The Economics of Harvesting and Transporting Corn Stover for Conversion to Fuel Ethanol: A Case Study for Minnesota

Daniel Petrolia

No 14213, Staff Papers from University of Minnesota, Department of Applied Economics

Abstract: Corn stover harvest and transport cost functions were estimated for two harvest operations for a proposed biomass-to-ethanol conversion facility located in southern Minnesota, USA. This work presents an alternative methodology to estimating corn stover quantities and harvest costs at the county level, taking into account county-specific yields, transportation distances, erosion constraints, machinery specifications, and other key variables. Monte Carlo simulation was also used to estimate the probability distribution of costs under alternative assumption on key parameters whose values vary widely in the literature. Marginal stover cost for 50MM gal/year of ethanol output was estimated at $54/dt ($0.77/gal ethanol) for the more intensive harvest method and $65/dt ($0.80/gal) for the less intensive method. Costs were greater than $62/dt ($0.89/gal) for a facility producing > 200MM gal/year under the more intensive harvest method, and greater than $84/dt ($1.21/gal) for the less-intensive harvest method. Monte Carlo simulation estimated a mean marginal cost of $52/dt ($63/dt under the less intensive harvest method) for 50MM gal ethanol output, with an $11 ($9) standard deviation. Costs were found to be at or below $62/dt 90 percent of the time ($71/dt for the less-intensive method). An $11/dt standard deviation in stover cost would result in a $0.16/gal swing in ethanol cost. Overall, costs were found to be consistently higher than those found in the literature, but even under a variety of parameter assumptions, costs tended to stay within a $10/dt range of the mean.

Keywords: Crop Production/Industries; Resource/Energy Economics and Policy (search for similar items in EconPapers)
Pages: 44
Date: 2006
References: View complete reference list from CitEc
Citations: View citations in EconPapers (27)

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Persistent link: https://EconPapers.repec.org/RePEc:ags:umaesp:14213

DOI: 10.22004/ag.econ.14213

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