APEC Biofuels Transportation and Distribution Infrastructure
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Biofuel Transportation and Distribution Options for APEC Economies APEC Energy Working Group APEC Biofuels Task Force May 2011 1 APEC Project EWG 20/2009 Produced by BBI Biofuels Canada P.O. Box 205 Delaware, Ontario Canada N0L 1E0 Telephone: (519)203-2191 Fax: (519) 488-3621 For Asia Pacific Economic Cooperation Secretariat 35 Heng Mui Keng Terrace Singapore 119616 Tel: (65) 68919 600 Fax: (65) 68919 690 Email: [email protected] Website: www.apec.org © 2011 APEC Secretariat APEC#211-RE-01.4 2 NOTICE This report was prepared as an account of work sponsored by APEC. Neither BBI Biofuels Canada nor any of its employees, makes any warranty, expressed or implied, or assumes any legal liability or responsibility for the accuracy, completeness, or usefulness of any information, apparatus, product, or process disclosed, or represents that its use would not infringe privately owned rights. Reference herein to any specific commercial product, process, or service by trade name, trademark, manufacturer, or otherwise does not constitute or imply its endorsement, recommendation, or favouring by BBI Biofuels Canada. 3 THIS PAGE INTENTIONALLY LEFT BLANK 4 TABLE OF CONTENTS EXECUTIVE SUMMARY .................................................................................................................. 7 1.0 INTRODUCTION ..................................................................................................................... 8 1.1 BIOFUEL TRANSPORTATION OVERVIEW ................................................................................. 8 1.2 BIOFUEL DISTRIBUTION OVERVIEW ..................................................................................... 10 1.3 CURRENT BIOFUEL TRANSPORTATION AND DISTRIBUTION ................................................. 11 1.3.1 TYPICAL BIOFUEL TRANSPORT MODES ........................................................................... 12 1.3.2 OPERATIONAL AND LOGISTICAL ASPECTS OF BIOFUEL TRANSPORT.............................. 13 1.3.3 TYPICAL BLENDING AND DISTRIBUTION PRACTICES ....................................................... 13 1.4 BIOFUEL TRANSPORTATION AND DISTRIBUTION OPTIONS ............................................. 14 2.0 BIOFUELS TRANSPORTATION AND DISTRIBUTION CONSIDERATIONS .......... 15 2.1 ETHANOL TRANSPORTATION AND DISTRIBUTION ................................................................ 16 2.2 BIODIESEL TRANSPORTATION AND DISTRIBUTION ............................................................... 17 2.3 BIOFUEL TRANSPORTATION AS IT RELATES TO BIOFUEL PRODUCTION LOCATION ............. 17 2.3.1 TRANSPORTATION IMPLICATIONS OF BIOFUELS LOCATION .......................................... 17 2.3.2 SUPPLY CHAIN ISSUES WITH BIOFUEL LOCATION........................................................... 18 2.4 CONSIDERATIONS FOR ETHANOL PIPELINE TRANSPORTATION IN APEC ECONOMIES ......... 20 2.5 CONSIDERATIONS FOR BIODIESEL TRANSPORTATION IN APEC ECONOMIES ....................... 26 3.0 APPROACH TO ANALYSIS OF BIOFUEL TRANSPORTATION AND DISTRIBUTION OPTIONS .................................................................................................. 27 3.1 FACTORS AFFECTING DEVELOPMENT OF BIOFUEL TRANSPORTATION AND DISTRIBUTION 27 3.2 TRANSPORTATION INFRASTRUCTURE CATEGORIES FOR APEC ECONOMIES ....................... 28 3.3 ISSUES FOR BIOFUELS DISTRIBUTION INFRASTRUCTURE IN APEC ECONOMIES .................. 30 3.4 METHODOLOGY AND KEY METRICS FOR BIOFUELS INFRASTRUCTURE ............................... 30 4.0 METRICS FOR EVALUATING BIOFUEL INFRASTRUCTURE OPTIONS .............. 32 4.1 TRANSPORTATION COST METRICS ........................................................................................ 32 4.1.1 PIPELINE COSTS .................................................................................................................... 32 4.1.2 TRUCKING INFRASTRUCTURE COSTS .............................................................................. 35 4.1.3 RAIL INFRASTRUCTURE COSTS ............................................................................................. 36 4.1.4 MARINE INFRASTRUCTURE COSTS ........................................................................................ 37 4.1.5 COMPARISON OF TRANSPORTATION COSTS .......................................................................... 37 4.1.6 TERMINAL STORAGE COSTS ................................................................................................. 38 4.1.7 BLENDING EQUIPMENT COSTS .............................................................................................. 38 4.2 DISTRIBUTION COST METRICS .............................................................................................. 39 4.2.1 RETAIL STORAGE COSTS ....................................................................................................... 39 4.2.2 RETAIL PUMP COSTS FOR E85 .............................................................................................. 40 4.2.3 METRICS FOR DETERMINING E85 PUMP REQUIREMENTS ..................................................... 40 4.3 BIOFUELS STATISTICS FOR APEC ECONOMIES ..................................................................... 42 4.4 FIRST GENERATION BIOFUELS PRODUCTION IN VARIOUS APEC ECONOMIES ..................... 45 4.5 BIOFUELS TRADE PATTERNS ................................................................................................. 47 4.6 SECOND GENERATION BIOFUEL POTENTIAL AND IMPACT ON RETAIL DISTRIBUTION INFRASTRUCTURE .............................................................................................................. 49 4.7 CRITERIA AND CONDITIONS FOR PIPELINE TRANSPORT OF BIOFUELS IN APEC ECONOMIES………………………………………………………………………………50 4.8 POLICIES TO PROMOTE BIOFUEL INFRASTRUCTURE EXPANSION ......................................... 55 5.0 SUMMARY AND RECOMMENDATIONS ........................................................................ 56 GLOSSARY ............................................................................................................................. 58 5 LIST OF FIGURES FIGURE 1.3.1 BIODIESEL TRANSPORTATION AND DISTRIBUTION INFRASTRUCTURE IN CANADA ..................................................................................................................................................................... 11 FIGURE 4.1.1 EFFECT OF LINE DIAMETER ON CONTRIBUTION OF MATERIALS TO OVERALL PIPELINE COST ......................................................................................................................................... 33 FIGURE 4.1.2 EFFECT OF LINE DIAMETER ON PIPELINE COST OF MATERIALS ................................ 33 FIGURE 4.1.3 EFFECT OF PIPELINE LENGTH ON LABOUR COSTS TO INSTALL A PIPELINE ........... 33 FIGURE 4.1.4 UNITED STATES ETHANOL RAIL SHIPMENT COSTS, APRIL 2011 ................................. 36 FIGURE 4.4.1 ASIAN ETHANOL PRODUCTION: CURRENT AND PREDICTED IN 2017 (MILLION LITERS PER YEAR) .................................................................................................................................. 45 FIGURE 4.4.2 ASIAN ETHANOL: PROJECTED GROWTH RATE 2009-2017 .............................................. 46 FIGURE 4.4.3 ASIAN BIODIESEL PRODUCTION: CURRENT AND PREDICTED IN 2017 (MILLION LITERS PER YEAR) .................................................................................................................................. 46 FIGURE 4.4.4 ASIAN BIODIESEL: PROJECTED GROWTH RATE 2009-2017 ............................................ 47 FIGURE 4.5.1 ASIAN ETHANOL NET TRADE: CURRENT AND PROJECTED 2017 ................................. 48 FIGURE 4.5.2 ASIAN BIODIESEL NET TRADE: CURRENT AND PROJECTED 2017 ............................... 48 LIST OF TABLES TABLE 4.1.1 LIQUID PIPELINE PROJECT COST SUMMARY ..................................................................... 34 TABLE 4.1.2 EXAMPLE OF TRUCKING COSTS FOR TRANSPORTATION IN THE UNITED STATES . 35 TABLE 4.1.3 EXAMPLE OF RAIL COSTS FOR TRANSPORTATION IN THE UNITED STATES ............ 36 TABLE 4.1.4 EXAMPLE OF MARINE COSTS FOR TRANSPORTATION IN THE UNITED STATES ...... 37 TABLE 4.1.5 ILLUSTRATION OF COMPARATIVE TRANSPORTATION COSTS OF LIQUID BIOFUELS ............................................................................................................................................... 38 TABLE 4.2.1 GASOLINE RETAIL DISTRIBUTION IN THE UNITED STATES .......................................... 41 TABLE 4.3.1 ETHANOL MANDATES IN SOME APEC ECONOMIES ......................................................... 42 TABLE 4.3.2 BIODIESEL MANDATES IN SOME APEC ECONOMIES ....................................................... 43 TABLE 4.3.3 PRODUCTION AND BLENDING TARGETS FOR SOME OF THE APEC ECONOMIES ..... 44 TABLE 4.4.1 PROJECTED CONTRIBUTION OF BIOFUELS TO TOTAL TRANSPORT FUEL DEMAND IN 2030 (USAID, 2009) .............................................................................................................................. 47 TABLE 4.6.1 SECOND GENERATION ETHANOL POTENTIAL AND PROJECTED RETAIL DISTRIBUTION INFRASTRUCTURE ..................................................................................................... 50 TABLE 4.7.1 SUMMARY OF INFRASTRUCTURE AND BIOFUEL DEVELOPMENT IN APEC ECONOMIES .............................................................................................................................................. 54 6 APEC BIOFUELS INFRASTRUCTURE - EXECUTIVE SUMMARY As biofuel markets expand in a wide range of