Outline. Forest Biomass Supply for Bio-production in the Southeastern United States. Zhimei Guo. Biofuel consumption trend.

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1 Forest Biomass Supply for Bio-production in the Southeastern United States Zhimei Guo Dept. of Forestry, Wildlife and Fisheries The University of Tennessee March 26, 2008 Outline Objectives Acknowledgement Biofuel consumption trend Source: EIA

2 Renewable Energy consumption, 2004 Source: EIA Bio-production and biomass utilizations Forest biomass: Industrial sector: for heat and steam Utility sector: for electricity Agricultural biomass: Transportation sector: for biofuels (ethanol, biodiesel) Benefits: This? Energy security Policy Support Environmental quality OR This? Economic development

3 Technologies and bioproducts Woody Biomass Combustion Fermentation Gasification Heat, steam, electricity Ethanol Methanol, ethanol, diesel, syngas, chemicals Pyrolysis Biooil Early federal incentives Energy Tax Act of 1978: excise tax exemption of 4 per gallon on gasoline blended with at least 10% ethanol Crude Oil Windfall Profits Tax Act of 1980: tax credits for biofuel producers and retailers Energy Security Act of 1980: insured loans to small ethanol plants; price guarantees and purchase agreements Alternative Motor Fuels Act of 1988: credits for automakers Energy Conservation Reauthorization Act of 1998: AFV credit to fleet operators for using biodiesel Recent federal incentives (woody biomass) Biomass Research and Development Act of 2000: financial assistance to research projects on bio-products; grants for improving cellulosic biomass conversion technologies Farm Bill of 2002: provided funds to biobased industrial production using trees, wood waste and residues; projects to stimulate biomass production and biorefinery technology improvements, including lingocellulosic biomass

4 Recent federal incentives (woody biomass) MOU on Policy Principles for Woody Biomass Utilization for Restoration and Fuel Treatment on Forests, Woodlands, and Rangelands: reduce hazardous fuels; sustainable development and stabilization of woody biomass utilization markets Healthy Forests Restoration Act of 2003: grants for research on thinning, harvesting, transportation, processing and economic valuation; grant programs for adoption of technologies and reducing costs Objectives Calculate supply curves of forest biomass for bio-production industry; Develop a market model to identify how the forest biomass supply for bio-production will affect the traditional wood markets; Examine how governmental incentives will influence the biomass and solid wood supply in regional markets. FIA data Forest areas Inventory Growth Removals Supply curve: Stumpage Price transportation cost Logging cost

5 Cellulosic Resource Costs (SRTS) Harvesting Costs Transportation Cost Cellulosic Supply Curves Biorefinery Site Flow chart of Sub-Regional Timber Supply model Inputs Outputs Timberland Characteristics Forest Inventory Characteristics Growth and Yield Parameters Inventory Model Inventory Supply Shifts Harvest Allocations Regional Demand Supplier Characteristics Supply and Demand Parameters Market Model Prices Quantities Welfare Measures (Source: Abt 2000) Sub-Regional Timber Supply model Price S 2 S 1 P 2 P 1 D 1 =D 2 Q 2 Q 1 Quantity Harvested (Source: Abt 2000)

6 Impacts of governmental incentives Financial incentives to producers Reducing procurement cost New Market Equilibrium SRTS Model Price Quantity Welfare Measure Results? Acknowledgement Southeastern SunGrant Center, US Department of Energy, USDA Forest Service Advisor: Dr. Don Hodges Fellow graduate students

7 Thanks!?