MPC
Research Projects (2006-07)

Identifying Number

MPC-269

Project Title

Economic and Environmental Implications of Alternative Fuel Use and Regulations in the Mountain-Plains Region

University

North Dakota State University

Project Investigator

Mark Berwick, NDSU
mark.berwick@ndsu.edu

External Project Contact

Jack Olson, NDDOT

Project Objective

The objective of this study is to provide a benefit/cost analysis of switching from traditional to alternative fuels (such as ethanol and biodiesel) for consumers in the Mountain Plains region. The study will analyze users that would be affected by alternative fuel policy mandates and also examine potential demand for such products. Included will be a comparison of existing alternative fuels and related effects on the transportation sectors, as well as an overview of associated mandates/incentives that have been implemented in other states.

Project Abstract

Fuel shortages and increased dependency on foreign oil during the 70s, the Persian Gulf War in the 90s and the second Gulf War in 2003 have renewed interest in renewable fuel sources. EPA regulations and air quality guidelines have also created the awareness and need to switch to cleaner burning fuels for a cleaner environment. Taking effect in 2006, the EPA requires a significant reduction in the sulfur content in diesel fuels. Alternative fuels are becoming increasingly available and more readily consumed, in part due to policy mandates. For example, currently in place are several policies requiring all gasoline sold in certain states contain a percentage of ethanol. Ethanol production in the U.S. has seen a steady incline starting in the 80s and reaching 3.4 billion gallons in 2004. The production and use of biodiesel is also on the rise. Minnesota's B2 program requires almost all diesel sold to have a blend of at least 2 percent. The first statewide law of this kind will significantly impact transportation, particularly vehicle fleets and the trucking industry. At the present time, alternative fuels are not commonly used by transportation service providers in the region. This study will focus on determining and outlining the key factors influencing the use or non-use of alternative fuels like ethanol and biodiesel by transportation service providers in the region. The study will also offer potential gains and/or costs associated with switching to alternative fuel use.

Task Descriptions

1. Conduct a review of literature (July and August 2006)
2. Identify all existing, relevant data sources (September 2006)
3. Identify all fuel users. Estimate state/region fuel usage (October and November 2006)
4. Identify alternative fuels and trends, and analyze affects on transportation sectors. (December 2006 and January 2007)
   1. Identify and analyze users most affected by alternative fuel policy mandates.
   2. Examine transportation providers' costs associated with a switch to alternative fuels.
   3. Describe existing efficiency gains and/or costs associated with the use of alternative fuels.
5. Examine production characteristics for success and strategic resource factors that influence production (February 2007)
   1. Locate current and planned alternative fuel production facilities in North Dakota.
   2. Conduct a resource assessment of alternative fuel production and estimate raw material demand for biodiesel and ethanol production.
6. Costs/benefits of switching (March 2007)
7. Report write up (April and May 2007)
8. Finalize and publish report (June 2007)

Milestones, Dates

Starting Date: July 1, 2006
Ending Date: June 30, 2007

Yearly and Total Budget

$50,000

Student Involvement

Undergraduate students

Relationship to Other Research Projects

North Dakota Strategic Freight Analysis: Regional Strategic Freight Study on Motor Carrier Issues

Truck Costing Model for Transportation Managers (MPC Report No. 03-152)

Technology Transfer Activities

An MPC report providing valuable analysis of prospective alternative fuel use and mandates as well as the impacts of alternative fuel policy for local and regional transportation entities.

Potential Benefits of the Project

Provide guidance to policy makers and potential users in the region as to the potential benefits, cost implications and justification of switching to alternative fuels such as biodiesel.

TRB Keywords

Alternative Fuels, Trucking Costs, Biodiesel, Ethanol