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Vedenov, Dmitry V.; Duffield, James A.; Wetzstein, Michael E.. |
The hypothesis underlying this analysis is that in the presence of volatile gasoline prices competitive market forces will yield alternative, less volatile fuels as substitutes. A real-option pricing approach was employed for this analysis by modeling investment under uncertainty for the case of comparing stochastic prices of substitute commodities. Based on real options, threshold decision rules were developed for the adoption of portfolio fuels such as ethanol and conventional gasoline blends. Considering this portfolio effect, the benefit-to-cost ratios are above four for the alternative blends under varying discount rates and time horizons. This provides a strong indication that consumer demand exists for these portfolio fuels. Competitive markets will... |
Tipo: Conference Paper or Presentation |
Palavras-chave: Resource /Energy Economics and Policy. |
Ano: 2005 |
URL: http://purl.umn.edu/19182 |
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Duffield, James A.; Shapouri, Hosein; Graboski, Michael S.; McCormick, Robert; Wilson, Richard. |
With environmental and energy source concerns on the rise, using agricultural fats and oils as fuel in diesel engines has captured increasing attention. Substituting petroleum diesel with biodiesel may reduce air emissions, increase the domestic supply of fuel, and create new markets for farmers. U.S. agricultural fats and oils could support a large amount of biodiesel, but high production costs and competing uses for biodiesel feedstocks will likely prevent mass adoption of biodiesel fuel. Higher-priced niche markets could develop for biodiesels as a result of environmental regulations. Biodiesel has many environmental advantages relative to petroleum diesel, such as lower CO, CO2, SOx, and particulate matter emissions. Enhancing fuel properties by... |
Tipo: Report |
Palavras-chave: Biodiesel; Biodiesel blends; Fatty acid esters; Soybean; Oil crops; Animal fats; Plant genetics; Diesel engines; Alternative fuels; Resource /Energy Economics and Policy. |
Ano: 1998 |
URL: http://purl.umn.edu/34029 |
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