Why banning diesel makes no economic sense.

I don’t claim to understand fully the various steps in this train of thought, and I doubt that anybody understands all of them, but here goes…

Science

Crude oil is a mixture of various different types of hydrocarbon molecules. The smallest/lightest are CH4 (methane gas), there is no precise chemical formula for petrol, which “constitutes the largest fraction of product obtained per barrel of crude oil. The hydrocarbons in gasoline have a chain length of between 4 and 12 carbons.” Next is diesel, which “consists of hydrocarbons of a chain length between eight and 21 carbon atoms”, and so on, all the way down to the heavy stuff used for heating oil

Heating oil “is one of the “left-over” products of crude refining. It is often less pure than other refined products, containing a broader range of hydrocarbons. Because of its contaminants, fuel oil has a high flash point and is more prone to autoignition. It also produces more pollutants when burned.”

Technology

There are different methods of splitting up crude oil into its constituent parts, known as cracking, different kinds of crude oil have different mixes of the various kinds of hydrocarbon atom and different methods of cracking produce different results etc.

But by and large, for every three or four litres of petrol, you get one litre of diesel.

The environment

As a rule of thumb, the lighter the original molecules, the cleaner the stuff burns, so methane burns away to CO2 (carbon dioxide) and H20 (water) which are more or less harmless and the heavier stuff like heating oil churns out the most soot. Diesel molecules are heavier than petrol molecules, so generate more soot or ‘particulates’ in the modern jargon, which is unhealthy to breathe in as is widely documented.

The Kuznets Curve

Initially, new industrial processes tend to very polluting, and governments in developing countries are loath to tax pollution because economic progress has to come first. With the benefit of hindsight, the UK was a developing country for these purposes until fifty years ago; having got a fair bit of industrialisation behind it, PR China is now at the cusp where the population are starting to care more about air quality than just economic growth (the Kuznets Curve).

Capitalism and waste

As the economy grows, raw materials become more scarce and labour and power become more expensive. So initially, factories and oil extractors will pollute like morons and don’t care about recycling. As technology develops, people find ways of reducing waste or putting by-products to some sort of productive use.

A few examples: the average miles per gallon of cars on the road has doubled over the past fifty years. Bauxite us plentiful, but it takes huge amounts of electricity to turn it into aluminium, so most recycling rates for aluminium is approaching 100% in developed countries (melting down cans for re-use uses one-tenth as much electricity as refining bauxite). When trees were plentiful, sawdust was just discarded or burned; nowadays, a lot of it is used to make chipboard or mdf, which is a higher value use than using it as fuel etc.

Taxes on pollution

We would therefore expect the tax on diesel to be higher than on petrol, which it is in the UK. Interestingly, it isn’t in Germany, apparently because of the haulage and farming lobby; diesel is about twenty percent cheaper.

Efficient use of by-products

So what would happen if everybody got a conscience and deciding to switch from petrol to diesel, assuming they don’t want to run their cars on vegetable oil (there isn;t enough to that to go round anyway)?

That would push up the price of petrol and mean that a larger amount of crude oil has to be refined, but they would still be left over with one part diesel for every three or four parts petrol.

Having gone to all that bother extracting and refining, it makes no sense to throw the diesel away. So the price of diesel would fall relative to petrol, and some people would then ignore their conscience and use diesel anyway, thus restoring the three- or four-to-one ratio between petrol and diesel use.

Source: http://markwadsworth.blogspot.com/2016/01/why-banning-diesel-makes-no-economic.html