economic modeling of a lignocellulosic biomass

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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
• Biomass feedstock production
• Harvest, transport and storage
• Bioconversion
– Gasification
– Fermentation
– Microbial catalysts
• Economics
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.
Strategy
Biomass
Gasifier
Bioreactor
Grow,
harvest,
store, and
transport
Convert biomass to
producer gas (CO,
CO2, H2)
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.
Power River Basin
Wyoming
Coal Mine
http://www.blm.gov/nhp/300/wo320/slide12.html
Size Matters
http://www.carrtracks.com/prbcoal2.htm
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
Quantity of Feedstock Required for a
4,000 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 $590,000 / harvest unit
•
10 people
•
•
•
•
•
Biomass Alternatives
(Oklahoma)
• Crop residue
– wheat straw (June-July)
– corn stover (September-October)
• Production from Conservation Reserve Program acres
(July-October)
• Established perennials (June-February)
– native grasses (short, mixed and tall prairie grass)
– improved pastures (Bermuda, fescue, old world
bluestem)
• Convert and manage cropland specifically for the
production of biomass
– switchgrass (model species) (July-February)
Oklahoma
33 million acres in farms and ranches
– 50% rangeland
– 25% permanent improved pasture and hay
– 25% cropland (1 million acres in CRP)
• Alternative use for these agricultural and rural
resources
•
Multi-region, Multi-period, Monthly time step,
Mixed Integer Mathematical Programming Model
•
•
•
•
•
•
•
•
•
•
•
77 counties (production regions)
11 potential plant locations
3 plant sizes (1,000, 2,000, 4,000 tons per day)
9 potential feedstocks
4 fertility levels for improved pasture grasses
Endogenously determined number of harvest units
Monthly harvest capacity restricted by harvest days
12 months
In-field storage
Storage at biorefinery
Designed for multiple products
Case Study
Single Biorefinery
• Pseudo product
• Three Size Alternatives
•
– 1,000, 2,000, and 4,000 tons/day
•
Two Feedstock Alternatives
– Multiple feedstock
• Crop Residue, Native Range, Improved Pastures, Switchgrass
• Limited to 10% of existing acres by source per county
– CRP-only
• Limited to 25% of CRP acres per county
Estimated Average Distance to Transport Lignocellulosic
Biomass to a Biorefinery located in Oklahoma from Multiple
Feedstock Sources and from CRP-Only
147
98
100
78
(miles)
Average Feedstock
Transport
150
64
CRP
49
50
0
1000
2000
4000
Biorefinery Size
(tons/day)
Multiple Sources
Estimated Cost to Deliver Lignocellulosic Biomass to a
Biorefinery; Multiple Feedstock Sources and CRP-Only
($/ton)
$75
$69
(delivered ton)
Feedstock Cost
$64
$50
$33
$32
$35
CRP
$25
$0
1000
2000
Biorefinery Size
(tons/day)
Multiple Sources
4000
Estimated Quantity of Feedstock Harvested by Month
for a 2,000 t/d Biorefinery; Multiple Feedstock Sources
and CRP-Only.
(CRP Harvest is Limited by Policy to 120 Days Beginning with July 2.)
Multiple Sources
CRP
150,000
(tons)
Feedstock Harvested
200,000
100,000
50,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Estimated Quantity of Feedstock Stored by Month at
Remote Sites for a 2,000 t/d Biorefinery; Multiple
Feedstock Sources and CRP-Only.
(CRP Harvest is Limited by Policy to 120 Days Beginning with July 2.)
400,000
CRP
300,000
(tons)
Field Storage
Multiple Sources
200,000
100,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Estimated Quantity of Feedstock Stored per Month at
the Biorefinery for a 2,000 t/d Biorefinery; Multiple
Feedstock Sources and CRP-Only.
45,000
30,000
(tons)
Storage at Biorefinery
(Storage at the Biorefinery is Limited to 42,000 tons (21 days))
15,000
0
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Month
Multiple Sources
CRP
Feedstocks Selected by the Model for use by the 2,000
t/d Biorefinery with Multiple Sources.
Wheat Straw
9%
Native Grasses
37%
CRP
2%
Corn Stover
0%
Switchgrass
52%
Findings
• The most economical system would process a variety of
feedstocks
• Harvest would extend over as many months as permitted
by weather and species
• Crop residues would not be a major feedstock in the region
(narrow harvest window)
• Method of feedstock acquisition ($/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
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