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ECONOMIC MODELING OF A LIGNOCELLULOSIC BIOMASS BIOREFINING INDUSTRY

Agriculture as a Producer and Consumer of Energy. ECONOMIC MODELING OF A LIGNOCELLULOSIC BIOMASS BIOREFINING INDUSTRY. Francis M. Epplin Lawrence D. Mapemba Gelson Tembo Department of Agricultural Economics Oklahoma State University. Biobased Products Research at Oklahoma State University.

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ECONOMIC MODELING OF A LIGNOCELLULOSIC BIOMASS BIOREFINING INDUSTRY

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  1. Agriculture as a Producer and Consumer of Energy ECONOMIC MODELING OF A LIGNOCELLULOSIC BIOMASS BIOREFINING INDUSTRY Francis M. Epplin Lawrence D. Mapemba Gelson Tembo Department of Agricultural Economics Oklahoma State University

  2. Biobased ProductsResearch at Oklahoma State University • Biomass feedstock production • Harvest, transport and storage • Bioconversion • Gasification • Fermentation • Microbial catalysts • Economics

  3. Agriculture as a Producer and Consumer of Energy Vision Agriculture that provides feedstock for a biomass processing industry that produces economically competitive, and environmentally sound products.

  4. Strategy Biomass Grow, harvest, store, and transport Gasifier Convert biomass to producer gas (CO, CO2, H2) Bioreactor Ferment producer gas to ethanol and other useful products

  5. Gasification-Fermentation Could Use a Variety of Feedstocks • Harvest windows differ across species • Use harvest machinery over many months • Reduce feedstock storage cost • Variable landscape • Reduce insect and disease risk

  6. Research Questions • Where would LCB be produced? • What feedstock or combination of feedstock is economically optimal? • How much LCB harvest machinery would be required? • How much of what species should be harvested in each period (month)? • What quantity of LCB should be placed in field storage in each period (month)? • What quantity of LCB should be placed in storage at the biorefinery in each period (month)?

  7. Research Questions(continued) • What quantity of LCB should be removed from each storage location in each month? • What is the optimal transportation flow of LCB from the field and from field storage to the biorefinery? • What is the optimal size of the biorefinery? • Where should the biorefinery be located? • What products should the biorefinery produce?

  8. Objective to describe a modeling system that may be used to determine for a specific region • the most economical sources of LCB, • timing of harvest, • time and location of storage, • inventory management, • biorefinery size, • and biorefinery location.

  9. Power River Basin Wyoming Coal Mine http://www.blm.gov/nhp/300/wo320/slide12.html

  10. Size Matters http://www.carrtracks.com/prbcoal2.htm

  11. 11,000 tons per day for one electric generating plant 110 cars that transport 100-tons each (a mile of coal) Coal at the mine mouth is about $5 per ton. It is shipped 1,100 miles to Oklahoma, for an additional $20 per ton. 80% of the cost of the coal is for transportation. http://smtc.uwyo.edu/coal/trains/unit.asp

  12. Quantity of Feedstock Required for a4,000 tons per day Biorefinery • 1,400,000 tons of biomass per year • 17 dry tons per truck • 350 days of operation per year • 235 trucks per day • 24 hours per day • 9.8 trucks per hour Neonatal coal

  13. Modeling • Harvest units • Harvest capacity depends upon • Number of harvest days per month • Number of endogenously determined harvest units • Farmer/landowner may be paid either a fixed rate per ton (crop residue) or a fixed rate per acre (CRP acres)

  14. Harvest Unit • 6 mower conditioners • 6 rakes • 3 balers • 9 tractors • 1 in-field transporter • Average Investment of $590,000 / harvest unit • 10 people

  15. Biomass Alternatives(Oklahoma) • Crop residue • wheat straw (June-July) • corn stover (September-October) • Production from Conservation Reserve Program acres (July-October) • Established perennials (June-February) • native grasses (short, mixed and tall prairie grass) • improved pastures (Bermuda, fescue, old world bluestem) • Convert and manage cropland specifically for the production of biomass • switchgrass (model species) (July-February)

  16. Oklahoma • 33 million acres in farms and ranches • 50% rangeland • 25% permanent improved pasture and hay • 25% cropland (1 million acres in CRP) • Alternative use for these agricultural and rural resources

  17. Multi-region, Multi-period, Monthly time step,Mixed Integer Mathematical Programming Model • 77 counties (production regions) • 11 potential plant locations • 3 plant sizes (1,000, 2,000, 4,000 tons per day) • 9 potential feedstocks • 4 fertility levels for improved pasture grasses • Endogenously determined number of harvest units • Monthly harvest capacity restricted by harvest days • 12 months • In-field storage • Storage at biorefinery • Designed for multiple products

  18. Case Study • Single Biorefinery • Pseudo product • Three Size Alternatives • 1,000, 2,000, and 4,000 tons/day • Two Feedstock Alternatives • Multiple feedstock • Crop Residue, Native Range, Improved Pastures, Switchgrass • Limited to 10% of existing acres by source per county • CRP-only • Limited to 25% of CRP acres per county

  19. Estimated Average Distance to Transport Lignocellulosic Biomass to a Biorefinery located in Oklahoma from Multiple Feedstock Sources and from CRP-Only

  20. Estimated Cost to Deliver Lignocellulosic Biomass to a Biorefinery; Multiple Feedstock Sources and CRP-Only($/ton)

  21. Estimated Quantity of Feedstock Harvested by Month for a 2,000 t/d Biorefinery; Multiple Feedstock Sources and CRP-Only. (CRP Harvest is Limited by Policy to 120 Days Beginning with July 2.)

  22. Estimated Quantity of Feedstock Stored by Month at Remote Sites for a 2,000 t/d Biorefinery; Multiple Feedstock Sources and CRP-Only.(CRP Harvest is Limited by Policy to 120 Days Beginning with July 2.)

  23. Estimated Quantity of Feedstock Stored per Month at the Biorefinery for a 2,000 t/d Biorefinery; Multiple Feedstock Sources and CRP-Only.(Storage at the Biorefinery is Limited to 42,000 tons (21 days))

  24. Feedstocks Selected by the Model for use by the 2,000 t/d Biorefinery with Multiple Sources.

  25. Findings • The most economical system would process a variety of feedstocks • Harvest would extend over as many months as permitted by weather and species • Crop residues would not be a major feedstock in the region (narrow harvest window) • Method of feedstock acquisition ($/t or $/acre) matters • Given the quantity of LCB required, and the lack of an existing infrastructure to harvest and transport a continuous flow of massive quantities of LCB, it is likely that an integrated and centrally controlled harvest and transportation system would develop.

  26. Findings(continued) • The structure of a mature biomass to bioproducts industry that produces bulk commodities such as liquid fuel, from dedicated feedstocks such as switchgrass, may evolve to resemble a vertically integrated timber production and processing business • Public policy that restricts business ties between feedstock production and feedstock processing is likely to hinder the development of an LCB biorefinery industry.

  27. Challenges • Identifying niche (profit generating) products • Isolating microbial catalysts • Funding pilot scale biorefinery • Competition

  28. Benefits • Environmental • Alternative use for range land • Alternative use for land enrolled in the Conservation Reserve Program • Economic activity for rural areas

  29. Agriculture as a Producer and Consumer of Energy

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