Diesel industry integral to U.S. economy, report finds

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The diesel industry contributes more than $480 billion annually to the U.S economy, provides more than 1.25 million jobs and supplies a substantial export-to-value ratio five times higher than the national average, according to a new economic report released Wednesday, Sept. 28, by the Diesel Technology Forum.

The report – “Diesel Powers the U.S. Economy: Providing High-Paying Jobs, Exports and Long-Term Productivity Gains in the Nation’s Fundamental Sectors” – was researched by Aspen Environmental Group and M.Cubed. The study 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, the diesel technology producing and servicing sectors directly contributed $183 billion and 1.25 million jobs to the U.S. economy in 2009, and 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 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 percent of the 2009 GDP from key diesel-reliant industries. 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,” says 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 says diesel is a technology and an industry that is largely home grown, highly successful, and provides good paying jobs that exemplifies U.S. innovation and technological advancements. “The clean diesel industry also manufacturers and supplies the energy-efficient low-emissions products that are not merely aspirations of the future, but highly valued exports that are sought after today by nations in all regions of the world,” he says.

Schaeffer says diesel is the prime fuel for transporting freight, powering tractors, building roads and meeting critically important demand for emergency services and national defense. “More than 80 percent of products exported from and imported to the U.S. are moved using diesel technology, and about 75 percent of the fossil-fueled equipment used in construction, mining and agriculture are diesel-powered,” he says.

Dr. Richard McCann of Aspen Environmental Group, who was the report’s prime author, says several aspects of diesel are striking. “First, the economic value produced per job is twice the national average, and as a result wages are 60 percent higher,” McCann says. “The industry is a prime source of good-paying jobs.”

Second, according to McCann, diesel technology is ubiquitous. “It probably touches even more transactions and activities than electricity,” he says. “That technology influence multiplies through the economy – $1 earned on diesel technology enables another $4.50 of added value elsewhere in the economy.”

And third, McCann says, diesel technology industries are an export powerhouse that generates five times more exports from industry output than the national average. “Most diesel technologies require sophisticated processes using a well-trained labor force,” he says. “Diesel products are often built to customer specs. These jobs cannot be easily ‘off-shored.’ ”