[go: up one dir, main page]
IDEAS home Printed from https://ideas.repec.org/a/gam/jeners/v16y2022i1p428-d1020118.html
   My bibliography  Save this article

Review of the Impact of Biofuels on U.S. Retail Gasoline Prices

Author

Listed:
  • Karel Janda

    (Faculty of Finance and Accounting, Prague University of Economics and Business, 11000 Prague, Czech Republic)

  • Eva Michalikova

    (Faculty of Business and Management, Brno University of Technology, 60190 Brno, Czech Republic)

  • Luiz Célio Souza Rocha

    (Management Department, Federal Institute of Education, Science and Technology—North of Minas Gerais, Almenara 39900-000, Brazil)

  • Paulo Rotella Junior

    (Faculty of Finance and Accounting, Prague University of Economics and Business, 11000 Prague, Czech Republic
    Department of Production Engineering, Federal University of Paraíba, João Pessoa 58051-900, Brazil)

  • Barbora Schererova

    (Faculty of Finance and Accounting, Prague University of Economics and Business, 11000 Prague, Czech Republic)

  • David Zilberman

    (Department of Agricultural and Resource Economics, University of California, Berkeley, CA 94720, USA)

Abstract
This study aims to provide a review of the state-of-the-art literature regarding the impacts and contributions of corn ethanol on retail gasoline prices in the US. For this, a systematic literature review following PRISMA statement was carried out, seeking to answer four research questions: (1) What are the main characteristics of the literature regarding the impact and contributions of ethanol on US retail gasoline prices? (2) What are the main article clusters identified in the evaluated literature? (3) What was the numerical impact of the Volumetric Ethanol Excise Tax Credit/Renewable Fuel Standard (VEETC/RFS) mandate on the price of gasoline and what are the main methods used for calculation in the literature? (4) What are the main trends and possibly new research directions for this literature? As a result of the characterization of the sample, driving themes, such as energy policy, costs, price dynamics, trade and energy market, were identified. Furthermore, three main clusters were identified in the sample: (i) impacts of biofuels on commodity prices and general price dynamics; (ii) impacts of public policies on the implementation of ethanol and flexibility in formulating fuel blends; and (iii) impact of biofuels on environmental aspects. As a practical implication, the prevailing result in the analyzed literature is that the addition of ethanol reduces the price of gasoline at the pump, and estimates range from no effect to nearly 10% off the price of gasoline. Finally, the topic on the impacts of biofuels on commodity prices and on the general dynamics of prices is the most relevant research line and the trend suggested by the proposed research agenda.

Suggested Citation

  • Karel Janda & Eva Michalikova & Luiz Célio Souza Rocha & Paulo Rotella Junior & Barbora Schererova & David Zilberman, 2022. "Review of the Impact of Biofuels on U.S. Retail Gasoline Prices," Energies, MDPI, vol. 16(1), pages 1-21, December.
    • Handle: RePEc:gam:jeners:v:16:y:2022:i:1:p:428-:d:1020118
    as

    Download full text from publisher

    File URL: https://www.mdpi.com/1996-1073/16/1/428/pdf
    Download Restriction: no
    File URL: https://www.mdpi.com/1996-1073/16/1/428/
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Christensen, Adam & Siddiqui, Sauleh, 2015. "Fuel price impacts and compliance costs associated with the Renewable Fuel Standard (RFS)," Energy Policy, Elsevier, vol. 86(C), pages 614-624.
    2. Aria, Massimo & Cuccurullo, Corrado, 2017. "bibliometrix: An R-tool for comprehensive science mapping analysis," Journal of Informetrics, Elsevier, vol. 11(4), pages 959-975.
    3. Antonio M. Bento, Richard Klotz, and Joel R. Landry, 2015. "Are there Carbon Savings from US Biofuel Policies? The Critical Importance of Accounting for Leakage in Land and Fuel Markets," The Energy Journal, International Association for Energy Economics, vol. 0(Number 3).
    4. Gal Hochman & David Zilberman, 2018. "Corn Ethanol and U.S. Biofuel Policy 10 Years Later: A Quantitative Assessment," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(2), pages 570-584.
    5. Thompson, Wyatt & Whistance, Jarrett & Meyer, Seth, 2011. "Effects of US biofuel policies on US and world petroleum product markets with consequences for greenhouse gas emissions," Energy Policy, Elsevier, vol. 39(9), pages 5509-5518, September.
    6. McPhail, Lihong Lu & Babcock, Bruce A., 2012. "Impact of US biofuel policy on US corn and gasoline price variability," Energy, Elsevier, vol. 37(1), pages 505-513.
    7. Xiaoguang Chen & Haixiao Huang & Madhu Khanna & Hayri Önal, 2011. "Meeting the Mandate for Biofuels: Implications for Land Use, Food, and Fuel Prices," NBER Chapters, in: The Intended and Unintended Effects of US Agricultural and Biotechnology Policies, pages 223-267, National Bureau of Economic Research, Inc.
    8. Rajagopal, Deepak & Zilberman, David, 2008. "Environmental, Economic and Policy Aspects of Biofuels," Foundations and Trends(R) in Microeconomics, now publishers, vol. 4(5), pages 353-468, October.
    9. Du, Xiaodong & Hayes, Dermot J., 2009. "The impact of ethanol production on US and regional gasoline markets," Energy Policy, Elsevier, vol. 37(8), pages 3227-3234, August.
    10. Gabriel E Lade & C -Y Cynthia Lin Lawell & Aaron Smith, 2018. "Policy Shocks and Market-Based Regulations: Evidence from the Renewable Fuel Standard," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 100(3), pages 707-731.
    11. Sébastien Pouliot & Bruce A. Babcock, 2016. "Compliance Path and Impact of Ethanol Mandates on Retail Fuel Market in the Short Run," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 98(3), pages 744-764.
    12. Rajagopal, D. & Plevin, Richard J., 2013. "Implications of market-mediated emissions and uncertainty for biofuel policies," Energy Policy, Elsevier, vol. 56(C), pages 75-82.
    13. Piroli, Giuseppe & Ciaian, Pavel & Kancs, d'Artis, 2012. "Land use change impacts of biofuels: Near-VAR evidence from the US," Ecological Economics, Elsevier, vol. 84(C), pages 98-109.
    14. Gabriel E. Lade & James Bushnell, 2019. "Fuel Subsidy Pass-Through and Market Structure: Evidence from the Renewable Fuel Standard," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 6(3), pages 563-592.
    15. Rajagapol, Deepak & Sexton, Steven & Hochman, Gal & Roland-Holst, David & Zilberman, David D, 2009. "Model estimates food-versus-biofuel trade-off," Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series qt41k1w82x, Department of Agricultural & Resource Economics, UC Berkeley.
    16. Jarrett Whistance & Wyatt W. Thompson & Seth D. Meyer, 2010. "Ethanol Policy Effects on U.S. Natural Gas Prices and Quantities," American Economic Review, American Economic Association, vol. 100(2), pages 178-182, May.
    17. Koto, Prosper Senyo, 2015. "Are retail prices of ethanol, gasoline and natural gas in the midwest cointegrated? An asymmetric threshold cointegration analysis," Journal of Economics and Business, Elsevier, vol. 77(C), pages 79-93.
    18. Perianes-Rodriguez, Antonio & Waltman, Ludo & van Eck, Nees Jan, 2016. "Constructing bibliometric networks: A comparison between full and fractional counting," Journal of Informetrics, Elsevier, vol. 10(4), pages 1178-1195.
    19. Paulo Rotella Junior & Luiz Célio Souza Rocha & Sandra Naomi Morioka & Ivan Bolis & Gianfranco Chicco & Andrea Mazza & Karel Janda, 2021. "Economic Analysis of the Investments in Battery Energy Storage Systems: Review and Current Perspectives," Energies, MDPI, vol. 14(9), pages 1-29, April.
    20. Westbrook, Jessica & Barter, Garrett E. & Manley, Dawn K. & West, Todd H., 2014. "A parametric analysis of future ethanol use in the light-duty transportation sector: Can the US meet its Renewable Fuel Standard goals without an enforcement mechanism?," Energy Policy, Elsevier, vol. 65(C), pages 419-431.
    21. Nees Jan Eck & Ludo Waltman, 2010. "Software survey: VOSviewer, a computer program for bibliometric mapping," Scientometrics, Springer;Akadémiai Kiadó, vol. 84(2), pages 523-538, August.
    22. Dong Hee Suh, 2019. "Interfuel substitution effects of biofuel use on carbon dioxide emissions: evidence from the transportation sector," Applied Economics, Taylor & Francis Journals, vol. 51(31), pages 3413-3422, July.
    23. Xiaodong Du & Dermot J. Hayes, 2008. "Impact of Ethanol Production on U.S. and Regional Gasoline Prices and on the Profitability of the U.S. Oil Refinery Industry, The," Center for Agricultural and Rural Development (CARD) Publications 08-wp467, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    24. McPhail, Lihong Lu, 2011. "Assessing the impact of US ethanol on fossil fuel markets: A structural VAR approach," Energy Economics, Elsevier, vol. 33(6), pages 1177-1185.
    25. Gardner Bruce, 2007. "Fuel Ethanol Subsidies and Farm Price Support," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(2), pages 1-22, December.
    26. Valentina Della Corte & Giovanna Del Gaudio & Fabiana Sepe & Fabiana Sciarelli, 2019. "Sustainable Tourism in the Open Innovation Realm: A Bibliometric Analysis," Sustainability, MDPI, vol. 11(21), pages 1-18, November.
    27. Rômulo de Oliveira Azevêdo & Paulo Rotela Junior & Luiz Célio Souza Rocha & Gianfranco Chicco & Giancarlo Aquila & Rogério Santana Peruchi, 2020. "Identification and Analysis of Impact Factors on the Economic Feasibility of Photovoltaic Energy Investments," Sustainability, MDPI, vol. 12(17), pages 1-40, September.
    28. JunJie Wu & Christian Langpap, 2015. "The Price and Welfare Effects of Biofuel Mandates and Subsidies," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 62(1), pages 35-57, September.
    29. David Moher & Alessandro Liberati & Jennifer Tetzlaff & Douglas G Altman & The PRISMA Group, 2009. "Preferred Reporting Items for Systematic Reviews and Meta-Analyses: The PRISMA Statement," PLOS Medicine, Public Library of Science, vol. 6(7), pages 1-6, July.
    30. Burkhardt, Jesse, 2019. "The impact of the Renewable Fuel Standard on US oil refineries," Energy Policy, Elsevier, vol. 130(C), pages 429-437.
    31. Arthur Leandro Guerra Pires & Paulo Rotella Junior & Sandra Naomi Morioka & Luiz Célio Souza Rocha & Ivan Bolis, 2021. "Main Trends and Criteria Adopted in Economic Feasibility Studies of Offshore Wind Energy: A Systematic Literature Review," Energies, MDPI, vol. 15(1), pages 1-24, December.
    32. Ghoddusi, Hamed, 2017. "Price risks for biofuel producers in a deregulated market," Renewable Energy, Elsevier, vol. 114(PB), pages 394-407.
    33. Whistance, Jarrett & Thompson, Wyatt, 2010. "How does increased corn-ethanol production affect US natural gas prices?," Energy Policy, Elsevier, vol. 38(5), pages 2315-2325, May.
    34. Jarrett Whistance & Wyatt Thompson, 2014. "A Critical Assessment of RIN Price Behavior and the Implications for Corn, Ethanol, and Gasoline Price Relationships," Applied Economic Perspectives and Policy, Agricultural and Applied Economics Association, vol. 36(4), pages 623-642.
    35. Madhu Khanna & Christine L. Crago, 2012. "Measuring Indirect Land Use Change with Biofuels: Implications for Policy," Annual Review of Resource Economics, Annual Reviews, vol. 4(1), pages 161-184, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Whistance, Jarrett & Thompson, Wyatt, 2014. "The role of CAFE standards and alternative-fuel vehicle production credits in U.S. biofuels markets," Energy Policy, Elsevier, vol. 74(C), pages 147-157.
    2. Philip Abbott, 2014. "Biofuels, Binding Constraints, and Agricultural Commodity Price Volatility," NBER Chapters, in: The Economics of Food Price Volatility, pages 91-131, National Bureau of Economic Research, Inc.
    3. Anna Manuella Melo Nunes & Luiz Moreira Coelho Junior & Raphael Abrahão & Edvaldo Pereira Santos Júnior & Flávio José Simioni & Paulo Rotella Junior & Luiz Célio Souza Rocha, 2023. "Public Policies for Renewable Energy: A Review of the Perspectives for a Circular Economy," Energies, MDPI, vol. 16(1), pages 1-28, January.
    4. Thompson, Wyatt & Whistance, Jarrett & Meyer, Seth, 2011. "Effects of US biofuel policies on US and world petroleum product markets with consequences for greenhouse gas emissions," Energy Policy, Elsevier, vol. 39(9), pages 5509-5518, September.
    5. Christopher R. Knittel and Aaron Smith, 2015. "Ethanol Production and Gasoline Prices: A Spurious Correlation," The Energy Journal, International Association for Energy Economics, vol. 0(Number 1).
    6. Vuong, Quan-Hoang & Huyen, Nguyen Thanh Thanh & Pham, Thanh-Hang & Phuong, Luong Anh & Nguyen, Minh-Hoang, 2020. "Mapping the intellectual and conceptual structure of research on gender issues in the family business: A bibliometric review," OSF Preprints jgnrw, Center for Open Science.
    7. Natanelov, Valeri & McKenzie, Andrew M. & Van Huylenbroeck, Guido, 2013. "Crude oil–corn–ethanol – nexus: A contextual approach," Energy Policy, Elsevier, vol. 63(C), pages 504-513.
    8. Christina Korting & Harry de Gorter & David R Just, 2019. "Who Will Pay for Increasing Biofuel Mandates? Incidence of the Renewable Fuel Standard Given a Binding Blend Wall," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 101(2), pages 492-506.
    9. Abdulaziz I. Almulhim & Simon Elias Bibri & Ayyoob Sharifi & Shakil Ahmad & Khalid Mohammed Almatar, 2022. "Emerging Trends and Knowledge Structures of Urbanization and Environmental Sustainability: A Regional Perspective," Sustainability, MDPI, vol. 14(20), pages 1-23, October.
    10. Britz, Wolfgang & Li, Jingwen & Shang, Linmei, 2021. "Combining large-scale sensitivity analysis in Computable General Equilibrium models with Machine Learning: An Example Application to policy supporting the bio-economy," Conference papers 333285, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    11. Hull, Simon Antony, 2024. "All for one and one for all? Exploring the nexus of land administration, land management and land governance," Land Use Policy, Elsevier, vol. 144(C).
    12. Peter Maniloff, 2013. "Ethanol and Energy Security," Working Papers 2013-10, Colorado School of Mines, Division of Economics and Business.
    13. Toshiyuki Hasumi & Mei-Shiu Chiu, 2022. "Online mathematics education as bio-eco-techno process: bibliometric analysis using co-authorship and bibliographic coupling," Scientometrics, Springer;Akadémiai Kiadó, vol. 127(8), pages 4631-4654, August.
    14. Marcelo Werneck Barbosa, 2022. "A Critical Appraisal of Review Studies in Circular Economy: a Tertiary Study," Circular Economy and Sustainability, Springer, vol. 2(2), pages 473-505, June.
    15. An, Henry & Qiu, Feng & Rude, James, 2021. "Volatility spillovers between food and fuel markets: Do administrative regulations affect the transmission?," Economic Modelling, Elsevier, vol. 102(C).
    16. Guangyong Zhang & Lixin Tian & Wenbin Zhang & Xu Yan & Bingyue Wan & Zaili Zhen, 2020. "A Study on the Similarities and Differences of the Conventional Gasoline Spot Price Fluctuation Network between Different Harbors," Sustainability, MDPI, vol. 12(2), pages 1-25, January.
    17. Thompson, Wyatt & Meyer, Seth D. & Westhoff, Patrick C., 2010. "Us Biofuel And Climate Policies Duel Over Cellulosic Biomass," 2010: Climate Change in World Agriculture: Mitigation, Adaptation, Trade and Food Security, June 2010, Stuttgart-Hohenheim, Germany 91404, International Agricultural Trade Research Consortium.
    18. Jiang, Jingze & Marsh, Thomas L. & Tozer, Peter R., 2015. "Policy induced price volatility transmission: Linking the U.S. crude oil, corn and plastics markets," Energy Economics, Elsevier, vol. 52(PA), pages 217-227.
    19. Sharma, Wamika & Lim, Weng Marc & Kumar, Satish & Verma, Aastha & Kumra, Rajeev, 2024. "Game on! A state-of-the-art overview of doing business with gamification," Technological Forecasting and Social Change, Elsevier, vol. 198(C).
    20. Andrea Caputo & Mariya Kargina, 2022. "A user-friendly method to merge Scopus and Web of Science data during bibliometric analysis," Journal of Marketing Analytics, Palgrave Macmillan, vol. 10(1), pages 82-88, March.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:gam:jeners:v:16:y:2022:i:1:p:428-:d:1020118. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: MDPI Indexing Manager (email available below). General contact details of provider: https://www.mdpi.com .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.