IDEAS home Printed from https://ideas.repec.org/a/eee/renene/v77y2015icp20-31.html
   My bibliography  Save this article

Petroleum refining flexibility and cost to address the risk of ethanol supply disruptions: The case of Brazil

Author

Listed:
  • de Barros, Marisa Maia
  • Szklo, Alexandre

Abstract

Biofuels' potential supply is uncertain. This uncertainty involves not only the possibility of expanding bio-energetic cultures in the medium term but also the risk of supply disruptions in the short term. These supply disruptions may be mainly caused by climatic conditions, soil management, plagues and diseases, Global Climatic Change (GCC), producers' strategies and other factors. An ethanol supply shock may force the petroleum refining industry to increase its gasoline output or result in an increase in liquid fuel imports. An intersection of both alternatives may also be a solution. This study developed and applied a methodology to evaluate the capacity of petroleum refineries to address unforeseen ethanol supply deficits in the short term. The tool utilized was a mixed-integer linear programming (MILP) model. The methodology was applied to Brazilian refineries system. Findings show that to build catalytic reforming (CR) units to produced additional gasoline volumes during unexpected ethanol supply shortage is not economically attractive. However, these investments can be justified when the probability of ethanol supply loss is high.

Suggested Citation

  • de Barros, Marisa Maia & Szklo, Alexandre, 2015. "Petroleum refining flexibility and cost to address the risk of ethanol supply disruptions: The case of Brazil," Renewable Energy, Elsevier, vol. 77(C), pages 20-31.
  • Handle: RePEc:eee:renene:v:77:y:2015:i:c:p:20-31
    DOI: 10.1016/j.renene.2014.11.081
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S096014811400812X
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.renene.2014.11.081?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Puri, Munish & Abraham, Reinu E. & Barrow, Colin J., 2012. "Biofuel production: Prospects, challenges and feedstock in Australia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(8), pages 6022-6031.
    2. de Freitas, Luciano Charlita & Kaneko, Shinji, 2011. "Ethanol demand under the flex-fuel technology regime in Brazil," Energy Economics, Elsevier, vol. 33(6), pages 1146-1154.
    3. Collantes, Gustavo & Melaina, Marc W., 2011. "The co-evolution of alternative fuel infrastructure and vehicles: A study of the experience of Argentina with compressed natural gas," Energy Policy, Elsevier, vol. 39(2), pages 664-675, February.
    4. Awudu, Iddrisu & Zhang, Jun, 2012. "Uncertainties and sustainability concepts in biofuel supply chain management: A review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(2), pages 1359-1368.
    5. Du, Xiaodong & Hayes, Dermot J., 2009. "The impact of ethanol production on US and regional gasoline markets," Energy Policy, Elsevier, vol. 37(8), pages 3227-3234, August.
    6. Rathmann, Régis & Szklo, Alexandre & Schaeffer, Roberto, 2010. "Land use competition for production of food and liquid biofuels: An analysis of the arguments in the current debate," Renewable Energy, Elsevier, vol. 35(1), pages 14-22.
    7. Sorda, Giovanni & Banse, Martin & Kemfert, Claudia, 2010. "An overview of biofuel policies across the world," Energy Policy, Elsevier, vol. 38(11), pages 6977-6988, November.
    8. Wu, Fangwei & Zhang, Deyuan & Zhang, Jinghua, 2012. "Will the development of bioenergy in China create a food security problem? Modeling with fuel ethanol as an example," Renewable Energy, Elsevier, vol. 47(C), pages 127-134.
    9. Gomes, Gabriel Lourenço & Szklo, Alexandre & Schaeffer, Roberto, 2009. "The impact of CO2 taxation on the configuration of new refineries: An application to Brazil," Energy Policy, Elsevier, vol. 37(12), pages 5519-5529, December.
    10. Bastian-Pinto, Carlos & Brando, Luiz & Hahn, Warren J., 2009. "Flexibility as a source of value in the production of alternative fuels: The ethanol case," Energy Economics, Elsevier, vol. 31(3), pages 411-422, May.
    11. Collantes, Gustavo, 2010. "Do green tech policies need to pass the consumer test?: The case of ethanol fuel," Energy Economics, Elsevier, vol. 32(6), pages 1235-1244, November.
    12. Junginger, Martin & van Dam, Jinke & Zarrilli, Simonetta & Ali Mohamed, Fatin & Marchal, Didier & Faaij, Andre, 2011. "Opportunities and barriers for international bioenergy trade," Energy Policy, Elsevier, vol. 39(4), pages 2028-2042, April.
    13. Szklo, Alexandre & Schaeffer, Roberto & Delgado, Fernanda, 2007. "Can one say ethanol is a real threat to gasoline?," Energy Policy, Elsevier, vol. 35(11), pages 5411-5421, November.
    14. Ishola, Mofoluwake M. & Brandberg, Tomas & Sanni, Sikiru A. & Taherzadeh, Mohammad J., 2013. "Biofuels in Nigeria: A critical and strategic evaluation," Renewable Energy, Elsevier, vol. 55(C), pages 554-560.
    15. Osei, Gabriel & Arthur, Richard & Afrane, George & Agyemang, Emmanuel Okoh, 2013. "Potential feedstocks for bioethanol production as a substitute for gasoline in Ghana," Renewable Energy, Elsevier, vol. 55(C), pages 12-17.
    16. Thompson, Wyatt & Whistance, Jarrett & Meyer, Seth, 2011. "Effects of US biofuel policies on US and world petroleum product markets with consequences for greenhouse gas emissions," Energy Policy, Elsevier, vol. 39(9), pages 5509-5518, September.
    17. W. W. Garvin & H. W. Crandall & J. B. John & R. A. Spellman, 1957. "Applications of Linear Programming in the Oil Industry," Management Science, INFORMS, vol. 3(4), pages 407-430, July.
    18. Ravindranath, N.H. & Sita Lakshmi, C. & Manuvie, Ritumbra & Balachandra, P., 2011. "Biofuel production and implications for land use, food production and environment in India," Energy Policy, Elsevier, vol. 39(10), pages 5737-5745, October.
    19. de Souza, Raquel R. & Schaeffer, Roberto & Meira, Irineu, 2011. "Can new legislation in importing countries represent new barriers to the development of an international ethanol market?," Energy Policy, Elsevier, vol. 39(6), pages 3154-3162, June.
    20. Lamers, Patrick & Hamelinck, Carlo & Junginger, Martin & Faaij, André, 2011. "International bioenergy trade--A review of past developments in the liquid biofuel market," Renewable and Sustainable Energy Reviews, Elsevier, vol. 15(6), pages 2655-2676, August.
    21. García, A.E. & Carmona, R.J. & Lienqueo, M.E. & Salazar, O., 2011. "The current status of liquid biofuels in Chile," Energy, Elsevier, vol. 36(4), pages 2077-2084.
    22. Pacini, Henrique & Silveira, Semida, 2011. "Consumer choice between ethanol and gasoline: Lessons from Brazil and Sweden," Energy Policy, Elsevier, vol. 39(11), pages 6936-6942.
    23. de Lucena, André Frossard Pereira & Szklo, Alexandre Salem & Schaeffer, Roberto & de Souza, Raquel Rodrigues & Borba, Bruno Soares Moreira Cesar & da Costa, Isabella Vaz Leal & Júnior, Amaro Olimpio P, 2009. "The vulnerability of renewable energy to climate change in Brazil," Energy Policy, Elsevier, vol. 37(3), pages 879-889, March.
    24. Schaeffer, Roberto & Szklo, Alexandre Salem & Pereira de Lucena, André Frossard & Moreira Cesar Borba, Bruno Soares & Pupo Nogueira, Larissa Pinheiro & Fleming, Fernanda Pereira & Troccoli, Alberto & , 2012. "Energy sector vulnerability to climate change: A review," Energy, Elsevier, vol. 38(1), pages 1-12.
    25. Qiu, Huanguang & Sun, Laixiang & Huang, Jikun & Rozelle, Scott, 2012. "Liquid biofuels in China: Current status, government policies, and future opportunities and challenges," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(5), pages 3095-3104.
    26. C. E. Bodington & T. E. Baker, 1990. "A History of Mathematical Programming in the Petroleum Industry," Interfaces, INFORMS, vol. 20(4), pages 117-127, August.
    27. Souza, Cristiane Duarte Ribeiro de & Silva, Suellem Deodoro & Silva, Marcelino Aurélio Vieira da & D’Agosto, Márcio de Almeida & Barboza, Arthur Prado, 2013. "Inventory of conventional air pollutants emissions from road transportation for the state of Rio de Janeiro," Energy Policy, Elsevier, vol. 53(C), pages 125-135.
    28. Ghobadian, Barat, 2012. "Liquid biofuels potential and outlook in Iran," Renewable and Sustainable Energy Reviews, Elsevier, vol. 16(7), pages 4379-4384.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Fernanda Guedes & Alexandre Szklo & Pedro Rochedo & Frédéric Lantz & Leticia Magalar & Eveline Maria Vásquez Arroyo, 2018. "Climate-Energy-Water Nexus in Brazilian Oil Refineries," Working Papers hal-03188594, HAL.
    2. Brexó, Ramon Peres & Sant’Ana, Anderson S., 2017. "Impact and significance of microbial contamination during fermentation for bioethanol production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 423-434.
    3. Pan, Lingying & Liu, Pei & Li, Zheng, 2018. "A discussion on China's vehicle fuel policy: Based on the development route optimization of refining industry," Energy Policy, Elsevier, vol. 114(C), pages 403-412.
    4. Aragão, Amanda & Giampietro, Mario, 2016. "An integrated multi-scale approach to assess the performance of energy systems illustrated with data from the Brazilian oil and natural gas sector," Energy, Elsevier, vol. 115(P2), pages 1412-1423.
    5. Rafael Henrique Mainardes Ferreira & Claudia Tania Picinin, 2018. "Bibliometric analysis for characterization of oil production in Brazilian territory," Scientometrics, Springer;Akadémiai Kiadó, vol. 116(3), pages 1945-1974, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Brexó, Ramon Peres & Sant’Ana, Anderson S., 2017. "Impact and significance of microbial contamination during fermentation for bioethanol production," Renewable and Sustainable Energy Reviews, Elsevier, vol. 73(C), pages 423-434.
    2. Franco, Carlos J. & Zapata, Sebastian & Dyner, Isaac, 2015. "Simulation for assessing the liberalization of biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 41(C), pages 298-307.
    3. Fanny Groundstroem & Sirkku Juhola, 2021. "Using systems thinking and causal loop diagrams to identify cascading climate change impacts on bioenergy supply systems," Mitigation and Adaptation Strategies for Global Change, Springer, vol. 26(7), pages 1-48, October.
    4. Zhang, Long & Bai, Wuliyasu, 2021. "Sustainability of crop–based biodiesel for transportation in China: Barrier analysis and life cycle ecological footprint calculations," Technological Forecasting and Social Change, Elsevier, vol. 164(C).
    5. Aloisio S. Nascimento Filho & Rafael G. O. dos Santos & João Gabriel A. Calmon & Peterson A. Lobato & Marcelo A. Moret & Thiago B. Murari & Hugo Saba, 2022. "Induction of a Consumption Pattern for Ethanol and Gasoline in Brazil," Sustainability, MDPI, vol. 14(15), pages 1-11, July.
    6. Ge, Jianping & Lei, Yalin, 2017. "Policy options for non-grain bioethanol in China: Insights from an economy-energy-environment CGE model," Energy Policy, Elsevier, vol. 105(C), pages 502-511.
    7. Curci, Ylenia & Mongeau Ospina, Christian A., 2016. "Investigating biofuels through network analysis," Energy Policy, Elsevier, vol. 97(C), pages 60-72.
    8. Lan-Cui Liu & Gang Wu, 2015. "Assessment of energy supply vulnerability between China and USA," Natural Hazards: Journal of the International Society for the Prevention and Mitigation of Natural Hazards, Springer;International Society for the Prevention and Mitigation of Natural Hazards, vol. 75(2), pages 127-138, February.
    9. Julia Hansson & Roman Hackl, 2016. "The potential influence of sustainability criteria on the European Union pellets market—the example of Sweden," Wiley Interdisciplinary Reviews: Energy and Environment, Wiley Blackwell, vol. 5(4), pages 413-429, July.
    10. Whistance, Jarrett & Thompson, Wyatt, 2010. "How does increased corn-ethanol production affect US natural gas prices?," Energy Policy, Elsevier, vol. 38(5), pages 2315-2325, May.
    11. Azad, A.K. & Rasul, M.G. & Khan, M.M.K. & Sharma, Subhash C. & Mofijur, M. & Bhuiya, M.M.K., 2016. "Prospects, feedstocks and challenges of biodiesel production from beauty leaf oil and castor oil: A nonedible oil sources in Australia," Renewable and Sustainable Energy Reviews, Elsevier, vol. 61(C), pages 302-318.
    12. Chanthawong, Anuman & Dhakal, Shobhakar, 2016. "Stakeholders' perceptions on challenges and opportunities for biodiesel and bioethanol policy development in Thailand," Energy Policy, Elsevier, vol. 91(C), pages 189-206.
    13. Taylor-de-Lima, Reynaldo L.N. & Gerbasi da Silva, Arthur José & Legey, Luiz F.L. & Szklo, Alexandre, 2018. "Evaluation of economic feasibility under uncertainty of a thermochemical route for ethanol production in Brazil," Energy, Elsevier, vol. 150(C), pages 363-376.
    14. Hector M. Nunez & Jesus Otero, 2017. "Integration in Gasoline and Ethanol Markets in Brazil over Time and Space under the Flex-fuel Technology," The Energy Journal, , vol. 38(2), pages 1-26, March.
    15. Santos, Maria João & Ferreira, Paula & Araújo, Madalena, 2016. "A methodology to incorporate risk and uncertainty in electricity power planning," Energy, Elsevier, vol. 115(P2), pages 1400-1411.
    16. Wang, Bing & Ke, Ruo-Yu & Yuan, Xiao-Chen & Wei, Yi-Ming, 2014. "China׳s regional assessment of renewable energy vulnerability to climate change," Renewable and Sustainable Energy Reviews, Elsevier, vol. 40(C), pages 185-195.
    17. Alizadeh, Reza & Lund, Peter D. & Soltanisehat, Leili, 2020. "Outlook on biofuels in future studies: A systematic literature review," Renewable and Sustainable Energy Reviews, Elsevier, vol. 134(C).
    18. Rathmann, Régis & Szklo, Alexandre & Schaeffer, Roberto, 2012. "Targets and results of the Brazilian Biodiesel Incentive Program – Has it reached the Promised Land?," Applied Energy, Elsevier, vol. 97(C), pages 91-100.
    19. Balogh, P. & Bai, A. & Popp, J. & Huzsvai, L. & Jobbágy, P., 2015. "Internet-orientated Hungarian car drivers’ knowledge and attitudes towards biofuels," Renewable and Sustainable Energy Reviews, Elsevier, vol. 48(C), pages 17-26.
    20. Alsaleh, Mohd & Abdul-Rahim, A.S. & Mohd-Shahwahid, H.O., 2017. "An empirical and forecasting analysis of the bioenergy market in the EU28 region: Evidence from a panel data simultaneous equation model," Renewable and Sustainable Energy Reviews, Elsevier, vol. 80(C), pages 1123-1137.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:renene:v:77:y:2015:i:c:p:20-31. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.journals.elsevier.com/renewable-energy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.