. This included his role of in-house Expert on Policy and Programming at the DG XVII-Energy of the European Commission, Director of Information of the OAPEC technology transfer subsidiary, AREC and researcher for UN agencies including the ILO.

© 2012 Copyright Andrew McKillop - All Rights Reserved Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.

© 2005-2019 - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.

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