System Dynamics Modeling of Corn Ethanol as a Bio Transportation Fuel in the United States

Abstract

The production capacity of corn ethanol as a transportation fuel is experiencing rapid growth in the United States. The demand is driven by increased prices of gasoline, government mandates, incentives, desire for cleaner fuels, and the need to achieve energy independence. Continued strong growth of the corn ethanol industry will depend on profitability by both suppliers and producers. This in turn will be influenced by several factors such as demand, government incentives, feedstock availability and prices, processing plant capacity, and efficient farm and ethanol processing technologies. How and to what extent will the projected growth of the corn ethanol industry in the United States be influenced by some or all of these factors? We use system dynamics modeling to construct the causal-loop structure of the corn ethanol industry and a stock and flow diagrams to explore how changes in projected factors will affect the industry. Currently, planners and researchers explore various energy supply options by the year 2030, when world energy usage is expected to double that of 2009. By developing and executing a system dynamics model, this paper explores different possible growth scenarios of the industry for the next twenty one years.