Optimal Draw Area and Feedstock Delivery Schedule of Biorefineries in the Southeast U.S. Based on Least Cost and Producers’ Willingness to Plant a Dedicated Energy Crop

To overcome the limitations of starch-based and sugar-based ethanol, scientists propose to expand the use of cellulosic ethanol. Cellulosic ethanol is a biofuel produced from wood, grasses, or the non-edible parts of plants. As the U.S. has a large cellulosic biomass production base (Perlack et al., 2006), production of ethanol from cellulosic feedstock and use of ethanol as a substitute for gasoline could help promote rural development, reduce green house gases emissions, and increase energy independence. This study focuses on the cost of producing cellulosic ethanol along with the amount of carbon sequestered and emitted using switchgrass as a feedstock.

In the first part of this study, willingness to adopt (WTA) switchgrass is evaluated. The amount of farmland available for growing switchgrass was estimated using Probit and Tobit models of switchgrass production survey data developed in the University of Tennessee’s Department of Agricultural and Resource Economics. The estimated results from these two models show that when switchgrass prices increase, the probability of farmers to grow switchgrass and land acreages used for switchgrass production will increase.

In the second part of this study, based on the results of estimated, farmland availability within an optimal draw area of 50 miles of a biorefinery and a switchgrass delivery schedule could be determined from the biorefinery’s perspective considering different bale types and storage methods. A cost minimization programming model was developed to estimate the year-round switchgrass delivery schedule within fifty miles of three selected biorefinery locations in the southeastern U.S. Also in this study, the carbon credit effect was considered in the model. The results from the programming model suggest that with the carbon credit paid to biorefineries, more marginal land will be used for growing switchgrass, and carbon will be sequestered in the soil at a level that exceeds emitted carbon by at least 1.5 times. Lower feedstock costs would be available to the biorefineries if a carbon payment was available to producers for net carbon sequestered.