The Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry

Du, Xiaodong; Hayes, Dermot J.

doi:10.2172/1218362

Cited by 16 publications

(15 citation statements)

References 13 publications

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“…In the past 4 years (April 2006 -April 2010) the average per barrel oil cost is cited as US$72.55 [EIA, 2010], and in that time per barrel oil price has been less than US$60 for only 6.5 months, where it averaged US$54.84 [EIA, 2010]. In fact, the growth in ethanol production, according to an Iowa State University study, has caused retail gasoline prices to be $0.29 to $0.40 per gallon lower than would otherwise have been the case [Du & Hayes, 2008]. Wheat-based ethanol production, which represents a large fraction of production in the EU and Canada, has less favorable economics than corn-based production.…”

Section: Countrymentioning

confidence: 99%

Limitations and Challenges for Wheat-Based Bioethanol Production

Saunders¹,

Izydorczyk²,

Levin³

2011

Economic Effects of Biofuel Production

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Section: Countrymentioning

confidence: 99%

Limitations and Challenges for Wheat-Based Bioethanol Production

Saunders¹,

Izydorczyk²,

Levin³

2011

Economic Effects of Biofuel Production

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“…Accordingly, several studies have recently reported that the tax credit and mandated ethanol production increases the domestic fuel supply, leading to a reduction in the price of gasoline at the pump (Blanch, 2008;Cooper, 2008;de Gorter and Just, 2009b;Du and Hayes, 2008;Schmitz, Moss, and Schmitz, 2007). Blanch (2008) referenced a Merrill Lynch study indicating that conventional gasoline prices would be 15% higher without mandated ethanol production.…”

Section: Conventional Gasoline Productionmentioning

confidence: 99%

“…Blanch (2008) referenced a Merrill Lynch study indicating that conventional gasoline prices would be 15% higher without mandated ethanol production. Du and Hayes (2008) reported that the growth in ethanol production has caused retail blended gasoline prices to be $0.29 to $0.40 per gallon lower than they would otherwise have been. Schmitz, Moss, and Schmitz (2007) reported that the increase in ethanol production lowers the price of gasoline by 4.3-6.0 cents per gallon, depending upon the relative size of the elasticity of demand for gasoline.…”

Section: Conventional Gasoline Productionmentioning

confidence: 99%

“…Blenders must now blend 10.5 billion gallons of ethanol in 2009, with the mandate rising to 15 billion gallons in 2015 and thereafter. 2 Given the complexity and the magnitude of economic and environmental effects of U.S. bio-fuel policies, results from fuel-energy/ commodity economic models have been increasingly relevant to economic and policy discussions (de Gorter and Just, 2009a,b;Du and Hayes, 2008;Schmitz, Moss, and Schmitz, 2007;Tyner and Taheripour, 2008;Vedenov and Wetzstein, 2007;Westhoff, 2008). However, the net effects on ethanol, conventional gasoline, and blended gasoline prices of both the bio-fuel tax credit under the AJCA and the blending mandate under the EISA have not been adequately discussed in the literature.…”

mentioning

confidence: 99%

“…The price of blended gasoline also depends on whether ethanol and conventional gasoline production are independently determined, as implicitly assumed in recent studies (de Gorter and Just, 2009a;Du and Hayes, 2008;Schmitz, Moss, and Schmitz, 2007). When ethanol and conventional gasoline are assumed to be independent in production, but they are perfect substitutes in consumption, total blended gasoline supply would be obtained by adding the ethanol supply curve and the conventional gasoline supply curve.…”

mentioning

confidence: 99%

See 2 more Smart Citations

The Relative Impacts of U.S. Bio-Fuel Policies on Fuel-Energy Markets: A Comparative Static Analysis

Kim

Schaible

Daberkow

2010

J. agric. appl. econ.

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Rapidly declining gasoline prices from their record high during the summer of 2008, while ethanol prices remained relatively high, made it difficult for many bio-fuel policy modelers to fully explain the impacts of U.S. bio-fuel policies on fuel prices. Using profitmaximization models for blenders, refiners, and distillers, we conduct a comparative static analysis to measure the relative magnitudes of the impacts of tax credits and blending mandates on fuel-energy market equilibrium prices. Our results indicate that first, the prices of all fuels including conventional gasoline, ethanol, and blended gasoline decline as the biofuel tax credit increases, but they increase as the rate of the blending mandate increases. Second, the shadow value of a blending mandate represents the marginal rate of substitution between the marginal price change associated with a blending mandate and the marginal price change associated with a bio-fuel tax credit. Therefore, bio-fuel policies can affect the prices of all fuels including conventional gasoline, ethanol, and blended gasoline. Finally, ethanol imports are affected by domestic blender's market-power effects, more than by the import duty imposed to offset the tax credit associated with the use of imported ethanol in the blending process.

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PHA bioplastic: A value‐added coproduct for biomass biorefineries

Snell

Peoples

2009

Biofuels Bioprod Bioref

119

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The petroleum industry has optimized profi ts by producing value-added coproducts, such as plastics and chemicals, in addition to primary liquid fuels. A similar coproduct strategy applied to biorefi neries processing cellulosic biomass to liquid fuels and/or energy would transform a technology that is marginally economic, depending on oil prices, to a sustainable business with enhanced revenue streams from multiple coproducts. The challenge is fi nding a biobased coproduct that is compatible with a biorefi nery scenario and where markets warrant its production on a similar scale as liquid fuels and/or energy. Polyhydroxyalkanoate (PHA) bioplastics represent a coproduct that would be entirely compatible with either production of liquid fuels by hydrolyzing the residual biomass after PHA extraction or by alternative thermochemical processes. PHA bioplastics possess properties making them suitable replacements for many of the applications currently served by petroleum-based plastics, thus providing tremendous market potential. Proof-of-concept technology for production of these plastics in several crops of agronomic interest has been demonstrated. In this review, we show that the potential for developing biomass-based biorefi neries producing liquid fuels and a value-added coproduct is both real and realizable. Examples using switchgrass producing PHA bioplastics as a coproduct are described.

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The Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry

Cited by 16 publications

References 13 publications

Limitations and Challenges for Wheat-Based Bioethanol Production

Limitations and Challenges for Wheat-Based Bioethanol Production

The Relative Impacts of U.S. Bio-Fuel Policies on Fuel-Energy Markets: A Comparative Static Analysis

PHA bioplastic: A value‐added coproduct for biomass biorefineries

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