Diesel Technology Forum report: Diesel industry contributes more than $480 billion annually to U.S economy

| September 28, 2011

The diesel industry contributes more than $480 billion annually to the U.S economy, provides more than 1.25 million jobs, and supplies a substantial export-to-value ratio five times higher than the national average, according to a new economic report released today by the Diesel Technology Forum (DTF).

The report -“Diesel Powers the U.S. Economy: Providing High-Paying Jobs, Exports and Long-Term Productivity Gains in the Nation’s Fundamental Sectors” – was researched by Aspen Environmental Group and M.Cubed and released during a press conference today at the National Press Club. The study evaluated the direct contribution of clean diesel engine and equipment manufacturing and fuel refining to the economy as well as the indirect contributions and influence of diesel technology on 16 diesel-reliant sectors of the economy.

To view the report and appendixes go to www.dieselforum.org/economicreport.

According to the report, the diesel technology producing and servicing sectors directly contributed $183 billion and 1.25 million jobs to the U.S. economy in 2009 and another $300 billion was created through indirect and induced ripple effects. These included “highly productive” jobs with each diesel-related employee creating $146,000 directly in national income, nearly a third higher the national average of $110,000 per employee. The diesel technology producing sectors were even higher, averaging $207,000 per job.

Beyond producing engines and fuel, diesel technology and fuel powered $455 billion or 3.2 percent of the 2009 GDP from key diesel-reliant industries. For every dollar of economic value from diesel technology, $4.51 is added elsewhere to national income in related industries that rely on diesel. The total GDP contribution for key diesel sectors, both technology producing and reliant, as well as diesel services, was $638.5 billion in 2009.

“Diesel Industry Is Vital to America’s Economic Recovery and Growth”

“Diesel is a major economic factor and job creator in the U.S. economy and is vital to America’s economic recovery and growth,” said Allen Schaeffer, the Executive Director of the Diesel Technology Forum. “Diesel not only provides jobs in the manufacturing and refining industries, it provides equipment and engines to our agricultural, mining and construction industries, and transports virtually every commodity available to American consumers.

“Diesel is a technology and an industry that is largely home grown, highly successful, and provides good paying jobs that exemplifies U.S. innovation and technological advancements. The clean diesel industry also manufacturers and supplies the energy efficient, low-emissions products that are not merely aspirations of the future, but highly valued exports that are sought after today by nations in all regions of the world.

“Diesel is the prime fuel for transporting freight, powering tractors, building roads, and meeting critically important demand for emergency services and national defense. More than 80 percent of products exported from and imported to the U.S. are moved using diesel technology and about 75 percent of the fossil-fueled equipment used in construction, mining and agriculture are diesel-powered.”

“Diesel Technology Industries Are an Export Powerhouse”

“Several aspects about diesel are striking,” said Dr. Richard McCann of Aspen Environmental Group, who was the report’s prime author. “First, the economic value produced per job is twice the national average, and as a result wages are 60 percent higher. The industry is a prime source of good-paying jobs.

“Second, diesel technology is ubiquitous. It probably touches even more transactions and activities than electricity. That technology influence multiplies through the economy – $1 earned on diesel technology enables another $4.50 of added value elsewhere in the economy.

“And third, diesel technology industries are an export powerhouse that generates five times more exports from industry output than the national average. Most diesel technologies require sophisticated processes using a well-trained labor force. Diesel products are often built to customer specs. These jobs cannot be easily ‘off-shored.’”

Diesel Export-To-Value Ratio Is Five Times Higher Than National Average

As the economy grows and the diesel passenger car market grows, so will the need for diesel fuel. The U.S. is self-sufficient in refining its fuel and even exports diesel fuel to other countries. Refineries accounted for the largest proportion of diesel-related exports, at $9.5 billion.

Altogether, diesel product and fuel exports represented $46.2 billion or 4.35 percent of U.S. exports in 2009, with an export-to-value ratio that was five times higher than the national average.

Diesel to Play an Increased Role in U.S. Economic Growth

The reports states: “As policymakers look to promote cleaner, more fuel efficient technologies, its use will grow along with other competitive alternatives. Diesel technology’s future value is further enhanced by its suitability for hybrid applications and its readiness to utilize a diverse range of first and second generation renewable and biodiesel fuels.

“National fuel economy standards for cars and light-duty trucks beginning in 2017 are expected to be met in part by an increasing number of clean diesel passenger vehicle choices. Similarly, first-ever fuel efficiency standards for medium- and heavy-duty commercial trucks and buses beginning in 2014 will drive further innovation and efficiency gains in diesel technology as a key compliance strategy.”

Highlights from the economic report

Diesel Moves 80 Percent Of All Freight. Diesel-powered trucks, trains, ships and intermodal systems moved 83 percent of freight by value ($11.7 trillion) and 85 percent by weight (12.5 billion tons) in 2007.

Diesel Is Dominant In Agriculture, Mining & Construction Industries: In 2009, agriculture produced $330 billion in output, of which $27.2 billion was for farm sales, contributing $176.6 billion to the nation’s GDP. Total added value of agriculture to the U.S. economy is estimated to be $365 billion. Farms employed 2.1 million in 2008.

Diesel Powers Extractive Industries: Over 60 percent of mining and fuel production equipment is diesel-powered. The nation gets 93 percent of its energy from mined sources, such as petroleum, natural gas, coal and uranium.

Construction Relies on Diesel: Diesel is the dominant fuel source, powering 60 percent of construction equipment and using 98 percent of all energy.

Diesel Powers Over 70 Percent Transit Buses: Approximately 71 percent of transit buses and 58 percent of commuter rail passenger-miles are provided by diesel-fueled trains.

Clean Diesel Auto Sales Projected To Increase Significantly: Currently, only 3.4 percent of the cars in the U.S. are diesel-powered. Diesel accounts for a larger share of pickup trucks (13.6 percent). However, clean diesel sales are increasing and diesel auto sales increased 37 percent during the first eight months of 2011 compared to the same period in 2010 (the overall automobile market increased 10.4 percent). Some analysts predict that diesel passenger cars will account for 10 percent of the market by 2015.

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