Fuel ethanol as an octane enhancer in the US gasoline market: potential demand and policy considerations
This study estimates potential demand for fuel ethanol as an octane enhancer in the US gasoline market and addresses the policy issues related to its production and use. A parametric linear-programming model is used to achieve the study objective. In this model, the cost of providing gasoline refineries with octane requirements is minimized subject to regional octane needs and supply-capacity constraints. Principal findings of the study include: lead phasedown regulations provide an opportunity for US corn-based fuel ethanol to play an important role as a gasoline octane enhancer. Ethanol can fill part of gasoline's octane requirements, but it will require a subsidy of $0.30-0.45 per gallon in most cases. Without this subsidy, US ethanol would not be able to compete with other octane alternatives. When these subsidy conditions are met, US corn-based ethanol faces a potential octane market of 1 to 2.5 billion gallons annually over the next few years. Oil and corn prices both bear importantly on the level of ethanol demand and the subsidy level required for domestic ethanol to compete with other octane enhancers. Imported ethanol from Brazil is more competitive than US ethanol. An import tariff of $0.30 per gallon Brazilian ethanol is sufficient to exclude its use in the US, assuming it does not benefit from any type of subsidy provided for domestic ethanol.
- Research Organization:
- Ohio State Univ., Columbus (USA)
- OSTI ID:
- 7229181
- Resource Relation:
- Other Information: Thesis (Ph. D.)
- Country of Publication:
- United States
- Language:
- English
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Related Subjects
33 ADVANCED PROPULSION SYSTEMS
29 ENERGY PLANNING
POLICY AND ECONOMY
ETHANOL FUELS
DEMAND FACTORS
GASOLINE
MARKET
ENERGY POLICY
OCTANE
SOCIO-ECONOMIC FACTORS
SUBSIDIES
TARIFFS
ALCOHOL FUELS
ALKANES
FINANCIAL INCENTIVES
FUELS
GOVERNMENT POLICIES
HYDROCARBONS
INSTITUTIONAL FACTORS
LIQUID FUELS
ORGANIC COMPOUNDS
PETROLEUM PRODUCTS
SYNTHETIC FUELS
090200* - Alcohol Fuels- (-1989)
330800 - Emission Control- Alternative Fuels
299003 - Energy Planning & Policy- Unconventional Sources & Power Generation- Other- (-1989)
290200 - Energy Planning & Policy- Economics & Sociology