ENERGY POLICY ACT: Including Propane as an Alternative Motor Fuel Will Have Little Impact on Propane Market

摘要

Propane is widely used for other purposes. The petrochemical industry, for example, by far the largest propane consumer, uses propane in its manufacturing processes, and the residential sector uses propane for heating and other household purposes. Some of these traditional users of propane have expressed concern that the achievement of EPACT's fuel-replacement goal could lead to rapid future growth in the demand for propane, resulting in higher propane prices. This report responds to your request that we determine whether and how including propane as an alternative fuel under EPACT will affect existing propane consumers as well as the supply and price. Specifically, this report addresses the following questions: (1) How likely is it that EPACT's goal of replacing at least 10 percent of the conventional fuel used in light-duty vehicles by 2000 and at least 30 percent by 2010 with replacement fuels will be achieved; (2) To what extent will the use of propane as a motor fuel increase as a result of EPACT; (3) What impact will the use of propane as a motor fuel under EPACT have on the supply and price of propane; (4) What impact will the use of propane as a motor fuel under EPACT have on existing users of propane. In order to respond to these questions, we asked EIA to use its National Energy Modeling System to estimate the likelihood of achieving EPACT's fuel-replacement goal and to estimate the potential impacts.