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Alternative Energy and Agriculture:
Perspectives on Cellulosic Feedstock and
Cellulosic Biorefineries
Francis Epplin
Department of Agricultural Economics
Oklahoma State University
Southern Association of Agricultural Sciences - Atlanta, GA
February 1 – 4, 2009
Collaborators
Plant & Soil Sciences
Charles Taliaferro (Retired) – grass breeding
Yanqi Wu – feedstock development
Biosystems & Agricultural Engineering
Ray Huhnke – biomass harvest and storage
Dani Bellmer - gasification
Tim Bowser - gasification
Mark Wilkins - bioconversion
Chemical Engineering
A.J. Johannes – process engineering
Randy Lewis (BYU) – bioreactor, bioconversion
Microbiology
Ralph Tanner (OU) – microbial catalyst development
U.S. Energy Use and Imports (2007)
105
101.6
(quadrillion BTU)
Energy
90
75
60
45
29.2
30
15
0
Total 2007 U.S. Energy
Consumption
Net 2007 U.S. Energy Imports
US Ethanol Production
January 2009 Capacity of 10.5 billion gallons
6,000
(million gallons)
US Ethanol Production
7,000
5,000
4,000
3,000
2,000
1,000
0
1980
1985
1990
1995
Year
2000
2005
US Gasoline and Ethanol Use
160,000
Gallons (million)
140,000
Gasoline
120,000
100,000
80,000
60,000
40,000
20,000
Ethanol
0
1975
1980
1985
1990
1995
Year
2000
2005
2010
Energy Content
• Gasoline
• Ethanol
• E-10
Btu/gallon
115,000
75,700
111,070
(66 % of Gasoline)
(97 % of Gasoline
(LHV - based on actual energy yield from use in motor vehicles)
Source: http://bioenergy.ornl.gov/papers/misc/energy_conv.html
• Miles per gallon
Gasoline
35
25
15
E-10 (based on Btu content)
33.8
24.1
14.5
Ethanol Price (minus the $0.51/gal blenders credit)
as percent of Gasoline price
120%
119%
111%
100%
85%
80%
60%
40%
20%
0%
1982-1991
1992-2001
2002-2008
Ethanol Price (minus the $0.51/gal blenders credit)
as percent of Gasoline price and
Potential Post E-10 Barrier (based on Btu content)
120%
119%
111%
100%
85%
80%
66%
60%
40%
20%
0%
1982-1991
1992-2001
2002-2008
Potential Price Ratio
After E-10 Barrier
U.S. Gasoline and Ethanol Use
(Energy Content)
18
Energy (Quad)
15
Gasoline
12
9
6
3
Ethanol
0
1975
1980
1985
1990
Year
1995
2000
2005
2010
U.S. Energy Imports and Energy from Corn
Ethanol (2007)
(quadrillion BTU)
Energy
30
29.2
20
% of Net 2007 Im ports
10
1.7%
9.2%
2.68
0.49
0
Net 2007 U.S.
Energy Imports
Ethanol from 2.4
billion bu of Corn
(U.S. 2007)
Potential Ethanol
from Total 2007
U.S. Corn
Production (13.1
billion bu)
BTU in U.S. Gasoline From
Ethanol (%)
Ethanol’s Btu Contribution Relative to US
Gasoline
20.0%
16.0%
12.0%
8.0%
2.9% in 2007
4.0%
0.0%
1975
1980
1985
1990
1995
Year
2000
2005
2010
BTU in US Gasoline from Ethanol
(%)
Ethanol’s Btu Contribution Relative to US
Gasoline
20.0%
16.0%
12.0%
8.0%
With E-10 Blends Maximum Contribution is 6.2%
4.0%
0.0%
1975
1980
1985
1990
1995
Year
2000
2005
2010
Cellulosic Ethanol
• Energy Independence and Security Act of 2007
• By 2022
– 36 billion gallons of biofuel
– 21 billion gallons of ethanol to be derived from nongrain products (e.g. sugar or cellulose)
– 15 billion gallons of grain (corn/sorghum) ethanol
• Based on 2007 gasoline use of 142 billion gallons,
14.2 billion gallons of ethanol would have
encountered the E-10 barrier
U.S. Energy Imports and Potential Energy from 21
Billion Gallons of Cellulosic Ethanol (EISA Mandate for 2022)
(quadrillion BTU)
Energy
30
29.2
20
% of Net 2007 Im ports
10
1.7%
0.49
5.5%
1.60
0
Net 2007 U.S.
Energy Imports
Ethanol from 2.4
billion bu of Corn
(U.S. 2007)
Cellulosic Ethanol
from 21 Billion
Gallon Mandate
Potential Energy from EISA Mandate for
2022 Relative to 2007 Use
100.0%
75%
(Btu %)
Gasoline & Ethanol Use
100%
50%
25%
16.2%
2.9%
6.7%
9.4%
0%
Ethanol 2007 2022 Goal for 2022 Goal for 2022 Goal for Gasoline &
Grain
Cellulosic Total Ethanol Ethanol 2007
Ethanol
Ethanol
Fuel
Perspective
• 2022 goal of 36 billion gallons of ethanol would
be equivalent to increasing fleet mileage by
– Four miles per gallon (e.g. 25 to 29 miles per gallon)
Challenges to Cellulosic Ethanol
• Economically viable conversion system
• Profitable business model
• Energy is a commodity
– The least-cost source will be used first
– In the absence of policy incentives (subsidies,
carbon taxes, mandates) extremely difficult to
compete with fossil fuels on cost
Costs (e.g. $/gallon)
Optimal Biorefinery Size
?
?
Biorefinery Size (e.g. tons/day)
Feedstock Transportation
Cost
(e.g. $/ton)
Feedstock Transportation Cost
Biorefinery Size
(e.g. tons/year)
Challenges
• Cost efficiency suggests
– Year-round operation of the biorefinery
– Year-round harvest of feedstock
• Optimal size is unknown but 50+ million gallons
per year is common for corn ethanol plants
• Anticipate that a cellulosic biorefinery would
require 2,000 dry tons per day
Quantity of Feedstock Required for a
2,000 tons per day Biorefinery
•
700,000 tons of biomass per year
•
350 days of operation per year
•
17 dry tons per truck
•
118 trucks per day
•
24 hours per day
•
4.9 trucks per hour
Can Agricultural Resources be Reallocated to
Provide Feedstock for Cellulosic Ethanol?
Hypotheses
• Land suitable for economically producing continuous corn and
corn-soybeans in rotation is too valuable for producing
perennial grass for cellulosic feedstock
• “Corn lobby” will spend a great deal trying to make corn stover
work as the base feedstock for cellulosic energy (ethanol
business is concentrated in the corn belt)
• Corn stover is not likely to be an economical feedstock (but it
won’t be for lack of trying and lack of research funds)
• If the subsidies/incentives are sufficiently great, stover “may
work”
Trouble with Stubble
Findings of a pilot corn stover collection project conducted near
Harlan, Iowa
• collection, storage, and transportation of a continuous flow of
corn stover is a “…logistical nightmare…”.
• In the U.S. Corn Belt, stover harvest may be complicated by
–
–
–
–
–
–
Rain
Mud
Snow
Narrow harvest window
Fire
Stalk moisture retention
• Dual collection combines, substantially more expensive, slow
harvest, increase the risk of grain loss
Source: Schechinger, Tom. Current Corn Stover Collection Methods and the Future. October 24, 2000. Online. Available at
http://www.afdc.doe.gov/pdfs/4922.pdf.
Trouble with Stubble
"Our main concern is $4-per-bushel corn (worth $750 to
$800 an acre)," Johnson (a corn producer) said.
“$30/acre for biomass is a minor concern for our
operation.“
Source: Bill Hord, 27 March 2007, Omaha World-Herald
May require 350,000 acres of corn stover for a single
biorefinery
contracts?
spot markets?
Will Perennial Grasses Work ?
Hypotheses
• Not on land suitable for economical production
of continuous corn and/or of corn-soybeans
rotation
• Perhaps on marginal cropland and cropland
pasture (remains to be seen if pasture can be
bid from livestock and converted to perennial
grasses)
Land ?
“…The rationale for developing lignocellulosic crops for
energy is that …poorer quality land can be used for
these crops, thereby avoiding competition with food
production on better quality land….” (McLaughlin et al.
1999, p. 293).
(Source: McLaughlin, S., J. Bouton, D. Bransby, B. Conger, W. Ocumpaugh, D. Parrish,
C. Taliaferro, K. Vogel, and S. Wullschleger. 1999. Developing Switchgrass as a
Bioenergy Crop. J. Janick (ed.), Perspectives on new crops and new uses. ASHS
Press, Alexandria, VA.)
U.S. Idle Cropland & Cropland
Pasture (million acres)
160
Cropland Pasture
Idle Cropland
140
120
100
80
60
40
20
0
1949 1954 1959 1964 1969 1974 1978 1984 1987 1992 1997 2002
Year
Source: R.N. Lubowski, M. Vesterby, S. Bucholtz, A. Baez, M.J. Roberts. Major Uses of Land in The United States, 2002. USDA ERS Electronic
Report Econ. Info. Bul. 14, May 2006.
DOE (Oak Ridge) Estimates of Least-Cost Production
Counties for Switchgrass Acreage (1996)
Graham, R. L., L. J. Allison, and D. A. Becker. “The Oak Ridge Crop County Level Database.”
Environmental Sciences Division, Bioenergy Feedstock Development Program, Oak Ridge National Laboratory, December 1996.
DOE (Oak Ridge) Estimates of Potential
Switchgrass Acreage (1998)
•
http://bioenergy.ornl.gov/papers/bioen98/walsh.ht
Biorefinery Locations
January 2009
Grass Yields
(dry t/acre/year)
OK
MS
IL
Switchgrass
7.1
12.5 2.5
Miscanthus
5.5
14.5 8.5
NE
ND
3.2
Sources: Busby. 2007. MSU MS Thesis.
Khanna. 2007. Choices.
Schmer et al. 2008. Proc. National Academy of Sciences .
Sladden et al. 1991. Biomass and Bioenergy .
Heaton et al. 2008. Global Change Biology.
AL
IL
9.9
4.5
13.4
Feedstock Acres
•
•
•
•
•
•
21 billion gallons (2007 Energy Act)
90 gallons per ton (DOE NREL goal)
233 million tons
3 - 7 dry tons per acre
33 - 78 million acres (if all from dedicated energy crop)
In 2007 US farmers planted
–
–
–
–
94 million acres of corn
64 million acres of soybeans
60 million acres of wheat
11 million acres of cotton
Business Model
• Is the most efficient switchgrass-biorefinery
business model likely to resemble the cornethanol business model?
– Perhaps in distillation and post-distillation
– Not in feedstock procurement
Corn versus Perennial Grasses
Corn
–
–
–
–
Annual crop
Spot markets
Infrastructure exists
Planting, harvesting,
transportation, and
storage systems
– Many alternative uses
– Risk management tools
(futures markets) in
existence
– Farming activities
Switchgrass
– Perennial
– Zero spot markets
– Zero Infrastructure
– Limited harvesting,
transportation, and
storage systems
– Few alternative uses for
mature switchgrass
– No futures markets
– After established, not
much “farming”
Policy Models
• Most U.S. agricultural policy models were designed to
evaluate acreage response among “program” crops
(corn, sorghum, barley, oats, wheat, rice, cotton) and
soybeans to alternative policies
– Annuals
– Single harvest
– Grown on high quality cropland
• Energy crops
– Perennials
– Proposed for “low quality” land (e.g. pasture)
• Traditional policy models are not well suited to model
perennial grasses on pasture land and capture the
consequences of harvest timing
Efficient Production, Harvest, Transportation,
and Storage System
Costs (e.g. $/gallon)
Hypothesis
• A mature system to produce and deliver
cellulosic feedstock to a biorefinery is more likely
to resemble the U.S. timber industry than the
U.S. corn industry
?
?
Biorefinery Size (e.g. tons/day)
Example of U.S. “Cellulose” Production
(Weyerhaeuser Locations)
Source: http://www.weyerhaeuser.com/Sustainability/Footprint/TimberlandsOwnership
South relative to Corn Belt for Producing
Perennial Grasses
• Higher yields
• Less expensive land
• Longer harvest window
• Longer growing season
• History of large integrated “cellulosic”
production and processing systems (timber)
Issues
– Profitable business model
– Efficient method to acquire the long term services
of millions of acres of land (contract acres or
contract production; insurance for the land owner
in the event of default by biorefinery)
– Sources for billions of dollars of investment capital
– Policy could be implemented that discriminates
against integrated systems
Cellulosic Ethanol
• Potential market is huge
• Many challenges remain
Acknowledgements
•
•
•
•
•
•
Oklahoma Agricultural Experiment Station
USDA/CSREES
USDA/IFAFS
Oklahoma Bioenergy Center
Sun Grant Initiative
Aventine
• Coskata (licensed technology)