The Economics of Ethanol from Sweet Sorghum

Using the MixAlco Process
Michael H. Lau
James W. Richardson
Joe L. Outlaw
Mark T. Holtzapple
Rene F. Ochoa
Lime water slurry
Air

Blower
Cooling water
or
heat source
Pump
Drain pipe
Liner
Cover
Biomass
Gravel











Sugar Juice Grain Leaves Bagasse
Fermentation Fermentation Co-gener ation Other uses
DDGS Ethanol Ethanol Electricity Heat

Sweet Sorghum
Pretreatment
fermentation
Dewater
Acid
springing
Hydrogenation
Lime kiln
Biomass
Lime
Calcium carbonate
Carboxylate
salts
Carboxylic
acids
Mixed
alcohols
Hydrogen
AFPC
Agricultural and Food Policy Center
The Texas A&M University System
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The Economics of Ethanol from Sweet Sorghum
Using the MixAlco Process
Michael H. Lau
James W. Richardson
Joe L. Outlaw
Mark T. Holtzapple
Rene F. Ochoa
AFPC Research Report 062
August 11, 2006
AFPC
Agricultural and Food Policy Center
The Texas A&M University System
1
Biomasshasthepotentialtoprovideasustain-
ablesupplyofenergy.Ithasthefollowingadvan-
tagesoverfossilfuels:
• Renewablesourceofenergythatdoesnotcon-
tribute to global warming as it has a neutral
effectoncarbondioxideemissions;
• Biomass fuels have low sulfur content and do
notcontributetosulfurdioxideemissions;
• Effective use of residual and waste material
forconversiontoenergy;
• Biomass is a domestic source that is not sub-
ject to world price fuctuations or uncertainties
inimportedfuels.
However,animportantconsiderationwithbio-
massenergysystemsisthatbiomasscontainsless
energyperpoundthanfossilfuels(SterlingPlan-
et). Dried biomass has a heating value of 5,000-
8,000Britishthermalunits(BTU)perpoundwith
virtuallynoashorsulfurproducedduringcombus-
tion(Osburn,1993).Otherestimatesshowtheen-
ergy content of agricultural residues in the 4,300
to 7,300 BTU per pound due to moisture content
(http://bioenergy.ornl.gov/index.html). Incomplete
combustion of biomass produces organic matter
and carbon monoxide pollution. There is also a
social debate over the use of land and water for
foodproductionversusenergyproduction(ACRE,
Mazza).Biomasscouldhaveanimportantimpact
onthesocio-economicdevelopmentofruralpopu-
Figure 1: Sweet Sorghum and Grain Sorghum Trials near
Amarillo.
Source: Travis Miller.
T
heUnitedStatesisbecomingmoredependent
on ethanol production as a renewable fuel
sourcetodecreasedependencyonforeignoil.
The increase in demand for renewable fuels, due
inparttotheEnergy Policy Act of 2005,hasledto
increasedresearchonalternativerenewablefuels
from biomass. One such avenue of research has
beentheconversionofbiomasstorenewablefuels,
and specifcally sweet sorghum, as an ethanol fuel
stock.
Biomass Energy
Biomassisusedtodescribeanyorganicmatter
from plants that derives energy from photosyn-
theticconversion.Itisauniqueresourcewhichis
theonlyrenewablesourceofcarbon.Biomassisa
versatile energy source that can be easily stored
and transformed into liquid fuel, electricity, and
heat through various processes (World Energy
Council,1994).Biogas,biodiesel,ethanol,metha-
nol, diesel, and hydrogen are examples of energy
carriersthatcanbeproducedfrombiomass(Bas-
sam).
Traditional sources of biomass include fuel
wood,charcoal,andanimalmanure.Modernsourc-
esofbiomassareenergycrops,agricultureresidue,
andmunicipalsolidwaste(ACRE).Biomassfuels
are produced mainly in countries that have sur-
plusofagriculturecommodities(Shapouri,2003).
Biomasscanbedividedintothreecategories;sugar
feedstock (sugarcane), starchy feedstock (grains),
and cellulose feedstock (fbrous plant material)
(Badger, 2002). Estimates show 512 million dry
tons of biomass residues is potentially available
intheUnitedStatesforuseasenergyproduction
(Mazza).
Ithasbeenestimatedthatbiomasscouldsup-
plyallcurrentdemandsforoilandgasif6percent
of contiguous U.S. land area was put into culti-
vation of biomass feedstocks (Osburn, 1993). No
netcarbondioxidewouldbeaddedtotheenviron-
ment if biomass energy replaced fossil fuels (Os-
burn, 1993). Fuels derived from biomass are re-
newable and are suffciently similar to fossil fuels
toprovidedirectreplacement(Bassam).TheU.S.
DepartmentofEnergybelievesthatbiomasscould
replace10percentoftransportationfuelsby2010
and50percentby2030(SterlingPlanet).
2
lations and the diversifcation of the energy sup-
ply(RenewableEnergyWorld,2000).
Combustion, gasifcation, liquefaction, and bio-
chemical are the primary ways of converting bio-
mass into energy. Combustion burns biomass to
produce heat. Gasifcation produces gas that can
becombustibleinaturbine.Liquefactionproduces
anoxygenatedliquidthatcansubstituteforheat-
ingoil.Thebiochemicalprocessconvertsbiomass
toliquidfuelthroughafermentationprocess(Ve-
ringa,ACRE).Biodieselandethanolareanexam-
pleofthisprocess.
Ethanolfromcellulosebiomassmaterialisstill
in the research and development phase (Mazza).
There is currently only one commercial cellulose
ethanol facility in operation (Canada) with an-
otherplantunderdevelopmentinSpain.Thelack
ofreal-worldexperiencewithcellulosebiomassto
ethanol production has limited investment in the
frst production facilities (California Energy Com-
mission,1999).Ethanolfromcellulosehasthead-
vantage of a faster rate of reaction than the tra-
ditional fermentation process. However, ethanol
productionusingcelluloseiscostlyduetotheneed
foracidhydrolysisofthebiomasspricingitabove
expected long-run gasoline prices (Badger, 2002).
MixAlco,aprocessdevelopedatTexasA&MUni-
versity, has the advantage of no extra processing
ofthebiomassisneededforfuelconversion.
Sweet Sorghum
Sorghum (Figures 1 and 2) has been identi-
fed as a preferred biomass crop for fermentation
intomethanolandethanolfuel(MillerandCreel-
man, 1980; Creelman et al., 1981). Sorghum is
among the most widely adaptable cereal grasses
potentiallyusefulforbiomassandfuelproduction
(Hons,et al.,1986).Theadaptationofsorghumto
sub-humid and semiarid climates has extended
sorghumproductionintolargerregionsthanother
warm-cerealgrains.
Sorghumisrelativelyinexpensivetogrowwith
high yields and can be used to produce a range
ofhighvalueaddedproductslikeethanol,energy,
and distillers dried grains (Chiaramonti, et al.).
Sorghumcanproduceapproximately30drytons/
ha per year of biomass on low quality soils with
low inputs of fertilizer and limited water per dry
tonofcrop,halfofthatrequiredbysugarbeetand
athirdoftherequirementforsugarcaneorcorn.
(RenewableEnergyWorld,2000).
Moststoverorcropresidueisplowedbackinto
thegroundtoreplenishnutrientsandusedtore-
ducesoilerosion.Smallamountsareharvestedfor
livestock feed. Studies to estimate sorghum resi-
dueyieldforbiomassproductionaveragesapprox-
imately1.75tons/acre(Franzluebbers,et al.,1995;
Gallagher,et al.;Hons,et al,1986;Powell,et al.,
1991).
Figure 3 shows a simplifed diagram of alterna-
tiveprocessestoconvertsweetsorghumtoenergy
fuel. Corn processing is very similar as the two
crops are interchangeable. Sorghum production
can be separated into grains (for consumption,
livestock feed, ethanol production), sugar juice
(extractedfromthecaneandusedforethanolpro-
duction), and stover (used for energy production,
plastics) (Chiaramonti, et al.). Sorghum easily
convertstoothervalueaddedproductsmakingit
aversatileinput.
Figure 2: Texas A&M University Crop Scientist with Hybrid
Sorghum.
Source: Travis Miller.
2
Althoughstudies(Gallagher,et al.;Wiedenfeld,
1984;CommitteeonBiobasedIndustrialProducts,
2000;MillerandCreelman,1980;Creelmanet al.,
1981) show sorghum stover is a good potential
candidate for cellulose energy production, no his-
torical values are available for residue costs and
yields. Agriculture residue price for energy pro-
duction is based on the opportunity cost for the
growerplusharvestingandbalingcost.
Residues are desirable raw materials for en-
ergy production because utilizing them does not
require covering land cost which are included in
the grain enterprise. Residue supply depends on
opportunity costs at the farm level and the as-
sumption that reasonable soil conservation prac-
ticeswillbefollowed.Theamountofresiduesup-
plied is an approximation for acquisition cost by
processing facilities. Growth is expected to occur
in crop residue resource due to increase crop
yields and declining livestock demand for for-
age(Gallagher).
MixAlco Process
While the MixAlco process has not been
testedatacommercialscale,thetechnologyap-
pearstoholdatremendousamountofpromise.
TheMixAlcoprocesscanconvertawidevariety
of biomass material such as sewer sludge, ma-
nure, agriculture residues, agriculture crops,
into acids and alcohol fuels using microorgan-
isms,water,steam,limeandhydrogenthrough
an anaerobic process (Holtzapple, 2004). Two
different versions of the MixAlco process are
available. Version one is the original process
which produces mixed alcohol fuels. Version
Figure 3: Simplifed Diagram of Alternative Processes to Convert Sweet Sorghum to Energy Fuel.
Source: Chiaramonti, et al.











Sugar Juice Grain Leaves Bagasse
Fermentation Fermentation Co-gener ation Other uses
DDGS Ethanol Ethanol Electricity Heat

Sweet Sorghum
Pretreatment
fermentation
Dewater
Acid
springing
Hydrogenation
Lime kiln
Biomass
Lime
Calcium carbonate
Carboxylate
salts
Carboxylic
acids
Mixed
alcohols
Hydrogen
Figure 4: Schematic of the MixAlco Process
Source: Holtzapple, 2004.
k
twoproducescarboxylateacidsandprimaryal-
cohols(ethanol).
Figure 4 summarizes the MixAlco process.
This process differs from the use of acid hydro-
lysisofbiomassmaterialtoproduceethanol.The
MixAlco process calls for mixing biomass with a
nutrientsourcesuchasmanureorsewagesludge
at a ratio of 80 percent to 20 percent. There are
fourphasestotheprocess:pretreatmentandfer-
mentation, dewatering, acid springing, and hy-
drogenation.
Duringthepretreatmentphase,biomass,lime,
and calcium carbonate are blended and stored
in a large pile. Air is blown up through the pile
whilewateristrickleddownthroughthepile.The
combination of air and lime removes lignin from
the biomass reducing the pH and rendering the
bio-matter digestible. The pile is then inoculated
with anaerobic microorganisms from saline envi-
ronments.Themicroorganismsdigestthebiomass
formingcarboxylicacidscommonlyknownasvola-
tile fatty acids (VFAs) such as acetic, propionic,
Figure 6: Schematic of the Fermentation Facility.
Source: Holtzapple, 2004.
Concentrated
product
Fresh
water
Lime water slurry
Air

Blower
Cooling water
or
heat source
Pump
Drain pipe
Liner
Cover
Biomass
Gravel
Figure 5: Schematic of the MixAlco Pretreatment Process
Source: Holtzapple, 2004.
$
Figure 7: MixAlco Pilot Plant Photos.
Source: Martk T. Holtzapple.
andbutyricacids.TheVFAscombinewithcalcium
carbonatetoformcarboxylatesalts,whichareex-
tractedfromthepilewithwater.
Fourreactorpilesarecreatedofequalvolume.
Figure 5 and Figure 6 show the schematic of the
pretreatment and fermentation facility. Each re-
actor is shaped like a cone to minimize material
use.Fora44ton/hourfacility,eachreactorhasa
basediameterof397feetandis115feethigh.The
fuelpileiscoveredwithageomembranetoresist
theweather,wind,andsun.Thebaseconsistsofa
one-meter-thicklayerofgravelthatisdividedby
bermedwallstocollecttheVFAsolution.
From fermentation, the VFA solution is con-
centrated using a vapor compression evaporator
during the dewatering phase. The fermentation
brothcontainingtheVFAsareheatedto100°Cand
mixedwithhigh-molecular-weightacid(e.g.,hep-
tanoic) to acidify the fermentation broth. Steam
andlimearethanusedtoremovenon-condensable
gasesandcalciumcarbonate.Thetreatedfermen-
tationbrothisheatedto212°Candwaterisevapo-
ratedfromthesolutionconcentratingthesalts.
Acid springing converts the carboxylate salts
intocarboxylateacidandcalciumcarbonate.The
concentrated broth is blended with carbon diox-
ide and a low-molecular-weight tertiary amine
(triethyl) to form insoluble calcium carbonates
and amine carboxylates. Approximately 75% of
the calcium carbonate removed can be used in
the pretreatment and fermentation phase and
theremaining25percentisconvertedtolimeus-
ingaspeciallimekiln.Mostofthewateristhen
removed leaving a concentrated amine carboxyl-
ate.
Thecarboxylateacidsareblendedwithhigh-
molecular-weight alcohols to form esters and
water. The water is evaporated and remaining
esters are mixed with high-pressure hydrogen
to form alcohols. The resulting ethanol fuel is
cooledandstoredfortransportationtobemixed
withgasolinefuel.Largestoragetanksareused
toholdtheethanolfueluntilshipping.
Byproducts
MixAlco produces water, heat, carbon diox-
ide,calciumcarbonate,andresidualbiomassas
byproducts. The MixAlco facility can be almost
self-sufficient after the first year of operation
if the necessary equipment for lime production,
waterrecycling,andsteamcapture,andboilers,
are in place. Water can be reused for the pre-
treatmentandfermentationphase.Calciumcar-
bonatecanbemanufacturedintolimeandused
in the pretreatment and fermentation phase.
Theheatgeneratedcanbetransferredtodryers
toaidintheevaporationduringthedewatering
phase.
The MixAlco structure is completely sealed
fromtheoutsideenvironmentandallcarbondi-
oxidegasproducedcanbecollected.Thecarbon
dioxide can be released once it is “scrubbed” to
removeodororsoldtooilrefineriestobepumped
intooilwellsandaidinthecollectionofoil.How-
ever,thecarbondioxidemarketisverylimited.
6
Incentive Packages - Location Choices
























Historical Data
Stochastic Variables
Exogenous and Control Variables
Equations and Calculations
Financial Statements
• Income Statement
• Statement of Cash Flows
• Balance Sheet

Key Output Variables
• Net Income
• Ending Cash Balance
• Dividends Paid
• Ending Real Net Worth
• Net Present Value
Risk Ranking of Alternative Scenarios
Residual biomass is the largest byproduct
produced. MixAlco differs from corn-based etha-
nolproductionthatproducesdistillerdriedgrains
with solubles (DDGS) that be can be sold to live-
stock operations for feed. Approximately 20 per-
cent of the biomass feedstock is residual biomass
when the MixAlco process is complete. The re-
sidualbiomasscanbeusedinternallytogenerate
powerandsteamforthefacilityoritcanbesoldto
coal-fred power plants as a fuel source to reduce
sulfuremissions.
Net Energy Balance of MixAlco
ThenetenergybalanceofMixAlcoalcoholfuel
is dependent upon which feedstock is used as a
fuelsource. Initial testing has shown ethanol
produced from MixAlco has a slightly higher en-
ergy content than corn-based ethanol. A gallon
of gasoline contains approximately 125,000 BTU/
gallon and corn-based ethanol contains 84,000
BTU/gallon (Holtzapple, 2004). The energy con-
tentofMixAlcoproducedethanolisapproximately
95,000BTU/gallon.Theenergycontentforthere-
sidual biomass byproduct is similar to coal. It is
substitutable for coal in co-fring energy produc-
tionfacilitiesandcanreducesulfur
emissions.
MixAlco Feedstock Requirements
Initial research into MixAlco
used sugarcane bagasse as feed-
stock as it is widely available
around the world. However, the
supply of sugarcane in the United
States is limited to the four states
producing sugarcane and is not
largeenoughtosupportlarge-scale
MixAlcoproduction.Theamountof
feedstock required is dependent on
the desired output size for the fa-
cility. The feedstock is decomposed
at the same rate for all crops and
all plant sizes. The effciency of the
MixAlco process is also still under
experimentation.Versiontwoofthe
MixAlco process has increased al-
coholyieldpertonofbiomassfrom
approximately90to100gallons/ton
inversiononeto130to140gallons/ton.However,
theethanolproducedfromversiontwohasalower
energy content than the alcohol produced in ver-
sionone.
MixAlcofeedstockdemanddiffersfromethanol
feedstockdemandasyear-roundsupplyisnotnec-
essary. The MixAlco process only requires feed-
stockinputonceayeartobuildthefuelpile.This
isadvantageouswhencomparedtootherformsof
biomass energy production. Biomass can be used
for other types of energy production (burning,
digesting) but again, have not found commercial
success.
Economic Analysis
A simulation model was developed for two al-
ternativeMixAlcoplantsizes(44ton/hourand176
ton/hour) using sweet sorghum as feedstock. For
bothplants,economicfeasibilitywasexaminedfor
twoinitialinvestmentamounts(Base–represent-
ingtheexpectedcostsandBasePlus30percent–
representingBasecostsplus30percent);withand
without incentives; and three alternative regions
inTexas(Panhandle,CentralTexas,andCoastal
Bend). A simplifed diagram of the model and the
Figure 8: Diagram of the Simulation Model.
7
alternative scenarios are presented in Figures 8
and9.
Common fnancial statements for each alterna-
tivescenarioweredeveloped.Stochasticvariables
wereincorporatedintothemodeltocapturerisk.
Specifc key output variables were calculated and
compared for each alternative scenario from the
fnancial statements.
Results
Key Output Variables

For all the scenarios analyzed, the projected f-
nancialfeasibilityresultsshowapositivenetpres-
entvalue(NPV)overthe16yearplanninghorizon
withonlyasmallprobabilityofbeingnegative.
Netincomeisexpectedtoremainpositiveand
increaseslightlyforallscenarios.Theprobability
of negative net income is less than 30 percent in
the frst year for all scenarios and only 1 percent
thereafteryears2006to2019.Asexpected,netin-
come for the Base Plus 30 initial investment sce-
narioislowerinallcasesduetohigherdeprecia-
tioncostsandhighercapitalimprovementcosts.
Because net income remains positive, ending
cashbalanceincreasesannually.Theprobabilityof
negative ending cash balance is less than fve per-
centin2005andlessthanonepercentfrom2006
to 2019 for all scenarios. Also, annual dividends
paidarepositiveforallscenarios.Real net worth
increases to 2014 and than fattens out for all sce-
narios because of the increasing defation factor.
RealnetworthishighestinthePanhandleRegion
for the 44 ton/hour and 176 ton/hour production
facilities because of the additional initial invest-
mentcostsneededforwellsandwaterrights.For
the Plus 30 initial investment scenario, real net
worthishigherforallscenariosasexpected.The
probabilityofrealnetworthbeingnegativeisless
thanonepercentforallscenarios
Community Impacts
The economic impacts of locating a MixAlco
productionfacilityinthePanhandle,CentralTex-
as,andCoastalBendRegionswereanalyzedusing
the Regional Industry Multiplier System (RIMS)
and the summation of the simulated discounted
wages,haulingcosts,propertytax,andadditional
farmerincomefrom2005to2019foreachregion.
TheRIMSmethodpresentsthedirectandindirect
benefts to the community. The simulation results
representdirectimpactsfromtheMixAlcoproduc-
tionfacility.
Theestimatedadditionalcapitalspendingwas
$50millionto$65millionforthe44ton/hourfacil-
ity with an additional household income of $124
millionto$133million.Forthe176ton/hourpro-
duction facility, the local economy would beneft
from $407 million to $440 million in additional
spending and $72 million to $78 million in addi-
tionalhouseholdincome.Theseeconomicgainsfor
thelocaleconomyarequitelargeandindicatelo-
catingaMixAlcoproductionfacilityintheregion
would have a substantial and positive impact on
thelocaleconomy.
Forthedirectimpacts,haulingrevenueswere
the largest direct contributor to the region rang-
ingfrom$42millionfora44ton/hourproduction
facilityto$190millionfora176ton/hourfacility.
Central
Panhandle
Coastal Bend
44 T/H
176 T/H
44 T/H
176 T/H
44 T/H
176 T/H
Base
Plus 30
Base
Plus 30
Base
Base
Plus 30
Plus 30
Base
Plus 30
Base
Plus 30
Incentive
No Incentive
Incentive
No Incentive
Incentive
No Incentive
Incentive
No Incentive
Incentive
No Incentive
Incentive
No Incentive
Location Plant Size
Investment
Level
Local Incentive
T
e
x
a
s

Figure 9: Flow Chart of Alternative Scenarios.
8
The summed discounted wages were $12 million
for a 44 ton/hour facility and $27.5 million for a
176 ton/hour facility. Farmers receive a substan-
tialincreaseinadditionalrevenuewithahighof
$20millionforthe44ton/hourproductionfacility
to$65millionfora176ton/hourproductionfacil-
ity.Propertytaxrevenueforthelocalcommunity
variesandisdependentontheofferoftaxabate-
ments.
Sensitivity Analysis
Elasticitiesforkeyinputvariableswereesti-
matedtodeterminewhichvariableshadthegreat-
esteffectonfeasibilityintermsofNPV.Fromthe
analysis, ethanol price, ethanol yield, and hydro-
gen price are the three variables with the high-
est elasticities. A one percent annual increase in
ethanol price or yield would increase NPV by six
to seven percent depending on the plant size. In
termsofcost,ifhydrogenpriceincreasesoneper-
cent each year, NPV would decrease by 2.5 to 3
percentfortheproductionfacility.Thecalculated
elasticitiesforallotherinputcostvariableswere
lessthan0.25percent.
Conclusions
Thepromisingresultsforproductionofethanol
from the MixAlco process should be viewed with
caution.TheanalysisusestheEnergyInformation
Administration’slong-termforecastforwholesale
gasolinepricewherepricesareexpectedtocontin-
uallyincreasefrom2005to2019.Theuncertainty
intheworldoilmarketcausedbythecurrentwar
in the Middle East could dramatically affect the
feasibility of a production facility. These outside
factorscannotbecontrolled.
Also, the MixAlco process is still being refned
andtheproductiondatausedinthisanalysisare
primarily derived from small-scale pilot plants.
These numbers, such as ethanol yield per ton of
feedstock, could vary in commercial conditions.
Morethanlikely,MixAlcowillfollowanadoption
curve for new technology where the process is fne
tuned over the frst few years before full effciency
canbereached.
Theresultsindicatethateithersizeplantwill
be proftable given current assumptions. A positive
NPV is forecasted with increasing net worth for
a 44 ton/hour and 176 ton/hour production facil-
ityinthePanhandle,CentralTexas,andCoastal
BendregionsofTexas.Potentialinvestorscanuse
the results to determine the location, plant size,
andkeyvariablesindecidingifaproductionfacil-
ityshouldbeconstructed.
Furthermore,theresultsofthisstudyprovide
useful information to compare the risk and benefts
betweenthealternativeplantsizesandlocations.
Investingsubstantialamountsofmoneyinanew
technologyisariskydecision.Understandingand
incorporatingvariabilityintothemodelallowsfor
aprobabilisticanalysiswhereaprobabilityrange
canbeassignedforeachoutcome.Theprobabilis-
tic framework gives decision makers much more
informationthanadeterministicestimate.
The results also show the additional business
activity associated with a MixAlco production fa-
cilitywouldincreasecapitalspendingandhouse-
hold income boosting the local economy. MixAlco
has the potentially to be a feasible alternative to
corn-based ethanol production offering substan-
tialeconomicgainsforthecommunity.
Study Limitations
There are several limitations to this study.
First, silage yields and silage prices were inter-
polated from historical grain yields and budgets.
Thesenumbersareonlybestestimatesofwhatthe
expected forage yield and price would be. Actual
data from experimental plots collected from indi-
vidualfarmerswouldgiveabetterrepresentation
oftheexpectedyieldandcostforsorghumsilage.
Yieldisheavilydependentonweather,especially
for dry-land farming in the Panhandle, Central
Texas,andCoastalBendregionsofTexas.
Second, this study assumed specifcally grow-
ing silage for energy production. Sorghum silage
isusedasfeedstockbecauseofitshighyieldchar-
acteristics,lowcostsofproduction,andadaptabil-
itytobegrownindifferentclimates.A20percent
premiumwasincludedinthepricetoenticefarm-
ers to harvest sorghum for silage rather than for
grainwhichmayormanynotbenecessary.How-
ever, MixAlco would directly compete with the
dairyindustryforsorghumsilagewhichmayraise
priceshigherthanexpected.Thehighersorghum
silage price could dampen the fnancial outlook for
MixAlco.
9
Residual biomass, such as tree clippings and
farmingresidues,arenotconsideredinthisstudy.
Agricultural residues could offer a low cost alter-
native to growing crops specifcally for energy con-
version. Studies show sorghum produces one ton
ofresidualmatterforeverytonofgrainproduced.
Harvesting the sorghum for grain and collecting
theresidualbiomasscouldbeaviablealternative.
TheabilityofMixAlcotoconvertanybiomassma-
terialtoalcoholfuelmakesitanattractivealter-
native for ethanol production. Large amounts of
available residual biomass represent a low cost
feedstock source that can be used for energy pro-
duction(Gallagher,et al.).
Third, electricity prices, natural gas prices,
steam prices, and lime prices were not separated
by region. The differences in price between re-
gionsmaybesmall,butforcompleteness,asepa-
ratepriceshouldbeusedineachregion.Also,the
prices are average prices for Texas. Better prices
maybeobtainedfromnegotiationswithproviders
ineachregion.
Fourth, location incentives may be available.
The location incentives used in this study were
generalized for each region after discussion with
thelocalChamberofCommerceandEconomicDe-
velopmentCorporations.Eachstatedthatthein-
centives are project specifc and negotiated on an
individualbasis.Theycouldnotprovideacomplete
and specifc incentive package for a production fa-
cilitywithouttheproperinformationtoevaluate.
Lastly, this study considers the production of
ethanol on premise and shipping the fnished fuel
to refneries for blending. Smaller acid production
facilities could ship acid to a centrally located,
largehydrationfacility.Theremaybecostadvan-
tages to shipping acids to a central hydration fa-
cilitylocatedclosetoalargehydrogenproduction
facility. This would reduce the cost of hydrogen
andnegatetheproblemsassociatedwithshipping
ethanol. However, little data is available on the
pricing and shipping cost for acids as well as the
costsforlarge-scaleproductionofhydrogen.
10
References
Australian CRC for Renewable Energy Ltd. (ACRE) “What is Bio-
mass.”Websitehttp://acre.murdoch.edu.au,1999.
Badger,P.C.“EthanolfromCellulose:AGeneralReview.”Trends in
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Bassam, N. E. Global Potential of Biomass for Transport Fuels. In-
stituteofCropandGrasslandScience,Braunschweig,Germany,
2004.
California Energy Commission. Evaluation of Biomass-to-Ethanol
Fuel Potential in Calfornia: A Report to the Governor and Cali-
fornia Environmental Protection Agency.Sacramento,CA,1999.
Chiaramonti, D., G. Grassi, A. Nardi, and H. P. Grimm. ECHI-T:
Large Bio-Ethanol Project from Sweet Sorghum in China and
Italy.EnergiaTrasportiAgricoltura,Florence,Italy,2004.
Committee on Biobased Industrial Products. Biobased Industrial
Products: Priorities for Research and Commercialization.Wash-
ingtonD.C.,NationalResearchCouncil,
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173(1995):55-65.
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H. Shapouri. “Supply and Social Cost Estimates for Biomass
from Crop Residues in the United States.” Environmental and
Resource Economics24(2003):335-358.
Holtzapple, M. MixAlco Process. Unpublished manuscript, Texas
A&MUniversity,CollegeStation,TX,2004.
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plied Nitrogen and Phosphorus Effects on Yield and Nutrient
Uptake by High-Energy Sorghum Produced for Grain and Bio-
mass.”Agronomy JournalVol,76,No.6(1986):1069-1078.
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drate Partitioning in Sorghum Stover.” Agronomy Journal Vol.
83,No.6(1991):933-937.
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Biomass and Waste.ECNBiomass,2004.
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bySweetSorghum.”Energy Agriculture3(1984):49-59.
World Energy Council. New Renewable Energy Resources. London,
KoganPage,1994.
A policy research report presents the final results of a research project
undertaken by AFPC faculty. At least a portion of the contents of this report
may have been published previously as an AFPC issue paper or working paper.
Since issue and working papers are preliminary reports, the final results
contained in a research paper may differ - but, hopefully, in only marginal
terms. Research reports are viewed by faculty of AFPC and the Department of
Agricultural Economics, Texas A&M University. AFPC welcomes comments
and discussions of these results and their implications. Address such comments
to the author(s) at:
Agricultural and Food Policy Center
Department of Agricultural Economics
Texas A&M University
College Station, Texas 77843-2124
or call (979) 845-5913.
Copies of this publication have been deposited with the Texas State Library in compliance with the State Depository
Law.
Mention of a trademark or a proprietary product does not constitute a guarantee or a warranty of the product by The
Texas Agricultural Experiment Station or Cooperative Extension Service and does not imply its approval to the
exclusion of other products that also may be suitable.

Ochoa AFPC Research Report 062 August 11.The Economics of Ethanol from Sweet Sorghum Using the MixAlco Process Michael H. Lau James W. Richardson Joe L. Outlaw Mark T. Holtzapple Rene F. 2006 AFPC Agricultural and Food Policy Center The Texas A&M University System .

an important consideration with biomass energy systems is that biomass contains less energy per pound than fossil fuels (Sterling Planet). and municipal solid waste (ACRE). electricity. and heat through various processes (World Energy Council. Modern sources of biomass are energy crops. 1994). biodiesel. methanol. • Effective use of residual and waste material for conversion to energy. Biomass is a versatile energy source that can be easily stored and transformed into liquid fuel. Source: Travis Miller. Biomass can be divided into three categories. No net carbon dioxide would be added to the environment if biomass energy replaced fossil fuels (Osburn. The U. The increase in demand for renewable fuels. and specifically sweet sorghum. Other estimates show the energy content of agricultural residues in the 4.0008.000 British thermal units (BTU) per pound with virtually no ash or sulfur produced during combustion (Osburn. It has the following advantages over fossil fuels: • Renewable source of energy that does not contribute to global warming as it has a neutral effect on carbon dioxide emissions. 1993). T Figure 1: Sweet Sorghum and Grain Sorghum Trials near Amarillo. and animal manure. land area was put into cultivation of biomass feedstocks (Osburn. 2002). It is a unique resource which is the only renewable source of carbon. Dried biomass has a heating value of 5. Incomplete combustion of biomass produces organic matter and carbon monoxide pollution. 2003). There is also a social debate over the use of land and water for food production versus energy production (ACRE. However. • Biomass is a domestic source that is not subject to world price fluctuations or uncertainties in imported fuels. 1993). Estimates show 512 million dry tons of biomass residues is potentially available in the United States for use as energy production (Mazza). Traditional sources of biomass include fuel wood.300 to 7. Biomass fuels are produced mainly in countries that have surplus of agriculture commodities (Shapouri. It has been estimated that biomass could supply all current demands for oil and gas if 6 percent of contiguous U.he United States is becoming more dependent on ethanol production as a renewable fuel source to decrease dependency on foreign oil.gov/index. and hydrogen are examples of energy carriers that can be produced from biomass (Bassam).S. starchy feedstock (grains). Fuels derived from biomass are renewable and are sufficiently similar to fossil fuels to provide direct replacement (Bassam). Department of Energy believes that biomass could replace 10 percent of transportation fuels by 2010 and 50 percent by 2030 (Sterling Planet). charcoal. 1993).html). Biomass Energy Biomass is used to describe any organic matter from plants that derives energy from photosynthetic conversion. diesel. Biomass could have an important impact on the socio-economic development of rural popu-  . sugar feedstock (sugarcane). as an ethanol fuel stock. • Biomass fuels have low sulfur content and do not contribute to sulfur dioxide emissions. Mazza).S. agriculture residue.300 BTU per pound due to moisture content (http://bioenergy. has led to increased research on alternative renewable fuels from biomass. ethanol. due in part to the Energy Policy Act of 2005. Biomass has the potential to provide a sustainable supply of energy. Biogas.ornl. One such avenue of research has been the conversion of biomass to renewable fuels. and cellulose feedstock (fibrous plant material) (Badger.

Gallagher. 1986). and biochemical are the primary ways of converting biomass into energy. Ethanol from cellulose has the advantage of a faster rate of reaction than the traditional fermentation process. Biodiesel and ethanol are an example of this process... Figure 3 shows a simplified diagram of alternative processes to convert sweet sorghum to energy fuel. Combustion burns biomass to produce heat. plastics) (Chiaramonti. and stover (used for energy production. 1991). Corn processing is very similar as the two crops are interchangeable. liquefaction. 2000). 2000).75 tons/acre (Franzluebbers. et al. 2002). 1986. ton of crop. ethanol production using cellulose is costly due to the need for acid hydrolysis of the biomass pricing it above expected long-run gasoline prices (Badger. There is currently only one commercial cellulose ethanol facility in operation (Canada) with another plant under development in Spain.. Sweet Sorghum Sorghum (Figures 1 and 2) has been identified as a preferred biomass crop for fermentation into methanol and ethanol fuel (Miller and Creelman. 1999). The adaptation of sorghum to sub-humid and semiarid climates has extended sorghum production into larger regions than other warm-cereal grains. sugar juice (extracted from the cane and used for ethanol production). The lack of real-world experience with cellulose biomass to ethanol production has limited investment in the first production facilities (California Energy Commission. Combustion. Sorghum is relatively inexpensive to grow with high yields and can be used to produce a range of high value added products like ethanol. Source: Travis Miller. Studies to estimate sorghum residue yield for biomass production averages approximately 1.  .. Small amounts are harvested for livestock feed. a process developed at Texas A&M University. et al.). energy. et al. ACRE). has the advantage of no extra processing of the biomass is needed for fuel conversion. Sorghum is among the most widely adaptable cereal grasses potentially useful for biomass and fuel production (Hons. Sorghum easily converts to other value added products making it a versatile input. Most stover or crop residue is plowed back into the ground to replenish nutrients and used to reduce soil erosion. Sorghum production can be separated into grains (for consumption. Creelman et al. et al. MixAlco. Ethanol from cellulose biomass material is still in the research and development phase (Mazza).lations and the diversification of the energy supply (Renewable Energy World. ethanol production). The biochemical process converts biomass to liquid fuel through a fermentation process (Veringa.. livestock feed. et al. 1981). Liquefaction produces an oxygenated liquid that can substitute for heating oil. Hons. 1980.1995. et al. et al. Sorghum can produce approximately 30 dry tons/ ha per year of biomass on low quality soils with low inputs of fertilizer and limited water per dry Figure 2: Texas A&M University Crop Scientist with Hybrid Sorghum. Gasification produces gas that can be combustible in a turbine. and distillers dried grains (Chiaramonti.). (Renewable Energy World. Powell. gasification. However. half of that required by sugar beet and a third of the requirement for sugar cane or corn.

the technology appears to hold a tremendous amount of promise. et al. manure. 1980. Source: Chiaramonti. water. agriculture residues. Version one is the original process which produces mixed alcohol fuels. The MixAlco process can convert a wide variety of biomass material such as sewer sludge. 2000.. 2004. Growth is expected to occur Biomass in crop residue resource due to increase crop yields and declining livestock demand for forage (Gallagher). 2004). into acids and alcohol fuels using microorganisms. Agriculture residue price for energy production is based on the opportunity cost for the grower plus harvesting and baling cost.Sweet Sorghum Grain Sugar Juice Bagasse Leaves Fermentation Fermentation Co -gener ation Other uses DDGS Ethanol Ethanol Electricity Heat Figure 3: Simplified Diagram of Alternative Processes to Convert Sweet Sorghum to Energy Fuel. 1984. Wiedenfeld. Two different versions of the MixAlco process are available. Miller and Creelman. Creelman et al. et al. Version Mixed alcohols Pretreatment fermentation Lime Lime kiln Dewater Carboxylate salts Acid springing Carboxylic acids Hydrogenation Calcium carbonate Hydrogen Figure 4: Schematic of the MixAlco Process Source: Holtzapple. MixAlco Process While the MixAlco process has not been tested at a commercial scale. The amount of residue supplied is an approximation for acquisition cost by processing facilities. 1981) show sorghum stover is a good potential candidate for cellulose energy production. no historical values are available for residue costs and yields.  . Residue supply depends on opportunity costs at the farm level and the assumption that reasonable soil conservation practices will be followed. Although studies (Gallagher. steam. Residues are desirable raw materials for energy production because utilizing them does not require covering land cost which are included in the grain enterprise.. lime and hydrogen through an anaerobic process (Holtzapple. agriculture crops. Committee on Biobased Industrial Products.

 . The pile is then inoculated with anaerobic microorganisms from saline environments. 2004.Air Lime water slurry Blower Cover Cooling water or heat source Biomass Gravel Drain pipe Pump Liner Figure 5: Schematic of the MixAlco Pretreatment Process Source: Holtzapple. During the pretreatment phase. Fresh water Concentrated product Figure 6: Schematic of the Fermentation Facility. The combination of air and lime removes lignin from the biomass reducing the pH and rendering the bio-matter digestible. biomass. 2004. There are four phases to the process: pretreatment and fermentation. propionic. Figure 4 summarizes the MixAlco process. Air is blown up through the pile while water is trickled down through the pile. This process differs from the use of acid hydrolysis of biomass material to produce ethanol. dewatering. The MixAlco process calls for mixing biomass with a nutrient source such as manure or sewage sludge at a ratio of 80 percent to 20 percent. and calcium carbonate are blended and stored in a large pile. lime. The microorganisms digest the biomass forming carboxylic acids commonly known as volatile fatty acids (VFAs) such as acetic. two produces carboxylate acids and primary alcohols (ethanol). acid springing. Source: Holtzapple. and hydrogenation.

are in place. The carboxylate acids are blended with highmolecular-weight alcohols to form esters and water. and residual biomass as byproducts. the carbon dioxide market is very limited. The MixAlco structure is completely sealed from the outside environment and all carbon dioxide gas produced can be collected. Four reactor piles are created of equal volume. The treated fermentation broth is heated to 212°C and water is evaporated from the solution concentrating the salts. each reactor has a base diameter of 397 feet and is 115 feet high. The fermentation broth containing the VFAs are heated to 100°C and mixed with high-molecular-weight acid (e. and boilers. Approximately 75% of the calcium carbonate removed can be used in the pretreatment and fermentation phase and the remaining 25 percent is converted to lime using a special lime kiln. and steam capture. For a 44 ton/hour facility. Large storage tanks are used to hold the ethanol fuel until shipping. The MixAlco facility can be almost self-sufficient after the first year of operation if the necessary equipment for lime production. calcium carbonate.Figure 7: MixAlco Pilot Plant Photos. The carbon dioxide can be released once it is “scrubbed” to remove odor or sold to oil refineries to be pumped into oil wells and aid in the collection of oil. Acid springing converts the carboxylate salts into carboxylate acid and calcium carbonate. The base consists of a one-meter-thick layer of gravel that is divided by bermed walls to collect the VFA solution. The heat generated can be transferred to dryers to aid in the evaporation during the dewatering phase. which are extracted from the pile with water. heptanoic) to acidify the fermentation broth. The fuel pile is covered with a geomembrane to resist the weather. wind. Source: Martk T. and sun. the VFA solution is concentrated using a vapor compression evaporator during the dewatering phase. Figure 5 and Figure 6 show the schematic of the pretreatment and fermentation facility.g. Calcium carbonate can be manufactured into lime and used in the pretreatment and fermentation phase.  . Holtzapple. Water can be reused for the pretreatment and fermentation phase. water recycling. However. The water is evaporated and remaining esters are mixed with high-pressure hydrogen to form alcohols.. From fermentation. Steam and lime are than used to remove non-condensable gases and calcium carbonate. The VFAs combine with calcium carbonate to form carboxylate salts. Most of the water is then removed leaving a concentrated amine carboxylate. Each reactor is shaped like a cone to minimize material use. and butyric acids. The resulting ethanol fuel is cooled and stored for transportation to be mixed with gasoline fuel. heat. Byproducts MixAlco produces water. carbon dioxide. The concentrated broth is blended with carbon dioxide and a low-molecular-weight tertiary amine (triethyl) to form insoluble calcium carbonates and amine carboxylates.

the supply of sugarcane in the United States is limited to the four states producing sugarcane and is not large enough to support large-scale MixAlco production. Initial testing has shown ethanol produced from MixAlco has a slightly higher energy content than corn-based ethanol. The energy content for the residual biomass byproduct is similar to coal. economic feasibility was examined for two initial investment amounts (Base – representing the expected costs and BasePlus 30 percent – representing Base costs plus 30 percent).  . with and without incentives. Version two of the MixAlco process has increased alcohol yield per ton of biomass from approximately 90 to 100 gallons/ton Stochastic Variables Incentive Packages . Economic Analysis A simulation model was developed for two alternative MixAlco plant sizes (44 ton/hour and 176 ton/hour) using sweet sorghum as feedstock. A gallon of gasoline contains approximately 125. The amount of feedstock required is dependent on the desired output size for the facility. The MixAlco process only requires feedstock input once a year to build the fuel pile. For both plants. The feedstock is decomposed at the same rate for all crops and all plant sizes. Net Energy Balance of MixAlco The net energy balance of MixAlco alcohol fuel is dependent upon which feedstock is used as a fuel source. However. A simplified diagram of the model and the MixAlco Feedstock Requirements Initial research into MixAlco used sugarcane bagasse as feedstock as it is widely available around the world. Residual biomass is the largest byproduct produced. and three alternative regions in Texas (Panhandle. The energy content of MixAlco produced ethanol is approximately 95. Historical Data in version one to 130 to 140 gallons/ton. This is advantageous when compared to other forms of biomass energy production.000 BTU/gallon (Holtzapple. However. have not found commercial success.Location Choices Equations and Calculations Exogenous and Control Variables Financial Statements • Income Statement • Statement of Cash Flows • Balance Sheet Key Output Variables • Net Income • Ending Cash Balance • Dividends Paid • Ending Real Net Worth • Net Present Value Risk Ranking of Alternative Scenarios Figure 8: Diagram of the Simulation Model. The residual biomass can be used internally to generate power and steam for the facility or it can be sold to coal-fired power plants as a fuel source to reduce sulfur emissions. It is substitutable for coal in co-firing energy production facilities and can reduce sulfur emissions. Approximately 20 percent of the biomass feedstock is residual biomass when the MixAlco process is complete. The efficiency of the MixAlco process is also still under experimentation. MixAlco differs from corn-based ethanol production that produces distiller dried grains with solubles (DDGS) that be can be sold to livestock operations for feed. Central Texas. 2004).000 BTU/gallon. Biomass can be used for other types of energy production (burning.000 BTU/ gallon and corn-based ethanol contains 84. digesting) but again. the ethanol produced from version two has a lower energy content than the alcohol produced in version one. and Coastal Bend). MixAlco feedstock demand differs from ethanol feedstock demand as year-round supply is not necessary.

The RIMS method presents the direct and indirect benefits to the community. farmer income from 2005 to 2019 for each region. the projected financial feasibility results show a positive net present value (NPV) over the 16 year planning horizon with only a small probability of being negative. The probability of real net worth being negative is less than one percent for all scenarios Community Impacts The economic impacts of locating a MixAlco production facility in the Panhandle. For the Plus 30 initial investment scenario. Stochastic variables were incorporated into the model to capture risk. As expected. Specific key output variables were calculated and compared for each alternative scenario from the financial statements. property tax. the local economy would benefit from $407 million to $440 million in additional spending and $72 million to $78 million in additional household income.alternative scenarios are presented in Figures 8 and 9. For the direct impacts. Also. The simulation results represent direct impacts from the MixAlco production facility. The probability of negative ending cash balance is less than five percent in 2005 and less than one percent from 2006 to 2019 for all scenarios. Results Key Output Variables For all the scenarios analyzed. Real net worth is highest in the Panhandle Region for the 44 ton/hour and 176 ton/hour production facilities because of the additional initial investment costs needed for wells and water rights. Texas Central Base 176 T/H Plus 30 No Incentive Incentive Base 44 T/H Plus 30 Coastal Bend Base 176 T/H Plus 30 Incentive No Incentive Incentive No Incentive  . and additional Location Plant Size Investment Level Local Incentive Base 44 T/H Plus 30 Panhandle Base 176 T/H Plus 30 Incentive No Incentive Incentive No Incentive Base 44 T/H Plus 30 Incentive No Incentive Figure 9: Flow Chart of Alternative Scenarios. ending cash balance increases annually. For the 176 ton/hour production facility. net income for the Base Plus 30 initial investment scenario is lower in all cases due to higher depreciation costs and higher capital improvement costs. hauling costs. hauling revenues were the largest direct contributor to the region ranging from $42 million for a 44 ton/hour production facility to $190 million for a 176 ton/hour facility. annual dividends paid are positive for all scenarios. real net worth is higher for all scenarios as expected. Because net income remains positive. The probability of negative net income is less than 30 percent in the first year for all scenarios and only 1 percent thereafter years 2006 to 2019. Real net worth increases to 2014 and than flattens out for all scenarios because of the increasing deflation factor. Central Texas. and Coastal Bend Regions were analyzed using the Regional Industry Multiplier System (RIMS) and the summation of the simulated discounted wages. These economic gains for the local economy are quite large and indicate locating a MixAlco production facility in the region would have a substantial and positive impact on the local economy. Common financial statements for each alternative scenario were developed. Net income is expected to remain positive and increase slightly for all scenarios. The estimated additional capital spending was $50 million to $65 million for the 44 ton/hour facility with an additional household income of $124 million to $133 million.

ethanol yield. More than likely. These numbers are only best estimates of what the expected forage yield and price would be. could vary in commercial conditions. Yield is heavily dependent on weather. MixAlco would directly compete with the dairy industry for sorghum silage which may raise prices higher than expected.5 to 3 percent for the production facility. The higher sorghum silage price could dampen the financial outlook for MixAlco. Investing substantial amounts of money in a new technology is a risky decision.The summed discounted wages were $12 million for a 44 ton/hour facility and $27. Farmers receive a substantial increase in additional revenue with a high of $20 million for the 44 ton/hour production facility to $65 million for a 176 ton/hour production facility. especially for dry-land farming in the Panhandle. The analysis uses the Energy Information Administration’s long-term forecast for wholesale gasoline price where prices are expected to continually increase from 2005 to 2019. the MixAlco process is still being refined and the production data used in this analysis are primarily derived from small-scale pilot plants. From the analysis. Property tax revenue for the local community varies and is dependent on the offer of tax abatements. and adaptability to be grown in different climates. this study assumed specifically growing silage for energy production. Actual data from experimental plots collected from individual farmers would give a better representation of the expected yield and cost for sorghum silage. MixAlco has the potentially to be a feasible alternative to corn-based ethanol production offering substantial economic gains for the community. These numbers. However. and key variables in deciding if a production facility should be constructed. low costs of production. Also. Central Texas. A positive NPV is forecasted with increasing net worth for a 44 ton/hour and 176 ton/hour production facility in the Panhandle. Conclusions The promising results for production of ethanol from the MixAlco process should be viewed with caution. silage yields and silage prices were interpolated from historical grain yields and budgets. A 20 percent premium was included in the price to entice farmers to harvest sorghum for silage rather than for grain which may or many not be necessary. A one percent annual increase in ethanol price or yield would increase NPV by six to seven percent depending on the plant size. The uncertainty in the world oil market caused by the current war in the Middle East could dramatically affect the feasibility of a production facility. the results of this study provide useful information to compare the risk and benefits between the alternative plant sizes and locations. Sorghum silage is used as feedstock because of its high yield characteristics. MixAlco will follow an adoption curve for new technology where the process is fine tuned over the first few years before full efficiency can be reached. These outside factors cannot be controlled.25 percent. There are several limitations to this study. Central Texas. Potential investors can use the results to determine the location. if hydrogen price increases one percent each year. In terms of cost. NPV would decrease by 2. and Coastal Bend regions of Texas. Understanding and incorporating variability into the model allows for a probabilistic analysis where a probability range can be assigned for each outcome. Second. The calculated elasticities for all other input cost variables were Study Limitations less than 0. plant size. and hydrogen price are the three variables with the highest elasticities. Furthermore. Sensitivity Analysis Elasticities for key input variables were estimated to determine which variables had the greatest effect on feasibility in terms of NPV. The results indicate that either size plant will be profitable given current assumptions. First. ethanol price.5 million for a 176 ton/hour facility. The probabilistic framework gives decision makers much more information than a deterministic estimate.  . such as ethanol yield per ton of feedstock. and Coastal Bend regions of Texas. The results also show the additional business activity associated with a MixAlco production facility would increase capital spending and household income boosting the local economy.

This would reduce the cost of hydrogen and negate the problems associated with shipping ethanol. The ability of MixAlco to convert any biomass material to alcohol fuel makes it an attractive alternative for ethanol production. However. The differences in price between regions may be small. are not considered in this study. Harvesting the sorghum for grain and collecting the residual biomass could be a viable alternative. et al. natural gas prices. Agricultural residues could offer a low cost alternative to growing crops specifically for energy conversion. Each stated that the incentives are project specific and negotiated on an individual basis. large hydration facility. but for completeness. the prices are average prices for Texas. The location incentives used in this study were generalized for each region after discussion with the local Chamber of Commerce and Economic Development Corporations. Lastly. and lime prices were not separated by region. Also. Studies show sorghum produces one ton of residual matter for every ton of grain produced. such as tree clippings and farming residues. Large amounts of available residual biomass represent a low cost feedstock source that can be used for energy production (Gallagher. this study considers the production of ethanol on premise and shipping the finished fuel to refineries for blending. a separate price should be used in each region. Fourth. Smaller acid production facilities could ship acid to a centrally located. steam prices.  . Residual biomass. There may be cost advantages to shipping acids to a central hydration facility located close to a large hydrogen production facility. Better prices may be obtained from negotiations with providers in each region. little data is available on the pricing and shipping cost for acids as well as the costs for large-scale production of hydrogen. electricity prices. Third. They could not provide a complete and specific incentive package for a production facility without the proper information to evaluate.). location incentives may be available.

G. 1999. “Sorghum. 2002. W. National Research Council. Miller. 0 . Energia Trasporti Agricoltura. and H. H. Osburn.J. P. Mazza. E. 2004. and J. A.com/magsandj/rew/200_03/bioethanol. Evaluation of Biomass-to-Ethanol Fuel Potential in Calfornia: A Report to the Governor and California Environmental Protection Agency. M. “Supply and Social Cost Estimates for Biomass from Crop Residues in the United States. and V. 2001. R.” Agronomy Journal Vol. “Ethanol: Fueling Rural Economic Revival. Nardi. Saladino. and F.A. Wiedenfield. CA.R. No. M. Braunschweig. 2004. MixAlco Process. St. 2000. Osburn. Unpublished manuscript. France. Creelman.org/renewables.com. 1999.M.. Hons.C. D.” Website www. “Sorghum-A New Fuel.ratical. London. 1993. F. 76. “Energy from Biomass.. “Bioethanol-Industrial World Perspective. Florence. Wheat.au. Franzluebbers. Renewable Energy World.. Texas A&M University. Grimm. 2004. 1994. Shapouri. Italy.edu. Sacramento.S.. Washington D. “Applied Nitrogen and Phosphorus Effects on Yield and Nutrient Uptake by High-Energy Sorghum Produced for Grain and Biomass. Gallagher. “The U. Dikeman. R. Veringa. J. California Energy Commission. “Ethanol from Cellulose: A General Review. 83. html. Grassi. and N Fertilization. Biofuel Industry: Present and Future. Paul.A. Shapouri. Fritz.R.” Climate Solutions Report. L. M. Wiedenfeld. Global Potential of Biomass for Transport Fuels. Creelman. World Energy Council. J. and R. 6 (1986): 1069-1078.” Paper presented at the American Seed Trade Association Annual Corn Sorghum Res.” Trends in New Crops and Uses. Kogan Page..W.M.T. Moresco. Chiaramonti. J. and G. McBee.” Website http://acre. December 2003. R.jxj.” Plant and Soil Vol. No. 2000.. Institute of Crop and Grassland Science.References Australian CRC for Renewable Energy Ltd. (ACRE) “What is Biomass. Committee on Biobased Industrial Products. P. Badger. 173 (1995): 55-65. 6 (1991): 933-937.G. ECHI-T: Large Bio-Ethanol Project from Sweet Sorghum in China and Italy. IL. Germany. Chicago. N..C. Cothren. Crop Sequence. Reims. 1980. P. Hons. Biobased Industrial Products: Priorities for Research and Commercialization. P. E.murdoch. W. F. and H. “Biomass Resources for Energy and Industry. MN. Advanced Techniques for Generation of Energy from Biomass and Waste. F.” Unpublished manuscript presented at the 2003 Conference AgroDemain. Conference. ECN Biomass. Paper presented at American Association of Cereal Chemist. F. and Soybean Production as Affected by Long-Term Tillage.” Agronomy Journal Vol. “Nutrient and Carbohydrate Partitioning in Sorghum Stover. Miller. Rooney. 2004.M.” Website www. A. L. Bassam. H. “Nutrient Requirements and the Use of Efficiency by Sweet Sorghum.P. 1981. Wailes. Hons.” Energy Agriculture 3 (1984): 49-59.F. 2004.P. Holtzapple. and J.” Website www.. Gauthier. R.” Environmental and Resource Economics 24 (2003): 335-358. TX.sterlingplanet. Powell. New Renewable Energy Resources. College Station. A.. Sterling Planet.

At least a portion of the contents of this report may have been published previously as an AFPC issue paper or working paper. Address such comments to the author(s) at: Agricultural and Food Policy Center Department of Agricultural Economics Texas A&M University College Station. Since issue and working papers are preliminary reports. hopefully. Research reports are viewed by faculty of AFPC and the Department of Agricultural Economics. AFPC welcomes comments and discussions of these results and their implications. Texas 77843-2124 or call (979) 845-5913.A policy research report presents the final results of a research project undertaken by AFPC faculty. the final results contained in a research paper may differ . Texas A&M University. in only marginal terms. .but.

. Mention of a trademark or a proprietary product does not constitute a guarantee or a warranty of the product by The Texas Agricultural Experiment Station or Cooperative Extension Service and does not imply its approval to the exclusion of other products that also may be suitable.Copies of this publication have been deposited with the Texas State Library in compliance with the State Depository Law.

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