Qi BioEnergy

Our Assistant Secretary for Energy Efficiency & Renewable Energy, U.S. Department of Energy, Andy Karsner, was the keynote speaker at today’s luncheon. He gave a very passionate speech that you would really enjoy listening to. That’s why I decided to post a link to the full speech below for you. I know it’s a little long but you can listen to as little or as much as you’d like this way.

I think he went to great lengths to talk about the mis-information filtering out to the public about renewable fuel sources. In fact, as so many of you know, it’s hard to believe how much of it is out there. So he addressed those problems head on with good scientific information.

He tells a very moving story about how much he travels for his present position and how that has affected his family and young children. He says that even though it’s difficult, it’s minor compared to what our military men and women are doing to fight the war on terror overseas. He says it’s the least we can do to do our part here at home which includes developing sources of energy that make us more independent of those countries that would do us harm.

Another message that came through loud and clear was his idea that the solutions to our energy needs are something that will be done by not just the government but by private industry and government working together.

You can listen to Andy Karsner’s speech here: Andy Karsner Speech (38:00 MP3 file)

National Ethanol Conference

Click here to read blogs, hear audio interviews and keep up to date with the 2008 Ethanol Conference

On Feb. 12, Gov. Bill Ritter created the Colorado Forest Health Advisory Council, a multi-agency action group that will coordinate and lead efforts to address the mountain pine beetle epidemic and other threats to Colorado’s 22 million acres of forestland.
“Colorado’s forests are vital to our environment, to our communities, to our economy and to our overall quality of life,” Gov. Ritter said. “But our forests are at risk, and one of the biggest risks is the mountain pine beetle. This epidemic has decimated more than 1.5 million acres of mature lodge-pole pines over the past decade and could wipe them out in another three to five years.
“Many people have been working on this issue for years,” Gov. Ritter added. “The time has come for a unified, coordinated and aggressive action plan that enlists all stakeholders as collaborative partners in this fight. The time has come for state government to lead that effort. The Colorado Forest Health Advisory Council will bring together local, state, federal and private interests to identify and implement short-term actions and long-term forest health strategies.”
Harris Sherman, executive director of the Colorado Department of Natural Resources, and Jeff Jahnke, state forester and director of the Colorado State Forest Service, will co-chair the Council. The 24-member group also will be composed of city, county, state, federal and private stakeholders and representatives from the woody biomass industry, water suppliers, conservation groups and sportsmen.

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Estimated Costs for Production, Storage and Transportation of Switchgrass

Mike Duffy, extension economist, 515-294-6160, mduffy@iastate.edu

The bioeconomy is the focus of research and discussion as a way to reduce dependence on imported oil, provide some relief from green house gas emissions and increase the use of agricultural products. Biofuels are a significant component of the bioeconomy. Ethanol and biodiesel are the primary biofuels used today.

In the United States, ethanol is primarily produced from corn. However, there is a considerable amount of research and development occurring to develop the capability to produce ethanol from cellulous material.

Switchgrass is one of the major plants considered in discussions of cellulous ethanol. Switchgrass (Panicum virgatum L.) is a perennial warm-season grass native to Iowa. In the past, it has been evaluated as an energy crop but primarily to replace coal. Using switchgrass to produce ethanol is a new use.

This report updates earlier production cost estimates for switchgrass. The earlier estimations were completed as a part of the study using switchgrass to replace coal. This information is available in Iowa State University (ISU) Extension publication Costs of Producing Switchgrass for Biomass in Southern Iowa, PM 1866). For more information on the agronomic aspects of switchgrass production, see the ISU Extension publication Switchgrass (AG 200).

The estimated costs of production are presented here in two sections. The first is the estimated costs. This is followed by a discussion of what could happen if we change the initial assumptions used to estimate the costs. Switchgrass costs are presented in three categories. The first is the production costs, which include establishment, reseeding and annual production. Next are the transportation costs; the final cost category considered here is storage.

Production Establishment

We make several assumptions based on 2001 research findings, with costs updates using 2007 estimates. The Information File 2007 Iowa Farm Custom Rate Survey was used to compute machinery costs. Other costs come from the Information File Estimated Costs of Crop Production in Iowa - 2007. Seed and chemical prices come from expert opinion.

Assumptions
(Note that these assumptions will be relaxed later, but they are used for the illustration that follows)

• The switchgrass is frost-seeded with a 25 percent probability of needing to reseed the stand
• The land charge assumed is $80 per acre
• Switchgrass yield is 4 tons per acre
• The switchgrass stand is assumed to last 11 years
• The reseed is assumed to last 10 years
• The interest rate used for prorating the establishment costs is 8 percent, while the operating interest rate is 9 percent
• Operating costs are assumed to be borrowed for six months
• The field is initially prepared by adding phosphorous and potassium. There is also an application of lime assumed.

It is assumed that a field needs to be reseeded 25 percent of the time. Basic ground preparation and lime are not included for the reseeding.

Assumptions

• A 4 ton per acre yield.
• 100 pounds of nitrogen (N) is used. The herbicides listed are examples. Phosphorus and potassium are at removal rates.
• Harvesting is done in mid to late November. It will be mowed, raked and baled, using a large square baler. Bales are 3×4x8 feet, with a weight of 950 pounds.
• The bottom of Table 3 also presents the total estimated costs for producing switchgrass. Production costs are the sum of the establishment costs, the prorated reseeding costs and the annual production costs.

Storage

Previous studies estimated the costs for storing switchgrass. The options considered include storing in: an open field, an open field on crushed rock covered with a tarp, an enclosed structure, and a pole building with open sides. These studies found that the enclosed building is the most expensive type of storage, but, because maintaining quality of switchgrass is very important for ethanol production, it is the method selected here. (Note that if switchgrass is used as a coal replacement, the quality consideration is not as critical and another storage option might be considered.)

The costs of storing include not only the cost for the facility or method used but also include the value of the switchgrass in storage and dry matter loss associated with the various storage methods.

The estimated storage costs are presented in Table 4 for an enclosed building. (These cost assumptions are relaxed in later discussions.)

Since there are various types of enclosed buildings, we make several assumptions.

Assumptions

• The structure is a tarped hoop type structure and holds 5,454 bales or 2,591 tons.
• Assume a cost of $12 per square foot for the finished building.
• Dimensions are 100×300 feet (30,000 square feet).
• The bales weigh 950 pounds or 0.475 tons and are 3×4x8 feet.
• The bales are stacked 20 feet high or six bales high.
• The building and area are assumed to take two acres. The extra space is for building edging, driveways and turnaround space for semi-trucks.

One issue that is not addressed is who owns the switchgrass while it is in storage. This aspect of the cost of production has not been decided. Therefore, we chose not to estimate it. There are at least two major costs that are not considered because of this decision. First, there is the value of the switchgrass over the time it is in storage. Second, and perhaps more important, is the insurance for the switchgrass and building. Storing this much dry hay could create a fire hazard.

Transportation and Handling

Transportation and storage logistics will vary depending on the situation, so again, we make some assumptions.

Assumptions

• For these estimates, the switchgrass bales are staged along the edge of the field. This cost is included in the production budget. A farmer with a typical tractor and bale fork can perform these duties.
• Another transportation cost is collecting, delivering and unloading the bales into a storage facility. A semi-trailer holding 20 tons (or 42 bales) is used to haul the switchgrass. Estimated times are 30 minutes to load the truck and 20 minutes to unload. The charge for the semi is $70 per hour.
• A typical tractor and bale hauler will not work to stack large square bales 20 feet high. More specialized equipment is needed for this task. Estimated costs of such a tractor were $20 per hour and $10.78 worth of fuel per hour. The operator charge is $12 per hour.

Table 5 shows the estimated transportation costs. These are shown in two categories; field to storage (5-mile trip) and storage to plant (30-mile trip). It is assumed that the unloading will be done at the plant at plant expense.

There are two comments regarding these cost estimates. The loading and travel time to take the semi from field to field and then to a storage facility may be underestimated. It is possible, too, that if enough farmers raise switchgrass, they can haul it to the facilities themselves. This would change the cost estimates. However, the estimates used here present the opinions of several farmers who grow switchgrass.

Table 6 shows the total estimated costs for switchgrass. This includes production, storage and transportation.

Alternative Assumptions

Estimating the cost of producing any crop will vary depending upon the assumptions made. Making assumptions is necessary, however, because we can’t model each individual farm, field, and situation. By varying some of the key assumptions we can determine areas that are the most critical in estimating the costs of production.

The Future

The future of switchgrass production depends upon its potential commercial uses. If switchgrass is used as a feedstock for ethanol, replacement for coal or other technologies, further research is needed to increase yields.

As shown in Figure 1, increasing yield will have the biggest impact on reducing the costs of switchgrass for any energy use.

The Conservation Reserve Program (CRP) may also play a role in the future of switchgrass. If green payments would be added to a switchgrass rotation on CRP land, there would be a larger economic incentive for producers. Switchgrass is a good alternative because it can be grown on marginal land and offers erosion control as well as other environmental benefits.

For switchgrass to become a commercially viable crop, there must be available markets. For cropland, there must be a sufficient economic incentive for producers to change their rotation systems. More efficient harvesting and transportation methods must be adapted to improve profitability. In addition, logistical issues must be addressed and, perhaps most important, the issues of handling and storage must be addressed.

Switchgrass can become a viable bioenergy crop. The engineering is being refined. But, before switchgrass can become viable commercially, key farmer issues must be addressed.

Currently, biomass is the only clean, renewable energy source that can help to significantly diversify transportation fuels in the U.S.

Biomass Programs are helping transform the nation’s renewable and abundant biomass resources into cost competitive, high performance biofuels, bioproducts, and biopower.

For biofuels to be competitive and sustainable, high-yielding energy crops will be required in most areas. That is because harvesting and transporting biomass to the biorefinery are collectively the most expensive part of feedstock supply. Low yields and widely dispersed crop residues quickly make harvest and delivery cost prohibitive.  

Due to the higher yield density of the feedstock, biofuels produced from dedicated energy crops have the potential to compete economically with gasoline and offer significant cost advantages over other biomass sources.

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bagasse) are about 65 gallons per dry ton.10 Thus, a

when short line rail transport is available.11 So, cellulosic

n Large Area: Minimum of 500,000 acres of available

n Sustainable: Cropping practice maintains or

n Reliable: Consistent crop supply history with dry

n Favorable Transport: Easy access from field to

WASHINGTON — Governors pushing alternative energy development are not shying from coal, a major culprit in global warming but also a homegrown energy source and an economic lifeline for many states.

Leaders of coal-rich states say clean-coal technology is a must. Governors from states without coal want more evidence the technology works.

“There’s no doubt there’s a tension and there’s no doubt there is very rapidly growing public opposition to coal,” said Gov. Jim Doyle, D-Wis. His state relies heavily on coal for power although Wisconsin is not a coal producer.

Energy tops the agenda at the governors’ annual winter meeting. The group’s new clean energy initiative seeks to promote renewable fuels such as ethanol and biodiesel and reducing greenhouse gas emissions.

“Next-generation coal is going to need to continue to be part of our energy future for this country,” said GOP Gov. Tim Pawlenty of Minnesota, chairman of the National Governors Association.

“It is abundant, it is available, it is Americanized in the sense that we control the supply,” he said Saturday. “We would be incomplete and doing a disservice to the debate and the ultimate policy direction that we’re going to take if we don’t envision coal being part of that.”

Next-generation coal typically refers to capturing and somehow sequestering or storing the carbon that coal produces. It also envisions reducing or eliminating emissions as coal is burned.

Pawlenty has embraced renewable fuels such as corn-based ethanol and conservation, but he also promotes clean-coal technology.

Such technology is a rallying cry for many coal-producing states. They say it is possible to continue relying on the fossil fuel while minimizing its impact on the environment.

Gov. Ed Rendell, D-Pa., envisions an economic turnaround if clean-coal technology takes off.

“Coal states would be back in business big time and the economies would flourish,” said Rendell, the association’s vice chairman.

Presidents of two of the country’s biggest power companies urged governors not to dismiss coal, calling it the country’s most abundant energy resource.

“We cannot ignore coal, we cannot demonize coal,” said Thomas Farrell, chairman of Richmond, Va.-based Dominion Resources Inc.

Michael Morris, chairman of Columbus, Ohio-based American Electric Power Co., said “the whole notion of delegitimizing coal is something we should all be frightened of.”

Gov. John Baldacci, D-Maine, needs to hear more before he would include clean-coal technology among the promising energy ideas for the country. His state promotes renewable energy produced through wind, solar and even tides.

“You have to deal with the coal states, but I don’t think you want them doing more of what they’re doing until they change what they’re doing and make it truly the next generation,” he said in an interview.

“Not just say clean-coal technology, but really do clean-coal technology.”

Proponents say all energy sources have their problems. The key, says Gov. Brian Schweitzer, D-Mont., is a national energy policy with many options and sources.

That is important because electricity demand will increase in the future. For instance, Schweitzer predicted that 10 years from now a significant number of cars will be plug-in hybrid vehicles, which will require more power plants, not fewer.

Coal “has a CO2 problem, wind has a reliability problem, solar has a price problem, nukes have a price and radiation problem,” Schweitzer said. “So all of those technologies have opportunities. but they all have problems — coal’s no different.”

He added, “What I can say about coal, is we have it. We have it in a greater supply than anyplace else on the planet.”

Doyle, the Wisconsin governor, said the emerging consensus is a mix of approaches. He said the state’s reliance on coal for electricity will decline but definitely not disappear.