Production and Location Economics
Sources of corn for ethanol production in the United States: a decomposition analysis of the empirical data
The use of corn for ethanol production in the United States quintupled between 2001 and 2009, generating concerns that this could lead to the conversion of forests and grasslands around the blobe, known as indirect land-use change (iLUC). Estimates of iLUC and related "food versus fuel" concerns rest on the assumption that the corn used for ethanol production in the United States would come primarily from displacing corn exports and land previously used for other crops.
Lignocellulosic Biomass to Ethanol Process Design and Economics Utilizing Co-Current Dilute Acid Prehydrolysis and Enzymatic Hydrolysis for Corn Stover
The U.S. Department of Energy (DOE) is promoting the development of ethanol from lignocellulosic feedstocks as an alternative to conventional petroleum-based transportation fuels. DOE funds both fundamental and applied research in this area and needs a method for predicting cost benefits of many research proposals. To that end, the National Renewable Energy Laboratory (NREL) has modeled many potential process designs and estimated the economics of each process during the last 20 years. This report is an update of the ongoing process design and economic analyses at NREL.
This paper examines the possibilities of breaking into the cellulosic ethanol market in south Louisiana via strategic feedstock choices and the leveraging of the area’s competitive advantages. A small plant strategy is devised whereby the first-mover problem might be solved, and several scenarios are tested using Net Present Value analysis.
The Energy Independence and Security Act (EISA) of 2007 established specific targets for the production of biofuel in the United States. Until advanced technologies become commercially viable, meeting these targets will increase demand for traditional agricultural commodities used to produce ethanol, resulting in land-use, production, and price changes throughout the farm sector. This report summarizes the estimated effects of meeting the EISA targets for 2015 on regional agricultural production and the environment. Meeting EISA targets for ethanol production is estimated to expand U.S.
Impact of Biofuel Industry Expansion on Grain Utilization and Distribution: Preliminary Results of Iowa Grain and Biofuel Survey
This paper examines the impact of biofuel expansion on grain utilization and distribution at the state and cropping district level as most of grain producers and handlers are directly influenced by the local changes. We conducted a survey to understand the utilization and flows of corn, ethanol and its co-products, such as dried distillers grains (DDG) in Iowa. Results suggest that the rapidly expanding ethanol industry has a significant impact on corn utilization in Iowa.
This paper examines the impact of declining energy prices on biofuels production and use and its implications to agricultural commodity markets. It uses PEATSim, a dynamic partial equilibrium, multi-commodity, multi-country global trade model of the agriculture sector to analyze the interaction between biofuel, crop and livestock sectors. The ability of countries to achieve their energy goals will be affected by future direction of petroleum prices.
Agricultural markets often feature significant transport costs and spatially distributed production and processing which causes spatial imperfect competition. Spatial economics considers the firms’ decisions regarding location and spatial price strategy separately, usually on the demand side, and under restrictive assumptions. Therefore, alternative approaches are needed to explain, e.g., the location of new ethanol plants in the U.S. at peripheral as well as at central locations and the observation of different spatial price strategies in the market.
Biomass Supply from Alternative Cellulosic Crops and Crop Residues: A Preliminary Spatial Bioeconomic Modeling Approach
This paper introduces a spatial bioeconomic model for study of potential cellulosic biomass supply at regional scale. By modeling the profitability of alternative crop production practices, it captures the opportunity cost of replacing current crops by cellulosic biomass crops. The model draws upon biophysical crop input-output coefficients, price and cost data, and spatial transportation costs in the context of profit maximization theory. Yields are simulated using temperature, precipitation and soil quality data with various commercial crops and potential new cellulosic biomass crops.
Optimal Biorefinery Locations and Transportation Network for the Future Biofuels Industry in Illinois
This article addresses development of the Illinois ethanol industry through the period 2007-2022, responding to the ethanol production mandates of the Renewable Fuel Standard by the U.S. Environmental Protection Agency. The planning for corn-based and cellulosic ethanol production requires integrated decisions on transportation, plant location, and capacity.
Traffic flows in the U.S. have been affected by the substantial increase and, as of January 2009, decrease in biofuel production and use. This paper considers a framework to study the effect on grain transportation flows of the 2005 Energy Act and subsequent legislation, which mandated higher production levels of biofuels, e.g. ethanol and biodiesels. Future research will incorporate changes due to the recent economic slowdown.