Georgetown University LogoGeorgetown University Library LogoDigitalGeorgetown Home
    • Login
    View Item 
    •   DigitalGeorgetown Home
    • Georgetown University Institutional Repository
    • McCourt School of Public Policy
    • Graduate Theses and Dissertations - Public Policy
    • View Item
    •   DigitalGeorgetown Home
    • Georgetown University Institutional Repository
    • McCourt School of Public Policy
    • Graduate Theses and Dissertations - Public Policy
    • View Item
    JavaScript is disabled for your browser. Some features of this site may not work without it.

    Does the U.S. Biofuels Mandate Increase the Price at the Pump?

    Cover for Does the U.S. Biofuels Mandate Increase the Price at the Pump?
    View/Open
    View/Open: Bolotin_georgetown_0076M_12714.pdf (944kB) Bookview

    Creator
    Bolotin, Stephen
    Advisor
    Jensen, Micah
    Abstract
    The Renewable Fuel Standard (RFS) as amended by the Energy Independence and Security Act of 2007 created a federal mandate for blending conventional biofuels like corn-based ethanol and advanced biofuels like biodiesel and renewable gasoline into the United States transportation fuel supply. The RFS established yearly blending standards for the obligated parties--refiners and importers of petroleum products--that increase progressively until reaching a high of 36 billion gallons by 2022. Each ethanol-equivalent gallon of biofuel blended is assigned a unique Renewable Identification Number (RIN) through the Environmental Protection Agency's (EPA) Moderated Transaction System (EMTS). At year's close, obligated parties must submit their allotted RIN obligations to the EPA to demonstrate compliance. In the case of under-compliance or over-compliance, RINs can be traded between obligated parties freely through the EMTS or carried over for use in the next year. It follows, then, that a RIN carries a market value reflective of the cost of complying with RFS regulations. Indeed, most biofuels cost more than their fossil-based equivalents. When the price of a corn ethanol RIN went from 2-3 cents each in 2012 to nearly $1.50 in July of 2013 due to a perceived shortage in corn ethanol RINs, obligated parties faced the prospect of multimillion-dollar compliance cost increases. Arguing that RFS makes fuel significantly more expensive for consumers, petroleum companies have begun to advocate for the full repeal of the RFS, winning over some allies in Congress. The future of this program is uncertain. In an attempt to quantify the concerns of RFS critics, this thesis estimated the effect that RIN prices have on the wholesale cost of diesel fuel. Using daily price data from January 2011 through August of 2013 on RINs and crude oil, I specified twelve OLS regression models that predict the passthrough of the diesel RIN price to wholesale diesel price. My statistical analysis suggests that the diesel RIN price is a useful predictor of wholesale diesel price; however, my analysis also casts some doubt on the claims of obligated parties that they pass the cost of compliance onto the consumer, thereby increasing fuel prices significantly.
    Description
    M.P.P.
    Permanent Link
    http://hdl.handle.net/10822/760918
    Date Published
    2014
    Subject
    advanced biofuel; bioenergy; biofuel; generation biofuel; Renewable Fuel Standard; RFS; Public policy; Power resources; Environmental economics; Public policy; Energy; Environmental economics;
    Type
    thesis
    Collections
    • Graduate Theses and Dissertations - Public Policy
    Metadata
    Show full item record

    Related items

    Showing items related by title, author, creator and subject.

    • Cover for Does EU's Energy Dependence on Russia Increase Price Volatility for Consumers?

      Does EU's Energy Dependence on Russia Increase Price Volatility for Consumers? 

      Yekeler, Zeynep (Georgetown University, 2016)
      Europe’s dependence on natural gas imports from Russia has raised questions about energy risk and the vulnerability of the European countries, especially after the supply cuts in 2006, 2008, 2009, and 2012. The implementation ...
    Related Items in Google Scholar

    Georgetown University Seal
    ©2009 - 2019 Georgetown University Library
    37th & O Streets NW
    Washington DC 20057-1174
    202.687.7385
    digitalscholarship@georgetown.edu
    Accessibility
     

     

    Browse

    All of DigitalGeorgetownCommunities & CollectionsCreatorsTitlesBy Creation DateThis CollectionCreatorsTitlesBy Creation Date

    My Account

    Login

    Statistics

    View Usage Statistics

    Georgetown University Seal
    ©2009 - 2019 Georgetown University Library
    37th & O Streets NW
    Washington DC 20057-1174
    202.687.7385
    digitalscholarship@georgetown.edu
    Accessibility