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Economics of Sourcing Cellulosic Feedstock for Energy Production

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  • Gustafson, Cole R.
  • Maung, Thein A.
  • Saxowsky, David M.
  • Nowatzki, John
  • Miljkovic, Tatjana

Abstract

This study investigates the economics of supplying wheat straw and corn stover within 100 mile radius of a potential new biorefinery in southeast North Dakota. In particular, straw and stover total delivery costs, potential straw and stover supply sites and least cost transportation routes are identified using a linear programming transport model and a GIS (Geographic Information Systems) mapping system. We show that USDA/NRCS (Natural Resources Conservation Service) future crop residue removal rate policies will be important for determining whether it is economically viable to harvest crop residues as potential feedstock for energy generation. Increase in residue removal rates narrow the size of residue supply areas and consequently result in lowering total transportation costs. There is an economic tradeoff between residue collection density and distance from the biorefinery. Most wheat residues are highly concentrated in the north, some distance from the biorefinery. Relying solely on wheat straw for supply needs require longer transportation distances which increases total cost. Using a combination of wheat and corn residues lowers total transportation costs. Since most wheat/corn residues are densely concentrated in north/south, regional highways would likely be the routes used often to transport the residues, as compared to interstate highways. Increased traffic volumes due to the hauling of crop residues would require additional investment in improving road conditions.

Suggested Citation

  • Gustafson, Cole R. & Maung, Thein A. & Saxowsky, David M. & Nowatzki, John & Miljkovic, Tatjana, 2011. "Economics of Sourcing Cellulosic Feedstock for Energy Production," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 103260, Agricultural and Applied Economics Association.
  • Handle: RePEc:ags:aaea11:103260
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    File URL: http://purl.umn.edu/103260
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    Cited by:

    1. Rosburg, Alicia & Miranowski, John & Jacobs, Keri, 2013. "Cellulosic Biofuel Potential Under Land Constraints: Locations, Plant Sizes and Feedstock Supply Costs," Staff General Research Papers Archive 36358, Iowa State University, Department of Economics.

    More about this item

    Keywords

    Wheat Straw; Corn Stover; Density; Transportation Cost; GIS; Community/Rural/Urban Development; Crop Production/Industries;

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