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US Biofuel Policies and Markets

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Handbook of Bioenergy Economics and Policy: Volume II

Part of the book series: Natural Resource Management and Policy ((NRMP,volume 40))

Abstract

The United States has established various policies to support a transition to biofuels from fossil fuels as part of its strategy to achieve energy security and independence. These policies include mandates, tax credits, and import tariffs aimed at developing the nascent biofuel industry. To compare the impact of various energy sources requires a comprehensive understanding of both direct and indirect effects. This chapter discusses some of the indirect effects, including land use change, fuel rebound effect, and balance of trade effect. It finds that due to the ubiquity of energy, indirect effects impact numerous markets and that an already noncompetitive energy market that is capital intensive exacerbates the challenge of introducing biofuels. While first-generation biofuels contributed to rural development and reduced dependency on imported fuel sources, they have failed to reduce GHG emissions significantly. Introduction of advanced biofuels is challenged by the blend wall in the US and high costs, there is much opportunity for them to contribute significantly to energy security but also reducing GHG emissions.

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Notes

  1. 1.

    The Energy Policy Act of 2005 is available at http://energy.gov/sites/prod/files/2013/10/f3/epact_2005.pdf.

  2. 2.

    See USDA Food Price Outlook website, available at http://www.ers.usda.gov/data-products/food-price-outlook/ (viewed: January 21, 2016).

  3. 3.

    See also Demirbas (2009).

  4. 4.

    See U.S. EPA ruling available at http://www.epa.gov/otaq/fuels/renewablefuels/index.htm.

  5. 5.

    See also Bennett et al. (2015).

  6. 6.

    See U.S. Environmental Protection Agency’s website at http://www.epa.gov/otaq/fuels/renewablefuels/regulations.htm.

  7. 7.

    The effective recovery factor used to calculate current proven reserves reflects: (i) a probability factor; (ii) prior experience in how production occurs; and (c) current resources in the play.

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Acknowledgements

This research was supported by USDA/NIFA grant number 267002.

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Authors and Affiliations

  1. Department of Agriculture, Food and Resource Economics, Rutgers University, New Brunswick, NJ, USA

    Gal Hochman & Michael Traux

  2. Department of Agricultural and Resource Economics, University of California at Berkeley, Berkeley, CA, USA

    David Zilberman

Authors
  1. Gal Hochman
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  2. Michael Traux
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  3. David Zilberman
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Correspondence to Gal Hochman .

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Editors and Affiliations

  1. Department of Agricultural and Consumer Economics, University of Illinois at Urbana-Champaign, Urbana, Illinois, USA

    Madhu Khanna

  2. Department of Agricultural and Resource Economics, University of California at Berkeley, Berkeley, California, USA

    David Zilberman

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Hochman, G., Traux, M., Zilberman, D. (2017). US Biofuel Policies and Markets. In: Khanna, M., Zilberman, D. (eds) Handbook of Bioenergy Economics and Policy: Volume II. Natural Resource Management and Policy, vol 40. Springer, New York, NY. https://doi.org/10.1007/978-1-4939-6906-7_2

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