The cost of clean diesel is adding up.


Let’s say you manufacture a classic construction machine, such as an air compressor, and it runs on a 63-horsepower diesel engine.


It’s a small-ticket item yet a necessary tool that stands in the crosshairs of California Air Resources Board’s Portable Equipment Registration Program (PERP), which requires equipment owners to register with the state diesel machines 50 hp and up.


You also know that the Environmental Protection Agency is on your back to upgrade your engine with the latest emission controls, commonly known as Tier 4.


In addition, your client's early-model machines out in the field need to be retrofitted because they are subject to CARB's in-use off-road diesel rule, which for the time-being is delayed but still looming.


On top of all that, local munis in various parts of the country are imposing idling restrictions on your rigs of five minutes or less.


It seems that diesels are being regulated into extinction. Or are they?


No question, the cost of cleaner air is putting diesel in a bind. Just those pesky Tier 4 controls, which Mike Larson writes about this week, are going to set back equipment buyers an average of 12% on top of the normal purchase price of many off-road machines, Caterpillar Inc. execs say.


The good news is that manufacturers must justify the higher price tag by making their machines more productive. In the end, the customer wins. Right?

Perhaps, but more drastic measures may be in store for the small stuff.

Take the $15,000 air compressor: Adding a Tier 4 diesel, with all the aftertreatment controls, could bring a price increase as high as 40%, or $6,000, Russ Warner, manager of global air products for Statesville, N.C.-based Doosan Infracore Portable Power, told me earlier this month at the World of Concrete in Las Vegas.

"I expect engine prices to double," Warner says, speaking of the Tier 4 mandate.

This cost crunch is already an issue in other sectors. For small cars, only a few companies, such as Audi, Volkswagen and BMW, are offering diesels as a fuel-efficient alternative. Virtually all other manufacturers have shelved small-diesel plans in the U.S. unless they are getting subsidies from the Dept. of Energy.

Work pickups are still heavily diesel, though their marketshare in recent years has dropped from 60% diesel, 40% gasoline to about 50/50.

Price is a big factor. General Motors just rolled out its new, 1-ton Silverado heavy-duty pickup, equipped with its EPA 2010-compliant 6.6L Duramax turbodiesel. For the moment, GM execs are holding off on setting a price.


“We haven’t decided yet,” Rick Spina, GM’s executive for full-size trucks, told me last week at the Chicago Auto Show. They other guys, Ford and Chrysler, “have signaled that they might be absorbing some of it.”


In the case of Doosan’s new line of 185-cfm air compressors, it took a clever route. By downsizing the engine from 63 hp to about 49 hp, it skirts the California PERP walk while emitting exhaust that meets federal EPA Tier 4 Interim rules.


Added bonus: It consumes 25% less fuel.


The air end is beefier so the rig can push more volume, and the solution costs more to produce. But for now, Doosan is not passing it on, Warner says. Down the road, however, he and others are worried about how all these costs will shake out.


“I think there’s going to be a market shift away from diesels,” says Warner. “It’s being regulated out of some products.”


ENR will be exploring these issues in an upcoming feature. Feel free to chime in. I look forward to hearing your thoughts.


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