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Economics and Uncertainty of Lignocellulosic Biofuel Production from Energy Cane and Sweet Sorghum in South Texas

Author

Listed:
  • Monge, Juan J.
  • Ribera, Luis A.
  • Jifon, John L.
  • Silva, Jorge A. da
  • Richardson, James W.

Abstract

Government support uncertainty, scarce yiel d information, and the inherent risk in bio- economic phenomena are some of the deterrents faced by investors in the nascent cellulosic biofuel industry. A financial probabilistic model was developed to contrast the economic feasibility of producing cellulosic biofuels from energy cane and sweet sorghum using three technologies: hydrolysis, pyrolysis, and gasification. Hydrolysis and pyrolysis proved feasible (showed possibilities of a positive net present value) without government support and conditioned to stochastic feedstock yields and biofuel prices. Gasification was feasible with government support. Improved feedstock and biofuel productivity would considerably raise the feasibility probabilities for hydrolysis and pyrolysis without government support.

Suggested Citation

  • Monge, Juan J. & Ribera, Luis A. & Jifon, John L. & Silva, Jorge A. da & Richardson, James W., 2014. "Economics and Uncertainty of Lignocellulosic Biofuel Production from Energy Cane and Sweet Sorghum in South Texas," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 46(4), pages 1-28, November.
  • Handle: RePEc:ags:joaaec:189142
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    File URL: http://ageconsearch.umn.edu/record/189142/files/jaae715.pdf
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    References listed on IDEAS

    as
    1. 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(02), pages 357-363, August.
    2. Richardson, James W. & Outlaw, Joe L. & Anderson, David P. & Sartwelle, James D., III & Schwart, Robert B., Jr. & Schumann, Keith D. & Feldman, Paul A. & Raulston, J. Marc & Klose, Steven L., 2003. "Representative Farms Economic Outlook for the January 2003 FAPRI/AFPC Baseline," Briefing Series 42699, Texas A&M University, Agricultural and Food Policy Center.
    3. Richardson, James W. & Klose, Steven L. & Gray, Allan W., 2000. "An Applied Procedure For Estimating And Simulating Multivariate Empirical (Mve) Probability Distributions In Farm-Level Risk Assessment And Policy Analysis," Journal of Agricultural and Applied Economics, Southern Agricultural Economics Association, vol. 32(2), pages 1-17, August.
    4. Schmit, Todd M. & Luo, Jianchuan & Tauer, Loren W., 2008. "Ethanol Plant Investment using Net Present Value and Real Options Analyses," Working Papers 51145, Cornell University, Department of Applied Economics and Management.
    5. Schmit, T.M. & J., Luo & Conrad, J.M., 2011. "Estimating the influence of U.S. ethanol policy on plant investment decisions: A real options analysis with two stochastic variables," Energy Economics, Elsevier, vol. 33(6), pages 1194-1205.
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    Cited by:

    1. 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(03), pages 347-362, August.
    2. repec:ags:ifaamr:264200 is not listed on IDEAS

    More about this item

    Keywords

    Agribusiness; Agricultural Finance;

    JEL classification:

    • G17 - Financial Economics - - General Financial Markets - - - Financial Forecasting and Simulation
    • Q16 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Agriculture - - - R&D; Agricultural Technology; Biofuels; Agricultural Extension Services
    • Q48 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Government Policy

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