Economic Impacts of Production, Storage, Transport, and Conversion of Switchgrass for Cellulosic Ethanol in Tennessee

The goal of this study is to evaluate the introduction of cellulosic ethanol conversion plants using switchgrass as the feedstock and how it impacts the economies of two Tennessee regions. Switchgrass feedstock production, storage, and transportation costs are estimated for one plant in West Tennessee and one plant in East Tennessee. In each region, the location for a cellulosic ethanol conversion plant and the acreage required to meet a 61.8 million-gallon/year capacity are specified. The costs associated with switchgrass production and cellulosic ethanol conversion are then entered into IMPLAN to estimate the economic impacts of one cellulosic ethanol plant in each region.

The key findings of the study for West Tennessee are as follows. The investment impacts of switchgrass farming are $100.4 million more in total industry output, an increase of 914 jobs, and $46.9 million more in total valued added. Investment impacts of a cellulosic ethanol conversion plant include $121.3 million increase in total industry output, an additional 653 jobs, and a $47.7 million increase in total valued added. Year-to-year operations of switchgrass farming and cellulosic ethanol conversion increase the region’s total industry output by $57.1 million, increase jobs by 296, and increase total value added by $26 million.

In East Tennessee the investment impacts of switchgrass farming are $118.3 million increase in total industry output, 949 jobs created, and a $66.4 million increase in total valued added. Investment impacts of a cellulosic ethanol conversion plant include a $116.9 million increase in total industry output, an additional 765 jobs, and a $48.3 million increase in total valued added. Year-to-year operations of switchgrass farming and cellulosic ethanol conversion increase the region’s total industry output by $80.4 million, jobs by 396, and the total value added by $39.2 million.