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New Economic Report Finds Diesel Industry Provides $480 Billion In Value, 1.25 Million Jobs

A new report finds that even with the development of alternative fuels, diesel is still a major driving factor in the U.S. economy and is likely to remain so for the foreseeable future.

“Diesel Powers the U.S. Economy: Providing High-Paying Jobs, Exports and Long-Term Productivity Gains in the Nation’s Fundamental Sectors” was released at a press conference at the National Press Club on Wednesday. The study by the Aspen Environmental Group 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.

According to the report, diesel technology producing and servicing sectors directly contributed $183 billion and 1.25 million jobs to the U.S. economy in 2009. 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 than 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%, of the 2009 GDP from key diesel-reliant industries, including agriculture and construction. 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 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, 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, Schaeffer said.

As a prime transportation fuel, more than 80% of products imported and exported by the U.S. are moved using diesel technology, and about 75% of the fossil-fueled equipment used in construction, mining and agriculture is diesel-powered.

Higher-Paying Jobs, Export Powerhouse

“Several aspects about diesel are striking,” said Dr. Richard McCann of Aspen Environmental Group, the report’s prime author. “First, the economic value produced per job is twice the national average, and as a result wages are 60% higher.”

That figure translates to $1,398 per week in 2009, $876 per week average for all U.S. workers.

Diesel technology is also ubiquitous, touching even more transactions and activities than electricity. Each dollar earned on diesel technology enables another $4.50 of added value elsewhere in the economy.

Diesel technology industries are an export powerhouse, generating five times more exports from industry output than the national average. Altogether, diesel product and fuel exports represented $46.2 billion, or 4.35% of U.S. exports in 2009, with an export-to-value ratio that was five times higher than the national average.

Increased role in economic growth

According to the report, as policymakers look to promote cleaner, more fuel-efficient technologies, diesel technology will grow along with other competitive alternatives. Diesel technology’s future value is enhanced by its suitability for hybrid applications and its readiness to use a diverse range of first- and second-generation renewable and biodiesel fuels.

Already, diesel has made significant leaps toward environmental friendliness in the past few years. Increasingly stringent standards mandated by the Environmental Protection Agency have helped drastically reduce harmful NoX and particulate emissions.

The 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, said the report. Additionally, 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.

Currently, only 3.4% of cars in the U.S. are diesel-powered. However, clean diesel sales are increasing, going up 37% during the first eight months of 2011 compared to the same period in 2010 – the overall automobile market increased 10.4%. Some analysts predict that diesel passenger cars will account for 10% of the market by 2015.

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