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Economic Feasibility of a Mobile Fast Pyrolysis System for Sustainable Bio-crude Oil Production

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  • Palma, Marco A.
  • Richardson, James W.
  • Roberson, Brad E.
  • Ribera, Luis A.
  • Outlaw, Joe L.
  • Munster, Clyde

Abstract

This paper analyzed the economic feasibility of a mobile bioenergy pyrolysis system using a Monte Carlo simulation model. Pyrolysis transforms any cellulosic materials into i) a bio-oil similar to crude oil ii) a synthesis gas similar to natural gas, and iii) a bio-charcoal substance. The pyrolyzer machine is currently being manufactured and tested with various types of feed-stocks including corn stover and energy sorghum. The economic analysis focused on creating an automated process that integrates a transportation logistics cost optimization model with geo-graphic information system (GIS) data. The geographic data provides possible paths for the mo-bile bioenergy pyrolysis unit as it moves to and from each harvest area, depending on stochastic availability of feedstock (determined by historical crop yields) and distance to oil refineries. The results indicated that there is a low probability of a positive Net Present Value (NPV) with cur-rent economic conditions. In general, the NPV was highest with a stationary scenario and it de-creased with additional moving times. A sensitivity analysis is presented to assess the potential probability of success of a mobile pyrolysis system under alternative oil prices and feedstock costs scenarios.

Suggested Citation

  • Palma, Marco A. & Richardson, James W. & Roberson, Brad E. & Ribera, Luis A. & Outlaw, Joe L. & Munster, Clyde, 2011. "Economic Feasibility of a Mobile Fast Pyrolysis System for Sustainable Bio-crude Oil Production," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 14(3), pages 1-16, September.
    • Handle: RePEc:ags:ifaamr:114636
    DOI: 10.22004/ag.econ.114636
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    References listed on IDEAS

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    1. Richardson, James W. & Herbst, Brian K. & Outlaw, Joe L. & Gill, Robert Chope, II, 2007. "Including Risk in Economic Feasibility Analyses: The Case of Ethanol Production in Texas," Journal of Agribusiness, Agricultural Economics Association of Georgia, vol. 25(2), pages 1-18.
    2. Richardson, James W. & Mapp, Harry P., Jr., 1976. "Use Of Probabilistic Cash Flows In Analyzing Investments Under Conditions Of Risk And Uncertainty," Southern Journal of Agricultural Economics, Southern Agricultural Economics Association, vol. 8(2), pages 1-6, December.
    3. Richardson, James W. & Outlaw, Joe L. & Anderson, David P. & Sartwelle, James D., III & Feldman, Paul A. & Schumann, Keith D. & Klose, Steven L. & Schwart, Robert B., Jr. & Womack, Abner W., 2001. "Representative Farms Economic Outlook for the December 2003 FAPRI/AFPC Baseline," Working Papers 42720, Texas A&M University, Agricultural and Food Policy Center.
    4. Outlaw, Joe L. & Ribera, Luis A. & Richardson, James W. & Silva, Jorge da & Bryant, Henry & Klose, Steven L., 2007. "Economics of Sugar-Based Ethanol Production and Related Policy Issues," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 39(2), pages 357-363, August.
    5. Richardson, James W. & Anderson, David P. & Smith, Edward G. & Womack, Abner W. & Feldman, Paul A. & Schumann, Keith D. & Outlaw, Joe L. & Klose, Steven L. & Schwart, Robert B., Jr. & Ochoa, Rene F. &, 2001. "Representative Farms Economic Outlook for the January 2001 FAPRI/AFPC Baseline," Working Papers 42783, Texas A&M University, Agricultural and Food Policy Center.
    6. Outlaw, Joe L. & Anderson, David P. & Klose, Steven L. & Richardson, James W. & Herbst, Brian K. & Waller, Mark L. & Raulston, J. Marc & Sneary, Shannon L. & Gill, Robert Chope, II, 2003. "An Economic Examination of Potential Ethanol Production in Texas," Working Papers 42707, Texas A&M University, Agricultural and Food Policy Center.
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    3. Ji, Li-Qun & Zhang, Chuang & Fang, Jing-Qi, 2017. "Economic analysis of converting of waste agricultural biomass into liquid fuel: A case study on a biofuel plant in China," Renewable and Sustainable Energy Reviews, Elsevier, vol. 70(C), pages 224-229.
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    6. Albashabsheh, Nibal T. & Heier Stamm, Jessica L., 2019. "Optimization of lignocellulosic biomass-to-biofuel supply chains with mobile pelleting," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 122(C), pages 545-562.
    7. Zapata, Samuel D. & Ribera, Luis A. & Palma, Marco A., 2017. "Effect Of Production Parameters On The Economic Feasibility Of A Biofuel Enterprise," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 49(3), pages 347-362, August.
    8. Bizimana, Jean-Claude & Derseh, Melkamu B. & Adie, Aberra & Kiker, Gregory A., 2023. "Simulated economic and nutritional impacts of irrigated fodder and crossbred cows on farm households in southern Ethiopia," World Development Perspectives, Elsevier, vol. 31(C).
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    10. Yeboah, Anthony K. & Naanwaab, Cephas B. & Yeboah, Osei-Agyeman & Owens, John Paul & Bynum, Jarvetta S., 2013. "Economic Feasibility of Sustainable High Oilseed-Based Biofuel Production: The Case for Biodiesel in North Carolina," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 16(1), pages 1-26, February.
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