Identifier

etd-10132011-155152

Degree

Doctor of Philosophy (PhD)

Department

Agricultural Economics

Document Type

Dissertation

Abstract

The development of an efficient processing infrastructure is critical for the budding cellulosic ethanol industry. Developing a diverse feedstock portfolio is one crucial part of this process which can lead towards economically feasible cellulosic ethanol production. Cellulosic ethanol production requires the production and transportation of large quantities of biomass. Sugarcane and other dense grasses offer a compelling path towards a successful biomass supply chain. The Louisiana sugar belt already has an infrastructure adapted to the task of biomass supply, and taking advantage of this is one key way that a cellulosic ethanol plant can benefit from the region’s endowment. Additionally, the area has very large and sophisticated biomass processing facilities in the form of sugar mills. Finally, production of renewable energy from biomass is an area that is filled with economic uncertainty, both from the market and from economic policy. Dealing with this uncertainty will be crucial to any firm that attempts to operate in the cellulosic ethanol industry in the foreseeable future. This study focuses on several possibilities for aiding the development of the cellulosic ethanol industry, including feedstock development and building upon and within existing agricultural infrastructure. The Louisiana sugarcane belt is the target area of the study, which concentrates on sugarcane bagasse, energy cane, and sweet sorghum as cellulosic feedstocks. This study examines several possible scenarios and feedstock combinations, finding that a combination of sugarcane bagasse, energy cane, and sweet sorghum could supply a profitable cellulosic ethanol plant situated in the Louisiana sugar belt. By collocating with a sugar mill, a cellulosic ethanol plant can gain further advantage in the form of reusing capital and other fixed costs. This collocation is found to offer substantial benefits to both the cellulosic ethanol processor and the sugar mill, offering a diversified revenue stream, which enhances both operations. Finally, by employing real options analysis to the question of uncertainty in the market, it is found that a cellulosic ethanol plant can separate feedstock decisions from production and capacity decisions in a manner that mitigates downside potential from at least some types of market and policy shocks. This is found to greatly enhance the value of the firm in cases where unpredictable negative shocks occur

Date

2011

Document Availability at the Time of Submission

Release the entire work immediately for access worldwide.

Committee Chair

Salassi, Michael

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