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Liquid Fuels Module

The Stochastic Energy Deployment System's (SEDS's) liquid fuels module is a petroleum refining model, which includes gasification technology to produce Fischer-Tropsch fuels and blending of gasoline and ethanol to make E85 and E10.

The module is based on the MARS model, which is a detailed model of U.S. petroleum refining developed at Argonne National Laboratory.

Focus of Analyses

The liquid fuels module calculates crude oil and refinery fuel use (natural gas and electricity) needed to meet demand for gasoline and distillate products. Refinery carbon dioxide (CO2) emissions are estimated. The price of refinery products is calculated. Ethanol and gasoline blending is included. Imports and exports of crude and finished products are estimates.

Limitations of Analyses

Some uncertainty exists as to how much refinery capacity additions will be made in the United States versus importing finished gasoline and diesel products.

Technologies of Interest to U.S. Department of Energy

Technologies include gasification and coal-to-liquids Fischer-Tropsch technology with carbon capture and sequestration.

Overview of Methodology

For a given amount of gasoline and distillate oil (diesel, light fuel oil, and jet fuel) demand, the liquid fuels module determines how much crude oil is needed. Since the ratio of gasoline to distillate produced by a refinery is limited, any excess gasoline or distillate is exported, additional gasoline or distillate is imported. The ratio of gasoline to distillate is allowed to change over time to accommodate more distillate production. This is done at the refinery by changing crude distillation cut points, blending and through adding hydrocracking capacity, and selecting heavier oils that produce more distillate. Natural gas and electricity used by the refinery is calculated according to the amount of gasoline and distillate oil produced.

Gasoline, diesel, and jet fuel prices are calculated by setting the refinery revenues equal to costs, including crude oil, other variable costs and return on investment. This condition is necessary if there are to be any capacity additions at refineries. Federal and state taxes and markups are added to the final gasoline, diesel, and jet fuel prices.

Gasoline and ethanol blending is determined by using a capacity constrained logit choice model to select how much corn ethanol, cellulosic ethanol, and gasoline will be used. Corn ethanol supply and price are exogenously specified within the liquid fuels module and are based on Annual Energy Outlook (AEO) projections. Cellulosic ethanol capacity and price come from the biofuels module.

After the maximum ethanol requirements for conventional gasoline are met, any additional ethanol is applied to producing E85. Conventional gasoline and E85 price are a weighted average of pure gasoline, corn ethanol, and cellulosic ethanol price.

Major Assumptions

It is assumed that U.S. refinery capacity is built to balance excess demand for distillate oil with any surplus production of gasoline, with differences being sold on the world market. Product yields and variable inputs are based on the MARS model.

Stochastic Inputs

Inputs include coal supply for Fischer-Tropsch fuels.

Key Inputs from Other Modules

  • Gasoline, diesel, and jet fuel demand from transportation modules
  • Fuel demand from flex-fuel vehicles in light-duty transportation module
  • Light fuel oil demand
  • Cellulosic ethanol capacity and price from biofuels module
  • Price of crude oil, industrial natural gas, industrial electricity, industrial coal

Key Outputs to Other Modules

  • Price of gasoline, E85, diesel, light fuel oil, and heavy fuel oil
  • Crude oil demand
  • Refinery natural gas and electricity demand
  • Coal demand for FT fuels

Attachments

SEDS Review: Liquid Fuels Sector

Authors

Donald Hanson, Argonne National Laboratory

Deena Patel, Argonne National Laboratory