Substitutional fuels are fuels that can replace, either partially or completely, conventional fuels. It includes biodiesel, biogas, alcohol, myco-diesel, algal fuel, and metal fuel. They have applications to replace conventional fuels in functions such as transportation, although they still compose a small proportion of global fuel sources. Lots of substitutional fuel use is the result of government-enforced mandates, exemptions, or subsidies.[1]
Substitutional fuel has been gaining popularity along with renewable energy in the United States over the past several decades. The Energy Independence and Security Act of 2007 requires that U.S. transportation fuels contain 36 billion gallons of renewable fuels.[7]
"A market failure can arise in the transport fuels market if the potential differences in emissions from petroleum based fuels and those from biofuels are not taken into account in the decisions of fuel producers and consumers...Policy intervention through an emissions tax or a subsidy for avoided emissions could be justified to address this market failure."[1]
Demand for substitutional fuel is also dependent on the availability of alternative energy vehicles, since 29% of energy consumption in the U.S. is from transportation. In 2017, biofuels composed about 5% of transportation fuels.[8] Biofuels are currently a leading substitutional fuel. The U.S. Energy Information Administration forecasts a stable biofuel market through 2020. Due to relatively stable domestic motor gasoline consumption in recent years, the industry is not likely to see large growth in the near future without government support.[9]
U.S. Annual Fuel Consumption (Quadrillion BTU)[10]
Year
Coal
Natural Gas
Petroleum
Total Fossil Fuels
Biomass
Total Renewable Energy
2000
22.58
23.82
38.23
84.69
3.01
6.10
2001
21.91
22.77
38.15
82.86
2.62
5.16
2002
21.90
23.51
38.19
83.66
2.70
5.73
2003
22.32
22.83
38.77
83.97
2.81
5.94
2004
22.47
22.92
40.21
85.74
3.01
6.07
2005
22.80
22.57
40.28
85.69
3.11
6.23
2006
22.45
22.24
39.80
84.55
3.26
6.64
2007
22.75
23.66
39.45
85.88
3.48
6.52
2008
22.39
23.84
36.84
83.11
3.85
7.17
2009
19.69
23.42
34.86
77.94
3.94
7.61
2010
20.83
24.57
35.42
80.82
4.51
8.27
2011
19.66
24.95
34.73
79.35
4.61
9.20
2012
17.38
26.09
33.94
77.41
4.51
8.85
2013
18.04
26.81
34.50
79.33
4.85
9.45
2014
18.00
27.38
34.76
80.12
4.99
9.74
2015
15.55
28.19
35.48
79.20
4.98
9.72
2016
14.23
28.40
35.82
78.42
5.02
10.37
2017
13.84
28.03
36.17
78.02
5.08
11.18
Net change
-8.74
+4.21
-2.05
-6.68
+2.08
+5.07
The above table shows the proportions of energy consumption by source in the U.S. from 2000 to 2017 using data from the Energy Information Administration. Fossil fuel consumption has declined overall, although natural gas consumption has increased. Both biomass and general renewable energy consumption has increased.
