IDEAS home Printed from https://ideas.repec.org/p/ags/uerser/308485.html

Biomass Crop and Ethanol Supply from Agricultural Lands in the United States with Methodology, Estimation Results, and State-by-State Simulations

Author

Listed:
  • Gallagher, Paul W.
  • Shapouri, Hosein

Abstract

We estimated the biomass crop supply from U.S. farmland, accounting for the contribution of marginal lands, gauging effects of removing income support programs, and returning some Conservation Reserve Program (CRP) land where biomass production can be sustained. We excluded biomass yield growth because we believe the infrastructure to sustain this growth is not in place. We estimate that 484 million tons of biomass could be brought into production, with 176 million tons on cropland and the remainder coming from marginal farmland. However, it could take a decade with sustained high biomass prices to induce the necessary reallocation of farmland resources. Presently, the land-value effects of existing programs may deter the adoption of biomass processing technologies. Cropland policies more conducive to biomass expansion are reviewed. The ethanol market analysis sketches some plausible market developments that could influence the adoption of biomass ethanol (BE). That is, a corn-ethanol (CE) industry expansion has pushed CE costs up to the point where BE could be competitive. Still, the new entrant, BE, would likely compete with narrow profit margins in the commodity fuel market. But the equilibrium with impending technology suggests ethanol output of 45 billion gallons, or about one-third of U.S. gasoline consumption. However, removing the ethanol subsidy would reduce profitability to near the competitive margin, even if anticipated processing yields for BE occur in the intermediate term. Justifications for retaining the ethanol subsidy are reviewed.

Suggested Citation

  • Gallagher, Paul W. & Shapouri, Hosein, 2008. "Biomass Crop and Ethanol Supply from Agricultural Lands in the United States with Methodology, Estimation Results, and State-by-State Simulations," Agricultural Economic Reports 308485, United States Department of Agriculture, Economic Research Service.
    • Handle: RePEc:ags:uerser:308485
    DOI: 10.22004/ag.econ.308485
    as

    Download full text from publisher

    File URL: https://ageconsearch.umn.edu/record/308485/files/aer844.pdf
    Download Restriction: no
    File URL: https://libkey.io/10.22004/ag.econ.308485?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. repec:aen:journl:1999v20-02-a04 is not listed on IDEAS
    2. Gallagher, Paul W. & Dikeman, Mike & Fritz, J. & Wailes, Eric J. & Gauthier, W. & Shapouri, H., 2003. "Biomass from Crop Residues: Some Cost and Supply Estimates," Staff General Research Papers Archive 10240, Iowa State University, Department of Economics.
    3. Gallagher, Paul W. & Johnson, Donald, 1999. "Some New Ethanol Technology: Cost Competition and Adoption Effects in the Petroleum Market," Staff General Research Papers Archive 5265, Iowa State University, Department of Economics.
    4. Gallagher, Paul W. & Shapouri, Hosein & Price, Jeffrey & Schamel, Guenter & Brubaker, Heather, 2003. "Some Long-Run Effects of Growing Markets and Renewable Fuel Standards on Additives Markets and the U.S. Ethanol Industry," Staff General Research Papers Archive 10648, Iowa State University, Department of Economics.
    5. Dean T. Chen & Shoichi Ito, 1992. "Modeling Supply Response with Implicit Revenue Functions: A Policy-Switching Procedure for Rice," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 74(1), pages 186-196.
    6. Gallagher, Paul W. & Schamel, Guenter & Shapouri, Hosein, 2002. "Some Cost and Price Analysis for the Corn Processing Sector," Staff General Research Papers Archive 10241, Iowa State University, Department of Economics.
    7. Gallagher, Paul W. & Shapouri, Hosein & Price, Jeffrey & Schamel, Guenter & Brubaker, Heather, 2003. "Some long-run effects of growing markets and renewable fuel standards on additives markets and the US ethanol industry," ISU General Staff Papers 200309010700001445, Iowa State University, Department of Economics.
    8. Hallam, Arne & Anderson, I. C. & Buxton, D. R., 2001. "Comparative Economic Analysis of Perennial, Annual and Intercrops for Biomass Production," Staff General Research Papers Archive 5076, Iowa State University, Department of Economics.
    9. Paul C. Westcott, 1991. "Planting Flexibility and Land Allocation," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 73(4), pages 1105-1115.
    10. Gallagher, Paul W. & Otto, Daniel & Dikeman, Mike, 2000. "Effects of an Oxygen Requirement for Fuel in Midwest Ethanol Markets and Local Economies," Staff General Research Papers Archive 5244, Iowa State University, Department of Economics.
    11. Paul W. Gallagher & Daniel M. Otto & Mark Dikeman, 2000. "Effects of an Oxygen Requirement for Fuel in Midwest Ethanol Markets and Local Economies," Review of Agricultural Economics, Agricultural and Applied Economics Association, vol. 22(2), pages 292-311.
    12. Gallagher, Paul & Johnson, Donald, 1999. "Some New Ethanol Technology: Cost Competition and Adoption Effects in the Petroleum Market," ISU General Staff Papers 199901010800001274, Iowa State University, Department of Economics.
    13. Gallagher, Paul W. & Shapouri, H. & Graboski, M., 2002. "Usda's 1998 Ethanol Cost-Of-Production Survey," Staff General Research Papers Archive 10243, Iowa State University, Department of Economics.
    14. Gallagher, Paul W. & Dikeman, Mark & Fritz, John & Wailes, Eric J. & Gauthier, Wayne M. & Shapouri, Hosein, 2003. "Biomass From Crop Residues: Cost And Supply Estimates," Agricultural Economic Reports 34063, United States Department of Agriculture, Economic Research Service.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gallagher, Paul W., 2014. "The regional effects of a biomass fuel industry on US agriculture," Energy Policy, Elsevier, vol. 69(C), pages 598-609.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Paul W. Gallagher, 2009. "Roles for evolving markets, policies, and technology improvements in U.S. corn ethanol industry development," Regional Economic Development, Federal Reserve Bank of St. Louis, issue Apr, pages 12-33.
    2. Gallagher, Paul W., 2009. "Roles for Evolving Markets, Policies, and Technology Improvements in U.S. Corn Ethanol Industry Development," ISU General Staff Papers 200901010800001495, Iowa State University, Department of Economics.
    3. Jacinto F. Fabiosa & John C. Beghin & Fengxia Dong & JAmani Elobeid & Simla Tokgoz & Tun-Hsiang Yu, 2010. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Land Economics, University of Wisconsin Press, vol. 86(4), pages 687-706.
    4. Rendleman, C. Matthew & Shapouri, Hosein, 2007. "New Technologies in Ethanol Production," Agricultural Economic Reports 308483, United States Department of Agriculture, Economic Research Service.
    5. Szulczyk, Kenneth R. & McCarl, Bruce A. & Cornforth, Gerald, 2010. "Market penetration of ethanol," Renewable and Sustainable Energy Reviews, Elsevier, vol. 14(1), pages 394-403, January.
    6. Gallagher, Paul & Shapouri, Hosein & Brubaker, Heather, 2007. "Scale, Organization, and Profitability of Ethanol Processing," ISU General Staff Papers 200703010800001439, Iowa State University, Department of Economics.
    7. Fabiosa, Jacinto F. & Beghin, John C. & Dong, Fengxia & Elobeid, Amani E. & Tokgoz, Simla & Yu, Tun-Hsiang (Edward), 2009. "Land Allocation Effects of the Global Ethanol Surge: Predictions from the International FAPRI Model," Hebrew University of Jerusalem Archive 48598, Hebrew University of Jerusalem.
    8. Gallagher, Paul W. & Yee, Winnie C. & Baumes, Harry S., 2016. "2015 Energy Balance for the Corn-Ethanol Industry," USDA Miscellaneous 391412, United States Department of Agriculture.
    9. Carriquiry, Miguel A. & Du, Xiaodong & Timilsina, Govinda R., 2011. "Second generation biofuels: Economics and policies," Energy Policy, Elsevier, vol. 39(7), pages 4222-4234, July.
    10. Lambert, D.M. & Wilcox, M. & English, A. & Stewart, L., 2008. "Ethanol Plant Location Determinants and County Comparative Advantage," Journal of Agricultural and Applied Economics, Cambridge University Press, vol. 40(1), pages 117-135, April.
    11. Robert Perlack, Robert & Eaton, Lawrence & Thurhollow, Anthony & Langholtz, Matt & De La Torre Ugarte, Daniel, 2011. "US billion-ton update: biomass supply for a bioenergy and bioproducts industry," MPRA Paper 89324, University Library of Munich, Germany, revised 2011.
    12. Luchansky, Matthew S. & Monks, James, 2009. "Supply and demand elasticities in the U.S. ethanol fuel market," Energy Economics, Elsevier, vol. 31(3), pages 403-410, May.
    13. Ferris, John N. & Joshi, Satish V., 2004. "Evaluating The Impacts Of An Increase In Fuel-Ethanol Demand On Agriculture And The Economy," 2004 Annual meeting, August 1-4, Denver, CO 20089, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    14. Povellato, Andrea & Bosello, Francesco & Giupponi, Carlo, 2007. "A Review of Recent Studies on Cost Effectiveness of GHG Mitigation Measures in the European Agro-Forestry Sector," Natural Resources Management Working Papers 10268, Fondazione Eni Enrico Mattei (FEEM).
    15. Townsend, T.J. & Sparkes, D.L. & Ramsden, S.J. & Glithero, N.J. & Wilson, P., 2018. "Wheat straw availability for bioenergy in England," Energy Policy, Elsevier, vol. 122(C), pages 349-357.
    16. Zhang, Bingquan & Xu, Jialu & Lin, Zhixian & Lin, Tao & Faaij, André P.C., 2021. "Spatially explicit analyses of sustainable agricultural residue potential for bioenergy in China under various soil and land management scenarios," Renewable and Sustainable Energy Reviews, Elsevier, vol. 137(C).
    17. Junpyo Park & John Anderson & Eric Thompson, 2019. "Land-Use, Crop Choice, and Proximity to Ethanol Plants," Land, MDPI, vol. 8(8), pages 1-14, July.
    18. Thorsell, Sara & Epplin, Francis M. & Huhnke, Raymond L., 2003. "Economies Of Size Of A Coordinated Biorefinery Feedstock Harvest System," 2003 Annual Meeting, February 1-5, 2003, Mobile, Alabama 35059, Southern Agricultural Economics Association.
    19. Gallagher, Paul W. & Baumes, Harry, 2012. "Biomass Supply From Corn Residues: Estimates and Critical Review of Procedures," Agricultural Economic Reports 308488, United States Department of Agriculture, Economic Research Service.
    20. Bai, Yun & Ouyang, Yanfeng & Pang, Jong-Shi, 2012. "Biofuel supply chain design under competitive agricultural land use and feedstock market equilibrium," Energy Economics, Elsevier, vol. 34(5), pages 1623-1633.

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;
    ;

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:ags:uerser:308485. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: AgEcon Search (email available below). General contact details of provider: https://edirc.repec.org/data/ersgvus.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.