Even though Volkswagen's recent announcement it is cancelling three diesel models for 2007, there still is hope for a thriving diesel market in the U.S. The New York Times reports on the general market for diesel, which promises to grow in the U.S. Buyers of SUVs and cars that normally opt for larger gasoline engines will be open to spending some extra money on diesel engines, which will provide exceptional performance and durability, while saving money on fuel. In addition, tax incentives currently available to hybrids will be offered on clean diesel engines, made possible by the low-sulfur diesel fuel which will be available at filling stations starting October 1st, 2006.

The diesel skeptics point to the refining capacity in the U.S., which is heavily slanted towards gasoline. The comparison is made to the European market, where diesel has become extremely popular, in large part due to tax policy. A former oil executive comments that diesel buyers in Europe drive more, and therefore save no net fuel. In my opinion, this argument is flimsy at best. Diesel buyers in Europe do not drive more because they use less fuel; they drive more because they need to for various reasons. And the argument that the same benefits can be achieved from hybridization or advances in gasoline technology is a stretch as well. While hybrids work excellent for the driver with significant stop-and-go driving, they do not provide significant fuel savings for those consumers that do mostly highway driving. Advances in gasoline engines could eventually reach the efficiency of diesel engines, but more research in that area is needed. Clean and efficient diesel engines are available today, and provide an excellent alternative for some consumers. If you look at the love for SUVs and pick-up trucks in the U.S. market, it is surprising diesel engines have not made inroads in the light duty market much sooner. These heavier vehicles are ideally matched to the characteristics of diesel engines.

[Source: New York Times]