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My dad has been telling me for a fair portion of my adult life that diesel cars have many advantages over gasoline run cars. He’s said for years that one day the American public will get over the bad memories they have of badly designed diesels in the 70’s, which he says were largely the result of trying to sloppily retrofit a gasoline engine with diesel capability rather than designing a diesel engine from a clean slate. A few years back he purchased a diesel VW golf, and although my sister swiped it, he really loves that purchase.

Today I took a look at Business Week, and there was an interview with J.D. Power forecaster Al Bedwell. Some excerpts:

Why does J.D. Power believe that diesels will grab a much larger share of the market than hybrids for fuel-efficient cars? The problem with hybrid cars is they have an expensive power train. Hybrids have two engines connected by an expensive electronic kit. They’re likely to always cost more than a clean diesel power train. Once consumers add up the costs and benefits for hybrid cars, they aren’t likely to do as well over the long term. There will always be people willing to pay more for an environmentally friendly car. But people who are constrained by costs and still want a fuel-efficient car will opt for clean diesel.

Will Americans really embrace diesel cars if the cost of U.S. diesel fuel remains slightly higher than that of gasoline? Europeans at least enjoy savings with diesel, which costs less at the pump than gasoline. The U.K. offers an interesting example, since diesel costs about 3% to 5% more than gasoline at the filling station. Britain was pretty anti-diesel up to five years ago. But diesel vehicles have grown rapidly to 40% of new car sales, up from about 15% in 2000. In the past when diesel cars burned a dirtier fuel, consumers needed a big economic incentive to buy diesel. Now, with diesel that’s as nice as gas, you don’t need low diesel prices to sell cars. And if you get 25% to 35% better gas mileage, you’re still gaining quite a lot of savings.

How hard will it be to overcome the negative image of diesel in U.S. car buyers’ minds? Americans’ consciousness for diesel cars hasn’t yet been pierced. There’s still a big marketing job to be done. But we think we’ve been a bit conservative in our forecast. A changing image and infrastructure for diesel could accelerate the trend.

When do you think diesel car sales will really take off in the U.S.? What will be the breakthrough year? It’s still a bit premature, because the federal law that requires the oil companies to switch to clean diesel fuel at the filling stations only takes effect in September. We think diesel car sales will really take off in 2008.

Hmm. Gotta listen to dad more often.

The one thing J.D. Power’s Al Bedwell says that I have an issue is that he suggests there must be a decision between diesel and hybrid. While in the near term they may be separate because the technology hasn’t matured enough to be cost effective, in less than a decade a diesel engine coupled with a hybrid power train might be economical. And it would be pretty incredible, combining the efficiency of diesel and the efficiency of hybrid.

The J.D. Power forecaster also touches lightly on biodiesel:

There’s the possibility of bio-diesel too. That’s a win-win situation. Biodiesel is added directly into the diesel, and that can change the economic equation again. The emissions becomes even better, since bio fuels are carbon-neutral.

Biofuels are very intriguing. That’s fuel derived from crops. Since America is the OPEC of food, it could potentially supply its own energy needs now and into the foreseeable future. How would the autocratic governments of the Middle East change if they had to rely on developing and unleashing their human capital, rather than relying on lulling their populations into lethargy using the oil underneath their ground?

Vinod Khosla, the cofounder of Sun Microsystems and famed venture capitalist who has backed dozens of multimillion dollar companies, has pointed out that crop based fuel could completely support America’s energy needs until at least 2050, and that the technology to economically run engines on fuel derived entirely from crops exists today (and is actually being used currently in Brazil).

Crop derived fuel, with a hybrid powertrain, anyone?