Browsing by Subject "two-stage stochastic programming"

Now showing 1 - 2 of 2

Access status: Open Access ,
Impact of government policies on sustainable petroleum supply chain (SPSC): a case study - part I (models)
(AGH University of Science and Technology Press, 2020) Ghahremanlou, Davoud; Kubiak, Wiesław
Environmental concerns and energy security have led governments to establish legislation to convert a Conventional Petroleum Supply Chain (CPSC) to a Sustainable Petroleum Supply Chain (SPSC). The United States (US), one of the biggest oil consumers in the world, has created regulations to manage ethanol production and consumption over the last half century. Although these regulations have created new opportunities, they have also added new burdens to the obligated parties. It is thus key for the government, the obligated parties, and related businesses to study the impact of the policies on the SPSC. We develop a two-stage stochastic programming model, General Model (GM), which incorporates Renewable Fuel Standard 2 (RFS2), Tax Credits, Tariffs, and Blend Wall (BW) to study the policy impact on the SPSC using cellulosic ethanol. The model, as with any other general model available in the literature, makes it highly impractical to study the policy impact due to the model's computational complexity. We use the GM to derive a Lean Model (LM) to study the impact by running computational experiments more efficiently and consequently by arriving much faster at robust managerial insights. We present a case study of the policy impact on the SPSC in the State of Nebraska using the LM in the accompanying part II (Ghahremanlou and Kubiak, 2020).
Access status: Open Access ,
Impact of government policies on sustainable petroleum supply chain (SPSC): a case study - part II (the State of Nebraska)
(AGH University of Science and Technology Press, 2020) Ghahremanlou, Davoud; Kubiak, Wiesław
The accompanying part I (Ghahremanlou and Kubiak, 2020) developed the Lean Model (LM), a two-stage stochastic programming model which incorporates Renewable Fuel Standard 2 (RFS2), Tax Credits, Tariffs, and Blend Wall (BW), to study the policy impact on the Sustainable Petroleum Supply Chain (SPSC) using cellulosic ethanol. The model enables us to study the impact by running computational experiments more efficiently and consequently by arriving at robust managerial insights much faster. In this paper, we present a case study of the policy impact on the SPSC in the State of Nebraska using the model. The case study uses available real-life data. The study shows that increasing RFS2 does not impact the amount of ethanol blended with gasoline but it might lead to the bankruptcy of the refineries. We recommend that the government consider increasing the BW because of its positive economic, environmental and social impacts. For the same reason, we recommend that the tax credit for blending the US produced ethanol with gasoline be at least 0.189 $\frac{\$}{gal}$ and the tariff for imported ethanol be at least 1.501 $\frac{\$}{gal}$. These also make the State independent of foreign ethanol thereby enhancing its energy security. Finally, the change in policy impacts the SPSC itself, most importantly it influences strategic decisions. However setting up a bio-refinery at York county and a blending site at Douglas county emerge as the most robust location decisions against the policy change in the study.