This document summarizes research on the economics of various biofuel feedstocks. It discusses the economics of corn production and criteria for sustainable and low-cost feedstocks. It also describes projects in North Dakota investigating wheat straw, energy beets, and other feedstocks. The document outlines the design and capital costs for a proposed 20 million gallon per year energy beet biorefinery. It discusses the development phases and funding for the energy beet industry in North Dakota. Finally, it addresses potential constraints and competition for agricultural residues as biofuel feedstocks.

1. “Economics of Biofuel
Feedstock”
Dr. Cole Gustafson
April 10, 2012

2. Corn vs. Biofuel Feedstocks
• Economics of Corn Production
– Market price
– Low cost of production
• Feedstock Economics
– Contract/Price
– Sustainable
– Lower GHG
– Low Cost
– Scaleable

3. North Dakota Projects
• Wheat straw to biofuel
• Energy beets
• Flair gas to fertilizer
• USDA feedstock market standards
• Economics of corn stalk harvesting

4. Energy Beet Plant Design
• 20 mgy
• Feedstock, 20 miles, 30,000 acres
• 70% thermal energy from feedstock
• Capital investment $40 million w/ working
capital

5. Energy Beet Industry
• Phase I Development
– 2009 APUC, $58,245, Initial Feasibility
– 2009 REC, $330,000, Burn Test, Yield Trials,
Juice Storage, Grower Education,
• Phase II
– 2011 APUC, $73,317, EPA Advanced Biofuel
– 2011 REC, $1,000,000, Frontend Processing,
Yield Trials, Juice Storage, Promotion
• Phase III
– Commercialization

6. 2007 Energy Independence and Security Act
Year Conventional Advanced Cellulosic Biofuel Biomass-based
Biofuel Biofuel Diesel
2008 9.0
2009 10.5 0.60 0.5
2010 12.0 0.95 0.10 0.7
2011 12.6 1.35 0.25 0.8
2012 13.2 2.00 0.50 1.0
2013 13.8 2.75 1.00 *
2014 14.4 3.75 1.75 *
2015-2022 15.0 5.50-21.0 3.00-16.0 *

10. Biomass Contracts
• What, When, Where?
• Moisture
• Premiums/Discounts
– Foreign matter (dirt)
– Purity
– Spoilage

11. Highly Variable Quality

12. Lower Than Expected Quantity

13. Logistics and Transportation
• Wheat straw
biorefinery
• Is collection
economically feasible?

18. Potential Wheat Straw Supply
• 1.16 million tons (bone dry)
• 10% moisture
• Plant height 34.6”
• Combine height 7.6”
• Producers are willing to supply
• Adequate time to harvest

20. Farm Focus Group
Table 2.7. Reasons Why Participants Do Not Collect More Straw
Reason Percent Response Number of Participants
Too distant to haul 0.00% 0
No market 38.89% 7
Environmental concern 11.11% 2
Fertility loss 50.00% 9
Loss of wildlife habitat 0.00% 0
No time 0.00% 0
Total 100.00% 18

21. Farm Focus Group
Table 2.12. Price of Wheat Straw Participants Willing to Accept
Participant Number Wheat Straw ($/ton)
1 -
2 35.00
3 40.00
4 30.00
5 25.00
6 20.00
7 25.00
8 50.00
9 40.00
10 50.00
11 20.00
12 30.00
13 15.00
14 15.00
15 15.00
16 50.00
Average 30.67

22. Potential Constraints
1) Rotary Combines
2) Tenant vs. Land Owner
3) USDA/NRCS

23. Stover Harvest to Maintain Carbon
Continuous Corn Corn Soybean Rotation
Grain Stover Plow Chisel/ Plow Chisel/
Yield No Till No Till
Bu/ac t/ac t/ac t/ac t/ac t/ac
103 2.2 0.0 0.0 0.0 0.0
Source: PRX 2010, Johnson 2006
156 3.3 0.0 1.0 0.0 0.0
200 4.5 1.1 2.1 0.0 0.9
259 5.6 2.2 3.2 0.0 2.1
312 6.7 3.3 4.3 0.9 3.2
363 7.8 4.4 5.4 2.1 4.3
415 8.9 5.5 6.6 3.2 5.4

24. Competition
• Who else is interested in biomass?
– Livestock bedding
– Livestock feed
– Fertility
– Ground Cover
– ????

25. Questions?
cole.gustafson@ndsu.edu
(701) 231-7096