Notes and Sources

1) Letter from Sen. Jeffords to Guy F. Caruso, dated March 29, 2005. See Appendix.

2) The October oil futures case projects a U.S. crude oil price that is about $5 per barrel higher than the AEO2005 reference case projection in 2025 and corresponds loosely to the mid-term profile prices on the NYMEX oil futures market when AEO2005 was being prepared. For more in-depth discussion of the October oil futures case, see Energy Information Administration, Annual Energy Outlook 2005, DOE/EIA-0383(2005) (Washington, DC, February 2005), p. 44, web site www.eia.doe.gov/oiaf/aeo/index.html.

3) The American Jobs Creation Act of 2004, signed into law on October 22, 2004, extended the Federal tax credit for ethanol to 2010. This tax credit has been extended several times in the past, and AEO2005 assumed it would continue beyond 2010.

4) In February 2004, EIA published a Service Report that analyzed the effects of the CEB. See Energy Information Administration, Summary Impacts of Modeled Provisions of the 2003 Conference Energy Bill, SR/OIAF/2004-02 (Washington, DC, February 2004), web site http://www.eia.doe.gov/oiaf/servicerpt/pceb/pdf/sroiaf(2004)02.pdf.

5) The base case includes MTBE bans in 20 States (mainly in reformulated gasoline used in California, New York, Connecticut, Missouri, and Kentucky), which collectively accounted for more than one-half of the Nation’s MTBE consumption before MTBE was banned in those States.

6) The West North Central Census Division (CD 4) includes Minnesota, Iowa, Missouri, North Dakota, South Dakota, Nebraska, and Kansas.

7) The East North Central Census Division (CD 3) includes Wisconsin, Illinois, Michigan, Indiana, and Ohio. The Mountain Census Division (CD 8) includes Idaho, Montana, Wyoming, Colorado, Utah, Nevada, Arizona, and New Mexico.

8) The world oil price represented in the NEMS model represented the refineries’ average imported crude oil acquisition cost, which could be $5 to $6 per barrel lower than the West Texas Intermediate (WTI) price often quoted in the media.

9) Each gallon of ethanol displaces two-thirds gallon of gasoline and is subject to Federal taxes of 18.4 – 51.0 = -32.6 cents per gallon. The Federal tax foregone on two-thirds of a gallon of gasoline is 12.3 cents. Therefore, each gallon of ethanol reduces Federal excise tax revenue by 44.9 cents (32.6 and 12.3 cents).

10) Energy Information Administration, Review of Transportation Issues and Comparison of Infrastructure Costs for a Renewable Fuels Standard (Washington, DC, September 2002), web site www.eia.doe.gov/oiaf/servicerpt/fuel/pdf/question3.pdf.

11) The East South Central Census Division (CD 6) includes Kentucky, Tennessee, Alabama, and Mississippi.