Contact: Nick Houtman, Dept. of Public Affairs, 207-581-3777, [email protected].
Jonathan Rubin, Margaret Chase Smith Center, 207-581-1528, [email protected].
Paul Leiby, Oak Ridge National Laboratory, 423-574-7720.
Note: This story can also be seen at http://www.umaine.edu/mainesci/Archives/ResEconomics/Alternative%20Fuel.htm.
ALTERNATIVE FUEL VEHICLES
WON'T BE COMMON ON U.S. ROADS ANY TIME SOON
Market costs are likely to make vehicles that are powered by fuels other than gasoline too expensive for most consumers for the next decade, according to a report co-authored by Jonathan Rubin, a University of Maine resource economist. Rubin is a policy analyst in UMaine's Margaret Chase Smith Center for Public policy and collaborates with Paul Leiby, a researcher at the Oak Ridge National Laboratory (ORNL) in Tennessee.
Rubin is also an assistant professor in the UMaine Department of Resource Economics and Policy and member of National Research Council subcommittees on energy conservation and alternative fuels.
Alternative fuels include compressed natural gas, methanol from natural gas, propane from petroleum and ethanol from biomass such as corn or wood chips. The report by Rubin and Leiby does not cover hybrid gasoline/electric vehicles or hydrogen producing fuel cell technology.
"Proposals that the nation adopt alternative fuels often don't consider the market costs involved in a transition to a new system," says Rubin. "It's not enough to say that the technology works, or that it would be economical if they were mature and widely available. We also have to show that it's economical during the transition phase. Our model calculates those costs, such as the capital cost of establishing a new retail infrastructure for alternative fuels, and estimates market penetration."
The model predicts that, for the period 1996 to 2010, less than one percent of transportation related oil use will be replaced by alternatives, unless oil price increases are sustained for a period of years or the federal government pursues more aggressive policies than those currently in-place.
The model is known as the Transitional Alternative Fuels and Vehicles Model and was used to generate a report for the Department of Energy in 1999.
It's possible that rising gasoline prices could promote the production of alternative fuel vehicles, Rubin adds, but to have a significant impact, prices would have to rise at least 50 cents per gallon and be sustained for years.
Rubin and Leiby have received support to refine their model by incorporating hybrid vehicles and extending their analysis to 2020. In a related project, Rubin, Leiby and Mark Delucchi of the University of California, Davis, are evaluating changes in cropping patterns and market impacts related to a large shift to corn-based ethanol production.
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