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.
Filter by Category
Filter by Keywords
KDF Search Results
Ethanol production using corn grain has exploded in the Upper Midwest. This new demand for corn, and the new opportunities
for value-added processing and cattle production in rural communities, has created the best economic development
opportunity in the Corn Belt states in a generation or more. Ethanol demand has increased rapidly recently because of favorable
economics of ethanol vs. gasoline, and the need for a performance enhancer to replace MTBE (methyl tertiary-butyl ether)
For several years the Idaho National Laboratory (INL) has been developing a Decision Support System for Agriculture (DSS4Ag) which determines the economically optimum recipe of various fertilizers to apply at each site in a field to produce a crop, based on the existing soil fertility at each site, as well as historic production information and current prices of fertilizers and the forecast market price of the crop at harvest.