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Bio-Based Energy Analysis Group
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October 6, 2011

Investing in Renewable Energy Creates Jobs
With the United States on a path to achieving the 25x'25 clean energy goal, an estimated 1.4 million new jobs would be created by 2015, 2.9 million jobs by 2020, and 4.7 million by 2025, according to a University of Tennessee study.  The study, 25% Renewable Energy for the United States by 2025: An Analysis on Jobs Created By Meeting this Goal, shows that jobs will be created by annual economic growth in the renewable energy sector, reaching $208 billion by 2015, $411 billion in 2020, and $646 billion by 2025.  In addition, temporal jobs generated through construction are estimates at 1.3 million through over a 15 year period.

“Reaching the 25x’25 vision of meeting 25% of the nation’s energy needs with renewable  energy by 2025 would have a favorable economic impact on rural America and the nation as a whole” says Burton English, co author of the study with Jamey Menard, Kim Jensen, Chad Hellwinckel and Daniel G. De La Torre Ugarte, researchers at the University of Tennessee's Bio-based Energy Analysis Group in the Department of Agricultural and Resource Economics. “Pursuing the 25x'25 goal generates economic activity that creates millions of new jobs over the next 15 years by growing and collecting and harvesting renewable energy feedstocks; harnessing the sun, wind, water, and heat from the earth; purchasing inputs; adding value to those inputs and supplying the energy produced. The jobs would be widespread throughout the United States, with rural areas benefitting due to renewable energy-related economic activity.”
As a result of agriculture supplying over 15 Quads of energy from biomass and leasing land to wind farms, annual national net farm income could increase by $37 billion by 2025, as the market rewards growers for producing alternative energy when compared with USDA baseline extended projections.   “This impact has the potential to assist our rural communities with economic survival” says English.

Contributions from America's farms, forests and ranches could result in the production of 87.2 billion gallons of biofuels annually, which has the potential to decrease gasoline consumption by 59 billion gallons (based on Btu content) in 2025, the study shows.

"The report underscores the need for appropriate public policy support and funding to maximize the economic benefits that come from our nation's vast sustainable resources and achieving a clean, 25x'25 renewable energy future," said Read Smith, co-chairman of the National 25x'25 Steering Committee. "This report makes clear – and should make clear to policy makers – that these renewable energy resources and a 25x'25 clean energy future offer the nation a triple bottom line of energy security, environmental benefits and economic recovery," said Smith.

October 6, 2011
Cover article: University of Tennessee Hosts Biomass Field Days
This article is found in the Fuels Fix

Final Report -

Evaluating the Economics of Incorporating Preprocessing Facilities in the Biomass Supply Logistics with an Application in East Tennessee

The development of a viable biofuel industry that uses lignocellulosic biomass (LCB) feedstock has become one of the major focuses in the nation’s renewable energy plan. The Renewable Fuel Standard in the Energy Independence and Security Act 2007 explicitly mandated a minimum of 16 billion gallons of cellulosic biofuels to be produced annually by 2022. However, the substantial harvest, storage, and transportation costs of bulky LCB feedstock have posted a significant challenge to the economic feasibility of a LCB biofuels industry. The Biomass Crop Assistance Program (BCAP) provision in the Food, Conservation and Energy Act of 2008 was designed to assist in the development of collection, harvest, storage, and transportation infrastructure for eligible LCB materials for use in conversion facilities. It is apparent that a cost-effective supply chain of LCB feedstocks for biorefinery is crucial to developing a commercial-scale cellulosic biofuels industry to meet the national goals.

The objective of this study was to evaluate the costs of LCB feedstocks delivered to a potential commercial-scale biorefinery through alternative feedstock logistic systems. Specifically, the economic value of satellite preprocessing facilities in the feedstock supply chain for the biorefinery was analyzed because it is hypothesized that preprocessing facilities reduce the transportation and storage costs of LCB feedstock through densification of feedstocks and the reduction in storage dry matter losses when compared to traditional hay systems. However, the capital costs of preprocessing facilities could be significant. In addition, the impact of the BCAP payment on the total feedstock cost for various commercial-scale biorefineries was estimated.

By applying a geo-spatial industrial siting model to a potential switchgrass-based biorefinery in East Tennessee, this study initially evaluated the baseline logistic system including various conventional hay logistic methods that transport feedstock from the field to the biorefinery without additional densification process. Based on the location of biorefinery determined in the baseline system, the preprocessing system containing alternative densification technologies was introduced in the logistic system. The two densification storage packaging technologies evaluated in this study are: 1) stretch-wrap balers and 2) pellet mills. Impacts on feedstock costs for alternative feedstock supply chain configurations were analyzed for biorefineries with annual ethanol production capacities of 15-, 25- and 50-million gallons per year. The study results are summarized as follows:

  • Utilizing the stretch-wrap baling system and single-pass harvest using a chopper with a cutter-header can reduce the switchgrass logistics costs by 22% to 26% over various cases under the baseline system, which could result in a decrease in ethanol production costs by $0.16/gallon to $0.19/gallon.
  • In the stretch-wrap baling system, the total feedstock cost savings rise with the annual production capacity of the biorefinery due to the larger volume of feedstock handled within the logistics system; however, the percentage gains from using the stretch-wrap baling system over the baseline system is relative constant with increasing biorefinery capacity.
  • The potential for pellet mills to densify and prepare switchgrass for biofuel production appears to be limited if the pelletized feedstock is solely dedicated to be used the biofuel production.  The substantial capital costs with the pellet mill system dominate the potential savings in storage and transportation. 
  • The pellet mill preprocessing system may be more cost competitive when used to process multiple feedstocks or serve markets, thus spreading fixed costs over more feedstock volume.
  • BCAP payments can reduce the net present value of total feedstock costs for the biorefinery over a 10-year planning horizon by about 12% to 14%.
  • It is an important and timely issue to continuously explore additional options in harvest, storage, preprocessing and transportation in the LCB feedstock logistic system for enhancing the profitability of the industry. Particularly, exploring the economic values of combing various pretreatment and preprocessing procedures to generate a densified feedstock with constant quality will provide useful information of a stable feedstock supply chain to this industry.

June 2011

 


Research findings by the Biobased Energy Analysis Group in the Department of Ag. & Resource Economics at the University of Tennessee were featured in an episode of “This New House” on the DIY Network.  The research was conducted for the 25x’25 Work Group http://www.25x25.org/  and centered America’s ability to meet 25% of its energy needs from farms, fields, and forests.   If you want to watch the Q&A featuring the research on this episode, go to the link http://www.diynetwork.com/diy-this-new-house/videos/index.html select “This New House” and then the Full Episodes button.  The Q &A is about 13:39 minutes into the episode.
October 20, 2010


BEAG and the 25X'25 Work Group study was recently mentioned in the New York Times Freakonomics column.
January 4, 2010


The Impact of Climate Change Legislation on Agriculture
A podcast discussion on Climate and Energy Legislation between Dr. Burt English and Richard Baker on Perspecitve, a weekly public affairs program, produced by Research and Extension at Kansas State University.


Fueling America - Switchgrass Science

At the University of Tennessee, switchgrass is all the buzz. It's a plant that's farmer & environment-friendly, and a cheap alternative to high-priced corn ethanol. View video


The Bio-based Energy Analysis Group, BEAG, was established in 2004 by the Department of Agricultural Economics and Agricultural Experiment Station. The purpose of BEAG is to provide decision makers in Government and Industry with the most up-to-date economic and environmental analysis of the bio-based industry at the state, region, and national levels. Focus includes supply and demand, costs of production, market opportunities, feasibility analyses, and regional and national economic impacts, along with environmental impact analysis.

Currently, BEAG uses several different models including a national, interregional agricultural model (POLYSYS), a regional input-output model (IMPLAN), a GIS based system (ORIBAS), a county-wide biomass data base (BIOCOST), and erosion impact indicator data, and emission information; along with national and regional secondary source data. Each of these models is used to provide decision makers information on the economic viability of a bio-based feedstock industry and the potential environmental impacts that might occur.

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A partnership with several institutions including:

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Institute of Agriculture

Kansas State University

Oak Ridge National
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