2014 Feedstock Supply and Price Projections for Commercial Biotechnology

Transcription

1 2014 Feedstock Supply and Price Projections for Commercial Biotechnology BIO World Congress 15 May 2014 Laurence Eaton Breakout Session 5: Potential Yield, Composition, and Supply of Dedicated Energy Crops: Results and Outcomes of the Sun Grant Regional Feedstock Partnership

2 Outline Project Background, BT Feedstock Supply Curves Sensitivity analysis Conversion Efficiency (Gallons/ton) USDA Baseline Yield Growth scenario Crop tillage assumptions 30-year county-level production variability 2014 Enhancements from SGI Energy Crop Yields Feedstock Quality 2 ORNL Resource Assessment, 10 September 2013

3 Project Background Project goal Identify the what, where, when, how of commercial feedstocks from agriculture and forestry systems Provide timely and credible estimates of feedstock supplies and prices to support commercialization Relevance: Farmgate price $50-$60/dt plus haul cost gal/dt) ~= 20-25% of $3.00/g MESP 85 gal/dt $1.20 $1.10 $1.00 $0.90 $0.80 $0.70 $0.60 $0.50 $0.40 $0.30 $0.20 $0.10 $0.00 Feedstock component of MESP Haul cost ($10/dt) Farmgate price $40 $50 $60 $70 $80 Farmgate price 3 ORNL Resource Assessment, 10 September 2013

4 Billion-ton Update Modeling Framework County model anchored to USDA 10-year projections and extended to major crops (corn, soybeans, wheat, sorghum, oats, barley, rice, cotton) and hay, livestock, food/feed markets Projected demands for food, feed, industry, and exports Biomass resources include stover, straws, energy crops (perennial grass, coppice and non-coppice woody, annual energy crop) Land base includes cropland (250 million acres), cropland pasture (22 million acres), hay (61 million acres), permanent pasture (118 million acres) Pasture can convert to energy crops if forage made up through intensification Restraints limiting land use change Exogenous price run (supply curve) and Endogenous price (demand approach) Chad Hellwinckel University of Tennessee - Agricultural Policy Analysis Center (APAC) ( Other model versions: Burt English Daniel G De la Torre Ugarte 4 ORNL Resource Assessment, 10 September 2013

5 Billion-ton Results Baseline scenario $60 dry ton x 10 6 dt 5 ORNL Resource Assessment, 10 September 2013

6 Billion-ton Results Baseline scenario $60 dry ton x 10 6 dt 6 ORNL Resource Assessment, 10 September 2013

7 Billion-ton Results Baseline scenario $60 dry ton x 10 6 dt 7 ORNL Resource Assessment, 10 September 2013

8 State-level Resource Shares, 2030 $60/dry ton 8 ORNL Resource Assessment, 10 September 2013

9 2013 Demand run reference case and sensitivity Variable Optimistic Reference Pessimistic Conversion Yield (gal/dt) USDA Baseline Crop Yield (dt/ac annual improvement) 3% 1% No-till adoption rate High (3) Intermediate (2) Low (1) Climate Monte Carlo Residue collection restricted to no-till and reduced tillage operations No added demand for biopower Constrained to 50% of non-federally sourced wood from forestry module 9 ORNL Resource Assessment, 10 September 2013

10 Reference Case, EISA Demand Run 300 $90 Wood Resid (Mil.tons) 250 $80 $70 Algae (Mil.tons) SweetSorgh(Mil.tons) Willows (Mil.tons) Poplars (Mil.tons) Dry tons $60 $50 $40 Farmgate Price Switchgrass(Mil.tons) Straw(Mil.tons) Stover(Mil.tons) Marginal Farmgate Price, Nominal Marginal Farmgate Price, 2011$ 100 $ $20 $10 $0 Reference case assumptions: 85 gal/ton 2013 USDA Baseline 1.2% yield improvements 2% no-till flexibility 10 ORNL Resource Assessment, 10 September 2013

11 Sensitivity Analysis: Farmgate price needed to supply 21 billion gallons in 2022 Reference Case: $78 Nominal $ $50 $60 $70 $80 $90 $100 R&D Conversion Efficiency 85 gallons/ton Macroeconomic Variability USDA Baseline Low price Agronomic R&D Mother nature Yield scenario 1.0% No-till adoption sensitivity C=2% 30-year variability 3% 1St Dev C=3% 1% C=1% 1 St. Dev. High price $40 $50 $60 $ $ Reference Case: $63 11 ORNL Resource Assessment, 10 September 2013

12 Stochastic POLYSYS Deviation from Mean, Lincoln Co, NE, Hay Corn *$80/dt, nominal. Base case. Do not cite Switchgrass Stover Supply (million tons/year) Year Combined Supply (million tons/year) -80% -70% -60% -50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% Count of years Deviation from mean production Supply (million tons/year) S.d=+/-48 mm tons of 464 mm tons in Year Year Wood residues Sweet Sorghum Willow Poplars Switchgrass Straw Stover 12 ORNL Resource Assessment, 10 September 2013

13 SGI Feedstock Yield Advancements Specification of grass/woody species in projections 13 ORNL Resource Assessment, 10 September 2013

14 2014 Feedstock Throat Supplies Quality incorporated through dockage and preprocessing costs 2017 Thermochemical Design Case (INL) Nth plant at 800K tons/year Woody residues, pulpwood, switchgrass 14 ORNL Resource Assessment, 10 September 2013

15 Summary and Outlook to FY14 Uncontrollable (e.g. climate, macroeconomics) and potentially controllable (e.g. gal/ton and tons/acre) factors influence farmgate price needed to meet EISA. Economic expectations according to USDA Baseline- leveling from highs Feedstock Supply and Price Projections (FSPPs) will account for agronomic advancements and economic outlook. Enhancement of specific energy crops and independent cost and supply curves for additional analysis 2014 FSPP targeted public release to KDF (September 2014) 15 ORNL Resource Assessment, 10 September 2013

16 Thank you! References Langholtz, M., Eaton, L., Turhollow, A. and Hilliard, M. (2014), 2013 feedstock supply and price projections and sensitivity analysis. Biofuels, Bioprod. Bioref.. doi: /bbb.1489 Link Muth, D. J., Langholtz, M. H., Tan, E. C.D., Jacobson, J. J., Schwab, A., Wu, M. M., Argo, A., Brandt, C. C., Cafferty, K. G., Chiu, Y., Dutta, A., Eaton, L. M. and Searcy, E. M. (2014), Investigation of thermochemical biorefinery sizing and environmental sustainability impacts for conventional supply system and distributed pre-processing supply system designs. Biofuels, Bioprod. Bioref.. doi: /bbb.1483 Link Argo, A. M., Tan, E. C., Inman, D., Langholtz, M. H., Eaton, L. M., Jacobson, J. J., Wright, C. T., Muth, D. J., Wu, M. M., Chiu, Y.-W. and Graham, R. L. (2013), Investigation of biochemical biorefinery sizing and environmental sustainability impacts for conventional bale system and advanced uniform biomass logistics designs. Biofuels, Bioprod. Bioref., 7: doi: /bbb.1391 Link 16 ORNL Resource Assessment, 10 September 2013

17 17 ORNL Resource Assessment, 10 September 2013