From DetNews.com

DETROIT — Government and auto industry officials expressed optimism today about the future of diesel-powered passenger cars and light trucks, even as an oil industry official expressed concerns about the costs of dramatically increased diesel fuel use.

Americans use 140 billion gallons of petroleum a year — or more than 20 million barrels of oil a day — with estimates suggesting use will top 200 billion gallons in the next decade as the number of vehicle miles increases by about 2 percent yearly. America’s 230 million vehicles traveled 3 trillion miles last year, up 30 percent since 1985.

Concerns about energy dependence and global warming have prompted calls in Congress and the White House to reduce the nation’s oil use and cut auto emissions. But those proposals could cost the auto industry more than $100 billion over the next decade.

Officials from the Environmental Protection Agency and Department of Energy expressed strong support for boosting diesel use during today’s Society of Automotive Engineers 2007 World Congress panel titled “Is Light Duty Diesel Ready for Prime Time.”

Diesel engines offers benefits, especially on fuel economy, getting up to 30 percent better mileage than gasoline engines. With EPA-mandated ultra-low sulfur diesel required last year, the cleanliness of diesel engines has been dramatically improved.

Christopher Grundler, deputy director of the EPA’s Office of Transportation and Air Quality and head of the National Vehicle and Fuel Emissions Laboratory in Ann Arbor, strongly endorsed the diesel efforts. He also said diesel vehicles might be a better choice than hybrids in some instances, especially for rural drivers.

Grundler said drivers are going to enjoy the performance and fuel economy of new diesel vehicles. “They are not your father’s Oldsmobile anymore,” Grunter said, referring to the General Motors Corp. advertising slogan and the bad experience some owners of diesel Oldsmobiles had in the late 1970s, when diesels were smelly, noisy and had trouble starting in cold weather.

Today’s diesel engines have dramatically improved, he said.

The 2005 Energy Policy Act provides tax incentives to buy clean diesel vehicles; currently just one diesel vehicle, the Mercedes E320 has been qualified by the Internal Revenue Service for the incentive.

Bob Lee, a DaimlerChrysler AG vice president for powertrain product engineering, noted Chrysler’s dozen-plus diesel-powered versions of vehicles sold in Europe. He said that was “a shopping list to think about the U.S. market.”

Lee cited internal research showing that 49 percent of consumers who are considering a diesel purchase named higher fuel economy as their main reason. But he said the auto industry needed to dispel myths about diesel. “Perceptions are not in tune with reality,” Lee said.

Jim Williams, an official with the American Petroleum Institute, an oil industry trade association, said it would takefive to 10 years to dramatically ramp up the diesel supply, since most U.S. refining is focused on the production of gasoline. Converting a gasoline refinery to diesel costs $500 million to $1 billion, he said.

That estimate could be a big hurdle to the automakers realizing previously stated goals of dramatically increasing diesel penetration in the U.S. fleets. Several estimates have predicted that by 2015, 15 percent of passenger cars and 25-28 percent of light trucks will be produced with diesel engines.

In recent years, the rate of growth in diesel use has been outpacing that of gasoline use, especially as commercial trucking payloads have increased under a strong U.S. economy.

European refineries are designed to maximize production of diesel. As a result of high gasoline taxes, diesel now accounts for 50 percent of passenger cars and light trucks in Europe, versus less than 0.5 percent of U.S. passenger cars and about 6 percent of light trucks, primarily pickups. Europe imports diesel fuel and exports gasoline, which acts to counterbalance opposite U.S. trends, Williams said.

SAE says it believes this is the largest technical conference in the world and noted that engineers have been meeting in Detroit since 1933. In a sign of how the industry has changed, an Asian automaker — Toyota — is hosting the SAE Congress for the first time.