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A parametric analysis of future ethanol use in the light-duty transportation sector: Can the US meet its Renewable Fuel Standard goals without an enforcement mechanism?

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  • Westbrook, Jessica
  • Barter, Garrett E.
  • Manley, Dawn K.
  • West, Todd H.

Abstract

The modified Renewable Fuel Standard (RFS2) prescribes a volume of biofuels to be used in the United States transportation sector each year through 2022. As the dominant component of the transportation sector, we consider the feasibility of the light-duty vehicle (LDV) parc to provide enough demand for biofuels to satisfy RFS2. Sensitivity studies show that the fuel price differential between gasoline and ethanol blendstocks, such as E85, is the principal factor in LDV biofuel consumption. The numbers of flex fuel vehicles and biofuel refueling stations will grow given a favorable price differential. However, unless the feedstock price differential becomes extreme (biomass prices below $100 per dry ton and oil prices above $215 per barrel), which deviates from historical price trends, LDV parc biofuel consumption will fall short of the RFS2 mandate without an enforcement mechanism. Additionally, such commodity prices might increase biofuel consumption in the short-term, but discourage use of biofuels in the long-term as other technologies that do not rely on any gasoline blendstock may be preferable. Finally, the RFS2 program goals of reducing fossil fuel consumption and transportation greenhouse gas emissions could be achieved through other pathways, such as notable improvements in conventional vehicle efficiency.

Suggested Citation

  • Westbrook, Jessica & Barter, Garrett E. & Manley, Dawn K. & West, Todd H., 2014. "A parametric analysis of future ethanol use in the light-duty transportation sector: Can the US meet its Renewable Fuel Standard goals without an enforcement mechanism?," Energy Policy, Elsevier, vol. 65(C), pages 419-431.
    • Handle: RePEc:eee:enepol:v:65:y:2014:i:c:p:419-431
    DOI: 10.1016/j.enpol.2013.10.030
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    References listed on IDEAS

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    1. Anderson, Soren T., 2012. "The demand for ethanol as a gasoline substitute," Journal of Environmental Economics and Management, Elsevier, vol. 63(2), pages 151-168.
    2. Parcell, Joseph L. & Westhoff, Patrick C., 2006. "Economic Effects of Biofuel Production on States and Rural Communities," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 38(2), pages 1-11, August.
    3. Barter, Garrett E. & Reichmuth, David & Westbrook, Jessica & Malczynski, Leonard A. & West, Todd H. & Manley, Dawn K. & Guzman, Katherine D. & Edwards, Donna M., 2012. "Parametric analysis of technology and policy tradeoffs for conventional and electric light-duty vehicles," Energy Policy, Elsevier, vol. 46(C), pages 473-488.
    4. Burnes, Ellen & Wichelns, Dennis & Hagen, John W., 2005. "Economic and policy implications of public support for ethanol production in California's San Joaquin Valley," Energy Policy, Elsevier, vol. 33(9), pages 1155-1167, June.
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    Cited by:

    1. Michael D. Noel & Travis Roach, 2016. "Regulated And Unregulated Substitutes: Aversion Effects Of An Ethanol Mandate," Economic Inquiry, Western Economic Association International, vol. 54(2), pages 1150-1166, April.
    2. Whistance, Jarrett & Thompson, Wyatt, 2014. "The role of CAFE standards and alternative-fuel vehicle production credits in U.S. biofuels markets," Energy Policy, Elsevier, vol. 74(C), pages 147-157.
    3. Ghoddusi, Hamed, 2017. "Price risks for biofuel producers in a deregulated market," Renewable Energy, Elsevier, vol. 114(PB), pages 394-407.
    4. Tokgoz, Simla & Traoré, Fousseini, 2023. "Understanding E10 markets in the U.S.: Evidence from spatial data," Economic Analysis and Policy, Elsevier, vol. 78(C), pages 1267-1281.
    5. Radpour, Saeidreza & Hossain Mondal, Md Alam & Kumar, Amit, 2017. "Market penetration modeling of high energy efficiency appliances in the residential sector," Energy, Elsevier, vol. 134(C), pages 951-961.
    6. Karel Janda & Eva Michalikova & Luiz Célio Souza Rocha & Paulo Rotella Junior & Barbora Schererova & David Zilberman, 2022. "Review of the Impact of Biofuels on U.S. Retail Gasoline Prices," Energies, MDPI, vol. 16(1), pages 1-21, December.
    7. Dumortier, Jerome & Carriquiry, Miguel & Elobeid, Amani, 2021. "Where does all the biofuel go? Fuel efficiency gains and its effects on global agricultural production," Energy Policy, Elsevier, vol. 148(PA).
    8. Chen, Yuche & Meier, Alan, 2016. "Fuel consumption impacts of auto roof racks," Energy Policy, Elsevier, vol. 92(C), pages 325-333.

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    Keywords

    Biofuels; Flex fuel vehicle; Renewable Fuel Standard; E85;
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