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A Workshop on the DOE Model of the dynamics of expanding the transportation fuel supply chain

Biomass Scenario Model Workshop. A Workshop on the DOE Model of the dynamics of expanding the transportation fuel supply chain October 25, 2006. Agenda. 7:30 Continental Breakfast 8:00 Welcome and Introductions 8:15 Purpose of Meeting – Expectations for Participants and DOE

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A Workshop on the DOE Model of the dynamics of expanding the transportation fuel supply chain

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  1. Biomass Scenario Model Workshop A Workshop on the DOE Model of the dynamics of expanding the transportation fuel supply chain October 25, 2006

  2. Agenda • 7:30 Continental Breakfast • 8:00 Welcome and Introductions • 8:15 Purpose of Meeting – Expectations for Participants and DOE • Background on this Modeling Effort • Overview of the Model – Big Picture • 9:00 Detailed description and discussion of Conversion & Investment • 10:00 Break • 10:15 Detailed description and discussion of Feedstock & Deployment • 11:15 Base run & Scenarios • 11:45 Discussion in groups of what should be demonstrated • 12:15 Catered Lunch and Break • 1:00 Model Execution/Discussions of Outcomes • Revisit Expectations • Results of group discussions – Clarification/Orientation • Interactive case demonstration from group result • 2:30 Close out – Summarize what we’ve Heard • 3:00 Adjourn

  3. Background • DOE-OBP has a need to better understand drivers and constraints on the ultimate deployment of billions of gallons of ethanol • DOE-OBP has sponsored the development of a dynamic model describing possible future scenarios of how biofuels will deploy in the marketplace • Purpose of the model • Understand how DOE activities might influence the ultimate ethanol deployment • Explore what else (outside of DOE) might be needed to reach the desired deployment levels

  4. Purpose of this Meeting • Gather a small group of Stakeholders knowledgeable in the various aspects of biomass deployment depicted in the model • Spend enough time reviewing what is involved in the model to enable everyone to discuss and comment on the its usefulness for the purpose intended • Have the discussion and collect comments

  5. Outcomes • Participants will gain a thorough understanding of this modeling effort and how it might be useful to DOE and to their own work • DOE will obtain comments on the model as to • how well it can or ultimately will be able to address the stated objectives • on whether or not this is a useful approach to gaining insight into future deployment • DOE will use these comments to improve the model

  6. Based on the Supply Chain Model Highlights

  7. Sourcesof Data & Information

  8. The Complex Interactions

  9. The language of system dynamics Dying Being born Population

  10. The language of system dynamics

  11. Getting to 60 bgy For Illustrative Pruposes Only Do not cite values 60,182 56,892 42,691 24,499 22,309

  12. Getting to 60 bgy For Illustrative Pruposes Only Do not cite values

  13. One of the Influences - Conversion Cost

  14. Nominal price • Target price at first seems very competitive • But remember our definitions

  15. Nominal price • First let’s correct for Btu content

  16. Nominal price • Then add cost for taxes, marketing and distribution • Result is that a nominal price of $1.07 per gallon of ethanol is equivalent to $2.25 per gallon

  17. Risk-inflated price of new technology

  18. Improvements are Underway - Conceptual Overview of Version 2.0 Material flow (e.g., Feedstock, fuel) Integration Module Information flow (e.g., relative fuel price) Petroleum Industry Module Feedstock Module Conversion Module Fuel Distribution Module Fleet Dynamics Module Conceptual Overview of Transition Model Structure

  19. Summary of Ver. 2 Anticipated Structural Changes/Enhancements Overall Architecture: • Modular (modules runnable in isolation or in combination) • High level regional disaggregation (facilitates analysis of regional differences—e.g., corn belt, areas of concentration of autos) Anticipated changes to each module in the table below:

  20. What You’ll See Today A Fully Functioning, but Version 1 of the Model Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  21. What You’ll See Today Land Use Allocate agricultural lands between switch grass & other uses Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  22. What You’ll See Today Feedstock Production Calculate total Switch grass and Ag and Forest Residue production Calculate switch grass yield Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  23. What You’ll See Today Feedstock Cost Determine the cost of feedstock delivered to the plant gate (including the grower payment) Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  24. What You’ll See Today Conversion R&D How the funding impacts the technology development as measured by process yield & capital growth Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  25. What You’ll See Today Investment Determine the capital cost Determine the operating costs & the ultimate cost of Ethanol Decide if it is attractive to build facilities Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  26. What You’ll See Today Conversion Facilities Build the plants Determine the yield and capacity Determine the demand for feedstock Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  27. What You’ll See Today Fuel Marketplace Determine the Price of Gasoline Determine the Price of Corn Ethanol Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  28. What You’ll See Today Vehicle Dynamics Determine the number of Ethanol Powered Vehicles Determine the fuel economy of the Fleet and Hence the Ethanol Demand Fuel Marketplace Feedstock Production Conversion R&D Vehicle Dynamics Feedstock Cost Conversion Facilities Land Use Investment

  29. Agenda • 7:30 Continental Breakfast • 8:00 Welcome and Introductions • 8:15 Purpose of Meeting – Expectations for Participants and DOE • Background on this Modeling Effort • Overview of the Model – Big Picture • 9:00 Detailed description and discussion of Conversion & Investment • 10:00 Break • 10:15 Detailed description and discussion of Feedstock & Deployment • 11:15 Base run & Scenarios • 11:45 Discussion in groups of what should be demonstrated • 12:15 Catered Lunch and Break • 1:00 Model Execution/Discussions of Outcomes • Revisit Expectations • Results of group discussions – Clarification/Orientation • Interactive case demonstration from group result • 2:30 Close out – Summarize what we’ve Heard • 3:00 Adjourn

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