Cellulosic Biofuels Analysis: Economic Analysis of Alternative Technologies

The passage of U.S. laws mandating and subsidizing advanced cellulosic biofuels may spur the development of a commercial cellulosic biofuels industry. However, a cellulosic industry will only develop if the overall economics including government incentives render investment in the sector attractive to private investors.This study compares the profitability of three biofuel production types: grain based ethanol, cellulosic biochemical ethanol, and cellulosic thermochemical biofuels. In order to compare the current profitability of each of the production types, the Biofuels Comparison Model (BCM) was developed. The BCM is a spreadsheet model that estimates the net present value (NPV) for each production type given input and output prices, technical, and financial assumptions. The BCM can be updated to reflect the current profitability through embedded web price links. The study finds that grain, biochemical, and thermochemical production types are all currently unprofitable when subsidies and mandates are ignored. However, the grain based ethanol process is predicted to be the most profitable (lowest loss) compared to the cellulosic biofuels. When the 2008 Farm Bill subsidies are added to the BCM, all three production types are projected to be profitable. With the addition of the different subsidies, the cellulosic biofuels are estimated to have higher NPV’s than grain based ethanol. When compared on an energy equivalent basis, the estimated cost of producing grain ethanol is $114/bbl. crude oil equivalent, biochemical ethanol$141/bbl., and thermochemical gasoline $108/bbl.biofuels, cellulosic biofuels, corn ethanol, biofuel economics

Farm Income Stabilization: A Central Goal for American and European Policies

The central thesis developed in this paper is that snapshot views of the global measures of agricultural support mask what is really happening in U.S. and E.U. agricultural policies. We demonstrate that American and European farmers are effectively protected from market risk by these policies. The level of PSE is largely determined by the level of world price. Most economists do not pay much attention to the role of agricultural policies in income stability. Yet farm income stability is clearly a prime objective of government policy both in the E.U. and the U.S. and probably elsewhere. We need to turn out attention to this objective if we are to produce policy analysis relevant to real world policy decisions.agricultural policy, market risks, agricultural income, U.S., E.U., agricultural and natural resource economics, Agricultural and Food Policy,

Implications of the Biofuels Boom for the Global Livestock Industry: A Computable General Equilibrium Analysis

In this paper, we offer a general equilibrium analysis of the impacts of US and EU biofuel mandates for the global livestock sector. Our simulation boosts biofuel production in the US and EU from 2006 levels to mandated 2015 levels. We show that mandates will encourage crop production in both biofuel and non biofuel producing regions, while reducing livestock and livestock production in most regions of the world. The non-ruminant industry curtails its production more than other livestock industries. The numerical results suggest that the biofuel mandates reduce food production in most regions while they increase crude vegetable oils in almost all regions. Implementing biofuel mandates in the US and EU will increase croplands within the biofuel and non-biofuel producer regions. A large portion of this increase will be obtained from reduced grazing lands. The biofuel producing regions are expected to reduce their coarse grains exports and raise imports of oilseeds and vegetable oils. While all livestock industries use more biofuel byproducts in their animal feed rations, the dairy and other ruminant industry benefit most from the expansion of DDGS. We finally conclude that, while biofuel mandates have important consequences for the livestock industry, they do not harshly curtail these industries. This is largely due to the important role of byproducts in substituting for higher priced feedstuffs. In addition, with relatively inelastic food demands, producers are able to pass much of the price rise on to consumers. In general, US, EU, Meddle East & North Africa, and Russia will experience significant welfare loses due to the combined US and EU mandates, while Brazil, Japan, India, and East Asia are expected to get major gains.Biofuels, Livestock, Feed Ration, Biofuel Co-Product, Land Use, Livestock Production/Industries,

Biofuels for all? Understanding the Global Impacts of Multinational Mandates

The recent rise in world oil prices, coupled with heightened interest in the abatement of greenhouse gas emissions, has led to a sharp increase in domestic biofuels production around the world. Previous authors have devoted considerable attention to the impacts of these policies on a country-by-country basis. However, there are also strong interactions among these programs, as they compete in world markets for feedstocks and ultimately for a limited supply of global land. In this paper, we evaluate the interplay between two of the largest biofuels programs, namely the renewable fuel mandates in the US and the EU. We examine how the presence of each of these programs influences the other, and also how their combined impact influences global markets and land use around the world. We begin with an analysis of the origins of the recent bio-fuel boom, using the historical period from 2001-2006 for purposes of model validation. This was a period of rapidly rising oil prices, increased subsidies in the EU, and, in the US, there was a ban on the major competitor to ethanol for gasoline additives. Our analysis of this historical period permits us to evaluate the relative contribution of each of these factors to the global biofuel boom. We also use this historical simulation to establish a 2006 benchmark biofuel economy from which we conduct our analysis of future mandates. Our prospective analysis of the impacts of the biofuels boom on commodity markets focuses on the 2006-2015 time period, during which existing investments and new mandates in the US and EU are expected to substantially increase the share of agricultural products (e.g., corn in the US, oilseeds in the EU, and sugar in Brazil) utilized by the biofuels sector. In the US, this share could more than double from 2006 levels, while the share of oilseeds going to biodiesel in the EU could triple. Having established the baseline 2006-2015 scenario, we proceed to explore the interactions between the US and EU policies. This involves decomposing the contributions of each set of regional policies to the global changes in output and land use. The most dramatic interaction between the two sets of policies is for oilseed production in the US, where the sign of the output change is reversed in the presence of EU mandates (rising rather than falling). In other sectors, the interaction is more modest. However, when it comes to the impacts of these combined mandates on third economies, the two policies combine to have a much greater impact than just the US or just the EU policies alone.Resource /Energy Economics and Policy,

Biofuels and their By-Products: Global Economic and Environmental Implications

The biofuel industry has been rapidly growing around the world in recent years. Several papers have used general equilibrium models and addressed the economy-wide and environmental consequences of producing biofuels at a large scale. They mainly argue that since biofuels are mostly produced from agricultural sources, their effects are largely felt in agricultural markets with major land use and environmental consequences. In this paper, we argue that virtually all of these studies have overstated the impact of liquid biofuels on agricultural markets due to the fact that they have ignored the role of by-products resulting from the production of biofuels. Feed by-products of the biofuel industry, such as Dried Distillers Grains with Solubles (DDGS) and biodiesel by-products (BDBP) such as soy and rapeseed meals, can be used in the livestock industry as substitutes for grains and oilseed meals used in this industry. Hence, their presence mitigates the price impacts of biofuel production on the livestock and food industries. The importance of incorporating by-products of biofuel production in economic models is well recognized by some partial equilibrium analyses of biofuel production. However, to date, this issue has not been tackled by those conducting CGE analysis of biofuels programs. Accordingly, this paper explicitly introduces DDGS and BDBP, the major by-products of grain based ethanol and biodiesel production processes, into a worldwide CGE model and analyzes the economic and environmental impacts of regional and international mandate policies designed to stimulate bioenergy production and use. We first explicitly introduce by-products of biofuel production into the GTAP-BIO database, originally developed by Taheripour et al. (2007). Then we explicitly bring in DDGS and BDBP into the Energy-Environmental version of the Global Trade Analysis Project (GTAP-E) model, originally developed by Burniaux and Truong (2002), and recently modified by McDougall and Golub (2007) and Birur, Hertel, and Tyner (2008). The structure of the GTAP-E model is redesigned to handle the production and consumption of biofuels and their by-products, in particular DDGS, across the world. Unlike many CGE models which are characterized by single product sectors, here grain based ethanol and DDGS jointly are produced by an industry, named EthanolC. The biodiesel industry also produces two products of biodiesel and BDBP jointly. This paper divides the world economy into 22 commodities, 20 industries, and 18 regions and then examines global impacts of the US Energy Independence and Security Act of 2007 and the European Union mandates for promoting biofuel production in the presence of by-products. We show that models with and without by-products demonstrate different portraits from the economic impacts of international biofuel mandates for the world economy in 2015. While both models demonstrate significant changes in the agricultural production pattern across the world, the model with by-products shows smaller changes in the production of cereal grains and larger changes for oilseeds products in the US and EU, and the reverse for Brazil. For example, the US production of cereal grains increases by 10.8% and 16.4% with and without by-products, respectively. The difference between these two numbers corresponds to 646 million bushels of corn. In the presence of by-products, prices change less due to the mandate policies. For example, the model with no by-products predicts that the price of cereal grains grows 22.7% in the US during the time period of 2006 to 2015. The corresponding number for the model with by-products is 14%. The model with no by-products predicts that the price of oilseeds increases by 62.5% in the EU during 2006-2015. In the presence of by-products, this price grows 56.4%. Finally, we show that incorporating DDGS into the model significantly changes the land use consequences of the biofuel mandate polices.Resource /Energy Economics and Policy, Environmental Economics and Policy,

An analysis of yield variation under soil conservation practices

Much attention has been paid to the effects of multiple soil conservation and soil health practices on the mean yield of the subsequent crop. Much less research has focused on the variability of crop yields over time or space. Yield stability reported in standard deviation, mean absolute deviation, or coefficient of variation can be an important measure of risk for producers. Risk reduction has economic value, and understanding the effect of tillage and other soil conservation practices on yield risk is relevant to farm financial management and crop insurance risk assessment. We used data from test plots in a corn (Zea mays L.)–soybean (Glycine max L.) rotation, spanning from 2003 to 2011 to assess differences in yield stability over time and space. In this experiment, each plot was randomly assigned to a treatment of no-till with no cover crop (NTNC), no-till with an annual ryegrass (Lolium multiflorum Lam.) cover crop (NTCC), or a control group using conventional tillage with no cover crop (CTNC). The statistical analysis made three relevant comparisons: (1) NTCC versus NTNC, (2) NTNC versus CTNC, and (3) NTCC versus CTNC. The analysis also included separating temporal and spatial variation using a time-first approach from the literature, followed by testing for differences between groups. We employed a standard deviation ratio test, Levene’s test, and coefficient of variation t-test. Additionally, analysis of temporal volatility was conducted using ordinary least squares regression and associated t-tests in a method similar to a stock beta, a technique commonly accepted in finance to measure the volatility of an investment. We propose this as a new method in analyzing the temporal volatility in crop yields. We found that no-till reduced average temporal yield variation in corn, and that cover crops reduced average spatial variation in corn. These results were robust over multiple statistical tests. Using the beta coefficient methodology proposed in this paper, we found in both corn and soybeans that NTNC and NTCC had lower temporal yield volatility relative to a benchmark yield from the CTNC group. However, the beta coefficients were, in most cases, not statistically significant. The results of this study suggest that both no-till and cover crops may help reduce yield risk for Midwestern farmers while reducing soil and nutrient loss

Preliminary catalog of pictures taken on the lunar surface during the Apollo 15 mission

Catalog of all pictures taken from lunar module or lunar surface during Apollo 15 missio

A Benefit-Cost Assessment of New Vehicle Technologies and Fuel Economy in the U.S. Market

Increasingly stringent fuel economy and emissions regulations alongside efforts to reduce oil dependence have accelerated the global deployment of advanced vehicle technologies. In recent years, original equipment manufacturers (OEMs) and consumers have generally been successful in mutually deploying cleaner vehicle options with little sacrifice in cost, performance or overall utility. Projections regarding the challenges and impacts associated with compliance with mid- and long-term targets in the U.S., however, incur much greater uncertainty. The share of existing new vehicles that is expected to comply with future regulations, for example, falls below 10% by 2020. This article explores advanced technologies that result in reduced fuel consumption and emissions that are commercially available in 2014 Model Year compact and midsize passenger cars. A review of the recent research literature and publicly available cost and technical specification data addressing correlations between incremental cost and fuel economy is presented. This analysis reveals that a 10% improvement in the sales-weighted average fuel economy of passenger cars has been achieved between 2011 and 2014 at costs that are at or below levels anticipated by the regulations by means of reductions in weight, friction, and drag; advancements in internal combustion efficiency; turbocharging combined with engine downsizing; transmission upgrades; and the growth of hybrids. Benefit-cost analyses performed on best-selling models in the selected classifications reveal that consumers thus far are not substantially incentivized to purchase fuel economy. Under baseline conditions, benefit-cost ratios are above a breakeven value of unity for only 6 of 28 models employing improved fuel-economy technologies. Sales-weighted data indicate that the ‘‘average’’ consumer that elected to invest in greater fuel economy spent $1490 to realize a 17.3$1070. Thus savings were, on average, insufficient to cover technology costs in the baseline scenario. However, a sensitivity analysis reveals that a majority of new technologies become financially attractive to consumers when average fuel prices exceed $5.60/gallon, or when annual miles traveled exceed 16,400. The article concludes with techno-economic implications of the research on future fuel economy regulations for stakeholders. In general, the additional cost consumers incur in exchange for a given level of fuel economy improvement in the coming years will need to be steadily reduced compared to current levels to ensure that the expected benefits of fuel savings are financially warranted

Solar two: A molten salt power tower demonstration

A consortium of United States utility concerns led by the Southern California Edison Company (SCE) is conducting a cooperative project with the US Department of Energy (DOE), Sandia National Laboratories, and industry to convert the 10-MW Solar One Power Tower Pilot Plant to molten nitrate salt technology. The conversion involves installation of a new receiver, a new thermal storage system, and a new steam generator; it utilizes Solar One`s heliostat field and turbine generator. Successful operation of the converted plant, called Solar Two, will reduce economic risks in building initial commercial power tow projects and accelerate the commercial acceptance of this promising renewable energy technology. The estimated cost of Solar Two, including its three-year test period, is $48.5 million. The plant will begin operation in early 1996