RFS Compliance: Death Spiral or Investment in E85?

Bruce Babcock and Sebastien Pouliot ()

Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University

Abstract: The American Petroleum Institute (API) commissioned NERA Economic Consulting to study "the economics and compliance issues related to the implementation of the Renewable Fuel Standard (RFS2)." NERA's October 2012 report finds that ethanol and biodiesel blend walls create insurmountable barriers to the amount of biofuels that can be consumed in the United States. Once these blend walls are hit, producers of gasoline and diesel will only be able to comply with biofuel blending mandates by reducing domestic sales of gasoline and diesel. NERA argues that such cuts will make it even more difficult to meet blending mandates in subsequent years, thus leading to further reductions in gasoline and diesel sales. This series of fuel sales reductions leads to an upward "death spiral" in fuel prices, with severe harm to the US economy.

Date: 2013-11
New Economics Papers: this item is included in nep-ene
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
https://www.card.iastate.edu/products/publications/pdf/13pb16.pdf Full Text (application/pdf)
https://www.card.iastate.edu/products/publications/synopsis/?p=1214 Online Synopsis (text/html)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ias:cpaper:13-pb16

Access Statistics for this paper

More papers in Center for Agricultural and Rural Development (CARD) Publications from Center for Agricultural and Rural Development (CARD) at Iowa State University Contact information at EDIRC.
Bibliographic data for series maintained by ().