Modeling Bioenergy in the
U.S. Forest Service’s RPA Assessment
Designing U.S. Forest Assessment System
to analyze agricultural and forest feedstock
markets, including small-diameter and fire
salvage wood, and impacts of biorefinery
development
Peter J. Ince
USDA Forest Service
Forest Products Laboratory
Madison, Wisconsin USA
Forestry and Agriculture Greenhouse Gas Modeling Forum
March 5-8, 2007 – Shepherdstown, West Virginia
Modeling Bioenergy in the
U.S. Forest Service’s RPA Assessment
Topics:
 Background – “RPA Assessment”
 New global modeling approach (USFPM/GFPM)
 Modeling future development of wood bioenergy
 Assessing biofuel and bioenergy implications
Forestry and Agriculture Greenhouse Gas Modeling Forum
March 5-8, 2007 – Shepherdstown, West Virginia
RPA Assessment
Background:
2000 RPA
Timber
Assessment
(Haynes et al.)
The Renewable Resources Planning Act (RPA)
mandates periodic assessments of the U.S. forest
resource situation (every 5 years), including longrange analysis of supply, demand and price trends.
The U.S. forest assessment system is a set of bioeconomic models that provide 50-year projections.
RPA Assessment
Background:
From the late 1970s to 2005, the RPA
assessment system consisted of North
American forest sector models (TAMMNAPAP-ATLAS). Global trade was
exogenous.
The U.S. forest assessment system for
the 2010 RPA will include a global forest
products model (GFPM) as the new
solver of market supply, demand and
price equilibria.
Why a global model?
Economic globalization has had big impacts on the forest
sector since the early 1990s. Growth in wood fiber demand
has shifted to Asia, and U.S. timber harvest has declined.
(The WTO . . . )
(A forest
product
bulk
carrier)
Since 1990 U.S. producers lost domestic market share for all wood
products, especially labor-intensive products, with rising imports . . .
In view of economic globalization, the Forest Service is adopting a
global forest product market modeling approach for the 2010 RPA.
100%
1990
2005
80%
60%
40%
20%
0%
Paper &
Board
OSB &
Plywood
Softwood
Lumber
HH
Furniture
Hardwood
Lumber
Hardwod
flooring
Hwd &
softwd
molding
Sources: Shipments : Dept Commerce, Bureau Census , ASM; Imports & Exports : FAS; Paper & Board: AF&PA
 New global modeling approach (USFPM/GFPM)
Global market model:
Global Forest Products Model (GFPM)
• Dynamic Equilibrium Model
• All Major Forest Products
and All Countries
• Production, Consumption
and Trade
• Based on PELPS (PriceEndogenous Linear
Programming System)
Within GFPM (global model) we are developing
USFPM – U.S. Forest Product Module . . .
USFPM
To create USFPM we are adding sub-regions and
more product detail for the United States (one of
numerous countries within GFPM), creating USFPM
within GFPM, or “USFPM/GFPM” . . .
USFPM/GFPM
USFPM/GFPM expands the regional structure of USA
(currently a single region in GFPM), by expanding
supply and production into three U.S. sub-regions:
Current GFPM
USFPM/GFPM
Demand
USA
World (export)
Demand
USA
World (export)
Supply/Production
USA
Supply/Production
U.S. North
U.S. South
U.S. West
World (import)
World (import)
USFPM/GFPM expands U.S. timber and fiber supply to
include both hardwood and softwood sawtimber and nonsawtimber, other forest biomass, ag. SRWC, and residues:
Current GFPM
USFPM in GFPM
Fuelwood & Charcoal
(N.A.)
Sawlogs & Pulpwood
(one commodity)
Hardwood Sawtimber
Softwood Sawtimber
Hardwood Non-Sawtimber
Softwood Non-Sawtimber
Other Forest Biomass
(branches, cull, whole-tree chips, etc.)
Agricultural SRWC
Residues
Other Indust. Roundwood
Other Fiber Pulp
Wastepaper
(N.A.)
Non-Wood Fiber Pulp
Recovered Paper
USFPM/GFPM expands the U.S. product structure of GFPM,
by differentiating hardwood and softwood lumber, and OSB
and particleboard, and adding biofuel to the product mix:
Current GFPM
USFPM/GFPM
Sawnwood
Hardwood Lumber
Softwood Lumber
Veneer/Plywood
Oriented Strand Board (OSB)
Industrial Particleboard
Fiberboard
Mechanical Wood Pulp
Chem./Semichem Pulp
Newsprint
Printing & Writing Paper
Other Paper & Board
Biofuel (Cellulosic Ethanol)
Fuelwood
Veneer/Plywood
Particleboard
Fiberboard
Mechanical Wood Pulp
Chem./Semichem Pulp
Newsprint
Printing & Writing Paper
Other Paper & Board
(N.A)
Fuelwood
USFPM/GFPM* will be part of the larger
U.S. Forest Assessment System (USFAS)
for the 2010 RPA Forest Assessment.
USFAS has three major domains,
(1) Forest Use Domain (which includes forest
products sector, and USFPM/GFPM model)
(2) Forest Dynamics Domain (plot-based forest
transition and harvest model)
(3) Forest Ecosystem Services Domain (models
of carbon, water, wildlife and ecosystem
conditions linked to plot transitions)
Global Economy
Climate
Trade
Forest Use Domain
Land Uses
Wood Products Markets
Resource Management
Forest Dynamics Domain
Forest area
Forest conditions
USFAS
Forest Ecosystem Services Domain
Carbon
United States Economy
Wildlife
Water
The Forest Dynamics
Domain of USFAS will
model transitions
across the entire
spectrum of U.S. forest
inventory plots (FIA
database of all forests
and plantations).
Transitions will include
tree growth, shifts in
species mix, and forest
management actions
such as harvests in
responds to timber
price and demand
(derived from domestic
and global markets).
For example, USFPM/GFPM will contribute
to projected timber harvest and prices by
solving for the market equilibrium between
the USFAS forest transition model and the
global and regional forest product markets.
Forest Transition Model –
based on all FIA forest
plots (D. Wear et al.):
T=t+d
t=1, T, d
{time steps}
Plot=i; Label=Li
i= 1, N
{all plots}
m= 1,M
Stochastic
Transition
Model
{imputations}
Predicted Label
Harvest Forecast
Census Data &
Woods and Poole
Price Forecast
USFPM\GFPM
Climate Forecast
IPCC,
climate analysis
Random draw donor plot / store label
Historical Plot Data Base
Summarize all
realizations for plot i
Calculate inventory
variables / store results
Forecast inventory
T+d
Novel Plot Data Base
Expansion Factor
Forecast
Land Use Change
Models
*
As in past RPA assessments
agricultural short-rotation
woody crops such as hybrid
poplars, and wood from fire
salvage or fuel thinning
programs may be introduced
also in USFPM/GFPM via
cost-based supply functions
that can provide new supply
sources if competitive with
existing supply sources.
 Modeling future development of wood bioenergy
The DOE R&D goal for
cellulosic ethanol is to
compete with corn ethanol
(at break-even costs of
around $1.10/gallon) . . .
The goal is cellulosic
ethanol at $1.07/gallon
by 2012, with feedstock
at $30/dry ton.
Source: Dr. Stanley Bull, NREL, “Non-Carbon-Emitting Technologies for the Future”, May 8, 2006
$120
$80
$40
$0
-- Peter Ruschmeier, 2006 PIMA Conference
$ per Dry Ton on the stump
Large trees (>10”) are too
valuable for use as biofuel
feedstock. Only smaller
trees (6-8” pulpwood) could
be affordable as feedstock.
However, in the past year delivered pulpwood prices have moved further away
from the DOE feedstock goal ($30 per dry ton) as prices in the West increased
with a shortage of sawmill residue chips due to housing and lumber downturn.
Delivered softwood pulp log price
indexes by region (avg.)
New Housing Units Started in the United States
2,200
160
2,000
Thousands of Units
West (PNW)
North
South
1,800
Multifamily
1,600
1,400
1,200
Single Family
1,000
140
800
In the South, delivered pulpwood
prices are double the $30 per dry ton
feedstock goal, and pulpwood prices
are substantially higher in the West.
Source: Regional averages of softwood roundwood prices from International Woodfiber Report
Jan-07
Jul-06
Jan-06
Jul-05
Jan-05
Jul-04
Jan-04
Jul-03
Jan-03
Jul-02
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1st Qtr
'06
'06
'06
'06
'07
Jan-02
80
Jul-01
100
Jan-01
120
Jul-00
600
Jan-00
Price Index (South 1stQ06 = 100)
200
180
Seasonally Adjusted Annual Rate
2,400
• In USFPM/GFPM the growth and development
of wood products is determined by their cost
competitiveness and profitability
• In USFPM/GFPM, biofuels and bioenergy uses
will compete for wood raw materials (such as
pulpwood) versus other conventional wood
products, like pulp & paper or OSB (oriented
strand-board)
Wood receipts at U.S. OSB/panel mills and wood pulp mills*
OSB and wood pulp have been projected to be lead competitors for
“pulpwood” – but may face future competition from wood biofuels . . .
Historical
Projected
*Total receipts,
softwood &
hardwood;
roundwood
& residues
for pulp, and
roundwood
for OSB.
2005 RPA Timber Assessment Update
$ per ton of feedstock
Relative costs &
profit margins in
U.S. South . . .
At current costs and prices, producing
cellulosic fuel ethanol from pulpwood
is unprofitable. Wood pulp and OSB
offer higher & less risky profit margins.
500
= Range of net returns
given product price
range since mid-90s
400
300
Profit & Return
on Capital
200
Other Operating
Costs (approx.)
100
Feedstock Cost
(pulpwood)
0
Wood
Pulp
OSB
Cellulosic
Ethanol
January ‘07 prices:
Pulp @ $750/ton
OSB @ $180/MSF
Ethanol @ $2.00/gal
Costs approximated from following sources: NLK (kraft pulp), Spelter-FPL (OSB), NREL (ethanol), Timber Mart-South (feedstock)
In USFPM/GFPM, we
can introduce future
cost assumptions for
wood biofuels such as
cellulosic ethanol
Source: Dr. Stanley Bull, NREL, “Non-Carbon-Emitting Technologies for the Future”, May 8, 2006
$ per ton of feedstock
Relative costs &
profit margins in
U.S. South . . .
At future costs and median prices,
producing cellulosic fuel ethanol from
pulpwood may become profitable and
competitive with wood pulp and OSB.
500
= Range of net returns
given product price
range since mid-90s
400
300
Profit & Return
on Capital
200
Other Operating
Costs (approx.)
Feedstock Cost
(pulpwood)
100
0
Wood
Pulp
OSB
Cellulosic
Ethanol
Median prices:
Pulp @ $700/ton
OSB @ $240/MSF
Ethanol @ $2.50/gal
Costs approximated from following sources: NLK (kraft pulp), Spelter-FPL (OSB), NREL (ethanol), Timber Mart-South (feedstock)
Also, co-production of fuel ethanol and acetic acid via
hemicellulose extraction at a kraft pulp mill may be an
economically feasible approach to forest biorefining
according to preliminary FPL studies . . .
Extraction
Pulping
Hemicellulose
(fraction of wood)
Probability Distribution for IRR (real) / After-tax
1.4
X <=0
5%
X <=1.17
95%
Mean = 0.4425941
Mean = 44.3%
1.2
Separation
Acetic Acid
1
FPL estimates of
returns with variable
ethanol prices
0.8
0.6
Wood Sugars
0.4
0.2
0
-50%
Fermentation
& Distillation
Fuel Ethanol
0%
50%
100%
150%
200%
In this case, biorefining diverts
hemicelluloses from black
liquor combustion to biofuel
and chemical feedstock.
And, gasification of spent pulping liquors (black liquor) and wood
residues with reforming to biofuels and chemicals is another
potential approach to forest biorefining, with high estimated rates of
return on investment.1
Gasifier technology under
development by Chemrec
1Reference:
Again, mill byproducts (black
liquor and wood
residues in this
case) might be
economically
diverted from
direct combustion
to biofuel, even
though direct
conversion of
pulpwood may not
be economical.
Larson, E.D. et al. 2006. A Cost-Benefit Assessment of Gasification-Based Biorefining in the Kraft Pulp
and Paper Industry. FINAL REPORT under contract DE-FC26-04NT42260 with the U.S. Department of Energy. 164 p.
The most economical approaches to producing
wood-based biofuels (e.g. cellulosic ethanol)
are at present based on biorefining of readily
available or existing byproduct feedstocks at
pulp and paper mills (i.e. hemicelluloses, black
liquor and wood residues). Pulpwood is less
likely to be used directly as a feedstock unless
substantial gains are achieved in cellulosic
ethanol production efficiency. However, all
available options should be assessed in the
context of dynamic and competitive markets.
 Assessing biofuel and bioenergy implications
USFPM/GFPM will assess the following:
• Competitive outlook for wood biofuels and bioenergy
in the context of all competing wood uses and global
wood markets; expected U.S. market implications;
future development of wood biofuels and feedstocks
USFAS , the broader U.S. forest assessment system,
will assess the following (via forest transition model):
• Forest resource implications (timber inventory,
forest ecology) of biofuel/bioenergy development
• Forest sector carbon sequestration and other
implications of bioenergy and biofuels
Questions?