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New Oil Regulations Expected to Cause an Increase in Diesel Prices

by Jake Ostmann / Friday, 14 September 2018 / Published in Diesel, News

The International Maritime Organization (IMO) has created new regulations for the shipping industry which go into effect on January 1st, 2020. Previously, the IMO restricted oil to 3.5% sulfur content, but that will soon change. New regulations are requiring the shipping industry to use fuel containing no more than .5% sulfur content. The shipping industry has two options: operate ships with oil that meets the .5% sulfur requirement or install costly mechanical systems, “scrubbers,” that reduce sulfur emissions. According to U.S. News, “a single cruise ship in one day generates as much particulate matter as 1 million cars, and 15 of the world’s biggest ships emit more sulfur and nitrogen oxides than all the cars on the planet.”

The Impact on Farmer’s Fuel Costs

The new regulations will create a greater demand for #2 farm diesel (low-sulfur content) and economists are anticipating diesel prices for all consumers to increase as a result. A paper written by a credible economist, Philip Verleger, explains how diesel prices could rise to $8 or $9/gallon as a result of the new regulations. U.S. News provides us with multiple perspectives on the potential changes in diesel demand and price from various industry experts. This increase in demand will not be able to be met by refineries as the lead time is too long. Therefore, the input costs for farmers will increase drastically starting in 2019 for those farm operations dependent on diesel for their irrigation and grain drying/handling.

SPPS Offers a Solution for Predicted Rise in Diesel Cost

Single-Phase Power Solutions manufactures the only large horsepower single-phase electric motors and they are 60% more efficient than diesel engines, have a starting current of less than 2x the running current, and an operating efficiency up to 95.5%. Utilities across the U.S. and Canada have approved BELLE™ motors to operate our power company-friendly motors on their power grids. BELLE™ motors are not phase converters or VFD’s and they produce clean power without creating voltage sag or harmonic distortion.

In fear of another 2008 recession, many business owners are beginning to convert their combustion engines to electrically powered alternatives and are anticipating incredible cost-savings prior to the diesel price increase. It is estimated that farmers using diesel engines in 2020 will have an operating cost of as much as $20.65/hr*. By converting to a BELLE™ motor users can expect an operating cost of only $6.51/hr*, equating to an annual savings of over 60%.

*Diesel cost based on an estimated 2020 diesel price of $4.77/gal at an avg. of 4.33gals/ hr. BELLE™ estimate based on $0.11/kWh.

Contact Us Today to Invest in Your Future

Rural business owners located in areas with single-phase power can achieve better efficiency and long-term cost savings by converting to a large horsepower single-phase BELLE™ motor. SPPS offers single-phase motors ranging from 30-100 HP as well as a 3-phase micro-grid capable of creating 3-phase power from your existing single-phase line.

Contact Single Phase Power Solutions:
(513) 399-6263
sales@sppowersolutions.com
www.SinglePhasePowerSolutions.com

 

References

Neuhauser, Alan. “$10 Gas? The Obscure Maritime Rule That Could Make It a Reality.” U.S. News, 31 July 2018, www.usnews.com/news/national-news/articles/2018-07-31/ 10-gas-the-obscure-maritime-rule-that-could-make-it-a-reality. Accessed 24 Sept. 2018.

George, Libby, and Ahmad Ghaddar. New rules on ship emissions herald sea change for oil market. Reuters, 17 May 2018, www.reuters.com/article/us-shipping-fuel-sulphur/ new-rules-on-ship-emissions-herald-sea-change-for-oil-market-idUSKCN1II0PP. Accessed 24 Sept. 2018.

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