Some Long-Run Effects of Growing Markets and Renewable Fuel Standards on Additives Markets and the U.S. Ethanol Industry
The effects of likely regulatory and policy changes in the US gasoline and additives market are compared to a reference baseline. The baseline reflects existing EPA policies about fuel quality regulation and likely petroleum and gasoline expansions. The market and welfare effects are presented for implementing a renewable fuel standard; imposing a national ban on the additive MTBE; and removing the oxygen standard for reformulated fuel. Market and welfare estimates are based on adjusting product market demands and factor supplies. Product market and price analyses include quality-differentiated products, such as refinery gasoline, chemical additives and ethanol at the wholesale level; and gasoline grades in conventional, reformulated and oxygenated markets at the retail level. Factor market analyses include supplies for petroleum, natural gas byproducts, and corn. The analysis includes the welfare cost of fuel to consumers and income in agriculture and the petroleum sector.
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|Date of creation:||01 Sep 2003|
|Publication status:||Published in Journal of Policy Modeling, September 2003, vol. 25, pp. 585-608|
|Contact details of provider:|| Postal: Iowa State University, Dept. of Economics, 260 Heady Hall, Ames, IA 50011-1070|
Phone: +1 515.294.6741
Fax: +1 515.294.0221
Web page: http://www.econ.iastate.edu
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