New Diesels. Gas Usage Down. Oil Drops. Yippee!

By Bob Difley
It was good news when Mercedes Benz announced that they are building three new SUVs with the new wave of diesel engines that use low-sulfur diesel fuel (the cleanest burning diesels in history). Though diesel fuel now costs more than gasoline, it can get up to 33% more miles per gallon and emissions are so clean that the new diesels are approved for use in all 50 states. They also announced that they have reduced the premium for diesels to about $1,000, competing effectively with gasoline engines and opening the doors to biodiesel fuel on a larger scale. Mercedes diesels are already being used in small Class C RVs (Winnebago’s View and Itasca’s Navion, both about 24 feet, for example) so it won’t be long before efficient smaller diesel engines will move into slightly larger RVs as well. Could it be the age of diesel for RVs?

Oil continued its decline this week, closing at $115.20 per barrel on Friday, its lowest price since May 1. Could it be that the falling price was due to the drop in consumption, down 2.3% from the same period a year ago? Seems so. The DJI rose at the news.

According to MSNBC, “Many analysts have pointed to the $117-a-barrel mark for crude oil as technically significant — a move below this level suggests, they say, that oil’s recent slide is more than a brief pullback. Crude is now down $32 from its high of $147.27 on July 11.” That could be the signal that oil prices have peaked, that we won’t see any more market highs, and speculators with switch out of oil commodities into something else.

So how do we keep oil down? We could reduce our driving by another 2.3%. Doesn’t seem like much. Hey, I’ll bet we RVers have already reduced the numbers of miles we drive by that much–if not more. Now we’ll see whether this new lower oil price will be reflected at the gas pump. Will gas station operators, eager to increase sales from the current slump, also lower their prices to sell more, or keep the extra profits? I’m betting on price drops.

Cutting back usage (demand), and affecting price because of a current over-supply, is what works now to lower prices at the pump. More than increased drilling, more than opening sensitive areas, more than switching over to ethanol or biodiesel—all of which will take time. That is the kind of change we can see right there at the pump. And just maybe (if OPEC doesn’t cut back supply to drive prices up again) we can keep gasoline prices well below $5 a gallon (you think maybe closer to $4?), if we resist the urge to increase our driving mileage just because gas near $4 seems like such a bargain.