Scope: This project will enhance current methods and modeling tools to quantify the benefits of a diversified transportation fuel mix.  Benefits to be evaluated include the value of reduced fluctuation in fuel prices with a diversified fuel mix (including electrified transportation) and traffic congestion impacts.

Current transportation demand models that support project evaluation do not incorporate feedback mechanisms that assess project design elements aimed at diversifying the mix of transportation fuels.  Diversification affects both the mean and variance of cost per vehicle mile traveled.  Thus, projects that specifically incorporate design elements that diversify fuels have the potential of reducing fuel-price risk. Stable fuel prices imply greater stability in the distribution of VMT/RMT (through the fuel-price elasticity), which provide a technique for monetizing the “insurance benefit” of projects that increase transportation fuel diversification.