distribution

This study quantifies the impact of increasing ethanol production on wholesale/retail gasoline prices employing pooled regional time-series data from January 1995 to March 2008. We find that the growth in ethanol production kept wholesale gasoline prices $0.14/gallon lower than would otherwise have been the case. The negative impact of ethanol on retail gasoline prices is found to vary considerably across regions. The Midwest region has the biggest impact at $0.28/gallon, while the Rocky Mountain region had the smallest impact at $0.07/gallon. The results also indicate that the ethanol-induced reduction in gasoline prices comes at the expense of refiners’ profits. We find a net welfare loss of $0.5 billion from the ethanol support policies in multiple markets.

The increase in oil prices has caused a concern on the dependence for fossil fuels. Different alternative fuels are being analyzed to determine whether they are feasible. Many avenues need to be searched for each alternative fuel before deciding whether the benefits outweigh the costs. One such problem that needs to be addressed is whether the transportation sector can handle such a change. A synopsis of the transportation costs are examined in this report for different types of commodities which can be used for alternative fuels.

Enhanced environmental quality, fuel security, and economic development along with reduced prices of ethanol-gasoline blends are often used as justifications for the U.S. federal excise tax exemption on ethanol fuels. However, the possible effect of increased overall consumption of fuel in response to lower total price, mitigating the environmental and fuel security benefits, are generally not considered. Taking this price response into account, the optimal U.S. ethanol subsidy is derived. Estimated values of the optimal subsidy reveal the subsidy’s environmental and security benefits are questionable. However, positive environmental and security benefits from the ethanol tax-exemption subsidy may be obtained if the subsidy is combined with an increase in the excise tax on gasoline.

The rapidly expanding biofuel industry has changed the fundamentals of U.S. agricultural commodity markets. Increasing ethanol and biodiesel production has generated a fast-growing demand for corn and soybean products, which competes with the well-established domestic livestock industry and foreign buyers. Meanwhile, the co-products of biofuel production are replacing or displacing coarse grains and oilseed meal in feed rations for livestock. These developments in the agricultural and energy markets change the distribution of domestic grains and feeds and the utilization of shipping modes, which is likely affect the prices and basis of grains and other feedstocks in spatial markets.

This article investigates ethanol and its integration into the petroleum supply chain. Recent state and federal mandates require varying levels of ethanol in reformulated gasoline (RFG) and, consequently, new complexities are being introduced into what has to this point been a streamlined petroleum supply chain. As managers and researchers work to respond effectively in this fast evolving situation, this explorative study employs a grounded theory approach (GTA) methodology and identifies five strategic priorities associated with achieving large-scale use of ethanol in RFG as a renewable energy source. The insights presented here regarding ethanol and its infusion into the petroleum supply chain provide a necessary first step in setting strategic priorities in this arena.

A method is presented, which estimates the potential for power production from agriculture residues. A GIS decision support system (DSS) has been developed, which implements the method and provides the tools to identify the geographic distribution of the economically exploited biomass potential. The procedure introduces a four level analysis to determine the
theoretical, available, technological and economically exploitable potential. The DSS handles all possible restrictions and
candidate power plants are identied using an iterative procedure that locates bioenergy units and establishes the needed cultivated area for biomass collection. Electricity production cost is used as a criterion in the identication of the sites of economically exploited biomass potential. The island of Crete is used as an example of the decision-making analysis. A signicant biomass potential exists that could be economically and competitively harvested. The main parameters that affect the location and number of bioenergy conversion facilities are plant capacity and spatial distribution of the available biomass potential.

Discussions of alternative fuel and propulsion technologies for transportation often overlook the infrastructure required to make these options practical and cost-effective. We estimate ethanol production facility locations and use a linear optimization model to consider the economic costs of distributing various ethanol fuel blends to all metropolitan areas in the United States. Fuel options include corn-based E5 (5% ethanol, 95% gasoline) to E16 from corn and switchgrass, as short-term substitutes for petroleum-based fuel. Our estimates of 1−2 cents per L of ethanol blend for downstream rail or truck transportation remain a relatively small fraction of total fuel cost. However, for even the relatively small blends of ethanol modeled, the transportation infrastructure demands would be comparably larger than the current demands of petroleum. Thus if ethanol is to be competitive in the long run, then in addition to process efficiency improvements, more efficient transportation infrastructure will need to be developed, such as pipelines. In addition to these results, national and regional policy challenges on how to pay for and optimize a new fuel and distribution infrastructure in the United States are discussed.

Supply chain management involves all of the activities in industrial organizations from raw material procurement to final product delivery to customers. The main aim in supply chain management is to satisfy production requirements, while optimizing the economic objectives. In traditional fossil fuel supply chains, huge amounts of fossil fuels are transported via pipelines or tankers with very small costs. These fuels can be transformed into other sources of energy or transportation fuels at their destination points. This supply chain structure results in creation of global energy markets and has made the fossil fuel based energy systems the dominating energy technologies in the world. Unfortunately, the consumption of fossil fuels now represents the major cause of climate change, and as a consequence, the viability of the fossil fuel supply chain is becoming increasingly questioned.

Furthermore, whilst biofuels represent a sustainable alternative, the biofuel transportation channels are not as well developed as fossil fuels, are more expensive, and may be restricted by the perishability of the raw product. Thus, the development of biofuel supply chains may introduce a move from global energy markets to locally distributed energy supply chains: local plantations transformed into biodiesel in local production facilities and –usually- consumed within the same region.

Different species have been researched by many researchers as possible sources of biofuel. Although only in use for a relativity short period, Jatropha curcas is being championed as a revolutionary biofuel feedstock thanks to its environmental, economic and social benefits. Being a very resilient seed, it can grow in land which may not be considered nutritious for most crops. It can resist drought for up to three years and can be intercropped with many staple crops such as coffee and sugar. Since it is not a food source, it doesn’t involve in the ‘food vs. fuel’ debate. It is usually found and best grows in the more economically depressed regions of the world. Plantations of Jatropha and production of biofuel can create new job opportunities and an economic resource for people living in subsistence areas and these places can greatly benefit from further development of Jatropha. However, its success will depend on construction of a successful infrastructure for its supply chain. The cultivation of the plant, the production of the biodiesel, its distribution and marketing channels are developmental challenges. Thus, according to Caniëls et al. (2007) the Jatropha supply chain is characterized by being “highly dynamic and subject to uncertainties” and is a “dynamic adaptive system”, such that “the conventional preoccupation of the bulk supply chain management studies with detailed optimization and control is not so well suited to the requirements posed by this dynamic and unpredictable situation” .