The case against the usual suspect - the EPA is airtight.
The government knew as far back as 2001 that the EPA?s ULSD and Tier II regulations would have a catastrophic effect on diesel fuel prices. Here?s May 2001 study on the subject.
http://tonto.eia.doe.gov/FTPROOT/ser...iaf2001-01.pdf
If you don?t have the time to chop through nearly 200 pages, this is the long and the short of it.
Regulation 6.7 cents
Capital investment costs 7.6 cents
Revamp costs 6.9 cents
10% down grade costs 7.1 cents (some ULSD will be downgraded to LSD)
Efficiency loss 6.7 cents
Energy loss 7.0 cents
Imports not meeting new spec 8.1 cents
Total 50.1 cents per gallon
And these figures (as the link explains) are in 1999 dollars. This is why diesel now costs 60 cents a gallon more than unleaded.
All this is over and above price increases due to the cost of crude, now sitting at about $2.60/gallon.
Add on top of that the fact that Tier II robbed diesels of about 4% of their efficiency.
Thank the EPA.
Big Dave 
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