An analysis of potential alternative fuel. The case of methanol: Potential demand in transportation

Faten Abdul-Rahman Al-Awadhi, University of Pennsylvania


As concern about air pollution and growing U.S. dependence on imported petroleum increases, and as the transportation sector increasingly dominates the demand for petroleum fuels, interest in substitutes for petroleum based motor fuels intensifies. Interest arises from the belief that introduction of alternative fuels to gasoline will bring about lower crude oil prices and will reduce both the likelihood of an oil market disruption and its potential magnitude. More cleanly burning fuels such as methanol would also provide environmental benefits by reducing urban ozone. A strategy of methanol-based fuel-flexible transportation system is believed to offer the solution to both energy security and pollution concerns. Consumer behavior in the choice of fuel for flexible fuel vehicles determines the extent of methanol infrastructure utilization and is a key factor in the creation and stability of markets for new vehicles. This study examines the factors affecting demand for methanol and develops a behavioral model of consumer choice. The study utilizes a survey which employ dichotomous choice Contingent Valuation Method (DCVM), also known as take-it-or-leave-it CV method, to elicit consumers' valuation of methanol characteristics so as to provide some understanding of the factors that affect demand for methanol in the absence of any historical demand data. An estimate of the valuation function for methanol is then developed by aggregating the valuation functions for all the characteristics.

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Recommended Citation

Al-Awadhi, Faten Abdul-Rahman, "An analysis of potential alternative fuel. The case of methanol: Potential demand in transportation" (1992). Dissertations available from ProQuest. AAI9227603.