New Look at Ethanol Market Penetration: Rates, Benefits, and Opportunities

Ethanol can play a significant role in reducing petroleum dependency and providing environmental benefits in the neaer future, through expanding its role in the fuel additive market. Ethanol has been a commercial success as a reformulated gasoline additive, a winter fuel oxygenate, and octane enhancer, and a fuel extender in U.S. markets for years. New air quality programs have expanded ethanolopportunities around the world. These expanding markets offer ethanol producers a high value for their commodity, facilitating the expansion of ethanol producers and new market development for biomass-ethanol technologies. Estimates of ethanol breakeven prices for various market uses will display the value of ethanol in different uses. The fuel additive market can provide larger environmentalbenefits and contribute to larger amounts of petroleum displacement than the neat fuel market. A market equilibrium model is used to estimate ethanol penetration in the U.S. gasoline marketplace as a fuel additive and as a neat fuel. Results of this analysis will include: national equilibrium ethanol prices, ethanol quantities sold for additives and neat fuels, feedstock demand and prices infuture years, air quality and economic benefits, consumer savings, and more. Some sensitivity analysis of different petroleum and MTBE price forecasts will also be examined.