Effects of Increased Biofuels on the U.S. Economy in 2022
AbstractAchieving greater energy security by reducing dependence on foreign petroleum is a goal of U.S. energy policy. The Energy Independence and Security Act of 2007 (EISA) calls for a Renewable Fuel Standard (RFS-2), which mandates that the United States increase the volume of biofuel that is blended into transportation fuel from 9 billion gallons in 2008 to 36 billion gallons by 2022. Long-term technological advances are needed to meet this mandate. This report examines how meeting the RFS-2 would affect various key components of the U.S. economy. If biofuel production advances with cost-reducing technology and petroleum prices continue to rise as projected, the RFS-2 could provide economywide benefits. However, the actual level of benefits (or costs) to the U.S. economy depends importantly on future oil prices and whether tax credits are retained in 2022. If oil prices stabilize or decline from current levels and tax credits are retained, then benefits to the economy would diminish.
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Bibliographic InfoPaper provided by United States Department of Agriculture, Economic Research Service in its series Economic Research Report with number 96758.
Date of creation: Oct 2010
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Bioenergy; economywide; ethanol; petroleum; trade; macroeconomic factors; RFS-2; Resource /Energy Economics and Policy;
This paper has been announced in the following NEP Reports:
- NEP-AGR-2010-12-04 (Agricultural Economics)
- NEP-ALL-2010-12-04 (All new papers)
- NEP-ENE-2010-12-04 (Energy Economics)
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