Sustainable Bioenergy and Community Economic Development

Thomas G. JohnsonPresented April 11, 2012

Columbia, Missouri

Introduction

• What does the emerging bio-economy mean for community and regional economies?

• How can community leaders and businesses take full advantage of the biomass-based economy?

Energy—Past, Present and Future

Source: ukurbansurvival.com

Energy in the past was almost entire renewable

Source: safran-arts.com

…and almost entirely rural-sourced

Energy—Past, Present and Future

Source: ukurbansurvival.com

Biomass

Source: somethingawful.com

Energy—Past, Present and Future

Source: ukurbansurvival.com

Wind

Source: lampusuluh.blogspot.com

Energy—Past, Present and Future

Source: wikipedia

Hydro

Yesterday’s Energy Was:

• Distributed• Mostly renewable• Collected in rural areas

BUT• Low energy conversion efficiency• Unsustainable at today’s levels of demand

Energy—Past, Present and Future

Sources: Mineengineer.com BTGWord.com

Today’s energy is very differentCoal Petroleum

usbr.gov

Hydro Nuclear

Scientificamerican.com

Today’s Energy Is:

• Spatially concentrated– Oil refineries– Coal

Today’s Energy Is:

• Spatially concentrated• Mostly nonrenewable• Very large scale

Today’s Energy Is:

• Spatially concentrated• Mostly nonrenewable• Very large scale • Still rural• Higher, but still low energy conversion

efficiency• Frequently environmentally damaging• Unsustainable at tomorrow’s levels of

demand

Bioenergy—Back to the Future

The First Flex-Fuel Vehicle (1908)

Energy—Past, Present and Future

Source: prinsviewbelgians.com

100 years ago these were ‘hay burners’

Energy—Past, Present and FutureToday, this is a ‘hay burner’

Source: tootoo.com

Today’s Refinery

Tomorrow’s Refinery

energydescentplanning.blogspot.com

Tomorrow’s Energy Is:

• Still rural• Renewable• High energy conversion efficiency• Environmentally sound• More sustainable• Much more distributed

Energy—Past, Present and FutureFrom the concentrated non-renewable energy

economy

To a distributed renewable energy

economy

Non-renewable to Renewable Energy

• In the non-renewable energy economy – rural residents pay transportation costs in both

directions– they receive less when they sell commodities and

pay more when they buy consumer goods• In the renewable energy economy – energy is less expensive in rural areas– a competitive advantage for rural areas

With Distributed Renewable Energy

• Waste streams become energy sources • Rural firms no longer bear high costs of transporting

their energy inputs (diesel, gasoline, and electricity)• Rural farms no longer bear high costs of transporting

all their biomass to distant markets• Rural areas are more attractive to energy using

industries• Rural consumers save on locally produced energy

and commodities

Distributed Energy TechnologiesAnaerobic Digestion

Source: sustainabletech.ccSource: wbcarbonfinance.org

Even mobile unitsFarm-scale

Distribute Energy Technologies:Biomass

Crop ResiduesDedicated Crops

Source: farmindustrynews.com Source: biomassmagazine.com

CHP power station in Denmark burns straw as fuel. The adjacent greenhouses are heated from the plant

Advantages of Distributed Energy Systems

• Up to some level, transmission costs are reduced

• Reduced need for transmission lines and right-of-ways

• Greater possibilities of exploiting combined heat and power (CHP)

• Greater reliability when part of smart grid• Reduced emissions• Increased energy efficiency

Consequences of the Emerging Bioeconomy

• Most rural areas will switch from net energy consumers to net energy suppliers

• Energy costs will decline in many rural areas• More energy dependent sectors will locate in

rural areas• More rural economies will become energy

dependent

Some observations about the bioenergy sector and community development

• Bioenergy refineries and related sectors increase employment and income in local economies

• Like most modern sectors, employment in bioenergy is not high but highly paid and stable

Least cost sources of biomass• 18 types of

local biomass• Capital costs• Transportation

& handling costs

• Energy & moisture content

• Electricity costs

• Other revenue sources

Model Output

• t• Least cost

biomass sources

• Transportation & other costs

• Revenues• Financial

indicators• Economic

impact indicators

Other Community Economic Impact Studies and Tools

• Wisconsin’s Community Impact of Biodiesel and Bioethanol Plants http://www.aae.wisc.edu/renk/impactcalculator.asp

• Low, S. A. and Isserman, A. M. (2009). ”Ethanol and the local economy: Industry trends, location factors, economic impacts, and risks.” Economic Development Quarterly, 23(1): 71–88.

• Hodges, Alan W., Thomas J. Stevens and Mohammad Rahmani. 2010. Economic Impacts of Expanded Woody Biomass Utilization on the Bioenergy and Forest Products Industries in Florida. http://www.floridaforestservice.com/forest_management/fm_pdfs/Final%20Report%20on%20Economic%20Impacts%20of%20Woody%20Biomass%20Utilization.pdf

• Swenson, David. 2008. The Economic Impact of Ethanol Production in Iowa. Iowa State University. http://www2.econ.iastate.edu/research/webpapers/paper_12865.pdf

Myths about Bioenergy & Community Economies

1. Impacts are greater when locally owned– Depends on rate of return– Profits are repayment for investment and risk– Local ownership may exploit place-based

knowledge

2. Producers benefit more if producer owned– See points above– Producers benefit when they sell at the highest

price and make sound investments

Thank you