The importance of incorporating intertemporal and spatial log market dynamics in projections of residue-based biomass supply for liquid biofuel production in western Oregon and Washington, USA

Abstract

New methods of fiber pre-processing and cellulosic fermentation may allow production of isoparaffinic kerosene, a bio-based jet fuel, from abundant post-logging biomass residues in western Oregon and Washington, USA. Since production of these residues is characterized by complex spatial patterns that can shift markedly over time, and since residues may comprise roughly one-fifth of annual refinery operating costs, careful evaluation of residue supply (quantity/price) behavior is warranted. We examine potential residue supply characteristics at two likely refinery sites (Longview, WA and Springfield, OR) using a projection model of the regional log market that explicitly recognizes: (i) spatial locations of harvesting activities, (ii) the transportation network and residue haul costs, and (iii) the underlying conditions of the forest resource that determine harvesting methods and residue collection costs. We find that delivered residue prices in the range of $US64–75/bone dry metric tonne (BDMT) would be required to provide the 771,100 BDMT per year needed by a minimum commercial-sized refinery operation. Timber ownership and spatial harvesting patterns could give the Longview location nearly a $US12/BDMT wood cost advantage over Springfield at this minimum supply level, and operation of the Longview site would limit Springfield's ability to meet the minimum supply volume. Scenario analyses of lower residue collection costs indicate that a 1% reduction in costs could yield 0.6–0.9% increases in delivered supply at both refinery sites in the neighborhood of the minimum scale of commercial operation. Simulations of tripled residue output from federal lands, assuming RIN eligibility, suggest 15–30% increases in delivered residue supply at Springfield but only 0–10% increases at Longview, reflecting greater area and closer proximity of federal lands at Springfield.