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Economics of Sourcing Cellulosic Feedstock for Energy Production

Listed author(s):
  • Gustafson, Cole R.
  • Maung, Thein A.
  • Saxowsky, David M.
  • Nowatzki, John
  • Miljkovic, Tatjana

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.

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Paper provided by Agricultural and Applied Economics Association in its series 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania with number 103260.

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Date of creation: 24 Jul 2011
Handle: RePEc:ags:aaea11:103260
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