Diesel derived from petroleum comprises over 90 percent of the commercial and freight transport fuel used in North America. Petroleum has superior energy density compared to other commercially available fuels, and it is part of a mature and low-cost distribution system with applications across most vehicle types. Oil is expected to continue to dominate the fuel market for years, but it will cede share to alternatives.
Petroleum causes a wide array of sustainability impacts, including a large share of global greenhouse gas (GHG) and other emissions from transportation. It has also been associated with wider environmental and human rights impacts during drilling and refining, and occasional but destructive toxic releases from spills and accidents.
Oil is a fungible global commodity, making it rare among fuels in being traded as essentially the same product worldwide. The United States produces about 14 percent of global supply and consumes about 21 percent of global demand.1 The main sources of U.S. oil imports are Canada (31.9 percent), Saudi Arabia (13.5 percent), Mexico (9.3 percent), and Russia (4.7 percent).2
Petroleum demand remains strong, though it is beginning to cede share to alternatives for several reasons, including rising public concern and regulation of high-carbon energy sources; reduced potential for producing fuel from inexpensive, conventional supplies; and the increasing viability of alternative technologies. However, there is considerable uncertainty about this projection, with estimates ranging from just under 15 percent to around 95 percent of market share. 3
Average price of diesel for the past five years is 57.4 percent higher than averages for the previous 10 years. The price has increased 113 percent since 2000.4
The price of oil has a strong, albeit complex, impact on the competitiveness of alternative fuels. Low oil prices curtail short- and medium-term investments and returns on alternatives like natural gas, but are unlikely to be sustained in the long term. The rise of carbon regulation and the increased costs associated with developing unconventional petroleum sources point toward a long-term trend of higher oil prices, while costs fall for alternatives.
Diesel derived from petroleum generally works with any diesel internal-combustion engine (ICE) vehicles. It performs well in virtually all conditions, is ubiquitous and dependably high quality, and works with virtually all engines that are designed to use it. Therefore, it is the baseline fuel of choice for most medium- and heavy-duty applications.