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The Economics of Harvesting and Transporting Hardwood Forest Residue for Conversion to Fuel Ethanol: A Case Study for Minnesota

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  • Petrolia, Daniel R.

Abstract

Forest residues are being considered as potential feedstock for a biomass-to-ethanol facility in Minnesota (USA), using residues from major wood-producing counties in Minnesota, Wisconsin, and Michigan. Results indicate that marginal residue costs delivered to a conversion facility would be $56-80/Mg for a small (95-189 MM liters) plant, and about $81/Mg for a larger (379 MM liters) plant. Output beyond these levels would involve substitution of lower-cost market pulpwood as the plant feedstock because of relatively high marginal residue costs. Sensitivity analysis indicates that either a 20-percent increase or decrease in the quantity of available residue would impact marginal cost estimates by no more than $15/Mg.

Suggested Citation

  • Petrolia, Daniel R., 2006. "The Economics of Harvesting and Transporting Hardwood Forest Residue for Conversion to Fuel Ethanol: A Case Study for Minnesota," Staff Papers 14020, University of Minnesota, Department of Applied Economics.
    • Handle: RePEc:ags:umaesp:14020
    DOI: 10.22004/ag.econ.14020
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    Cited by:

    1. Mooney, Daniel F. & Roberts, Roland K. & English, Burton C. & Tyler, Donald D. & Larson, James A., 2008. "Switchgrass Production in Marginal Environments: A Comparative Economic Analysis across Four West Tennessee Landscapes," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6403, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    2. 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.
    3. Rauh, S. & Berenz, S. & Heißenhuber, A., 2008. "Abschätzung des unternehmerischen Risikos beim Betrieb einer Biogasanlage mit Hilfe der Monte-Carlo-Methode," Proceedings “Schriften der Gesellschaft für Wirtschafts- und Sozialwissenschaften des Landbaues e.V.”, German Association of Agricultural Economists (GEWISOLA), vol. 43, March.
    4. Rauh, Stefan & Berenz, Stefan & Heissenhuber, Alois, 2007. "ABSCHATZUNG DES UNTERNEHMERISCHEN RISIKOS BEIM BETRIEB EINER BIOGASANLAGE MIT HILFE DER MONTECARLO-METHODE (German)," 47th Annual Conference, Weihenstephan, Germany, September 26-28, 2007 7588, German Association of Agricultural Economists (GEWISOLA).
    5. Scott M. Swinton & Felix Dulys & Sarah S.H. Klammer, 2021. "Why Biomass Residue Is Not as Plentiful as It Looks: Case Study on Economic Supply of Logging Residues," Applied Economic Perspectives and Policy, John Wiley & Sons, vol. 43(3), pages 1003-1025, September.
    6. Epplin, Francis M., 2008. "Millions of acres for dedicated energy crops: farms, ranches, or plantations?," Integration of Agricultural and Energy Systems Conference, February 12-13, 2008, Atlanta, Georgia 48711, Farm Foundation.
    7. Luis Armando Becerra-Pérez & Luis Rincón & John A. Posada-Duque, 2022. "Logistics and Costs of Agricultural Residues for Cellulosic Ethanol Production," Energies, MDPI, vol. 15(12), pages 1-18, June.
    8. Zou, Tianyu & Pederson, Glenn D., 2008. "Using Real Options to Evaluate Investments in Ethanol Facilities," Staff Papers 37872, University of Minnesota, Department of Applied Economics.
    9. Eidman, Vernon R. & Petrolia, Daniel R. & Huang, Huajiang & Ramaswamy, Shri, 2009. "The Economic Feasibility of Producing Ethanol from Corn Stover and Hardwood in Minnesota," Staff Papers 47055, University of Minnesota, Department of Applied Economics.
    10. Lazarus, William F., 2008. "Energy Crop Production Costs and Breakeven Prices Under Minnesota Conditions," Staff Papers 45655, University of Minnesota, Department of Applied Economics.
    11. Petrolia, Daniel R., 2006. "Ethanol from Biomass: Economic and Environmental Potential of Converting Corn Stover and Hardwood Forest Residue in Minnesota," 2006 Annual meeting, July 23-26, Long Beach, CA 21422, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).

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    Keywords

    Resource /Energy Economics and Policy;

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