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The Economics of Harvesting and Transporting Hardwood Forest Residue for Conversion to Fuel Ethanol: A Case Study for Minnesota

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  • Petrolia, Daniel R.

Abstract

Forest residues are being considered as potential feedstock for a biomass-to-ethanol facility in Minnesota (USA), using residues from major wood-producing counties in Minnesota, Wisconsin, and Michigan. Results indicate that marginal residue costs delivered to a conversion facility would be $56-80/Mg for a small (95-189 MM liters) plant, and about $81/Mg for a larger (379 MM liters) plant. Output beyond these levels would involve substitution of lower-cost market pulpwood as the plant feedstock because of relatively high marginal residue costs. Sensitivity analysis indicates that either a 20-percent increase or decrease in the quantity of available residue would impact marginal cost estimates by no more than $15/Mg.

Suggested Citation

  • Petrolia, Daniel R., 2006. "The Economics of Harvesting and Transporting Hardwood Forest Residue for Conversion to Fuel Ethanol: A Case Study for Minnesota," Staff Papers 14020, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:14020
    DOI: 10.22004/ag.econ.14020
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    File URL: https://ageconsearch.umn.edu/record/14020/files/p06-15.pdf
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    Cited by:

    1. Scott M. Swinton & Felix Dulys & Sarah S.H. Klammer, 2021. "Why Biomass Residue Is Not as Plentiful as It Looks: Case Study on Economic Supply of Logging Residues," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 1003-1025, September.
    2. Lazarus, William F., 2008. "Energy Crop Production Costs and Breakeven Prices Under Minnesota Conditions," Staff Papers 45655, University of Minnesota, Department of Applied Economics.
    3. Rauh, S. & Berenz, S. & Heißenhuber, A., 2008. "Abschätzung des unternehmerischen Risikos beim Betrieb einer Biogasanlage mit Hilfe der Monte-Carlo-Methode," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    4. Petrolia, Daniel R., 2006. "Ethanol from Biomass: Economic and Environmental Potential of Converting Corn Stover and Hardwood Forest Residue in Minnesota," 2006 Annual meeting, July 23-26, Long Beach, CA 21422, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    5. Luis Armando Becerra-Pérez & Luis Rincón & John A. Posada-Duque, 2022. "Logistics and Costs of Agricultural Residues for Cellulosic Ethanol Production," Energies, MDPI, vol. 15(12), pages 1-18, June.
    6. Rauh, Stefan & Berenz, Stefan & Heissenhuber, Alois, 2007. "ABSCHATZUNG DES UNTERNEHMERISCHEN RISIKOS BEIM BETRIEB EINER BIOGASANLAGE MIT HILFE DER MONTECARLO-METHODE (German)," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7588, German Association of Agricultural Economists (GEWISOLA).
    7. Zou, Tianyu & Pederson, Glenn D., 2008. "Using Real Options to Evaluate Investments in Ethanol Facilities," Staff Papers 37872, University of Minnesota, Department of Applied Economics.
    8. Brechbill, Sarah C. & Tyner, Wallace E. & Ileleji, Klein E., 2008. "The economics of biomass collection and transportation and its supply to Indiana cellulosic and electric utility facilities," Risk, Infrastructure and Industry Evolution Conference, June 24-25, 2008, Berkeley, California 48732, Farm Foundation.
    9. Eidman, Vernon R. & Petrolia, Daniel R. & Huang, Huajiang & Ramaswamy, Shri, 2009. "The Economic Feasibility of Producing Ethanol from Corn Stover and Hardwood in Minnesota," Staff Papers 47055, University of Minnesota, Department of Applied Economics.
    10. Mooney, Daniel F. & Roberts, Roland K. & English, Burton C. & Tyler, Donald D. & Larson, James A., 2008. "Switchgrass Production in Marginal Environments: A Comparative Economic Analysis across Four West Tennessee Landscapes," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6403, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    11. Epplin, Francis M., 2008. "Millions of acres for dedicated energy crops: farms, ranches, or plantations?," Integration of Agricultural and Energy Systems Conference, February 12-13, 2008, Atlanta, Georgia 48711, Farm Foundation.

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    Keywords

    Resource /Energy Economics and Policy;

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