This study was requested by Thomas J. Gross, Deputy Assistant Secretary for Transportation Technologies, Office of Energy Efficiency and Renewable Energy, U.S. Department of Energy. The Energy Information Administration (EIA) was requested to analyze the impacts on petroleum prices of increased demand for diesel fuel stemming from an increase in the penetration of diesel-fueled engines in the light-duty vehicle fleet. Three cases were requested, each of which was defined in terms of diesel technology increasing its penetration of new light duty vehicle LDV sales to 10, 20, and 30 percent, respectively, by the year 2010. By assumption, those sales reduced sales shares of new gasoline-powered vehicles, maintaining or increasing the sales of alternate fuel vehicles. In subsequent discussions with staff of the Office of Transportation Technologies (OTT), the analysis was extended to include the impacts on refinery profitability, and to add a case which showed the impacts of reducing the sulfur content of diesel fuel for LDVs.
This report presents the methodology and results of the analysis, based on the assumptions provided by OTT. The National Energy Modeling System (NEMS), EIA's mid-term energy forecasting model, was used for analysis of the cases. The version of NEMS developed for the Annual Energy Outlook 1998 (AEO98) was modified to incorporate the requested assumptions. The analysis in this report compares the case results for prices, demand, and profits to the reference case published in the AEO98.
The legislation that created EIA vested the organization with an element of statutory independence. The EIA does not take positions on policy questions. The EIA's responsibility is to provide timely high quality information and to perform objective, unbiased analyses in support of the deliberations by both public and private decision makers. Accordingly, this report does not purport to represent the policy positions of the U.S. Department of Energy or the Administration.
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File last modified: February 2, 1999
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