An integrated biogeochemical and economic analysis of bioenergy crops in the Midwestern United States

Abstract

This study integrates a biophysical model with a county-specific economic analysis of breakeven prices of bioenergy crop production to assess the biophysical and economic potential of biofuel production in the Midwestern United States. The bioenergy crops considered in this study include a genotype of Miscanthus, Miscanthus  giganteus, and the Cave-in-Rock breed of switchgrass (Panicum virgatum). The estimated average peak biomass yield for miscanthus in the Midwestern states ranges between 7 and 48 metric tons dry matter per hectare per year ( t DM ha À1 yr À1), while that for switchgrass is between 10 and 16 t DM ha À1 yr À1. With the exception of Minnesota and Wisconsin, where miscanthus yields are likely to be low due to cold soil temperatures, the yield of miscanthus is on average more than two times higher than yield of switchgrass. We find that the breakeven price, which includes the cost of producing the crop and the opportunity cost of land, of producing miscanthus ranges from $53 t À1 DM in Missouri to $153 t À1 DM in Minnesota in the low-cost scenario. Corresponding costs for switchgrass are $88 t À1 DM in Missouri to $144 t À1 DM in Minnesota. In the high-cost scenario, the lowest cost for miscanthus is $85 t À1 DM and for switchgrass is $118 t À1 DM, both in Missouri. These two scenarios differ in their assumptions about ease of establishing the perennial crops, nutrient requirements and harvesting costs and losses. The differences in the breakeven prices across states and across crops are mainly driven by bioenergy and row crop yields per hectare. Our results suggest that while high yields per unit of land of bioenergy crops are critical for the competitiveness of bioenergy feedstocks, the yields of the row crops they seek to displace are also an important consideration. Even high yielding crops, such as miscanthus, are likely to be economically attractive only in some locations in the Midwest given the high yields of corn and soybean in the region.

Meeting the Mandate for Biofuels: Implications for Land Use, Food and Fuel Prices

“…Jain et al(2010) describe two scenarios for the costs of production of miscanthus and switchgrass, a low cost and a high cost scenarios. The benchmark case considered the low cost of miscanthus and switchgrass production described there.…”

Agent-Based Analysis of Biomass Feedstock Production Dynamics

“…However, there is currently a significant lack of understanding about the possible path and dynamics of this transition. Economists have worked rigorously on understanding the development of such a system using tools from macro-economics [7][8][9][10]. Although, it provides an excellent framework to identify or evaluate policy alternatives, these analyses often make simplifying assumptions that ignore the practical aspects of feedstock production system.…”

Co-firing in coal power plants and its impact on biomass feedstock availability

“…We are using the operating cost reported by Jain et al (2010) because the opportunity cost are endogenous to our model as opposed to exogenous (Huang et al, 2009;Jain et al, 2010;Aravindhakshan et al, 2010). For states that were not included in Jain et al (2010), we use the production cost reported by Aravindhakshan et al (2010) which results in operating cost of $38.13 per ton. For our analysis, we assume an upper and lower bound of +/-20% on this costs which results in $30 and $46 for the low and high cost scenarios, respectively.…”

“…Switchgrass (Panicum virgatum) yield data was obtained from Jager et al (2010) who provide the maximum of lowland and upland yield which was also used in the billion-ton study update (Perlack and Stokes, 2011). The cost of producing switchgrass is taken from Jain et al (2010) who calculates the cost ranging from $39 to $90 per dryton for eight Midwestern states 2 . We are using the operating cost reported by Jain et al (2010) because the opportunity cost are endogenous to our model as opposed to exogenous (Huang et al, 2009;Jain et al, 2010;Aravindhakshan et al, 2010).…”

“…The cost of producing switchgrass is taken from Jain et al (2010) who calculates the cost ranging from $39 to $90 per dryton for eight Midwestern states 2 . We are using the operating cost reported by Jain et al (2010) because the opportunity cost are endogenous to our model as opposed to exogenous (Huang et al, 2009;Jain et al, 2010;Aravindhakshan et al, 2010). For states that were not included in Jain et al (2010), we use the production cost reported by Aravindhakshan et al (2010) which results in operating cost of $38.13 per ton.…”