Economic Feasibility Study of the Eastern Shore Energy Beet to Bio-Jetfuel Project
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Economic Feasibility Study of the Eastern Shore Energy Beet to Bio-Jetfuel Project Prepared For USDA Rural Development Maryland/Delaware State Office Joanne Ivancic Donald C. Erbach Douglas Root Advanced Biofuels USA Frederick C. Michel Jr. Ohio State University Erin Heitkamp Michael Shoemaker Pat Ahren Wenck Prepared By Advanced Biofuels USA Report Date August 30, 2017 USDA Grant number 96860116 This institution is an equal opportunity provider. Contributors Steve Lipsack Robert Kozak VP of Business Development President All Beets Atlantic Biomass, LLC Burnsville, MN Frederick, MD Jurgen Schwarz Kathleen Turano Chair, Department of Agriculture, Food and Founder & President Resource Sciences Plant Sensory Systems, LLC University of Maryland Eastern Shore Halethorpe, MD Princess Anne, MD Frank Turano Amy S. Collick Founder & Chief Research Officer Research Assistant Professor Plant Sensory Systems, LLC University of Maryland Eastern Shore Halethorpe, MD Princess Anne, MD Acknowledgements Advanced Biofuels USA would like to acknowledge the work done by all the parties who participated in the initial stage of the University of Maryland Eastern Shore-based energy beet -to-jetfuel project and for the use of the results of the research derived from this project and from other sources. In addition to those listed above, these include faculty, staff and students of the School of Agriculture and Natural Sciences, particularly Dean Moses Kairo. Thanks to Patricia Gleason of the US Environmental Protection Agency, Region 3 and Jeff Corbin, Senior Vice-President for Water Quality Markets & Mitigation at Restoration Systems, for information about the nutrient credit trading systems in the Chesapeake Bay watershed. And thanks to those farmers, landowners, community leaders and interested members of the public who fielded phone calls from us or stopped at the Advanced Biofuels USA information booth at a variety of agricultural events over the past year to share their stories, insights, questions, concerns and ideas related to a possible energy beet-to-jetfuel project in the MId-Atlantic. Available electronically at https://advancedbiofuelsusa.info/wp-content/uploads/2017/08/UMES-Energy- Beet-Project-Feasibility-Study-v8-Final-Advanced-Biofuels-USA.pdf Energy Beet-to-Jetfuel Feasibility Study Advanced Biofuels USA Page ii Table of Contents Executive Summary ..........................................................................................................................1 Section 1: Purpose and Scope of Feasibility Study of Eastern Shore Energy Beet to Jetfuel Project .... 5 1.1 Description of UMES 2016 Energy Beet Test Project ........................................................................ 6 1.2 Results Reported from 2016 UMES Energy Beet Test Project .......................................................... 7 1.2.1 Biomass Yields ................................................................................................................................ 8 1.2.2 Fermentable Sugar and Biofuel Production ................................................................................ 10 1.2.3 Phosphorus Uptake .................................................................................................................... 112 1.2.4 Animal/Poultry Feed .................................................................................................................... 13 Section 2: Implementation ............................................................................................................. 13 2.1 Proposed Commercial System Design ............................................................................................. 13 2.1.1 Description of Process .................................................................................................................. 14 2.1.2 Acreage Required for Commercial Scale System ......................................................................... 16 2.2 Proposed Transportation System .................................................................................................... 18 2.2.1 Roads ............................................................................................................................................ 21 2.2.2 Railroads ....................................................................................................................................... 22 2.2.3 Waterway Transport .................................................................................................................... 23 2.2.3.1 Potential Delmarva Waterway Energy Beet Collection Transfer Sites With Less Than 20 MIles of Beet Road Transport ......................................................................................................................... 25 2.2.3.2 Use of an Existing Barge Design as the Platform for a Multiple-Process Biorefinery ............... 27 Section 3: Economic Analysis ......................................................................................................... 30 3.1 Potential Income, Market Analysis: Nutrient Management and Phosphorus Remediation, Maryland's Nutrient Management and Nutrient Trading Programs .................................................... 30 3.1.1 Maryland's Nutrient Management Plan Requirements for Farmland ......................................... 30 3.1.2 Maryland's Nutrient Trading Program ........................................................................................ 31 3.2 Potential Income, Market Analysis: Animal Feed from Protein and Beet Tops .............................. 37 3.2.1 Poultry/Animal Feed .................................................................................................................... 37 3.2.2 Beet Tops ...................................................................................................................................... 37 3.3 Potential Income, Market Analysis: Ethanol as Ground Transportation Fuel ................................. 38 3.4 Potential Income, Market Analysis: Sustainable Alternative Jetfuel (SAJF) .................................... 39 3.4.1 Military-First Strategy: Meeting U.S. Navy Demands ................................................................... 39 3.4.2 Overview of Commercial Aviation Markets ................................................................................. 41 3.4.3 Incentives ..................................................................................................................................... 42 Energy Beet-to-Jetfuel Feasibility Study Advanced Biofuels USA Page iii 3.4.3.1 International Policies ................................................................................................................. 42 3.4.3.2 United States Policies and Programs ......................................................................................... 43 3.4.4 U.S. Market ................................................................................................................................... 45 3.4.5 Mid-Atlantic Regional Market ...................................................................................................... 47 3.5 Potential Income, Market Analysis: Use of Ethanol as Feedstock for Bio-based Chemicals and Products ................................................................................................................................................ 53 Section 4: Putting It All Together: Costs and Income ..................................................................... 534 4.1 Grower's Perspective of Costs and Income ................................................................................... 545 4.2 Renewable Fuel Producer's Perspective of Costs and Income ........................................................ 57 Section 5: Further Research Needed................................................................................................ 62 5.1 Seeds ............................................................................................................................................... 63 5.2 Agonomy ......................................................................................................................................... 63 5.3 Animal/Poultry Feed ....................................................................................................................... 63 5.4 Nutrient Management Plans ........................................................................................................... 64 5.5 Nutrient Management Cap-and-Trade Credits ............................................................................... 64 5.6 Production Improvements .............................................................................................................. 64 Section 6: Recommendations and Conclusions ................................................................................ 66 Appendix 1: UMES 2016 Energy Beet Test Project Partners and Their Roles ........................................... 69 Appendix 2: Conversion of Oils to Jetfuel (Various ASTM-Accepted Processes) ...................................... 76 Appendix 3: Illustrations of ASTM and Navy Production Pathway Approval Processes .......................... 77 Appendix 4: Delmarva Peninsula Cropland Needed for Energy Beet Processing to Ethanol for Jetfuel .80 Appendix 5: Base Case Values for Sensitivity Analysis ............................................................................. 82 Appendix 6: Maryland's