Economists Find Current Biofuel Potential in Oregon May Be Costly and Limited

CORVALLIS, Ore. – The adoption of biofuels in Oregon could reduce the state’s fossil fuel use by less than one percent, but at a much higher cost to society than more direct approaches such as a gasoline tax or raising fuel economy standards. That is the conclusion of a study published this week by the Oregon State University Extension Service.

The study, by OSU economists William Jaeger, Robin Cross, and Thorsten Egelkraut, compared three types of biofuels
“The promotion of biofuels is a public issue,” said Jaeger. “Would a shift to biofuels achieve energy independence and a reduction of greenhouse gas? To answer this, we need to compare the cost for different approaches. Especially in terms of energy independence, these biofuels represent a costly and inefficient method compared to other approaches the government might take to achieve the same goal.”

The researchers estimate that to achieve a given improvement in energy independence, biofuels could be 6 to 15 times more costly than other policy approaches such as raising fuel economy standards for vehicles.

OSU Extension Service