Fuel Sell: Pumped Up Demand for Diesel Prompts Refineries to Invest Billions

BMW is rolling out a national commercial campaign this year to promote diesel automobiles.

The Ultimate Driving Machine may be onto something.

Diesel is beginning to no longer play second fiddle to gasoline, and refineries nationwide are starting to take notice by investing billions

In 2008, U.S. refineries produced a record 3.1 million barrels per day of on-highway or ultra-low sulfur diesel, up 10 percent from the 2.8 million barrels per day produced in 2007 and a 106 percent increase from the 1.5 million figure in 2006.

Gasoline production has been stable, coming in at 8.9 million barrels per day in 2008, a 1.1 percent decrease from the 9 million barrels per day in 2007 and just a 1 percent increase from the 8.8 million produced by U.S. refineries in 2006.

"The demand for diesel has been strong in the United States and worldwide, and refineries are responding to that," said Ron Planting, an American Petroleum Institute economist. "The market for gas is weaker than the market for diesel has been, so it makes sense that you concentrate a little bit more on the higher value product based on the marketplace."