ECONOMIC MODELING OF A LIGNOCELLULOSIC BIOMASS

BIOREFINING INDUSTRY

Francis M. EpplinLawrence D. Mapemba

Gelson Tembo 

Department of Agricultural Economics

Oklahoma State University  

Agriculture as a Producer and Consumer of Energy

Biobased Products Research at Oklahoma Research at Oklahoma

State UniversityState University• Biomass feedstock production• Harvest, transport and storage• Bioconversion

– Gasification– Fermentation– Microbial catalysts

• Economics

Vision

Agriculture that provides feedstock for a biomass processing industry that produces economically competitive, and environmentally sound products.

Agriculture as a Producer and Consumer of Energy

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

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

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)?

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?

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.

http://www.blm.gov/nhp/300/wo320/slide12.html

Power River BasinWyomingCoal Mine

http://www.carrtracks.com/prbcoal2.htm

Size Matters

                                                           

                 

http://smtc.uwyo.edu/coal/trains/unit.asp

11,000 tons per day for one electric generating plant110 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.

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

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)

Harvest Unit

• 6 mower conditioners• 6 rakes• 3 balers• 9 tractors• 1 in-field transporter• Average Investment of $590,000 / harvest

unit

• 10 people

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)

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

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

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

Estimated Average Distance to Transport Lignocellulosic Biomass to a Biorefinery located in

Oklahoma from Multiple Feedstock Sources and from CRP-Only

49

64

78

98

147

0

50

100

150

1000 2000 4000

Biorefinery Size(tons/day)

Ave

rag

e F

eed

sto

ck

Tra

nsp

ort

(mil

es

)

Multiple Sources

CRP

Estimated Cost to Deliver Lignocellulosic Biomass to a Biorefinery; Multiple Feedstock Sources and

CRP-Only($/ton)

$32 $33$35

$64

$69

$0

$25

$50

$75

1000 2000 4000

Biorefinery Size(tons/day)

Fe

ed

sto

ck

Co

st

(del

iver

ed t

on

)

Multiple Sources

CRP

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.)

0

50,000

100,000

150,000

200,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Fe

ed

sto

ck

Ha

rve

ste

d(t

on

s)

Multiple Sources

CRP

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.)

0

100,000

200,000

300,000

400,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Fie

ld S

tora

ge

(to

ns

)

Multiple Sources

CRP

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))

0

15,000

30,000

45,000

Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec

Month

Sto

rag

e a

t B

iore

fin

ery

(t

on

s)

Multiple Sources

CRP

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

CRP2%

Corn Stover0%Wheat Straw

9%

Native Grasses37%

Switchgrass52%

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.

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.

Challenges

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

Benefits

• Environmental• Alternative use for range land • Alternative use for land enrolled in the

Conservation Reserve Program• Economic activity for rural areas

Agriculture as a Producer and Consumer of Energy