The Economic and Financial Implications of Supplying a Bioenergy Conversion Facility with Cellulosic Biomass Feedstocks



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Comprehensive analyses are conducted of the holistic farm production-harvesting-transporting-pre-refinery storage supply chain paradigm which represents the totality of important issues affecting the conversion facility front-gate costs of delivered biomass feedstocks. Targeting the Middle Gulf Coast, Edna-Ganado, Texas area, mathematical programming in the form of a cost-minimization linear programming model(Sorghasaurus) is used to assess the financial and economic logistics costs for supplying a hypothetical 30-million gallon conversion facility with high-energy sorghum (HES) and switchgrass (SG) cellulosic biomass feedstock for a 12-month period on a sustainable basis. A corporate biomass feedstock farming entity business organization structure is assumed. Because SG acreage was constrained in the analysis, both HES and SG are in the optimal baseline solution, with the logistics supply chain costs (to the front gate of the conversion facility) totaling $53.60 million on 36,845 acres of HES and 37,225 acres of SG (total farm acreage is 187,760 acres, including HES rotation acres), i.e., $723.67 per harvested acre, $1.7867 per gallon of biofuel produced not including any conversion costs, and $134.01 per dry ton of the requisite 400,000 tons of biomass feedstock. Several sensitivity scenario analyses were conducted, revealing a potential range in these estimates of $84.75-$261.52 per dry ton of biomass feedstock and $1.1300-$3.4870 per gallon of biofuel. These results are predicated on simultaneous consideration of capital and operating costs, trafficable days, timing of operations, machinery and labor constraints, and seasonal harvested biomass feedstock yield relationships. The enhanced accuracy of a comprehensive, detailed analysis as opposed to simplistic approach of extrapolating from crop enterprise budgets are demonstrated. It appears, with the current state of technology, it is uneconomical to produce cellulosic biomass feedstocks in the Middle Gulf Coast, Edna-Ganado, Texas area. That is, the costs estimated in this research for delivering biomass feedstocks to the frontgate of a cellulosic facility are much higher than the $35 per ton the Department of Energy suggests is needed. The several sensitivity scenarios evaluated in this thesis research provides insights in regards to needed degrees of advancements required to enhance the potential economic competitiveness of biomass feedstock logistics in this area.