Abstract
This research developed a regional economic model to estimate the ex-ante impacts of biofuel production on the economy of the southeastern United States. The analysis focuses on biofuels produced using biochemical and pyrolysis technologies. The primary feedstocks considered include switchgrass (Panicum virgatum) and poplar (Populus spp.). The economic analysis modifies the Impact Analysis for Planning (IMPLAN) input-output model to determine the macroeconomic impacts of a mature industry producing biofuels using these technologies and feedstocks. Optimal facility locations are determined using a site locator model that minimizes the costs of procuring feedstock. Given a change in the land use caused by industry demand for feedstock, shocks to the farm economy are forward-linked to sectors supporting biofuel production. Key economic indicators analyzed include changes in employment and value added to the economy. System output is analyzed using a nonparametric bootstrap procedure to simulate the distributions of the impacts. The null hypothesis is that the economic impacts following the introduction of the industries are not different from baseline economic activity. Findings suggest that the net changes in employment and value added to the regional economy are positive, but modest. For example, job increases attributed to the advancement of the industries analyzed range between 0.18% and 0.95%. Total value added to the regional economy ranged between 0.15% and 0.83%.
Highlights
Prior research finds that the southeastern (SE) US will be an important supply region for cellulosic biomass feedstocks from dedicated energy crops and from forestry and wood waste sources [1] [2]
The Renewable Fuel Standard (RFS) policy was revised two years later (RFS2) through the Energy Independence and Security Act (EISA), mandating that 36 billion gallons per year of biofuels be produced in the United States by 2022, with 21 billion gallons produced with advanced biofuel technologies [3]
Biobutanol is produced from cellulosic biomass and has an efficiency advantage over ethanol because it is blended with gasoline and would not require new or modified pipelines, blending facilities, storage tanks, or retail station pumps [21]
Summary
Prior research finds that the southeastern (SE) US will be an important supply region for cellulosic biomass feedstocks from dedicated energy crops and from forestry and wood waste sources [1] [2]. Federal mandates set targets for the production of advanced biomass fuels from non-grain materials. The United States Energy Policy Act of 2005 established the Renewable Fuel Standard (RFS). This legislation required that 7.5 billion gallons of domestic transportation fuels originate from renewable sources. The RFS policy was revised two years later (RFS2) through the Energy Independence and Security Act (EISA), mandating that 36 billion gallons per year of biofuels be produced in the United States by 2022, with 21 billion gallons produced with advanced biofuel technologies [3]. Research suggests that 50% of this target could be produced in the SE US due to growing conditions favorable to variety of biomass materials [4]
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