|Dela Torre Ugarte, D|
Submitted to: Environmental Science and Technology
Publication Type: Peer Reviewed Journal
Publication Acceptance Date: 4/8/2002
Publication Date: 4/9/2002
Citation: MCLAUGHLIN, S.B., DELA TORRE UGARTE, D.G., GARTEN, C.T., LYND, L.R., SANDERSON, M.A., TOLBERT, V.R., WALSH, M.E., WOLF, D.D. HIGH-VALUE RENEWABLE ENERGY FROM PRAIRIE GRASSES. ENVIRONMENTAL SCIENCE AND TECHNOLOGY. 2002. v. 36. p. 2122-2129. Interpretive Summary: This paper focuses on quantifying social and environmental costs of production of one potential biofuel. Projected economic benefits of renewable energy derived from a native prairie grass, switchgrass, include non-market values that can reduce net fuel costs to near zero. At a farm-gate price of $44.00 dry Mg-1, an agricultural sector model predicts higher profits for switchgrass than conventional crops on 16.9 million ha. Benefits would include an annual increase of $6 billion in net farm returns, a $1.86 billion reduction in government subsidies, and displacement of 44 to 159 Tg yr-1 (1 Tg = 1012 g) of greenhouse gas emissions. Incorporating these values into the pricing structure for switchgrass bioenergy could accelerate commercialization and provide net benefits to the U.S. economy.
Technical Abstract: This paper focuses on quantifying social and environmental costs of production of one potential cellulosic feedstock, switchgrass (Panicum virgatum), a native, perennial, warm season prairie grass. We compare aspects of the market price and social cost of energy derived from switchgrass produced as a dedicated energy crop with costs and values associated with fossil fuels, primarily oil and natural gas. From our analyses it appears that price supports for cellulosic feedstock production would be an economically sound and cost-effective means of accelerating market penetration of bioenergy crops and developing an industry producing power, fuel, and bio-products from such crops. For example, a modest increase in the feedstock price of $10 Mg-1 (or an equivalent price support) at the $34 Mg-1 level for producers could potentially increase the acreage of switchgrass by more than five-fold. Such an increase in production area, at an annual national cost of $1.58 B in price support payments, is projected to increase net farm income to agriculture by about $4.7 billion with a benefit:cost ratio of 3:1. At this rate of return, price supports for production of renewable fuels would generate a sustainable source of income for the farm economy. By contrast subsidies for the fossil fuel industry have been estimated at ~$26 billion yr-1, an amount sufficient for wholesale purchase of one-third of the gasoline used annually in the U.S. There are important benefits to accelerating commercialization by assuring initial profitability of both production and processing components of the industry and thereby investing in a system that will add value to society at local, regional, and global scales.