Source: MISSISSIPPI STATE UNIV submitted to
ECONOMIC AND POLICY ANALYSIS FOR RENEWABLE AND SUSTAINABLE ENERGY
Sponsoring Institution
National Institute of Food and Agriculture
Project Status
COMPLETE
Funding Source
HATCH
Reporting Frequency
Annual
Accession No.
0207992
Grant No.
(N/A)
Cumulative Award Amt.
(N/A)
Proposal No.
(N/A)
Multistate No.
(N/A)
Project Start Date
Jul 1, 2006
Project End Date
Jun 30, 2012
Grant Year
(N/A)
Program Code
[(N/A)]- (N/A)
Project Director
Coble, KE, H..
Recipient Organization
MISSISSIPPI STATE UNIV
(N/A)
MISSISSIPPI STATE,MS 39762
Performing Department
Agricultural Economics
Non Technical Summary
The production and collection of biomass feedstocks that are used to produce renewable bioenergy fuels and/or value-added products could generate income for resource owners, provide economic growth and rural development, and provide energy sources to help reduce dependence on non-renewable petroleum fuels. Creating biomass and bioenergy industries in the U.S. would generate employment and promote economic development in rural communities. It is critical that these renewable feedstocks and bioenergy fuels are produced so that the environment is protected and land, air, and water quality is not harmed. Sustainability of these renewable energy systems depends on their economic profitability, competitiveness with alternative fuel sources and uses for the inputs, environmental benefits, and U.S. policies that influence investment and development of emerging industries. This project analyzes the economic sustainability of biomass production and collection that may be used to manufacture biorenewable fuels. Forest residues, grasses, corn, soybeans and other oilseeds will be primary biomass feedstocks studied. With the goal of achieving sustainable bioenergy industries, alternative public and private policies will be studied to determine how various incentives and trade institutions may influence the development of these systems. Costs and benefits will be estimated for proposed solutions to industry-wide production problems, comparing research results and current management practices, and guided by the goals of economic efficiency and sustainability.
Animal Health Component
(N/A)
Research Effort Categories
Basic
(N/A)
Applied
(N/A)
Developmental
(N/A)
Classification

Knowledge Area (KA)Subject of Investigation (SOI)Field of Science (FOS)Percent
1230611301020%
5115340301015%
6016030301020%
6036230301015%
6056110301015%
6106050301015%
Knowledge Area
601 - Economics of Agricultural Production and Farm Management; 511 - New and Improved Non-Food Products and Processes; 603 - Market Economics; 605 - Natural Resource and Environmental Economics; 123 - Management and Sustainability of Forest Resources; 610 - Domestic Policy Analysis;

Subject Of Investigation
6110 - Economy of the United States and sectors thereof; 0611 - Conifer forests of the South; 6230 - Marketing systems and sectors thereof; 5340 - Nonfarm structures and related facilities; 6030 - The farm as an enterprise; 6050 - Communities, areas, and regions;

Field Of Science
3010 - Economics;
Goals / Objectives
The objectives of this project are diverse in that it is proposed to investigate a wide range of economic components pertaining to the development and sustainability of biomass and other renewable energy sources. The three primary research objectives targeted during the first year of this project are: 1) Conduct a feedstock inventory and develop a prototype cost map to identify the quantities and locations of selected biomass materials that could be used as feedstocks in producing biofuels. 2) Develop cost of production estimates, e.g., enterprise budgets, for selected alternative biomass feedstocks that could be produced in the state and region. Estimate environmental costs and benefits for proposed feedstocks and bioenergy processes to evaluate environmental sustainability. 3) Perform a competitive analysis of selected biofuels by investigating the market structure and participants, trade flows, and pricing mechanisms for various fuels and energy products. Describe the sensitivity of the production of biorenewable feedstocks to changes in petroleum prices, substitute crop prices, and market structure variables, including analyses of policy alternatives at the local, state, regional, national and international levels.
Project Methods
Objective 1. The feedstock inventory will be conducted using existing Forest Service, USDA, industry assessments and other available data sources. These inventory data will be used to develop cost information needed to assess the economic feasibility of recovering forest residues, soybeans and poultry litter for bioenergy purposes. This assessment will focus on three sites located in central, north and south Mississippi. The model will be developed for these sites to demonstrate the costs and benefits of harvesting, collecting and transporting feedstock to processing facilities. This information is necessary to develop a methodology used to examine potential locations for biorefineries and develop feedstock cost maps, including GIS technologies. Objective 2. Detailed databases of land, equipment and inputs required to produce these biomass and bioenergy feedstocks must be developed to accomplish this objective. Possible feedstocks identified are: soybeans, corn, switchgrass, other grasses, castor beans, etc. Researchers will work with agronomists to identify potential biomass feedstocks. The tool used to develop cost of production estimates and enterprise budgets for alternative biomass feedstocks will be Mississippi State University Budget Generator (MSBG). MSBG is a professionally recognized tool for developing cost of production estimates for agricultural-based products. A database of equipment, inputs and other information related to producing some feedstocks are already available while new data will be collected for new and yet untested production methodologies. Full Cost Accounting (FCA) will be used to convert environmental outputs into dollar-equivalents such that these estimates may be added an overall economic analysis to arrive at the "full" cost of each process. FCA is similar to Life-Cycle Assessment (LCA), Material Flow Analysis, and Cost-Benefit Analysis. Objective 3. Biorenewable energy products will be targeted to estimate various price elasticities for selected energy fuels and biofuels to ascertain the price sensitivity of these products and its effect on their economic sustainability. A literature review will be conducted to evaluate relevant market and industry reports for selected energy and bioenergy products. Pricing and international trade flow information will be collected to determine domestic and international prices. Price, trade flows, and transportation data will be used in an econometric model to estimate price elasticities for these energy products. Researchers will conduct surveys of potential users of bioenergy products to collect information for estimating price sensitivity (elasticities) and willingness-to-pay for selected fuels and energy products. An assessment of economic and environmental policy alternatives will be used to promote biomass and bioenergy production to identify issues that may be addressable by policy instruments. Potential policy instruments are: farm programs, tax breaks, grants, no/low interest loans, electricity buyback requirements, state-mandated biofuel usage, State and Federal regulatory actions, and air and water quality standards will be targets for investigation.

Progress 07/01/06 to 06/30/12

Outputs
OUTPUTS: Coble, K.H. (2012) "Farm Bill Perspectives," Invited Presentation for Southeastern Region Extension Economist Meeting, September 26, 2012, Atlanta, GA. PARTICIPANTS: Keith Coble David Ubilava Corey Miller Dan Petrolia Joe Linton Randy Little TARGET AUDIENCES: crop Producers, renewable energy firms and policy makers PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Informed Mississippi energy policy institute, producers, and bioenergy researchers regarding renewable energy policy such as the renewable fuel standard.

Publications

  • No publications reported this period


Progress 01/01/11 to 12/31/11

Outputs
OUTPUTS: Energy policy briefs made available to clientele groups PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Biofuels industry in Southeast Region of the U.S. PROJECT MODIFICATIONS: Not relevant to this project.

Impacts
Provided input into Mississippi Energy Policy through participation in the Mississippi Energy Policy Institute

Publications

  • Miller, J.C. and K.H. Coble, Incentives Matter: Assessing Biofuel Policies in the South, Invited paper for the Southern Agricultural Economics Association Meetings, February 2011. Journal of Agricultural and Applied Economics 43(Aug 2011):413-421.
  • Linton, J.A., J. C. Miller, R.D. Little, D.R. Petrolia, and K.H. Coble, Economic feasibility of producing sweet sorghum as an ethanol feedstock in the Southeastern United States. Biomass and Bioenergy 35(July 2011):3050-3057.


Progress 01/01/10 to 12/31/10

Outputs
OUTPUTS: Linton, J., Petrolia, D., Coble, K.H., & R. Little, The Economic Feasibility of Sweet Sorghum Ethanol Production in Mississippi. Paper for Western Economics Association International, Portland OR, July 2010 Linton, J., Petrolia, D., Coble, K.H., & Little, R. The Economic Feasibility of Sweet Sorghum Ethanol Production in Mississippi. Poster presentation presented at the Ninth Annual Southern BioProducts and Renewable Energy Conference, Tunica, MS., April 13-14, 2010 PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: Policy makers in Mississippi considering renewable energy PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Keith Coble was invited to serve as a member of the Mississippi Energy Policy Institute. In that capacity policy makers have been briefed on several occasions regarding renewable energy.

Publications

  • Anderson, J.D. and K.H. Coble Impact of Renewable Fuels Standard Ethanol Mandates on the Corn Market Agribusiness 26(January 2010):49-63.


Progress 01/01/09 to 12/31/09

Outputs
OUTPUTS: Developed a summary of federal subsidies, laws, and regulations affecting the development of renewable fuels. Served on the Mississippi Energy Policy Institute Energy Policy Committee Developed various feasibility studies of alternative renewable fuel scenarios. PARTICIPANTS: Nothing significant to report during this reporting period. TARGET AUDIENCES: State and Federal level Policymakers Potential investors in renewable fuels PROJECT MODIFICATIONS: Nothing significant to report during this reporting period.

Impacts
Advised several potential renewable energy investors regarding the potential feasibility of investing in bio-oil facilities. This resulted in better, more informed, decisions by investors. Gave policy analysis to Mississippi Energy Policy Institute. This group advised the governor and several business leaders regarding energy policy

Publications

  • Wei, L., L.O. Pordesimo, S.D.F. To, C.W.Herndon W.D. Batchelor, Evaluation of Microscale Syngas Production Costs Through Modeling. Transactions of the ASABE 52(Sept-Oct) 2009:1649-1659.


Progress 01/01/07 to 12/31/07

Outputs
OUTPUTS: This period, several reports were published analyzing the economic viability of utilizing various feedstocks in a lignocellulousic plant producing ethanol. The costs of producing, harvesting, and transporting of various grasses were estimated to determine the value of selected feedstocks at the conversion plant. Sensitivity analyses were conducted using various ethanol yields from feedstocks and selected conversion plant construction costs to estimate the value of the feedstock at various prices for ethanol. Other research reports investigated the amounts and locations of various types of cellulousic feedstocks (poultry litter and forest residues) and used this information to determine probable least-cost transportation biofuel conversion plant sites in Mississippi. Finally, initial results were published analyzing a survey of U.S. consumers' willingness to pay for E10 and E85 ethanol products. Preliminary findings report that consumers in states located in the Northeast and MidWest are willing to pay more for these "green" biofuel products. PARTICIPANTS: No Participant information reported. TARGET AUDIENCES: No Target Audiences information reported. PROJECT MODIFICATIONS: No Project Modifications information reported.

Impacts
This research has provided vital information on the economic viability of producing, harvesting, transporting and storing agricultural crops and byproducts that could be used to produce biofuels. Enterprise budgets provide detailed information of the expected costs of specific practices for various feedstocks. There is also a need to determine whether and how much consumers are willing to pay for "green" biofuel products, like E10 and E85. In general, this research evaluates the potential for producing selected feedstocks that would support the development of a biofuels industry in Mississippi and across the southern region.

Publications

  • Grala, R.K., Grace L.A. and Stuart, W.B. 2007. Logging Residues as Bioenergy Feedstock: A broad perspective. 2007 Southern Forest Economics Workshop. San Antonio, TX, March 4-6, 2007.
  • Busby, D.P., Little, R.D., Shaik, S., Epplin, F., Baldwin, B.S., and Herndon, C.W. 2007. 'Costs of Producing Ethanol from a Lignocellulosic Biomass'. Research Paper presented at the 2007 Annual Meeting of the Southwestern Economics Association. March 14-17, 2007, Albuquerque, New Mexico
  • Muhammad,A., Whittington, A., Anderson, J. and Herndon, C.W. 2007. 'The Impact of Feed Cost on U.S. Poultry Production: Implications for the Impact of Increased Ethanol Production.' Research Paper presented at the 2007 Bio-Fuels, Food and Feed Tradeoffs Conference. April 13, 2007, St Louis, MO.
  • Busby, D.P., Little, R.D., Shaik, S., Epplin, F., Baldwin, B.S., and Herndon, C.W. 2007. 'Costs of Producing Ethanol from a Lignocellulosic Biomass.' Research Paper presented at the 2007 Annual Meeting of the Southwestern Economics Association. March 14-17, 2007, Albuquerque, New Mexico
  • Busby, D.P., and Herndon, C.W. 2007. 'Cost of Producing Biomass for Lignocellulosic Ethanol Production', Poster Paper presented at Mississippi State University Biofuels Conference, Starkville, Mississippi, August 29, 2007.
  • Busby, D.P., and Herndon, C.W. 2007. 'Biorefinery Production Feasibility using Lignocellulosic Biomass', Poster Paper presented at Mississippi State University Biofuels Conference, Starkville, Mississippi, August 29, 2007
  • Busby, D., Shaik, S., Martins, A., Epplin, F., Little, R.D., Taliaferro, C.M., Baldwin, B.S., and Hwang, S. 2007. 'Yield and Production Costs for Three Potential Dedicated Energy Crops in Mississippi and Oklahoma Environments.' Selected Paper at the 2007 Annual Meeting of the Southern Agricultural Economics Association. February 4-7, 2007, Mobile, Alabama.
  • Busby, D.P., Little, R.D., Shaik, S., Epplin, F., Baldwin, B.S., and Herndon, C.W. 2007. 'Cost of Producing Biomass for Lignocellulosic Ethanol Production.' Research Poster presentation at the American Farm Bureau Federation Annual Convention. January 7-8, 2007, Salt Lake City, Utah.
  • Whittington, A., Hood, K. and Herndon, C.W. 2007. 'Availability of Poultry Litter as an Alternative Energy Feedstock: The Case for Mississippi.' Selected Paper accepted for presentation at the 2007 Annual Meeting of the Southern Agricultural Economics Association. February 4-7, 2007, Mobile, Alabama.
  • Whittington, A. and Herndon, C.W. 2007. 'Poultry Litter as an Alternative Energy Feedstock.' Research Poster Presentation, American Farm Bureau Meetings. Salt Lake City, Utah January 7-9, 2007
  • Busby, D.P., 2007. Cost of Producing Lignocellulosic Biomass for the Production of Ethanol. Master of Science Thesis, Department of Agricultural Economics, Mississippi State University, July, 2007.
  • Petrolia, D. 2007. 'Impact of the Ethanol Industry on U.S. Agriculture', Invited Paper presented at Mississippi State University Biofuels Conference, Starkville, Mississippi, August 29, 2007
  • Muhammad, A., Whittington, A., Anderson, J.and Herndon, C.W. 2007. 'The Impact of Feed Cost on U.S. Poultry Production: Implications for the Impact of Increased Ethanol Production.' Submitted for journal publication to the Review of Agricultural Economics, Review in progress and publication pending.
  • Blair, B. and Rezek, J. 2008. 'The Effects of Hurricane Katrina on Pass-Through for Gulf Coast Gasoline.' Economics Letters, forthcoming.
  • Bhattacharjee, S., Petrolia, D. and Herndon, C.W. 2008. 'Estimating Willingness to Pay for E10 fuel: a contingent valuation method' Paper selected for presentation at the Southern Agricultural Economics Association Annual Meeting, Dallas, Texas, February 2-5, 2008
  • Denly, J. and Herndon, C.W. 2008. 'Financial Analysis of Implementing an Anaerobic Digester and Free Stall Barn System on a Mississippi Dairy Farm'. Paper selected for presentation at the Southern Agricultural Economics Association Annual Meeting, Dallas, Texas, February 2-5, 2008
  • Busby, D.P., Phillips, A.and Herndon, C.W. 2008. 'Construction Cost Sensitivity of a Lignocellulosic Ethanol Biorefinery'. Paper selected for presentation at the Southern Agricultural Economics Association Annual Meeting, Dallas, Texas, February 2-5, 2008
  • Herndon, C.W. 2008. 'The Booming Ethanol and Bioenergy Industry: Fad or Revolution for Agriculture'. Presented at the Agriculture Wealth Management, Accounting and Taxation Conference, Stoneville, Mississippi, January 11, 2008.


Progress 01/01/06 to 12/31/06

Outputs
This period, several reports were produced in the area of availability, quantities and location of selected agricultural products that have the potential to be used as feedstocks in producing biofuels. Enterprise budgets describing the costs of producing, harvesting and transportation of switch grass, Giant miscanthus, and Eastern gamma grass were published using the Mississippi Budget Generator.

Impacts
This research has provided vital information on the economic viability of producing, harvesting, transporting and storing agricultural crops and byproducts that could be used to produce biofuels. Enterprise budgets provide detailed information of the expected costs of specific practices for various feedstocks. In general, this research evaluates the potential for producing selected feedstocks that would support the development of a biofuels industry in Mississippi and across the southern region.

Publications

  • Busby, David P., Randall D. Little, Saleem Shaik, Francis Epplin, Brian S. Baldwin, and Cary W. Herndon. Costs of Producing Ethanol from a Lignocellulosic Biomass. Research Paper accepted for presentation at the 2007 Annual Meeting of the Southwestern Economics Association. March 14-17, 2007, Albuquerque, New Mexico David Busby, Saleem Shaik, Angelina Martins, Francis Epplin, Randall D. Little, Charles M. Taliaferro, Brian S. Baldwin, and Seonghuyk Hwang. Yield and Production Costs for Three Potential Dedicated Energy Crops in Mississippi and Oklahoma Environments. Selected Paper accepted for presentation at the 2007 Annual Meeting of the Southern Agricultural Economics Association. February 4-7, 2007, Mobile, Alabama. Busby, David P., Randall D. Little, Saleem Shaik, Francis Epplin, Brian S. Baldwin, and Cary W. Herndon. Cost of Producing Biomass for Lignocellulosic Ethanol Production. Research Poster presentation at the American Farm Bureau Federation Annual Convention. January 7-8, 2007, Salt La
  • Whittington, Andrew and C.W. Herndon. Biomass and Biofuels Literature Bibliography for Economic and Policy Analysis. Department of Agricultural Economic Research Report, Mississippi State University, December, 2006.
  • Whittington, Andrew, Kenneth Hood and C.W. Herndon. Availability of Poultry Litter as an Alternative Energy Feedstock: The Case for Mississippi. Selected Paper accepted for presentation at the 2007 Annual Meeting of the Southern Agricultural Economics Association. February 4-7, 2007, Mobile, Alabama.
  • Whittington, Andrew and C.W. Herndon. Poultry Litter as an Alternative Energy Feedstock. Research Poster Presentation, American Farm Bureau Meetings. Salt Lake City, Utah January 7-9, 2007.