January 19, 2010 | General

Biomass Energy Outlook: Cost Of Purpose-Grown Energy Crops

BioCycle January 2010, Vol. 51, No. 1, p. 50
Mark Jenner

Everyone who works with value-added carbon has some sense of the politics, where the passion and power of environmental interests, industry concerns and energy objectives collide with science. The political process places a premium on winning the debate rather than producing a workable solution. While more durable solutions can be found through science and technology, the relentless legislative and regulatory process demands answers on technologies that do not yet exist. The more closely rooted these answers are in science and reality, the better the chance of writing effective policies.
In December, I began working with the California Biomass Collaborative (CBC) in Davis, California. While working on a biomass inventory for San Benito County, California in 2008, I found excellent biomass data that had been prepared by CBC. The Collaborative has established Gross (total) and Technical (available) levels of biomass production based on existing county-level data from many different sources. The CBC data is the best publicly available biomass dataset I have ever used. When the opportunity arose to come and work with them, I could not wait to get started.
The quest at hand is to establish the cost of energy crop production in diverse California farming systems and locations. Crops that are grown solely for energy, not food or animal feed, are becoming known as purpose-grown energy crops. After training for 30 years to monetize and quantify the value of carbon, the project is a dream come true. I have a passion for the valuation of undervalued organics, but there is no economic data on purpose grown crops. I fit right in.
This opportunity to move back to an academic environment has forced me to refocus my attention to science that is not only defensible, but can also be built upon as we learn more. As a systems economist, I look at how efficiently enterprises can be successfully nested or built into a larger system. For many of our value-adding organic residuals, this is the only way to do the math. BioCycle readers intuitively understand the benefits of complementary feedstocks and enterprises without needing detailed economic theory.
This project in California, establishing the cost of energy crop production, is part of a larger, more commonly asked billion dollar question: “What will feedstocks needed for liquid and solid biofuels and other products cost?” This is a very complicated question with an answer that will not come quickly.

Much of these end use costs will depend on a variety of factors, including location (distance/storage), available materials (competition or scarcity), conversion technology and the intended market. The cost of feedstock delivery (and production) will ultimately depend on all the existing emissions regulations for water and air quality and solid waste management. This cost also will be influenced by existing and emerging energy policies – from tax credits to biomass purchasing subsidies and standards. Greenhouse gas regulations and incentives, when we finally get to them, also will greatly influence this emerging sector, as will local siting and worker safety regulations.
For land-based biomass production the market price will be different than the cost of production. Farmers, like other businesses, want to sell their commodities for a profit. For the most part, the purpose-grown energy crops being evaluated in the California study have never been grown on a large scale before. Crops like sweet sorghum and switchgrass can be grown in California, but currently no market exists for large-scale cellulose. There are risks involved in trying something new. It won’t be enough to grow a new crop that will yield the same net revenue as crop farmers have grown for many years. The risks associated with adopting a new crop will be different than for existing crops. At a minimum, a farmer will need more net revenue.
All of these public policy, technical, risk and revenue dimensions are for later analysis in this project. The first step is to determine the cost of production in current cropping systems across different climatic regions in California in order to calculate the opportunity cost of modifying existing crop choices with a purpose-grown energy crop. Once this baseline of current cropping patterns and costs across California has been established, it will be much easier and relevant to begin to add in the other layers not currently included in this analysis.
While we have only just begun my work on this project, I am confident that other innovative datasets being created within the Collaborative will feed directly into the initial cost of production results that we find. Combining my expertise in systems economics with the innovative biomass system datasets of the California Biomass Collaborative will facilitate the delivery of new cost estimates and will benefit the emerging biomass industries. These calculations will also result in robust estimates of the resources needed for their production, including irrigation water.
There are no easy answers. If there were, it would take the fun out of the quest because we’d already be doing them. The multifaceted politics of biomass and organic residuals will continue to ebb and flow. Meanwhile I am thrilled to be back in an academic community using the skills I have learned over my career to take the carbon/ biomass debate to a higher level.

Mark Jenner, PhD, and Biomass Rules, LLC has joined the California Biomass Collaborative. Burning Bio News and other biomass information is available at www.biomassrules.com.

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