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Essays concerning the cellulosic biofuel industry


  • Rosburg, Alicia Sue


Despite market-based incentives and mandated production, the U.S. cellulosic biofuel industry has been slow to develop. This dissertation explores the economic factors that have limited industry development along with important economic tradeoffs that will be encountered with commercial-scale production. The first essay provides an overview of the policies, potential, and challenges of the biofuel industry, with a focus on cellulosic biofuel. The second essay considers the economics of cellulosic biofuel production. Breakeven models of the local feedstock supply system and biofuel refining process are constructed to develop the Biofuel Breakeven (BioBreak) program, a stochastic, Excel-based program that evaluates the feasibility of local biofuel and biomass markets under various policy and market scenarios. An application of the BioBreak program is presented using expected market conditions for 14 local cellulosic biofuel markets that vary by feedstock and location. The economic costs of biofuel production identified from the BioBreak application are higher than frequently anticipated and raise questions about the potential of cellulosic ethanol as a sustainable and economical substitute for conventional fuels. Program results also are extended using life-cycle analysis to evaluate the cost of reducing GHG emissions by substituting cellulosic ethanol for conventional fuel. The third essay takes a closer look at the economic trade-offs within the biorefinery industry and feedstock production processes. A long-run biomass production through bioenergy conversion cost model is developed that incorporates heterogeneity of biomass suppliers within and between local markets. The model builds on previous literature by treating biomass as a non-commoditized feedstock and relaxes the common assumption of fixed biomass density and price within local markets. An empirical application is provided for switchgrass-based ethanol production within U.S. crop reporting districts (CRDs). Incorporating location-specific biomass supply conditions creates unique and important economic tradeoffs within each CRD that have important impacts on the potential supply and distribution of U.S. cellulosic biofuel production.

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  • Rosburg, Alicia Sue, 2012. "Essays concerning the cellulosic biofuel industry," ISU General Staff Papers 201201010800003732, Iowa State University, Department of Economics.
  • Handle: RePEc:isu:genstf:201201010800003732

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    References listed on IDEAS

    1. Mindy L. Baker & Dermot J. Hayes & Bruce A. Babcock, 2008. "Crop-Based Biofuel Production under Acreage Constraints and Uncertainty," Center for Agricultural and Rural Development (CARD) Publications 08-wp460, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    2. Bangsund, Dean A. & DeVuyst, Eric A. & Leistritz, F. Larry, 2008. "Evaluation of Breakeven Farm-gate Switchgrass Prices in South Central North Dakota-Summary," Agribusiness & Applied Economics Report 42253, North Dakota State University, Department of Agribusiness and Applied Economics.
    3. Bruce A. Babcock, 2011. "The Impact of Ethanol and Ethanol Subsidies on Corn Prices: Revisiting History," Food and Agricultural Policy Research Institute (FAPRI) Publications (archive only) 11-pb5, Center for Agricultural and Rural Development (CARD) at Iowa State University.
    4. Carlos Arnade & David Kelch, 2007. "Estimation of Area Elasticities from a Standard Profit Function," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 89(3), pages 727-737.
    5. Sarah C. Brechbill & Wallace E. Tyner, 2008. "The Economics Of Biomass Collection,Transportation, And Supply To Indiana Cellulosic And Electric Utility Facilities," Working Papers 08-03, Purdue University, College of Agriculture, Department of Agricultural Economics.
    6. Babcock, Bruce A. & Marette, Stéphan & Tréguer, David, 2011. "Opportunity for profitable investments in cellulosic biofuels," Energy Policy, Elsevier, vol. 39(2), pages 714-719, February.
    7. Ahmed, Syud Amer & Thomas Hertel & Ruben Lubowski, 2009. "Calibration of a Land Cover Supply Function Using Transition Probabilities," GTAP Research Memoranda 2947, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University.
    8. Bangsund, Dean A. & DeVuyst, Eric A. & Leistritz, F. Larry, 2008. "Evaluation of Breakeven Farm-gate Switchgrass Prices in South Central North Dakota," Agribusiness & Applied Economics Report 37845, North Dakota State University, Department of Agribusiness and Applied Economics.
    9. Altman, Ira J. & Bergtold, Jason S. & Sanders, Dwight R. & Johnson, Thomas G., 2011. "Producer Willingness to Supply Biomass: the Effects of Price and Producer Characteristics," 2011 Annual Meeting, February 5-8, 2011, Corpus Christi, Texas 98804, Southern Agricultural Economics Association.
    10. Bergtold, Jason S. & Fewell, Jason E. & Williams, Jeffery R., 2011. "Farmers’ Willingness to Grow Sweet Sorghum as a Cellulosic Bioenergy Crop: A Stated Choice Approach," 2011 Annual Meeting, July 24-26, 2011, Pittsburgh, Pennsylvania 108068, Agricultural and Applied Economics Association.
    11. Baker, Justin Scott & McCarl, Bruce A. & Murray, Brian C. & Rose, Steven K. & Alig, Ralph J. & Adams, Darius M. & Latta, Gregory S. & Beach, Robert H. & Daigneault, Adam J., 2010. "Net Farm Income and Land Use under a U.S. Greenhouse Gas Cap and Trade," Policy Issues 93683, Agricultural and Applied Economics Association.
    12. 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.
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