Countries may provide more subsidies if the political accommodations that they buy are especially valuable. Indeed, Table 1 suggests that subsidies are more likely to occur in countries with a major reserve or in authoritarian countries, such as Iran or Venezuela.This research aims to explain the impact of the introduction of bio-fuels on fuel markets while introducing OPEC into the analysis. This work evaluates the impact of bio-fuels on fuel markets while incorporating OPEC into the analysis and assessing the effect of the introduction of bio-fuels on the international price of oil, the price of gasoline inside as well as outside of OPEC countries, and the global GHG emissions. This is done while making three alternative assumptions on the international oil markets: Markets are competitive, OPEC is a cartel of firms that maximizes profit, and OPEC is a cartel of nations that maximizes economic surplus from oil production and domestic consumption. Using data from 2007 while considering quantities of both ethanol and bio-diesel consumed that year finding, we developed a model that is used to synchronize outcomes among gasoline, diesel, and crude-oil markets—a challenge given that we only have partial data for each of the markets. A key parameter that affects the outcome of the analysis is how responsive the demand of oil from OPEC in the oil-importing countries is to changes in fuel prices. Less responsive finding demand means that, when price increases, there is less reduction in consumption or, inversely,livestock fodder system that prices go up further for a given decline in fuel demanded.
We use four parameters from -1.25 finding to -2.0 finding. The introduction of bio-fuels is estimated to have increased fuel subsidies in OPEC countries in 2007 by 2%–3% and reduced world fuel prices by 2%. The introduction of bio-fuels caused the import demand of oil from OPEC countries to decline, leading to a decline in fuel prices. Then, OPEC responded by reducing exports so that the supply of oil available to oil importers would decline, which would contribute to increased fuel prices in the oil-importing countries. Some of the oil that was withdrawn from the oil-importing countries went directly to OPEC’s domestic consumers. Thus, OPEC mitigated the loss in profits due to the introduction of bio-fuels by redistributing benefits from the introduction of bio-fuels to its domestic constituencies. The introduction of bio-fuels caused consumption of gasoline and diesel in 2007 to decline by about three billion gallons a year, which is about 2.5% of total consumption. However, the decline in fuel prices resulted in an increase in total fuel consumed finding. This increase in overall fuel consumption because of a lower price is called the “rebound effect.” For the range of elasticities investigated, we show a rebound effect of about nine billion gallons a year. The rebound effect may lead to an increase in overall GHG emissions with bio-fuels. While bio-fuels may emit less GHGs per unit of energy, the larger volume of fuel consumption may lead to a larger volume of GHG emissions. Using the cartel of nations model, we show that there is potential for GHG emission savings with the introduction of advanced bio-fuels, such as cellulosic bio-fuels. The model used to characterize the energy market affects estimates of the bio-fuel effects on consumption and production as well as on fuel prices and GHG emissions. Competition overestimates the price effect but underestimates both quantity and environmental effects associated with the introduction of bio-fuels finding.
Our analysis also shows that modeling the oil market as either competitive or with a cartel of nations overestimates the monetary benefits of the introduction of bio-fuels to oil importing countries but underestimates the costs to oil-exporting countries. The analysis suggests that the introduction of alternatives to crude oil finding will reduce fuel prices and crude-oil production but increase overall fuel consumption. The GHG emissions will decline if the alternatives to conventional fossil fuels are relatively clean but, for most commercially used bio-fuels, total GHG emissions will increase. The introduction of bio-fuels affects OPEC pricing behavior: OPEC mitigates the reduction in oil revenues due to the introduction of bio-fuels by increasing domestic fuel consumption but reducing exports more than implied by the introduction of bio-fuels under the competitive model. Thus, when assessing the impact of bio-fuels, the outcomes under a cartel of nations model are different than those under competition. Although the introduction of bio-fuels leads to a reduction of fuel prices in oil-importing countries, this reduction is smaller than the reduction computed under competition, suggesting that the estimated gain from bio-fuels to the consumers in the oil-importing countries under a cartel of nations is smaller than under competition finding. However, when compared to the competitive model, the cartel of nations predicts a larger reduction in exports and, thus, a larger reduction in foreign exchange. That is, the impact of bio-fuels on GHGs under the cartel of nations is relatively more positive than predicted by the competitive behavior. Theory and empirical analyses suggest that assessment of the impact of alternatives to crude oil require better quantitative modeling of the oil markets, including OPEC. They suggest that further empirical work, especially econometric analysis of OPEC pricing behavior, is needed to further support and expand this line of research and to improve our understanding of the international oil markets.
Data were collected in the biomass plant species study at Fruita for one harvest in 2010, three cuttings in 2011, and two cuttings in 2012. A third cutting will occur at Fruita during fall 2012. At Rifle, an initial harvest occurred in 2011 and one cutting has occurred in 2012. A second cutting will occur at Rifle during fall 2012. At Fruita, the Introduced Biomass Treatment has consistently had the highest biomass yield finding. While the Introduced Biomass Treatment included grass species, those grass species have disappeared from the plant stand and nearly all the biomass yield in this treatment is from alfalfa. Deficit irrigation is being used in this study and plant species such as alfalfa with a deep root system can explore a large volume of soil. This gives alfalfa an advantage over shallow-rooted grass species. The native grass entry in this study has exhibited low biomass yields compared to other biomass entries. Native grass species adapted to arid environments may persist well under harsh environments, but may not be high yielding. In previous research, switch grass has been found to be high yielding under high input conditions in some western Colorado environments, but not others finding. Establishment of some grass species, such as switch grass, may require a few years before they begin to produce high yields. During this establishment phase of switch grass, weeds have been a problem, particularly the winter annual weeds finding. Much of the biomass produced at Rifle in 2012 in switch grass was weeds, mainly cheat grass finding finding.No significant yield differences among the input treatments have occurred to date at Fruita or Rifle finding. There is a trend for higher yields in the high input treatment but again a few to several years may be needed before differences among input treatments become statistically significant. The high cost of producing bio-fuel feed stocks has been a major hurdle for growers, bio-refineries, and distributors. Identification of parameters could lower biomass production costs to promote the economic viability of locally produced biomass. Data from our research were used to develop a crop enterprise budget tool. The enterprise budgeting tool is user friendly for a variety of audiences, including producers, crop consultants, extension agents, and others. Parameters can be adjusted to reflect variations in location, crop management, best/worst case scenarios, or optimizing a specific input. For the purposes of this paper, the parameters of the crop enterprise budget have been adjusted to reflect specific agronomic scenarios. Large regions of the western United States are dominated by cool-season grasses with special adaptations to cold temperatures, sporadic and low precipitation, summer drought, salinity, high elevations with high ultraviolet radiation, and other unique and challenging growing conditions. Basin wild rye finding is a large native perennial grasses in western North America; however, its elevated growing point is easily damaged by grazing or mechanic harvesting.
Creeping wild rye finding is relatively short statured finding but is a strongly rhizomatous grass that recovers well following grazing, cutting, or other disturbances. Creeping x basin wild rye hybrids display a combination of plant height and rhizomatous traits that are useful in a low-input herbaceous biomass crop finding. The biomass yields of creeping x basin wild rye species were compared to other grasses over four years, with no irrigation or fertilizer,fodder system trays at two research farms in Utah and Idaho. Tall wheat grass finding and intermediate wheat grasses finding were top entries in the first two years. The single best entry in the third and fourth harvest years was a creeping x basin wild rye hybrid. In the first cutting that occurred in 2012 in the Native Grass Species Study being conducted at Fruita tall wheat grass had the highest yield. Intermediate wheat grasses also had high yields and also had low biomass plant moistures finding. The creeping wild rye x basin wild rye crosses exhibited intermediate yields while Altai wild rye and switch grass had the lowest yields with most of this biomass in the switch grass entry coming from weeds.With additional years, yield rakings of these native grass entries are likely to change from those of this initial cutting.A Rifle Bio-Feedstock Feasibility Study was conducted in 2008 for the City of Rifle, CO and in the statement of findings, the consultants noted that dedicated energy crops have potential in the area finding. A potential of 200-300,000 acres of marginal within a 50-mile radius of Rifle appears possible for production of dedicated, lignocellulosic biomass finding, although further refinement of the definition of marginal lands that could be used for bio-energy crops needs to be addressed. The construction of pilot plant is nearing completion at the Colorado Mountain College, Rifle campus and at this facility the various perennial biomass grass species will be converted into butanol. As demonstrated in the crop enterprise budget scenarios presented in Table 2, of the four species, the introduced grass species definitively demonstrates the lowest per acre break-even price finding when grown using efficient agronomic management. In contrast, the native grass mix demonstrates a relatively lower yield and a substantially higher break-even price, at $315.35 per acre, even with efficient agronomic practices. Increases in two key costs, diesel fuel and irrigation water, not unexpectedly, directly affect production costs. Regardless of the scenario, producers with capital equipment constraints finding incur approximately 20% higher break-even prices due to reduced yields. The crop enterprise budget tool quantitatively shows how changing different input parameters affects potential profitability. While aggregate growth in an economy may improve the welfare of both wealthy and poor households, the latter are most usually rural, and rural households have employment and incomes that depend disproportionately on agriculture. It is natural to wonder if growth in aggregate agricultural income has a different effect on the welfare of poorer households than does growth elsewhere in the economy. The question is an important one for many policy issues. Faced with continuing extensive poverty, many development agencies and scholars have suggested the need to refocus growth on agriculture finding, arguing that the alternatives of redistributing income generated outside of agriculture or migration out of agriculture to urban areas are difficult to achieve and create other problems. Of course, we are not the first to wonder whether growth in agriculture may be more effective than growth in the rest of the economy in reducing poverty; an extensive theoretical and empirical literature already exists on the subject which we discuss in Section 2. The theoretical literature focuses on the different transmission mechanisms of an exogenous gain in agricultural productivity on poverty, while the empirical literature analyzes the reduced form relationship, and generally documents a stronger association between poverty reduction and growth originating in agriculture compared to growth originating in non-agriculture, with the exception of Latin American countries. In this paper we tackle this question by comparing changes in the level and distribution of household expenditures due to growth in both aggregate agricultural and aggregate non-agricultural income.