today’s markets. Had we not had ethanol, it seems likely that the crude oil refining industry
would be slightly larger today than it actually is, and in the absence of this additional crude oil
refining capacity the impact of eliminating ethanol would be extreme. In addition, the impact of
the first billion gallons of ethanol on this capacity constraint would intuitively be greater than the
billions of gallons that came later. We did try a quadratic term to pick up this effect, and it was
not significant.
14
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