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Cheaper Fuels for the Light-Duty Fleet: Opportunities and Barriers

Author

Listed:
  • Fraas, Arthur G.

    (Resources for the Future)

  • Harrington, Winston

    (Resources for the Future)

  • Morgenstern, Richard D.

    (Resources for the Future)

Abstract

The shale gas revolution in the United States has dropped the price of natural gas (NG) significantly. Combined with new fuel and vehicle technologies, an opportunity exists to expand the use of NG throughout the economy, including in the light-duty fleet of cars and trucks. This expansion could involve the direct combustion of the gas in the form of compressed natural gas or liquid petroleum gas or, alternatively, the use of natural-gas-based liquid fuels such as ethanol or methanol. This paper examines the potential economic, environmental, and national security gains from replacing a portion of the domestic gasoline use in the light-duty fleet with these various NG-based fuels. Also examined are the regulatory barriers to the expanded use of the fuels. We find that these NG-based fuels could yield significant fuel cost savings relative to conventional gasoline in the light-duty fleet, along with gains to national security and, possibly, some environmental benefits.

Suggested Citation

  • Fraas, Arthur G. & Harrington, Winston & Morgenstern, Richard D., 2013. "Cheaper Fuels for the Light-Duty Fleet: Opportunities and Barriers," RFF Working Paper Series dp-13-28, Resources for the Future.
    • Handle: RePEc:rff:dpaper:dp-13-28
    as

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    File URL: http://www.rff.org/RFF/documents/RFF-DP-13-28.pdf
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    References listed on IDEAS

    as
    1. Hamilton, James D., 2011. "Nonlinearities And The Macroeconomic Effects Of Oil Prices," Macroeconomic Dynamics, Cambridge University Press, vol. 15(S3), pages 364-378, November.
    2. Soren T. Anderson & James M. Sallee, 2011. "Using Loopholes to Reveal the Marginal Cost of Regulation: The Case of Fuel-Economy Standards," American Economic Review, American Economic Association, vol. 101(4), pages 1375-1409, June.
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    More about this item

    Keywords

    energy; natural gas; alternative fuels;
    All these keywords.

    JEL classification:

    • Q42 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Alternative Energy Sources
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy
    • Q53 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Air Pollution; Water Pollution; Noise; Hazardous Waste; Solid Waste; Recycling
    • Q55 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Environmental Economics - - - Environmental Economics: Technological Innovation

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