economic feasibility of ethanol production - thesis (pdf)

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EVALUATION OF THE ECONOMIC FEASIBILITY OF GRAIN SORGHUM, SWEET SORGHUM, AND SWITCHGRASS AS ALTERNATIVE FEEDSTOCKS FOR ETHANOL PRODUCTION IN THE TEXAS PANHANDLE by JNANESHWAR RAGHUNATH GIRASE A Thesis Submitted in Partial Fulfillment of the Requirements for the Degree MASTER OF SCIENCE Major Subject: Agricultural Business and Economics West Texas A & M University Canyon, Texas August 2010

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EVALUATION OF THE ECONOMIC FEASIBILITY OF GRAIN SORGHUM, SWEET SORGHUM, AND SWITCHGRASS AS ALTERNATIVE FEEDSTOCKS FOR ETHANOL PRODUCTION IN THE TEXAS PANHANDLE

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Page 1: Economic Feasibility of Ethanol Production - Thesis (PDF)

EVALUATION OF THE ECONOMIC FEASIBILITY OF GRAIN SORGHUM, SWEET SORGHUM, AND

SWITCHGRASS AS ALTERNATIVE FEEDSTOCKS FOR ETHANOL PRODUCTION IN THE TEXAS PANHANDLE

by

JNANESHWAR RAGHUNATH GIRASE

A Thesis Submitted in Partial Fulfillment

of the Requirements for the Degree

MASTER OF SCIENCE

Major Subject: Agricultural Business and Economics

West Texas A & M University

Canyon, Texas

August 2010

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ABSTRACT

Economic, environmental and political concerns centered on energy use from

conventional fossil fuels have led to research on alternative renewable energy fuel such

as ethanol. The goal of this thesis is to evaluate the potential of grain sorghum, sweet

sorghum, and switchgrass for ethanol production in the Texas Panhandle Region using

three alternative ethanol production methodologies: starch based ethanol, sugar based

ethanol, and cellulose based ethanol respectively.

The study area includes the top 26 counties of the Texas Panhandle. The potential

of three feedstocks: grain sorghum, sweet sorghum, and switchgrass for ethanol

production in the Texas Panhandle Region is analyzed using yield and production costs

of feedstock, processing cost of feedstock, final demand for ethanol, farm to wholesale

marketing margin, and the derived demand price of feedstock.

The calculated farm-to-wholesale marketing margins per gallon of ethanol are

$0.57, $1.06, and $0.91 for grain sorghum, sweet sorghum, and switchgrass respectively.

Current price of ethanol in Texas is $1.81/ (E-100) gallon. Derived demand price is

calculated by subtracting farm-to-wholesale marketing margin from the price of ethanol.

The calculated derived demand price per gallon ethanol is $1.24, $0.75, and $0.90 for

grain sorghum, sweet sorghum, and switchgrass respectively. The estimated

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iii

grain sorghum production cost per acre is $413.40 and $141.70 under irrigated and

dryland conditions respectively. The estimated production costs of sweet sorghum and

switchgrass are $462.70 and $349.05 respectively under irrigated condition and $193.07

and $102.32 respectively under dryland condition. The calculated total gross income per

acre of grain sorghum, sweet sorghum, and switchgrass are $478.00, $162.53, and

$308.88 respectively under irrigated condition and $128.41, $72.98, and $98.28

respectively under dryland condition. An economic return is calculated by subtracting

irrigated cash rent of $110.00 per acre and dryland cash rent of $25.00 per acre from net

return of the selected feedstocks. The calculated economic returns per acre of grain

sorghum, sweet sorghum, and switchgrass are -$45.37, -$410.19, and -$150.17

respectively under irrigated condition and -$38.25, -$145.09, and -$29.04 respectively

under dryland condition.

The evaluation in this study demonstrates that ethanol production from grain

sorghum, sweet sorghum, and switchgrass in the Texas Panhandle Region is not

economically feasible given the current price for ethanol in Texas. This is consistent with

the status of the ethanol industry in the Texas Panhandle. An increase in the price of

ethanol would seem to justify a reevaluation of the economic feasibility. However, since

any increase in the price of ethanol would occur only with an increase in the prices of

energy inputs to the production process, the economic feasibility is not assured.

Decreases in cost and increases in productivity may present possibilities for achieving

economic feasibility.

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iv

ACKNOWLEDGMENTS

This work would not have been accomplished without the continuous support and

thoughtful insights of Dr. Arden Colette who has been instrumental in motivating me to

develop and complete this work. The views and guidelines provided by him were of

utmost importance with regard to the subject and application of learnt knowledge

throughout the time period involved in this study.

I consider myself privileged to have been guided by my learned committee

member Dr. Bob A Stewart who has been an inspiration during the study period and my

thesis development at West Texas A & M University. I also express my sincere gratitude

to Dr. Robert DeOtte for agreeing to provide useful guidance as a member of my thesis

committee and suggesting improvements that were extremely important in creating the

final shape of this research.

I am heartily thankful to my major advisor, Dr. Lal K. Almas for providing a

platform for the foundation of this research and whose encouragement, guidance and

support from the initial to the final level enabled me to develop an understanding of the

subject.

This research was supported in part by the Ogallala Aquifer Program, a

consortium between USDA Agricultural Research Service, Kansas State University,

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v

Texas AgriLife Research, Texas AgriLife Extension Service, Texas Tech University, and

West Texas A&M University.

Last but not the least; I would like to thank my parents Sushila and Raghunath B.

Girase and my brother Kishor for their never ending love, patience and belief in me.

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Approved:

___________________________ _________________ Chairman, Thesis Committee Date Dr. Lal K. Almas

___________________________ _________________ Member, Thesis Committee Date Dr. Arden Colette

___________________________ _________________ Member, Thesis Committee Date Dr. Robert DeOtte

___________________________ _________________ Member, Thesis Committee Date Dr. Bob A. Stewart

________________________ ________________ Head, Major Department Date

Dr. Dean Hawkins

________________________ _________________ Graduate School Date

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TABLE OF CONTENTS

Chapter Page

I. INTRODUCTION .......................................................................................... 1

Research Objective ................................................................................... 6

II. LITERATURE REVIEW ............................................................................... 7

Ethanol Overview ..................................................................................... 7

U.S. Ethanol Production and Demand .................................................... 10

Ethanol Production Techniques .............................................................. 12

General Chemistry of Ethanol Production .............................................. 16

Cellulosic Ethanol ................................................................................... 19

Cellulosic Ethanol Production Process ................................................... 20

Sugar-based Ethanol ............................................................................... 24

Sugar-based Ethanol Production Process................................................ 25

Starch-based Ethanol .............................................................................. 27

Starch-based Ethanol Production Process ............................................... 28

Conventional Ethanol versus Cellulosic Ethanol .................................... 32

By-products of Ethanol Production ........................................................ 33

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Chapter Page

SWEET SORGHUM .............................................................................. 34

Introduction ...................................................................................... 34

Importance and Uses ........................................................................ 35

GRAIN SORGHUM ............................................................................... 40

Introduction ...................................................................................... 40

Importance and Uses ........................................................................ 40

SWITCHGRASS .................................................................................... 42

Introduction ...................................................................................... 42

Importance and Uses ........................................................................ 42

III. MATERIALS AND METHODS .................................................................. 44

Selection of Feedstock Source ................................................................ 47

Current Situation of Selected Feedstocks Production ............................. 49

Potential of Selected Feedstocks in Panhandle ....................................... 50

Price of Ethanol....................................................................................... 52

Feedstock Requirement ........................................................................... 52

Farm-to-Wholesale Marketing Margin ................................................... 54

Estimated Derived Demand Price for Feedstock .................................... 57

Current Production Costs of Feedstock .................................................. 58

IV. RESULTS AND DISCUSSION ................................................................... 60

Grain Sorghum ........................................................................................ 60

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Chapter Page

Sweet Sorghum ....................................................................................... 62

Switchgrass ............................................................................................. 64

V. CONCLUSION AND SUGGESTIONS ....................................................... 66

REFERENCES ....................................................................................... 68

APPENDIX A ......................................................................................... 76

APPENDIX B ......................................................................................... 83

APPENDIX C ......................................................................................... 85

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LIST OF TABLES

Table Page

1. Summary of Feedstock Characteristics ............................................................... 15

2. Physical, Chemical and Thermal Properties of Ethanol ..................................... 18

3. Cost Competitiveness of Cellulosic Ethanol....................................................... 24

4. Nutritional Content Variations of DDGS ........................................................... 33

5. Comparison of Sugarcane, Sugar beet, and Sweet sorghum .............................. 39

6. Harvested acres and Production of major crops: Corn, Wheat, Cotton,

and Grain Sorghum in the 26 counties in the Texas Panhandle,

2005 - 2009 ......................................................................................................... 46

7. Irrigated and Dryland Grain sorghum Acreages and Production in the

top 26 Counties in the Texas Panhandle, 2005-2009 .......................................... 50

8. Yields of Selected Feedstocks used in the analysis for the Texas

Panhandle Region ............................................................................................... 51

9. Feedstock requirements of the three basic feedstocks for 20, 40, 60, 80,

and 100 MGY processing facilities ..................................................................... 53

10. Irrigated and dryland acres of feedstock requirement for 20, 40, 60, 80,

and 100 MGY ethanol processing facilities ........................................................ 54

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Table Page

11. Estimated Farm-to-Wholesale Marketing Margin for Grain Sorghum in

the Production of Ethanol using a 100MGY Processing Facility ....................... 55

12. Estimated Farm-to-Wholesale Marketing Margin for Switchgrass in the

Production of Ethanol using a 56MGY Processing Facility ............................... 56

13. Estimated Farm-to-Wholesale Marketing Margin for Sweet Sorghum in

the Production of Ethanol using a 40MGY Processing Facility ......................... 57

14. Farm-to-Wholesale Marketing Margin and Derived Demand Price

for three feedstocks in the Production of Ethanol ............................................... 58

15. Estimated Feedstock Production Cost per Acre in Texas Panhandle

Region ................................................................................................................. 59

16. Grain sorghum yield and economic returns per acre .......................................... 62

17. Sweet sorghum yield and economic returns per acre .......................................... 64

18. Switchgrass yield and economic returns per acre ............................................... 65

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LIST OF FIGURES

Figure Page

1. Role of Renewable Energy Consumption in the Nation’s

Energy Supply, 2008 ............................................................................................. 4

2. U.S. Ethanol Production in Billions of Gallons (1980-2009) ............................. 11

3. Ethanol Production Steps by Feedstock and Conversion Technique.................. 13

4. Ethanol Feedstocks and Production Process ...................................................... 14

5. Schematic Diagram of Ethanol Production from Switchgrass .......................... 22

6. General Process Flow: Production of Ethanol from Sweet Sorghum ................. 26

7. Diagrammatic Representation of Grain Feedstock to Ethanol ........................... 29

8. Graphical Representation of Alternative Processes to Convert

Sweet Sorghum to Energy Fuels ......................................................................... 38

9. Map of Texas with Panhandle Region indicated in box ..................................... 45

10. Grain Sorghum Production by State, 2009 ......................................................... 49

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CHAPTER I

INTRODUCTION

There is an increasing need for energy throughout the world. Given current

consumption trends, world energy demand is estimated to grow by 50% between 2005

and 2030 (EIA 2008). As the economy grows, the energy requirement also grows.

Traditional liquid fuels evolved from fossil resources are presently, and are predicted to

continue to be, a dominant energy source, given their remarkable role in the

transportation sector (EIA 2008). Presently, more than 90% of the energy used for

transportation is derived from petroleum fuels. More than 60% of the petroleum

consumption is directed towards the production of gasoline and diesel fuel (Research and

Innovative Technology Administration - Bureau of Transportation Statistics 2009).

Petroleum is a possible pollutant, non-renewable and geographically limited to a few

countries. Its use discharges huge amounts of greenhouse gases, mainly CO2, into the

atmosphere. This increase in CO2 is postulated to contribute to the greenhouse effect and

climate change. The transportation sector accounts for approximately 13% of global

anthropogenic greenhouse gas (GHG) emissions (IPCC 2007).

The rising prices of traditional energy fuels and increased scientific and political

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discussions of evaluating alternative energy sources have resulted in growth of support

for developing ethanol as a replacement or substitute fuel. The goal is to develop an

energy structure for the future that is renewable, sustainable, convenient, cost-effective,

economically feasible, and environmentally safe. The availability of oil at low prices has

retarded the research study and interest in alternative fuels. Current geopolitical,

environmental, and economical changes have led to an increasing interest in an

alternative fuel source, preferably renewable and cost-effective.

The role of petroleum and oil based products in the U.S. economy is remarkable.

Oil is the major source of energy in the United States. The transportation sector in the

United States is almost totally dependent on gasoline and diesel fuel which are obtained

from petroleum. According to the Energy Information Administration (EIA); U.S.

gasoline consumption reached a record high of 9.30 million barrels a day (391 million

gallons/day) in 2007 before declining to about 9.00 million barrels a day in 2008. About

7% of the gasoline consumed in 2008 was actually ethanol mixed gasoline. According to

EIA U.S.A. statistics for 2008; net petroleum imports were 12.95 million barrels/day,

petroleum consumption was 19.50 million barrels/day, U.S. total petroleum exports were

1.81 million barrels/day, and dependence on net petroleum imports was 66.41% of the

total requirement.

Triggered by high oil prices, government subsidies and energy policies, a large

expansion in ethanol production, along with research and innovation to develop second

generation biofuels is underway in the United States. This increased focus on ethanol and

other biofuels is an important element of United States economic, energy, environmental,

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and national security policies. The recent resurgence of interest in ethanol production has

spurred various stakeholders to request an unbiased analysis of the economic ethanol

production potential in Texas.

There has been increased interest in ethanol production recently for following

reasons:

1) The inconsistency in the political situation, the continued conflict in the Middle

East and the reliance on foreign oil has many in the United States looking for a

more dependable, renewable, and domestic fuel source.

2) Ethanol production would boost depressed commodity prices and provide

producers with ethanol feedstocks byproducts.

3) The finding that Methyl Tertiary Butyl Ether (MTBE), a widely used oxygenate

that has been linked to groundwater contamination and is likely to be banned

nationwide, increases interest in substituting ethanol as an oxygenating agent, and

4) Local, State, and Federal officials see ethanol production as a source of business

activity and tax base.

Ethanol is a clean burning, high octane, renewable fuel that can be made from

grains or other biomass sources such as sweet sorghum, switchgrass, wood chips, and

other plant residues. It can also be used as an effective octane boosting fuel additive,

which can replace MTBE (Methyl Tertiary Butyl Ether) as an oxygenating agent. Ethanol

use has been shown to reduce emissions, decrease the use of gasoline, and provide a fuel

which is free from MTBE (Wyman 1996). Ethanol, also known as an ethyl alcohol, is a

high proof form of grain alcohol.

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Production of renewable fuels would contribute to our goal of reducing nation’s

dependence on imported oil. Achieving the production goals for bio-ethanol production

will require appropriate and promising bioenergy feedstocks with supplementation from

agricultural crop residues.

The overall contribution of renewable energy is only 7% of the whole energy

supply of the United States, Figure 1. Fifty-three percent of the renewable energy comes

from biomass. Petroleum energy (37%), natural gas (24%), and coal (23%) account for

the greatest contribution in the nation’s whole energy supply, Figure 1. Solar (1%),

geothermal (5%), wind (7%), and hydropower (34%) are other sources of renewable

energy contributes in the nation’s energy supply.

Source: U.S. Energy Information Administration, Annual Energy Review 2008. Figure 1. Role of Renewable Energy Consumption in the Nation’s Energy Supply, 2008

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These fossil fuels are a limited source of energy due to their depletion by time and

non-renewable characteristics. At this stage of increasing depletion of non-renewable

energy sources there is a great need to have an alternative renewable energy sources.

They play an important role in the supply of energy. When renewable energy sources are

used, demand for fossil fuels is reduced.

Biofuels have evolved as an alternative energy source to fossil fuels by

substituting bioethanol and biodiesel for gasoline and diesel respectively. They have been

considered as alternative sources of energy due to their capacity to offset the reliance on

foreign oil and potential to moderate climate change (Pacala and Socolow 2004).

Currently bioethanol is being produced on a large scale, especially in the US and Brazil.

Sugarcane is the major feedstock used in Brazil for ethanol production by using sugar to

ethanol technology, while the US uses corn as a major feedstock for ethanol production

by using starch to ethanol technology. In the United States there is ongoing technology

development to produce ethanol from sugar, and ethanol from cellulose based feedstocks.

This study analyses ethanol production potential by three alternative

methodologies for the Texas Panhandle: starch based ethanol, sugar based ethanol, and

cellulose based ethanol. To be a viable ethanol production methodology for the Texas

Panhandle, it needs to meet environmental as well as economic criteria.

Feasibility of any ethanol production methodology for the Texas Panhandle

Region will be determined on the basis of economics of selected feedstock used, current

situation of selected feedstock production, current production levels and yields of

selected feedstock, estimated net value residual to selected feedstock.

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Research Objective

The research objective of this study is to evaluate the economic feasibility of three

ethanol production methods in the Texas Panhandle: starch to ethanol, sugar to ethanol,

and cellulose to ethanol. The three feedstocks associated with the three methods are grain

sorghum, sweet sorghum, and switchgrass respectively.

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CHAPTER II

LITERATURE REVIEW

Research has been conducted on different aspects of the ethanol industry but there

has not been a study over the use of alternative methodologies: sugar based, starch based,

and cellulose based for ethanol production in the Texas Panhandle Region. The review of

literature provides an overview of previous literature on ethanol, different ethanol

production techniques, ethanol production and demand in the U.S., and sources of

feedstock for ethanol production.

Ethanol Overview

Ethanol is a renewable fuel made from starches, sugars, and cellulosic biomass.

Conventional starch feedstocks used for ethanol production include crops such as corn,

wheat, and sorghum. A large growth in ethanol production, along with research and

innovation to foster second-generation biofuels, is underway in the United States. These

are prompted by high oil prices and energy policies. This increased focus on ethanol and

other biofuels production is an important aspect of United States economic, energy,

environmental and national security policies (BR&DI 2000). The inconsistency in

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political situation, the continued conflict in the Middle East and the reliance on foreign

oil by the United States has forced policy makers and researchers to look for a more

dependable, renewable and domestic fuel source. However, the volatile nature of oil

prices is an economic concern.

According to the United States Department of Energy (DOE 2007) the

importation of crude oil is increasing by period of time. Moreover, in 2005 crude oil

imports attained a record of more than 10 million barrels per day. The reduction of our

nation’s dependence on imported oil is identified as one of our greatest challenges. To

address this challenge, the United States needs a variety of alternative renewable fuels,

including ethanol produced from cellulosic materials like grasses, wood chips; sugar rich

materials like sugarcane, sweet sorghum, sugar beet; and starch based materials like corn

or sorghum grains. Fortunately, the United State has ample agricultural and forest

resources that can be easily converted into biofuels. Recent studies by the U.S.

Department of Energy (DOE) Biofuels suggest that these resources can be used to

produce 60 billion gallons of ethanol per year. This would replace about 30% of our

current gasoline consumption by 2030.

Ethanol can be used as an effective octane-boosting fuel additive or as a stand-

alone fuel (Salassi 2007). Ethanol has 30-35% of the energy value of gasoline. Bio-fuels

like bio-ethanol and bio-diesel, which are produced from renewable energy sources like

biomass, grains etc., are attaining an importance in the light of rising fossil fuel prices,

depleting oil reserves and concerns over the perceived ‘green house effect’ associated

with the use of conventional fossil fuels. The rising price of energy as well as the limited

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oil and gas reserves around the world has created a need to improve the renewable energy

production. By the year 2025 world energy consumption is projected to increase by 57%

over 2002 levels. The resulting stress on the world’s energy supply requires the

expansion of alternative energy sources. Moreover, concern about the potential

association of increases in atmospheric CO2 due to the consumption of fossil fuels with

global warming; is providing an additional motivation for the development of biofuels

that can generate low net carbon emission (Rooney et al. 2007).

The American Coalition for Ethanol (ACE), an advocacy group promoting

ethanol use, suggests that ethanol is a cleaner fuel source due to its perceived

environmental friendly nature than the traditionally used nonrenewable fossil fuel

sources. As shown in Figure 2. the increasing cost of crude oil along with the United

States’s movement towards decreasing the reliance on imported oil has lead to a boom of

the biofuel industry. In addition, the government tax incentives and environmental

concerns also have contributed to this boom. The remarkable increase in United States

ethanol production is enhancing ability to supply a major portion of our transportation

fuel requirement. As of 2007 there were 180 completed ethanol production facilities with

20 more processing plants under construction (ACE 2007). The advanced technology of

ethanol production, increasing energy prices, concern over pollution from the use of

conventional fossil fuels, and tax incentives have prompted automobile manufacturers to

promote vehicles that can easily be converted to use ethanol and gasoline blends with

other future alternative energy sources (David et al. 2008).

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David et al. (2008) noted that ethanol adds to the overall fuel supply of the United

States and contributes to maintaining competitive and affordable fuel prices. Cities

around the U.S. have been selling an ethanol blend (E85) and gasohol or E10 as

alternative fuel sources for automobiles (DOE 2007). E85 is a blend of 85% ethanol and

15% unleaded gasoline; whereas E10 is a blend of 10% ethanol and 90% unleaded

gasoline.

U.S. Ethanol Production and Demand

The fuel ethanol industry in the U.S. has grown to a total annual production

capacity of 13 billion gallons with an estimated 12 billion gallons per year of actual

production (RFA 2010). There are 201 ethanol plants operating in 27 states and 14 new

plants or plant expansions are underway (RFA 2010). New ethanol plant construction or

expansions are estimated to add 1.4 billion gallons of annual production, bringing U.S.

ethanol production capacity to 14.4 billion gallons per year (RFA 2010).

This increased trend in the annual U.S. ethanol production indicates increasing

scope and demand of ethanol usage over the use of conventional fossil fuels. Following

are the major factors that have driven demand for ethanol as an alternative renewable fuel

source (Hardy 2010):

• High oil prices

• National energy security

• Ethanol tax incentives

• Lower ethanol production costs with improved technology, and

• Climate change concerns.

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United States ethanol production (in billions of gallons) from the year 1980 to

2009 is summarized in Figure 2. Ethanol production has increased from 175 million

gallons in 1980 to 10.6 billion gallons in year 2009 (ACE 2007, RFA 2010), Figure 2.

This is 60 times more than year 1980.

Source: American Coalition for Ethanol 2007, Renewable Fuels Association 2010

Figure 2. U.S. Ethanol Production in Billions of Gallons (1980-2009)

0.180.22

0.350.38

0.430.61

0.710.83

0.850.87

0.90 0.951.10

1.201.35 1.40

1.101.30

1.401.47

1.631.77

2.12

2.81

3.40

4.00

4.89

6.20

9.23

10.60

0

2

4

6

8

10

12

Bill

ion

Gal

lons

Years

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Ethanol Production Techniques

Fermentation is the conversion process of an organic material from one chemical

form to another form using enzymes produced by living microorganisms (Soltes 1980). It

plays a vital role in the production of ethanol from alternate feedstocks such as starch

based feedstocks, sugar rich feedstocks, and cellulosic feedstocks. Ethanol is produced by

removing starch from carbohydrates with the action of yeasts. Carbohydrates are made up

of carbon, hydrogen, and oxygen with sugar and starch. Yeasts utilize fermentable sugar

to convert it into ethanol (Reidenbach 1981).

The steps in the ethanol production process by feedstock and conversion method

are summarized in Figure 3. The three major ethanol producing feedstocks: cellulose,

sugar, and starch have three different production techniques with different harvest

techniques for each feedstock. In crops such as sugar cane or sweet sorghum, stalks are

cut and hauled from the field to the ethanol processing plant. In grain crops such as corn,

grain sorghum, or wheat the grain is harvested and the stalks left in the field. In cellulosic

crops, such as trees, the full plants are harvested; with grasses several harvests are made

to allow for regrowth of the plant. There are variations in by-products from the different

feedstocks with respect to their ethanol production techniques. Heat, electricity, and

molasses are the by-products obtained from sugar based ethanol. Animal feed such as

distillers dried grain with solubles (DDGS) and wet distillers grain soluble (WDGS) are

the main by-products obtained from starch based ethanol. Heat, electricity, animal feed,

and bioplastics are the by-products obtained from cellulose based ethanol, Figure 3.

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Source: International Energy Agency 2004 Figure 3. Ethanol Production Steps by Feedstock and Conversion Technique

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Source of feedstock to produce ethanol and their production process is

summarized in Figure 4. Corn stover, switchgrass etc. are sources of cellulose. Whereas

corn, wheat, potatoes etc. are sources of starch and cane juice is a source of sugar.

Pretreatment, addition of enzymes and fermentation are the common steps involved in the

production of ethanol, Figure 4.

Source: Michael 2008

Figure 4. Ethanol Feedstocks and Production Process

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A comparison of the characteristics of the alternative feedstocks is shown in Table 1.

Table 1. Summary of Feedstock Characteristics Type of

feedstock Processing

needed prior to fermentation

Principal advantage (s)

Principal disadvantage (s)

Sugar crops (ex., sugar cane, sweet sorghum, sugar beets, Jerusalem artichoke)

Milling to extract sugar

Preparation is minimal

High yields of ethanol per acre

Crop co-products have value as fuel, livestock feed, or soil amendment

Storage may result in loss of sugar

Cultivation practices are not wide-spread, especially with “nonconventional” crops

Starch crops:

Grains (ex., corn, sorghum, wheat, barley)

Tubers (ex., potatoes, sweet potatoes)

Milling, liquefaction, and saccharification

Storage techniques are well developed

Cultivation practices are widespread with grains

Livestock co-product is relatively high in protein.

Preparation involves additional equipment, labor and energy costs

DDG from aflatoxin contaminated grain is not suitable as animal feed

Cellulosic:

Crop residues (ex., corn stover, wheat straw)

Forages (ex., switchgrass, alfalfa, forage sorghum)

Milling and hydrolysis of the linkages

Use involves no integration with the livestock feed market

Availability is wide-spread

No commercially cost-effective process exists for hydrolysis of the linkages

Source: Mother Earth Alcohol Fuel 1980

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General Chemistry of Ethanol Production

The chemical equations describing the reactions which occur during ethanol

production from the alternative feedstocks: starch based, sugar based, and cellulose based

is described by Reidenbach (1981).

Conversion of Starch-based Feedstock into Ethanol

Hydrolysis (starch liquefaction)

Starch + Water Sucrose

2N (C6H10O5) + N (H2O) N (C12H22O11)

(1 kg) + (0.056 kg) (1.056 kg)

In the conversion of starch to ethanol, first water is added into starch (C6H10O5) and

converted it into sucrose (C12H22O11) with the reaction of amylase. This process is called

hydrolysis or starch liquefaction.

Inversion (saccharification)

Sucrose + Water Glucose

(C12H22O11) + (H2O) 2(C6H12O6)

(1 kg) + (0.053kg) (1.053 kg)

In this process of inversion, water is added into sucrose (C12H22O11) obtained from the

starch hydrolysis in the previous process and converted into glucose (C6H12O6) with the

reaction of invertase. This process also called saccharification.

Fermentation

Glucose Ethanol + Carbon dioxide

(C2H12O6) 2(C2H5OH) + 2(CO2)

Amylase

Invertase

Yeast

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(1 kg) (0.511kg) + (0.489kg)

Fermentation is the last process of starch to ethanol conversion technique in which

glucose (C2H12O6) is converted into ethanol and carbon dioxide with the action of yeast.

Conversion of Sugar-based Feedstock into Ethanol

Fermentation

Glucose Ethanol + Carbon dioxide

(C2H12O6) 2(C2H5OH) + 2(CO2) + Heat

(1 kg) (0.511kg) + (0.489kg)

In the conversion of sugar to ethanol, glucose (C2H12O6) is readily available in the form

of sugar and converted easily into ethanol and carbon dioxide with the action of yeast.

This process is called fermentation. Heat can be harvested to improve energy efficiency

of ethanol production plant.

Conversion of Cellulose-based Feedstock into Ethanol

Hydrolysis (cellulose conversion)

Cellulose + Water Glucose

N (C6H10O5) + N (H2O) N (C6H12O6)

(1 kg) + (0.11 kg) (1.11 kg)

In the conversion of cellulose to ethanol, first water is added into cellulose (C6H10O5) and

converted into glucose (C6H12O6) with the reaction of acid or enzymes. This process is

called hydrolysis or cellulose conversion.

Fermentation

Glucose Ethanol + Carbon dioxide

(C2H12O6) 2(C2H5OH) + 2(CO2) + Heat

Yeast

Acid or Enzymes

Yeast

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(1 kg) (0.511kg) + (0.489kg)

Then in the process of fermentation glucose is converted into ethanol and carbon dioxide

with the action of yeast. This process is called fermentation.

Physical, chemical and thermal properties of ethanol are listed in Table 2. Boiling

temperature of ethanol is 78.50C with a molecular weight of 46.1. Chemical formula of

ethanol is C2H5OH with 52.1%, 34.75, and 13.1% by weight of carbon, oxygen, and

hydrogen respectively, Table 2.

Table 2. Physical, Chemical, and Thermal Properties of Ethanol Physical Properties of Ethanol

Specific gravity 0.79 gm/cm3 Vapor pressure (380) 50 mm Hg Boiling temperature 78.50C Dielectric constant 24.3 Water solubility ∞ Chemical Properties of Ethanol Formula C2H5OH Molecular weight 46.1 Carbon (wt) 52.1% Hydrogen (wt) 13.1% Oxygen (wt) 34.7% C/H ratio 4.0 Stoichiometric ratio (Air/ETOH) 9.0 Thermal Properties of Ethanol Lower heating value 6,400 kcal/kg Ignition temperature 350C Specific heat (kcal/kg-0C) 60 Melting point -1150C Source: ISSAAS 2007.

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Cellulosic Ethanol

Only a small percentage of a plant can be used in the form of sugar or starch,

consumed by animals or human beings, or fermented by yeast into ethanol. Most of the

rest of the plant is cellulose. Using the bulky portion of the plant may be more efficient

than using other portions of the plant. Some grasses have higher energy storage in the

form of cellulose when compared to corn in the form of grain, and can be grown

efficiently with less application of nitrogen based fertilizer, low pesticides use, and less

processed energy. Cellulosic ethanol is a second generation biofuel, as opposed to ethanol

made from corn which is considered a first generation biofuel. The important difference

is that the second generation biofuel uses non-food residual biomass including stems,

leaves, husks, wood chips etc., or they use non-food crops that can be grown without high

energy inputs.

Cellulosic feedstocks are under research and will be used for ethanol production

in the upcoming years. Crop byproducts like corn stover, grain straw, rice hulls, paper

pulp, and sugarcane bagasse; wood chips; and native grasses such as switchgrass are

major cellulose based feedstocks which can be converted easily into ethanol. Research in

advanced technology is directed to make cellulosic ethanol more economical so it can

attain a commercial level of production.

According to Rinehart (2006) switchgrass is not only the most suitable biomass

species to produce cellulosic based ethanol, it also bears some ecological characteristics

that makes it a very good competitor among all cellulosic feedstocks. Positive

characteristics of switchgrass include high cellulose yields, resistance to pests and

disease, superior wildlife habitat, low fertility requirements, can tolerate poor soils and

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wide variations of soil pH, drought and flood tolerant, can use water efficiently in

grassland ecosystems, and cultivars that are locally adapted and relatively available.

Cellulosic Ethanol Production Process

Cellulose is a polymer of sugar (glucose), which is easily consumed by yeast to

produce ethanol (Mosier and Illeleji 2006). It is produced by every living plant on the

earth, which means that cellulose is the most abundant biological molecule on the planet.

According to a USDA study, at least one billion tons of cellulosic feedstocks like corn

stover, straw, forages, grasses, and wood wastes etc. could be feasibly collected and

processed in the U.S. each year. This could contribute approximately 67 billion gallons of

ethanol. Which could replace 30% of gasoline consumption in the U.S. by 2030 (U.S.

Department of Energy Biofuels 2010).

There are three basic types of cellulose-to-ethanol production designs: acid

hydrolysis, enzymatic hydrolysis, and thermo-chemical (Badger 2002). Cellulose can be

converted into ethanol by using current technology. The technology at the front end of

the process is the major difference between grain ethanol and cellulosic ethanol processes

(Mosier and Illeleji 2006). The technology used for the processes of fermentation,

distillation, and recovery of the ethanol are the same for both grain and cellulosic based

feedstocks (Mosier and Illeleji 2006). In order for cellulose based ethanol to be

competitive with grain based ethanol, there are some major challenges associated with

reducing the costs related to production, harvest, transportation, and pretreatment of the

cellulosic feedstock (Eggeman and Elander 2005). There are also some processing

challenges associated with the biology and chemistry of the processing steps of cellulosic

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ethanol. Advances in biotechnology and engineering are expected to make substantial

gains toward attaining the goals of improving efficiency and yields in converting plant

cellulose to ethanol (Mosier 2006).

Although there are similarities between the cellulosic and grain ethanol

production techniques, there are three important steps (pretreatment, hydrolysis, and

fermentation) involved in the production of cellulosic ethanol that are different from

grain ethanol (Mosier 2006). The steps in the ethanol production process from

switchgrass are summarized in Figure 5.

Pretreatment is the process done to soften the cellulosic feedstock to make the

cellulose more susceptible to being broken down and accessible before it is broken down

into simple sugars. Thus the following hydrolysis step is more efficient because the

breakdown of cellulose into simple sugar is faster, higher in yield, and requires fewer

inputs like enzymes and energy (Mosier 2006). The leading pretreatment technologies

under development use a combination of chemicals (water, acid, caustics, and/or

ammonia) and heat to partially break down the cellulose or convert it into a more reactive

form (Mosier et al. 2005). According to Eggeman and Elander (2005), better

understanding of the chemistry of plant cell walls and the chemical reactions that occurs

during pretreatment processes is leading to improvements in these technologies which

can reduce the cost of ethanol production.

Hydrolysis is the process where the cellulose and other sugar polymers are broken

down into simple sugars through the action of biological catalysts called “enzymes”

(Mosier 2006). A combination of enzymes working together can best hydrolyze cellulose

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in industrial applications (Mosier et al. 1999). Biotechnology has allowed these enzymes

to be produced more cheaply and with better properties for use in biofuel applications

(Knauf and Moniruzzaman 2004).

Figure 5. Schematic Diagram of Ethanol Production from Switchgrass

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In the process of fermentation, the equipment and processing technology used to

produce ethanol from cellulose is the same as for producing ethanol from grain (Mosier

2006). In addition, yeast used in starch-based ethanol production can use glucose derived

from cellulose.

Distillation and recovery is the last step in cellulosic ethanol production similar to

ethanol production from grain. Since ethanol has a lower boiling point than water it can

be separated by a process called “distillation.” The conventional distillation or

rectification system has the ability to produce ethanol at 92-95% purity. The remaining

water is then removed by using molecular sieves that selectively absorb the water from an

ethanol or water vapor resulting in approximately pure ethanol (>99%) (Mosier and

Illeleji 2006).

Cost competitiveness of cellulosic ethanol with corn based ethanol is shown in

Table 3. According to Keith, 2007, the total production cost of cellulosic ethanol was

$2.65/gallon compared to corn based ethanol at $1.65/gallon. Department of Energy

(DOE) targeted total production cost of cellulosic ethanol for year 2010-12 to be

$1.10/gallon, which is far less than the production cost in 2007. This decline in the total

production cost of cellulosic ethanol between year 2007 and 2012 reflects decreased

feedstock cost and processing cost combined with increased production efficiency of

ethanol from 60 gallons/dry ton to 90 gallons/dry ton of cellulosic feedstock. In the DOE

target the cost of cellulose based feedstock declines from $60/dry ton in 2007 to $30/dry

ton in 2012 and cost of enzymes to produce one gallon of ethanol declines from $0.40 to

$0.10, Table 3.

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Table 3. Cost Competitiveness of Cellulosic Ethanol

Corn Based Cellulosic Cost as of 2007

Cellulosic Cost as of 2010-12 (DOE target)

Feedstock Cost ($/g of ethanol) $1.171 $1.002 $0.333

By-Product -$0.38 -$0.10 -$0.09

Enzymes $0.04 $0.40 $0.10

Other Costs** $0.62 $0.80 $0.22

Capital Cost $0.20 $0.55 $0.54

Total $1.65 $2.65 $1.10 Note: g = gallon, bu = bushel, dt = dry ton 1 = Cost of corn required to produce per gallon ethanol (2.75 g /bu @ $3.22/bu) 2 = Cost cellulosic feedstock required to produce per gallon ethanol as of 2007 (60 g/dt @ $60/dt) 3 = Cost cellulosic feedstock required to produce per gallon ethanol as of 2010-12 (90 g/dt @ $30/dt) ** (includes preprocessing, fermentation, labor) Source: Keith 2007

Sugar-based Ethanol

The production of ethanol from the sugar-based feedstocks was one of man’s

earliest pursuits into value-added processing. The technique used for the production of

ethanol from sugar-based feedstocks is the same as starch-based ethanol production

except for some of the pretreatments of feedstocks.

After harvesting, sugar rich stalks need to be processed through several steps to

get ethanol. The first step in this process is juice extraction. In this step juice is extracted

by a series of mills (Almodares and Hadi 2009) pressing the freshly harvested sugar rich

stalks. These stalks harvested fresh have a moisture content of about 75% (Cundiff and

Worley 1992). The primary goal of increasing ethanol production requires removing as

much sugar from the fresh stalks in the process of juice extraction as possible. Fifty to

one hundred tons of pressure should be applied on the fresh stalks when they pass

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through rollers to extract the sweet juice. About 55 lbs. of juice will be extracted from

100 lbs. of whole sweet sorghum stalks in an efficient system (Mask and Morris 1991).

Ethanol production from sugar is quite simple compared to that for starch and

cellulose, because sugar is readily available from the sugar rich stalks to ferment into

ethanol. Whereas in starch and cellulose based ethanol they have to go through various

processes to get in the form of sugar to ferment into ethanol.

Sugar-based Ethanol Production Process

General process flow of ethanol production from sweet sorghum grain and stalk is

summarized in Figure 6. In the process of ethanol production from sugar rich stalks, the

first step is the milling of stalks to extract the sugar juice. The juice coming out of milling

section is first screened, then sterilized by heating up to 1000C, and then clarified

(Quintero et al. 2008). During clarification the muddy juice is sent to a rotary vacuum

filter. The filtrate juice is then sent to the evaporation section for concentration. The juice

can also be sent directly to fermentation to produce ethanol or it can be concentrated

using evaporators depending on the selected design. In case of sugar juice to ethanol

production it is recommended to increase the concentration of juice by 16 - 18 brix.

Syrup which will be stored for use during the off season needs to concentrate up to 65 -

85 brix (Almodares and Hadi 2009).

Fermentation is the next step after the juice extraction, Figure 6. Fermentation is

an internally balanced oxidation-reduction reaction (Kundiyana 2006; and Kundiyana et

al. 2006). In this process juice or syrup is converted into ethanol, carbon dioxide, yeast

biomass as well as minor end products like glycerol, fusel oils, aldehydes, and ketones by

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the reaction of yeast, Saccharomyces cerevisiae (Almodares and Hadi 2009, Jacques et

al. 1999).

Distillation and dehydration is the last step in the sugar based ethanol production

process. During distillation, alcohol from fermented mash is concentrated up to 95

percent volume per volume (v/v). It is then further concentrated to a minimum

concentration of 99.6 percent to produce ethanol (Almodares and Hadi 2009). Vinasse

developed in the distillation step can be concentrated up to 20 - 25 percent solids

followed by press-mud-composting which further concentrates to 55 percent solids for

use as a liquid fertilizer (Almodares and Hadi 2009).

Source: ISSAAS 2007 (Modified) Figure 6. General Process Flow: Production of Ethanol from Sweet Sorghum

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Starch-based Ethanol

Presently, almost all the ethanol producing plants in the United States are based

on high starch content feedstock such as corn grain. Grain sorghum can also be used as a

source of starch for ethanol production. Commercial ethanol plants located in sorghum

production regions in the United States can easily rely on sorghum as their primary starch

source (RFA 2006).

In this category, ethanol is produced by fermenting and distilling simple sugars,

which are mostly derived from starch. There are two production processes of ethanol

from starch-based feedstocks: wet milling and dry milling.

In the United States, commercial production of ethanol from starch based grains

such as corn, grain sorghum, wheat etc. involves breaking down the starch into simple

sugars (glucose), feeding these sugars to yeast (fermentation), and then obtaining the

main product ethanol and byproducts like DDGS, carbon dioxide etc. (Mosier and Illeleji

2006). Starch content of corn varies between 70 to 72 percent. Sorghum varies between

68 to 70 percent starch (Shapouri et al. 2006). There is not much difference between corn

and sorghum starch content. Wet milling and dry milling are the two major industrial

methods used in the United States for producing fuel ethanol. Dry milling and wet

milling plant accounts for about 79 percent and 21 percent of total ethanol production

respectively (Shapouri et al. 2006).

Wet milling plants are more expensive to build than dry milling plants but more

flexible in terms of the products they can produce. Although they yield slightly less

ethanol per bushel than the dry mills, wet mills have more valuable byproducts.

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Originally wet milling plants accounted for most of the ethanol production in the United

States, but because of the lower building costs of dry mills, the new construction has

shifted from wet mills to dry mills (Rendleman and Shapouri 2007). In 2004, 75 percent

of ethanol production came from dry milling plants and only 25 percent from wet milling

plants (RFA 2006). In fact, dry milling plants have higher yields of ethanol per bushel

grain than the wet milling plants (Rendleman and Shapouri 2007). As a result of all this,

most of the new technologies are being developed for dry-mill production plants. A dry

mill can have lower initial construction costs but also generates lower valued byproducts

such as distillers dried grain (DDG).

Mosier and Illeleji 2006 state that; it is called “wet” because the first step in the

wet milling process involves soaking the grain in water to soften the grain and make it

easier to separate the various components of the grain. During fractionation the various

components such as starch, fiber, and germ are separated to make a variety of products.

Starch-based Ethanol Production Process

General process flow of ethanol production from grain sorghum is summarized in

Figure 7. In the dry milling process, the whole grain is processed and the remaining

components are separated at the end of the process. There are six major steps: milling,

liquefaction, saccharification, fermentation, distillation, and recovery involved in the dry

milling method of ethanol production (Mosier and Illeleji 2006).

Milling is the first step in dry-grind method of ethanol production, Figure 7. It

involves processing grains through a hammer mill to produce grain flour. This whole

grain flour is then slurried with water and heat stable enzyme (α-amylase) is added.

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Source: Viraj Alcohols Limited 2010 Figure 7. Diagrammatic Representation of Grain Feedstock to Ethanol

Drying

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Liquefaction is the second step of dry-grind method of ethanol production, Figure

7. The slurry obtained from the previous step is cooked. This step is practiced by using

jet-cookers that inject steam into the grain flour slurry to cook it at temperatures above

1000C (2120F). The heat and mechanical shear of the cooking process breaks and separate

the starch granules present in the grain endosperm. The enzymes then break down the

starch polymer into small fragments. The cooked grain mash is allowed to cool to 80-

900C (175-1950F). Additional enzyme (α-amylase) is added and the slurry is allowed to

continue liquefying for at least 30 minutes (Mosier and Illeleji 2006).

Saccharification, the third step, comes after the liquefaction, Figure 7. The slurry,

now called “grain mash,” is cooled to around 300C (860F), and a second enzyme

(glucoamylase) is added. This glucoamylase completes the breakdown of the starch into

simple sugar called glucose. Saccharification occurs while the mash is filling the

fermentor in preparation for the next step (fermentation) and continues throughout the

next step (Mosier and Illeleji 2006).

Fermentation is the fourth step of dry-grind method of ethanol production. The

yeast grown in seed tanks is combined with the grain mash to begin the process of

fermentation, converting the simple sugars to ethanol. The other components of the grain

remain unchanged during the process of fermentation. In most of the dry-milling plants,

the process of fermentation occurs in batches. A fermentation tank is filled, and the batch

ferments completely before the tank is drained and refilled with a new batch. The up-

stream processes like grinding, liquefaction, and saccharification and the down-stream

processes like distillation and recovery occur continuously. During these processes grain

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is continuously processed through the equipment. Dry-milling ethanol production plants

of this design commonly have three fermentation tanks. At any given time one tank is

filling, one tank is fermenting (usually for 48 hours) and one tank is emptying and

resetting for the next batch (Mosier and Illeleji 2006).

Carbon dioxide is also generated during the fermentation process. Usually it is not

recovered but is released from the fermentation tanks to the atmosphere. If it is recovered,

it can be compressed and sold for carbonation of soft drinks or can be frozen into dry ice

for cold product storage and transportation. After the completion of the fermentation

process, the fermented grain mash called “beer” is discharged into a beer well. After that,

this beer well stores the fermented beer between batches and supplies a continuous

stream of material for the distillation and recovery of ethanol (Mosier and Illeleji 2006).

Distillation and recovery is the last step of dry-grind method of ethanol

production. The liquid portion of the slurry remaining after the fermentation process has

8-12% ethanol by weight. Because ethanol has a lower boiling point than the water it can

be separated by a process called “distillation.” The conventional distillation or

rectification system has the ability to produce ethanol at 92-95% purity. The remaining

water is then removed with the help of molecular sieves that selectively absorb the water

from an ethanol or water vapor mixture resulting in approximately pure ethanol (>99%)

(Mosier and Illeleji 2006). The remaining water and grain solids remain after the process

of distillation is called “stillage.” This stillage is used to produce valued byproducts like

wet cake or distillers grains and distillers dried grain with solubles (DDGS).

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Conventional Ethanol versus Cellulosic Ethanol

Although conventional (starch based) and cellulosic ethanol are produced by

using different feedstocks and techniques, the result is the same product. Ethanol

produced conventionally is derived from the starch contained in grains like corn,

sorghum, wheat etc.; where starch is converted to ethanol by either a dry milling process

or wet milling process. In the dry milling process, liquefied grain starch is produced by

heating grain meal and adding water and enzymes. These enzymes convert the liquefied

starch to sugars and finally the sugars are fermented by yeast into ethanol. In the wet

milling process the fiber, germ and protein are separated from the starch before it is

fermented into ethanol. On the other hand, conversion of cellulosic feedstocks to ethanol

requires three important processing steps: pretreatment, saccharification, and

fermentation (Burden 2009). Pretreatment requirements vary with the different

feedstocks.

Cellulosic ethanol displays three times higher net energy content than the

conventionally produced ethanol from corn, and also some of the cellulosic ethanol

production systems pass far lower net levels of greenhouse gases (GHG). Most

conventional (starch-based) ethanol production systems use fossil fuel to create heat for

fermentation and other processing steps and produces GHG emissions. Many cellulosic

ethanol production systems use some part of the input biomass feedstock rather than

fossil fuel to generate heat (Burden 2009).

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By-products of Ethanol Production

Ethanol production from starch based feedstock has two major by-products:

distillers dried grain with solubles (DDGS) and carbon dioxide. One bushel of corn or

grain sorghum yields approximately 17 pounds of distillers grain, and 17 pounds of

carbon dioxide as by-products (Outlaw et al. 2003). DDGS contains all the nutrients from

the grain except starch. Generally, DDGS contains 27 percent protein, 11 percent fat, and

9 percent fiber (Outlaw et al. 2003). Nutritional content variations of DDGS summarized

in Table 4. It is a source of protein which can be sold either dry or wet. This DDGS can

be fed successfully to all major livestock species such as cattle, hogs, poultry etc.

Table 4. Nutritional Content Variations of Distillers Dried Grains with Solubles (DDGS) Contents %

Protein 25.5-30.7 Fat 8.9-11.4

Fiber 5.4-6.5

Calcium 0.017-0.45

Phosphorus 0.62-0.78

Sodium 0.05-0.17

Chloride 0.13-0.19

Potassium 0.79-1.05

Amino acids % total amino acid

Methionine 0.44-0.56

Cystine 0.45-0.60

Lysine 0.64-0.83

Arginine 1.02-1.23

Tryptophan 0.19-0.23

Threonine 0.94-1.05

Source: Noll 2004

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Fermentation of starch grain produces about equal amounts of carbon dioxide and

ethanol. A few ethanol producing plants catch and sell this CO2 on a commercial basis,

mostly to an organization that specializes in cleaning and pressurizing it. For an ethanol

producer to sell carbon dioxide it is very essential that a user must be nearby and the CO2

produced must be available long enough to justify the cost of the CO2 recovery and

purification equipment (McAloon et al. 2000).

Stillage or bagasse is the major by-product obtained from the conversion of sugar

based feedstocks such as sugar cane or sweet sorghum into ethanol. It is the biomass

remaining after the juice has been extracted from the stalks. It can be used to produce

electricity and steam for the refinery or for sale on the electricity grid (Gnansounou et al.

2005). Or it can be used as an excellent dry matter source for livestock as it is rich in

macro and micronutrients (Reddy et al. 2007). Heat, electricity, lignin, animal feed, and

bioplastics are the by-products obtained from the conversion of cellulose based

feedstocks into ethanol.

SWEET SORGHUM

Introduction

The term sweet sorghum is used to distinguish varieties of sorghum with high

concentration of soluble sugars in the plant sap or juice (Vermerris et al. 2007). It is a C-4

species plant having wide flat leaves and rounded head full of grain at the stage of

maturity. It can be grown and survive successfully in semi-arid tropics, where other crops

fail to thrive. It is highly suitable for tougher dry-land growing areas. It can produce very

high yields with irrigation. During very dry periods, sweet sorghum can go into

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dormancy, with growth resuming when sufficient moisture levels return (Gnansounou et

al. 2005). It can be grown easily on all continents, in tropical, sub-tropical, temperate,

semi-arid regions as well as in poor quality soils. It is also known as the sugar cane of the

desert. Sweet sorghum is a short duration (4-5 months) crop, propagated by seeds;

requiring daily temperatures above 100C.

Importance and Uses

Around 60 percent of the world ethanol production uses sugar crops as the

primary feedstock, with the remaining 40 percent using grain crops as the primary

feedstock (Salassi 2007). Sweet sorghums are used as an alternative sugar source in areas

where sugarcane is not produced or failed to survive (Rooney 2004). Because of the high

sugar content of sweet sorghum, it may also be accessible to the sugar production for

conversion to ethanol, using the same methodology used in sugarcane for ethanol

production. It can be grown as an alternative to sugarcane and has been identified as a

promising dedicated energy crop; that can be grown as far north and south as latitude 450

(Rooney et al. 2007). This crop is appealing due to the easy accessibility of readily

fermentable sugars associated with very high yields of green biomass. The sap of this

crop is extracted by the process of milling. After extraction, the sugars from sweet

sorghum stalks can be fermented easily to produce ethanol. Syrup, molasses, and crystal

sugar are other products which can be produced from this crop (Vermerris et al. 2007).

Since the 1970s sweet sorghum has generated interest as an efficient feedstock for

the production of ethanol by using currently available conventional fermentation

technology. The byproducts, like bagasse (crushed stalks), that remains after removal of

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juice from the sweet stalks can be burnt to create electricity or steam that can be a part of

co-generation strategy. Additionally, the bagasse available after juice removal could be

utilized as a feedstock for cellulosic ethanol production technology (Vermerris et al.

2007). According to the ICRISAT, the stillage obtained from sweet sorghum after the

extraction of sweet juice has a higher biological value than that of bagasse which is

obtained from sugarcane when used as forage for livestock, as it is rich in micronutrients

and minerals. Additionally, the level of pollution in sweet sorghum-based ethanol

production has one fourth of the biological oxygen demand (BOD) (19,500 mg/liter) and

lower chemical oxygen demand (COD) (38,640 mg/liter) compared to molasses–based

ethanol production (Reddy et al. 2007).

Traditional sweet sorghum varieties produce low grain yields. However, recently

varieties with more balanced grain as well as sugar production have been developed in

China and India. These varieties are the best example of dual-purpose crops, where grains

can be used for human or animal consumption, and sugars can be fermented to ethanol.

Alternatively, these varieties can be used as a dedicated bioenergy crop, where we can

use both sugars and grains for the production of ethanol (Vermerris et al. 2007). In

addition to sweet stalks, this crop gives grain yield of 2 to 2.5 tons/ha and this can be

used as food or feed (Reddy et al. 2007). While single-cut yields may be low, the

multiple cutting potential of this crop increases cumulative yields with an increased

growing season (Rooney et al. 2007).

The ICRISAT, headquartered in the Indian state of Andhra Pradesh, has found

that individual stalks of sweet sorghum grow up to 10 ft (3 m) in height in dry, saline, and

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flooding conditions, tolerates heat, and can be used to produce both ethanol and food. In

comparison to corn where an individual stalk can be used only once to produce either

ethanol or food, with sweet sorghum the grain can be removed for food processing before

the stalk is crushed to extract the sugary liquid that is used to produce ethanol. Sweet

sorghum can be a potential feedstock for ethanol production due to the characteristics of

high fermentable sugars, low fertilizer requirement, high water use efficiency (1/3 of

sugarcane and 1/2 of corn), short growing period, and the ability to adapt well to diverse

climate and soil conditions (Wu et al. 2008).

Sweet sorghum has both advantages and disadvantages in producing ethanol. The

initial advantage is that sugars are directly available to fermentation without any

enzymatic treatment after simply extracting the sweet juice from biomass. The major

disadvantage is the requirement for fresh processing. The seasonal availability of the

fresh feedstock limits the sugar extraction period. In sugar based ethanol production

technique, efficiency of ethanol production depends on the fresh content of the biomass.

Most of the sugar crops such as sugarcane, sweet sorghum, sugar beet are seasonal crops

mostly available during specific seasons. These crops can’t be stored such as grains for

long period of time due to their high moisture content.

It is a promising crop for biomass production due to its high yield and potential to

generate high value added products like ethanol, DDG (distiller dried grain), electricity,

and heat. After harvesting it can be separated into grain (used for ethanol and DDG

production), sugar juice (used for ethanol production), and bagasse (used to generate

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electricity and heat). Other by-products can be produced such as carbon dioxide from the

fermentation process, paper from bagasse or compost from leaves and roots, Figure 8.

Source: Chiramonti et al. 2004

Figure 8. Graphical Representation of Alternative Processes to Convert Sweet Sorghum to Energy Fuels

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General characteristics of sugarcane, sugar beet, and sweet sorghum are

summarized in Table 5.

Table 5. Comparison of Sugarcane, Sugar beet, and Sweet sorghum Characteristics Sugarcane Sugar beet Sweet sorghum

Crop duration about 12 - 13 months about 5 – 6 months about 4 months

Growing season one season one season all season

Soil requirement grows well in drain soil

grows well in sandy loam; also tolerates alkalinity

all types of drained soil

Water management

requires water throughout the year

(14,600 m3/acre)

less water requirement, 40 – 60% compared to sugarcane

(7,300 m3/acre)

less water requirement; can be grown as rain-fed crop

(5,000 m3/acre)

Crop management requires good management

greater fertilizer requirement; requires moderate management

little fertilizer required; less pest and disease complex; easy management

Yield per acre 25 – 30 tons 30 – 40 tons 20 – 25 tons

Sugar content on weight basis

10 – 12% 15 – 18% 7 – 12%

Sugar yield 2.5 – 4.8 tons/acre 4.5 – 7.2 tons/acre 2 – 3 tons/acre

Ethanol production directly from juice

450 – 720 gallons/acre 740 – 1100 gallons/acre

300 – 440 gallons/acre

Harvesting harvested mechanically

harvested

mechanically

very simple; both manual and through mechanical harvested

Source: Almodares & Hadi 2009; Prasad et al 2007

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GRAIN SORGHUM

Introduction

Grain sorghum (Sorghum bicolor L. Moench) is known with a variety of names:

great millet and guinea corn in West Africa, kafir corn in South Africa, dura in Sudan,

mtama in eastern Africa, jowar in India and kaoliang in China (Purseglove 1972). In the

USA sorghum is usually referred to as milo, which belongs to the tribe Andropogonae of

the grass family Poaceae (FAO 1991). Sorghum is a genus with many species and

subspecies; with several types of sorghum, including grain sorghums (for food), grass

sorghums (for pasture and hay), sweet sorghums (for syrup), and Broomcorn. Similar to

corn, sorghum uses the C4 malate cycle. This is the most efficient form of photosynthesis

and also has greater water use efficiency than C3 plants. Grain sorghum needs less water

than corn, so it is likely to be grown as a replacement to corn and can produce better

yields than corn in hotter and drier areas. Because of sorghum’s high water-use efficiency

and drought tolerance ability it can be successfully grown in a wide range of

environments like hot and dry subtropical and tropical regions. However, under optimal

conditions, grain yield potential of sorghum is equal to or greater than other cereal grain

yields, except corn (Rooney et al. 2007).

Importance and Uses

Grain sorghum is the fifth leading cereal crop in the world after corn, wheat, rice,

and barley, and also the third most important cereal crop grown in the USA. The United

States is the world’s largest producer of grain sorghum followed by India and Nigeria.

Sorghum is a leading cereal grain produced in Africa and one of the important food

sources in India. The leading exporters of grain sorghum are the USA, Australia and

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Argentina (U. S. Grains Council 2010). Sorghum grain constitutes the main food source

for over 750 million people who live in the semi-arid tropics of Africa, Asia, and Latin

America. Globally over half of all sorghum produced is used for human consumption

(FAO 2007; National Sorghum Producers 2006). Grain sorghum has the potential to offer

the best opportunity to satisfy the doubling demand for food in the developing world by

2020, by providing food for the poor and an alternative to corn for feed and food (Harlan

and de Wet 1972; Maunder 2005).

For the year 2005, total annual sorghum grain production was 58.6 million MT

from approximately 44.7 million ha. This represents an average yield of 1.31 MT/ha

(FAOSTAT 2006). The largest acreages of grain sorghum are centered in Sub-Saharan

Africa and India, where it plays a vital role of providing food grain, feed grain and

forage, and is even used as a fuel source (combustion) in industry. The highest average

sorghum grain yields are produced in countries like the USA, Mexico, Argentina, and

Australia where commercial agriculture has adopted sorghum hybrids and conditions are

more favorable to production. Presently, almost all the ethanol production plants in the

USA depend on starch conversion, primarily from corn grain. However, grain sorghum

can also be used as a starch source for the production of ethanol. Commercial ethanol

plants located in sorghum production regions in the USA can depend on sorghum as their

primary starch source (Rooney et al. 2007).

According to the USDA’s November, 2009 crop production report; corn

contributes 95.6 percent of the nation’s total feed grain production with 2.7 percent from

grain sorghum. From the national perspective, it is clear that corn will remain the

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dominant feedstock for starch-based ethanol production plants, because it has greater

production potential than sorghum (Wisner 2009). However, certain parts of the U.S. can

use grain sorghum as an alternative feedstock for ethanol production due to the

availability of grains at low cost.

SWITCHGRASS

Introduction

Switchgrass (Panicum virgatum L.) is a perennial warm-season grass, native to

North America. It is a vigorous bunchgrass that grows throughout most of the United

States. It can adapt well to a variety of soil and climatic conditions. Switchgrass is most

productive on moderately well to well-drained soils of medium fertility with a soil pH at

5.0 or above (Garland 2008). With an extensive root system the plant can reach heights

up to 10 feet. Once established, switchgrass well-managed for biomass production should

have a productive life of 10-20 years. Within the stand, switchgrass is an extremely

strong competitor. However, it is not considered as an invasive plant (Garland 2008).

Importance and Uses

Switchgrass can act as exceptional forage for pasture and hay for livestock. It also

provides excellent cover for wildlife populations and seeds are a quality food source for

game birds. Switchgrass is most abundant and plays an important role as a forage and

pasture grass in the central and southern Great Plains.

Switchgrass has been identified as a promising bioenergy feedstock since the

1980s through the studies conducted by the US Department of Energy (DOE). It has been

under investigation in Canada as a bioenergy crop since 1991 (Samson 2007). It has been

researched in the United States as a mid-summer forage crop since 1940 and is most

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commonly used for livestock forage in the south-central states. In the 1990’s it was

widely used in the Conservation Reserve Program (CRP) in the United States. To

enhance its erosion control and biodiversity value it is now recommended in the latest

Conservation Reserve Enhancement Program (CREP) to be used in mixtures with other

warm-season grasses (Samson 2007). Switchgrass, a perennial herbaceous plant, is being

evaluated as a cellulosic bioenergy crop (Schmer et al. 2007). Due to the high cellulosic

content of switchgrass it is a candidate as a feedstock for ethanol production. It is

estimated that it has the ability to yield adequate biomass to produce approximately 500

gallons of ethanol per acre (Garland 2008).

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CHAPTER III

MATERIALS AND METHODS

This study focuses on analyzing the economic feasibility of three ethanol

production methods in the Texas Panhandle Region: 1) starch to ethanol, 2) sugar to

ethanol, and 3) cellulose to ethanol. Since there is no market for sweet sorghum or

switchgrass in the Texas Panhandle Region, it is not possible to determine a price

directly. It is necessary to base the analysis on the final demand for ethanol. It is then

possible to estimate the maximum price that a rational processor would be willing to pay

for the feedstock input by subtracting the farm-to-wholesale marketing margin from the

final demand price to get the derived demand price for the feedstock used in the

production of ethanol. Total gross income from the production of the feedstock is then

calculated by measuring the yield per acre in gallons of ethanol produced by the

feedstock and multiplying by the derived demand price. The feasibility of ethanol

production from each feedstock is then determined by subtracting the total production

cost per acre from the gross income per acre to determine the return over specified costs

and economic return.

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The study area includes the top 26 counties of the Texas collectively known as the

Texas Panhandle, Figure 9. The area is in a rectangular shape bordered by New Mexico

to the west and Oklahoma to the north and east. The crop growing season averages

between 200 to 217 days per year. The average annual rainfall averages between 17 to

20.5 inches.

Source: Texas County Map 2006

Figure 9. Map of Texas with Panhandle Region indicated in box

Panhandle

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Corn, wheat, and grain sorghum are the important feed grain crops in the Texas

Panhandle. Cotton is the most important fiber crop in this region, Table 6. The five year

average (2005-2009) for harvested acres of corn, wheat, cotton, and grain sorghum in the

26 county area are 643,000 acres, 1,266,800 acres, 436,000 acres, and 357,700 acres

respectively. Average total production for the four major crops are 131,042,000 bushels

of corn, 45,755,250 bushels of wheat, 763,420 bales of cotton, and 21,558,600 bushels of

grain sorghum, Table 6.

Table 6. Harvested acres and Production of major crops: Corn, Wheat, Cotton, and Grain Sorghum in the 26 counties in the Texas Panhandle, 2005 - 2009

Year Corn Wheat

Harvested Production Harvested Production

(1000 acres) (1000 bushels) (1000 acres) (1000 bushels) 2005 559.6 106,543 1,570.3 55,996

2006 523.1 101,202 545.3 14,061

2007 733.4 154,292 1,797.6 79,045

2008 686.7 141,228 1,153.9 33,919

2009 711.9 151,945 - -

Average 643.0 131,042 1,266.8 45,755

Year Cotton Grain Sorghum

Harvested Production Harvested Production

(1000 acres) (bales) (1000 acres) (1000 bushels) 2005 585.5 1,052,700 345.4 22,207

2006 574.2 1,019,700 294.4 14,636

2007 340.2 677,700 396.9 26,121

2008 337.2 503,700 431.2 23,514

2009 342.5 563,300 320.6 21,239

Average 436.0 763,420 357.7 21,559

Source: National Agricultural Statistics Service (2005-09)

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Generally corn is the major starch based feedstock used to produce ethanol in the

United States. High water requirement in the production of corn and the impact of the

increased demand for corn on the price and availability of food are the main concerns that

lead to the search for an alternative starch based feedstock. Sugarcane is the predominant

sugar based feedstock used to produce ethanol in Brazil and the United States. The heavy

water use during the cultivation period and long season requirement of the crop are some

major concerns prompting the search for an alternative sugar based feedstock. Cellulosic

ethanol is considered a second generation biofuel. More research is needed on cellulosic

feedstocks to determine which will be economically feasible in production as well as in

the processing of the final product.

Selection of Feedstock Source

Since many kinds of agricultural products can be converted into ethanol, the

choice of feedstock selection is based on both biological and economic criterion. Since

the price of conventional gasoline fuel in the United States is not yet as high as the world

market price, the development of alternative fuels has been promoted by government

subsidies and research and development grants. Many alternative plant species and

technologies are being researched to determine the potential for alternative fuels.

Characteristics used in the evaluation of alternatives include production cost, selling price

of the main product and byproduct, processing cost, ethanol yield, and availability by

season and region, and procurement cost.

Feedstock suitable for use in ethanol production via fermentation process must

contain starches, sugars, or cellulose that can be readily converted to fermentable sugars.

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Feedstocks are classified into three groups based on their contribution of starches, sugars,

or cellulose which can be used for the production of ethanol (Mathewson 1980; Mother

Earth Alcohol Fuel 1980).

The three groups include:

1) Saccharine (sugar) containing materials in which the carbohydrate is present as

directly fermentable sugar molecules such as glucose, fructose, or maltose. Crops

such as sugarcane, sweet sorghum, sugar beets, and fruits are the major sugar

producing crops.

2) Starchy materials contain complex carbohydrates. These carbohydrates must be

broken down into fermentable sugars by hydrolysis with acid or enzymes. Crops

such as grains, potatoes, and artichokes are the major starch producing crops.

3) Cellulosic materials contain a complex form of carbohydrates bonded by a

substance called lignin which must be broken down with acid and enzyme

hydrolysis. Cellulosic materials such as grasses, wood, stover, waste material,

paper, and straw are the major source of cellulose.

This study considers grain sorghum as a starch based ethanol, sweet sorghum as a

sugar based ethanol, and switchgrass as a cellulose based feedstock to evaluate the

economic feasibility of ethanol production in the Texas Panhandle Region. These have

been selected because of their characteristic of low water requirement compared to corn

or sugarcane and characteristic of shorter growing periods than other crops.

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Current Situation of Selected Feedstocks Production

According to the USDA crop production reports, Texas is the second largest

producer of grain sorghum in the United States with 101.2 million bu., Figure 10. It can

be processed into ethanol with the same type of facility that converts corn grain into

ethanol (Wisner 2009). Also the co-product from grain sorghum ethanol, called distillers

grain soluble (DGS), is considered to be equal with corn DGS in value. A new highly

efficient ethanol plant typically has an annual capacity to produce about 100 million

gallons of ethanol. At that volume of output, a single plant takes approximately 35 to 36

million bushels of grain.

Source: Wisner 2009

Figure 10. Grain Sorghum Production by State, 2009

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Potential of Selected Feedstocks in Panhandle

The choice of feedstock used to produce ethanol is based primarily on the

availability, potential, and cost of alternative feedstock crops in the region. Presently corn

is the predominant feedstock being used in the ethanol production process. Corn accounts

for approximately 97 percent of the total ethanol produced in the United States.

Grain sorghum is an important grain crop in the Texas Panhandle Region. It can

be grown under both irrigation and dryland conditions, Table 7. Average harvested acres

of irrigated grain sorghum in the 26 counties in the Texas Panhandle Region for 2005-

2009 is 104,600 acres. Average total grain production under irrigation is 9,358,000

bushels, Table 7. Average harvested acres of dryland grain sorghum are 154,480 acres

with an average total grain production of 6,811,000 bushels.

Table 7. Irrigated and Dryland Grain sorghum Acreages and Production in the top 26 Counties in the Texas Panhandle, 2005-2009

Year

Acres harvested (1,000) Production (1000 bu.)

Irrigated Dryland Irrigated Dryland

2005 104.6 192.7 9,205 10,116

2006 110.6 163.4 9,178 4,676

2007 166.9 194.5 15,447 8,843

2008 54.3 91.8 4,389 3,924

2009 86.5 130.0 8,572 6,495

Average 104.6 154.48 9,358 6,811

Source: National Agricultural Statistics Service (2005-09)

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There are no published statistics reporting the production of either sweet sorghum

or switchgrass in the Texas Panhandle. Sweet sorghum and switchgrass production is in

the experimental stage in the Texas Panhandle and surrounding region. Switchgrass is

included in trials at the TAMU research stations at Etter, Texas, and at the New Mexico

State University research centers at Tucumcari, New Mexico, and at Roswell, New

Mexico. Sweet sorghum is included in trials at the TAMU research station at Bushland,

Texas; and at the New Mexico State University research program at Clovis, New Mexico.

Yield levels of selected feedstocks in the Texas Panhandle Region used in the

analysis are irrigated grain sorghum 134 bushels/acre and dryland grain sorghum 36

bushels/acre, Table 8. Switchgrass yields under irrigated and dryland condition are 4.4

dry tons/acre and 1.4 dry tons/acre respectively. Sweet sorghum yields under irrigated

and dryland condition are 25 wet tons/acre and 12.35 wet tons/acre, respectively.

Table 8. Yields of Selected Feedstocks used in the analysis for the Texas Panhandle Region (Appendix B-Table 1 and 2)

Feedstock Yield/acre

Irrigated Dryland

Grain sorghum 134 bushels 36 bushels

Switchgrass 4.4 dry tons 1.4 dry tons

Sweet sorghum 25 wet tons 12.35 wet tons

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Price of Ethanol

The state price of ethanol varies from $1.65 to $2.15 / (E-100) gallon in the

United States (Kment 2010). The average price of ethanol in the United States is about

$1.80 / (E-100) gallon. Day to day fluctuation in the price of ethanol depends on

changing prices of raw inputs and alternative products. The price of ethanol varies

between different states depending on the level of state subsidy to produce ethanol and

the economic feasibility of ethanol production.

The current, June 2010, prices of ethanol are: Texas $1.81, Oklahoma $1.82,

Kansas $1.71 and Colorado $1.78 / (E-100) gallon (Kment 2010). The profitability of

ethanol production is highly variable. Due to the volatile nature of the ethanol price and

prices of the feedstock inputs, its profitability can change rapidly from month to month.

In addition the price variations of ethanol by-products such as distillers dried grains with

soluble (DDGS), stillage, heat, electricity, and natural gas adds to the variability in

ethanol profits.

Feedstock Requirement

It takes one bushel of sorghum grain to produce about 2.9 gallons of ethanol

(Trostle 2008). At this conversion rate a 20 MGPY plant would need 6.9 million bushels

of grain to operate. A 60 MGPY plant would need 20.7 million bushels of grain and a

100 MGPY plant would need 34.5 million bushels of grain, Table 9.

It takes one ton of sweet sorghum fresh stalks to produce about 8.7 gallons of

ethanol (Bean et al. 2009; Marsalis 2010). At this conversion rate a 20 MGY plant would

need 2.3 million tons of fresh stalks to operate. A 60 MGY plant would need 6.9 million

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tons of fresh stalks and a 100 MGY plant would need 11.5 million tons of fresh stalks,

Table 9.

It takes one ton of dried switchgrass to produce about 78 gallons of ethanol

(Holcomb and Kenkel 2008). At this conversion rate a 20 MGY plant would need

256,410 tons of dried switch grass to operate. A 60 MGY plant would need 769,230 tons

of dried switch grass and a 100 MGY plant would need 1.3 million tons of dried switch

grass, Table 9.

Table 9. Feedstock requirements of the three basic feedstocks for 20, 40, 60, 80, and 100 MGY processing facilities Plant Size Bushels of Grain Tons of Sweet sorghum Tons of Switchgrass

20 MGPY 6,900,000 2,300,000 256,410

40 MGPY 13,800,000 4,600,000 512,820

60 MGPY 20,700,000 6,900,000 769,230

80 MGPY 27,600,000 9,200,000 1,025,641

100 MGPY 34,500,000 11,500,000 1,282,051

Note: Grain sorghum - 2.9 gallons ethanol per bushel (Source: Trostle 2008) Sweet sorghum - 8.7 gallons ethanol per fresh wet ton biomass (Source: Bean et al. 2009; Marsalis 2010) Switchgrass - 78 gallons ethanol per dry ton biomass (Source: Holcomb and Kenkel 2008)

Irrigated and dryland acres of feedstocks required to operate 20, 40, 60, 80, and

100 MGY ethanol processing facilities in the Texas Panhandle Region are summarized in

Table 10. Required acres of grain sorghum, sweet sorghum, and switchgrass to operate 20

MGY processing facility are 51,493 acres, 92,000 acres, and 58,275 acres under irrigated

condition and 191,667 acres, 186,235 acres, and 183,150 acres under dryland condition

respectively. Required acres of grain sorghum, sweet sorghum, and switchgrass to

operate 60 MGY processing facility are 154,478 acres, 276,000 acres, and 174,825 acres

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under irrigated condition and 575,000 acres, 558,704 acres, and 549,450 acres under

dryland condition respectively. Required acres of grain sorghum, sweet sorghum, and

switchgrass to operate 100 MGY processing facility are 257,463 acres, 460,000 acres,

and 291,375 acres under irrigated condition and 958,333 acres, 931,174 acres, and

915,751 acres under dryland condition respectively.

Table 10. Irrigated and dryland acres of feedstock requirement for 20, 40, 60, 80, and 100 MGY ethanol processing facilities

Plant size Grain sorghum Sweet sorghum Switchgrass

Irrigated Dryland Irrigated Dryland Irrigated Dryland

20 MGPY 51,493 191,667 92,000 186,235 58,275 183,150

40 MGPY 102,985 383,333 184,000 372,470 116,550 366,300

60 MGPY 154,478 575,000 276,000 558,704 174,825 549,450

80 MGPY 205,970 766,667 368,000 744,939 233,100 732,601

100 MGPY 257,463 958,333 460,000 931,174 291,375 915,751

Farm-to-Wholesale Marketing Margin

The Farm-to-Wholesale Marketing Margin includes all of the cost associated with

the conversion of alternative feedstocks from the farm to get the final product ethanol.

These costs include administrative, capital, transportation, pretreatment, pressing,

fermentation, distillation, and storage costs and return on investment. The processing cost

per gallon of ethanol produced will increase with an increase in any of the sub-costs of

processing.

Processing costs vary with the technology and type of feedstock. In this study

three types of feedstock: 1) grain sorghum as a starch based, 2) switchgrass as cellulose

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based, and 3) sweet sorghum as a sugar based feedstock were considered.

This study assumes a dry-milling method to convert starch based feedstock grain

sorghum into ethanol. The Estimated Farm-to-Wholesale Marketing Margin to produce

ethanol from grain sorghum using 100 million gallons per year facility is $0.5706/gallon

of ethanol, Table 11. Chemical costs and fixed costs are the major portion of processing

costs in starch based ethanol production.

Table 11. Estimated Farm-to-Wholesale Marketing Margin for Grain Sorghum in the Production of Ethanol using a 100MGY Processing Facility

Processing Input Cost per gallon ($) Cost per bushel ($)

Chemicals and other costs:

Enzymes 0.0550 0.1595 Chemical: process & antibiotics 0.0225 0.0653 Chemical: boil & cook 0.0060 0.0174 Denaturants 0.0500 0.1450 Yeasts 0.0250 0.0725 Repairs & Maintenance 0.0150 0.0435 Transportation 0.0075 0.0218 Water 0.0123 0.0357 Electricity 0.0450 0.1305 Other 0.0200 0.0580 Total Chemical and Other Costs 0.2583 0.7491 Fixed Costs: Depreciation 0.1174 0.3405 Interest 0.0726 0.2105 Labor & Management 0.0206 0.0597 Property Taxes 0.0017 0.0049 Total Fixed Costs 0.2123 0.6156 Profit Margin 0.1000 0.2900 Total Cost 0.5706 1.6547 Note: 2.9 gallons ethanol produced per bushel grain Source: Hofstrand 2010

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An enzymatic hydrolysis method is selected as the methodology to convert

cellulose based feedstock switchgrass into ethanol. The Estimated Farm-to-Wholesale

Marketing Margin for switchgrass is based on a 56 million gallons per year facility, Table

12. The Estimated Farm-to-Wholesale Marketing Margin per gallon of ethanol from

cellulosic feedstock is $0.9108.

Table 12. Estimated Farm-to-Wholesale Marketing Margin for Switchgrass in the Production of Ethanol using a 56MGY Processing Facility Processing Input Cost per gallon ($) Cost per ton ($)

Clarifier polymer 0.0080 0.62

Sulfuric acid 0.0108 0.84

Hydrated lime 0.0219 1.71

Corn Steep liquor 0.0256 2.00

Purchased cellulose 0.1394 10.87

Ammonium Phosphate 0.0030 0.23

Makeup water 0.0085 0.66

Boiler chemicals 0.0003 0.02

Cooling tower chemicals 0.0005 0.04

Waste water chemicals 0.0027 0.21

Waste water polymer 0.0001 0.01

Interest cost 0.1000 7.80

Insurance & property tax 0.0500 3.90

Depreciation cost 0.3400 26.52

Administrative & other costs 0.1000 7.80

Profit Margin 0.1000 7.80

Total cost 0.9108 71.04 Note: 78 gallons of ethanol produced per ton of Switchgrass Source: Holcomb and Kenkel 2008

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Since sweet sorghum processing plants are in the developmental stage no direct

data is available. Therefore, the processing budget for sweet sorghum is based on a sugar

cane plant producing 40 million gallons per year, Table 13. The Estimated Farm-to-

Wholesale Marketing Margin per gallon for sweet sorghum to produce ethanol is $1.06.

Table 13. Estimated Farm-to-Wholesale Marketing Margin for Sweet Sorghum in the Production of Ethanol using a 40MGY Processing Facility Processing Input Cost per gallon ($) Cost per ton ($)

Cane processing 0.18 1.56

Administrative costs 0.10 0.87

Ethanol processing 0.28 2.43

Denaturant 0.08 0.69

Capital costs 0.11 0.96

Depreciation 0.21 1.83

Profit Margin 0.10 0.87

Total cost 1.06 9.22 Note: 8.7 gallons of ethanol produced per fresh wet ton of sweet sorghum stalk Source: Outlaw et al. 2007

Estimated Derived Demand Price for Feedstock

The Estimated Derived Demand Price per gallon of ethanol for each feedstock is

obtained by subtracting the Farm-to-Wholesale Marketing Margin per gallon from the

wholesale price of ethanol. Given the current price of ethanol in Texas is $1.81/gallon,

subtracting the Farm-to-Wholesale Marketing Margin of $0.5706 leaves a Derived

Demand Price of $1.24 per gallon of ethanol produced using grain sorghum, Table 14.

The Derived Demand Price for switchgrass in the production of ethanol is $0.90. The

Derived Demand Price for sweet sorghum in the production of ethanol is $0.75.

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Table 14. Farm-to-Wholesale Marketing Margin and Derived Demand Price for three feedstocks in the Production of Ethanol

Feedstock source

Farm-to-Wholesale

Marketing Margin ($ per gallon)

Derived Demand Price per gallon of

ethanol ($)

Derived Demand Price per unit of

feedstock ($)

Grain sorghum 0.5706 1.2394 3.60/bushel

Switchgrass 0.9108 0.8992 70.14/ton

Sweet sorghum 1.0600 0.7500 6.53/ton

Current Production Costs of Feedstock

Maximizing potential profit from the farm operation is the economic goal of a

rational farmer. Selection of the optimal combination of crops, livestock, and other value

added products that will maximize profits is the primary managerial function. Land,

labor, capital, technology and management skills are some of the resources available to

farmers. These resources are combined to produce amounts of the feedstock that can

generate maximum profit.

The objective of this study is to evaluate the economic feasibility of ethanol

production from the three alternative ethanol production methodologies from sweet

sorghum, grain sorghum, and switchgrass in the Texas Panhandle Region. The

profitability of ethanol production from these three alternative methodologies is a

function of crop yield, production costs, processing costs, output and prices.

Estimated grain sorghum production costs per acre are $413.35 and $141.66

under irrigated and dryland conditions respectively, Table 15. The estimated production

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cost of sweet sorghum and switchgrass are $462.70 and $349.05 respectively under

irrigated condition and $193.07 and $102.32 respectively under dryland condition.

Table 15. Estimated Feedstock Production Cost per Acre in Texas Panhandle Region (Appendix A)

Feedstock source Irrigated ($)

Dryland ($)

Grain sorghum 413.35 141.66

Sweet sorghum 462.71 193.07

Switchgrass 349.05 102.32

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CHAPTER IV

RESULTS AND DISCUSSION

Concern over high fuel prices, volatility in fuel prices, and dependence on foreign

oil to meet energy demand in the United States has led to interest in development of

alternative renewable fuels. This study, as part of the USDA-ARS Initiative, Ogallala

Aquifer Program, evaluates the economic feasibility of three ethanol production

methodologies for the Texas Panhandle. The three technologies are starch based ethanol,

sugar based ethanol, and cellulose based ethanol. Agricultural feedstocks selected to

represent the three technologies include grain sorghum, sweet sorghum, and switchgrass

respectively.

Since there is no market for sweet sorghum or switchgrass in the Texas Panhandle

direct estimate of market price is not possible. Therefore, it is necessary to base the

estimate on the final demand for ethanol and then subtract the Farm-to-Wholesale

Marketing Margin to get an estimate of the Derived Demand Price for the feedstock used

to produce ethanol.

Grain Sorghum

Although there is a market price for grain sorghum at the farm level available, the

derived demand price for sorghum in the production of ethanol is estimated so that all

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alternatives follow the same protocol. Starting with the Final Demand Price for ethanol of

$1.81 per gallon in Texas, the Farm-to-Wholesale Marketing Margin of $0.57 is

subtracted to obtain the maximum farm level Derived Demand Price for grain sorghum of

$1.23. Given the price of ethanol of $1.81, this is the maximum price that a rational

processor would be willing to pay for the amount of grain sorghum needed to produce

one gallon of ethanol, Table 10.

Evaluations are performed for both irrigated grain sorghum production and

dryland grain sorghum production. Production levels are determined from the five year

average yield per acre for grain sorghum in the Texas Panhandle multiplied by the

conversion rate of 2.9 gallons of ethanol obtained from a bushel of grain sorghum.

Production costs and input prices are obtained from the 2010 planning budgets developed

by the Texas AgriLife Extension Service for District1.

The irrigated grain sorghum alternative yield of 134 bushels per acre converts to

an ethanol production of 388.6 gallons per acre. Given the maximum Derived Demand

Price per gallon of ethanol of $1.23, this corresponds to a Total Gross Income of $477.98

per acre. Total Specified Expenses, Appendix A-Table 1, are $413.35 per acre.

Subtracting Total Specified Expenses from Total Gross Income gives a net return of

$64.63 per acre. In order to determine the economic return to all resources, Irrigated Cash

Rent of $110 per acre is subtracted. The economic return to Irrigated Grain Sorghum

production for the production of ethanol is -$45.37, Table 16.

The dryland grain sorghum alternative yield of 36 bushels per acre converts to an

ethanol production of 104.4 gallons per acre. Given the maximum Derived Demand Price

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per gallon of ethanol of $1.23, this corresponds to a Total Gross Income of $128.41 per

acre. Total Specified Expenses, Appendix A-Table 2, are $141.66 per acre. Subtracting

Total Specified Expenses from Total Gross Income gives a net return of -$13.25 per acre.

In order to determine the economic return to all resources, Dryland Cash Rent of $25 per

acre is subtracted. The economic return to Dryland Grain Sorghum production for the

production of ethanol is -$38.25, Table16.

Table 16. Grain sorghum yield and economic returns per acre

Grain sorghum Yield Ethanol Economic returns

(bushels/acre) (gallons/acre) ($/acre)

Irrigated 134 388.6 -45.37 Dryland 36 104.4 -38.25

Sweet Sorghum

Since there is no market for sweet sorghum at the farm level, the Derived Demand

Price for sweet sorghum in the production of ethanol is estimated. Starting with the Final

Demand Price for ethanol of $1.81 per gallon in Texas, the Farm-to-Wholesale Marketing

Margin of $1.06 is subtracted to obtain the maximum farm level Derived Demand Price

for sweet sorghum of $0.75. Given the price of ethanol of $1.81, this is the maximum

price that a rational processor would be willing to pay for the amount of sweet sorghum

needed to produce one gallon of ethanol, Table 12.

Evaluations are performed for both irrigated sweet sorghum production and

dryland sweet sorghum production. Production levels are determined from the average

ethanol yield per acre reported by the experimental trials at Bushland, Texas and Clovis,

New Mexico, Appendix B-Table 1. Production costs and input prices are based on 2010

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63

planning budgets developed by the Texas AgriLife Extension Service for District1 which

are modified to reflect the input levels and cultural practices reported for the

experimental trials.

The irrigated sweet sorghum alternative has a yield of 216.7 gallons of ethanol per

acre. Given the maximum Derived Demand Price per gallon of ethanol of $0.75, this

corresponds to a Total Gross Income of $162.53 per acre. Total Specified Expenses,

Appendix A-Table 3, are $462.71 per acre. Subtracting Total Specified Expenses from

Total Gross Income gives a net return of -$300.18 per acre. In order to determine the

economic return to all resources, Irrigated Cash Rent of $110 per acre is subtracted. The

economic return to Irrigated Sweet Sorghum production for the production of ethanol is

-$410.18, Table 17. This considers only the value of the ethanol produced as no values

have been established for the bagasse byproduct for the Texas Panhandle.

The dryland sweet sorghum alternative has a yield of 97.3 gallons of ethanol per

acre. Given the maximum Derived Demand Price per gallon of ethanol of $0.75, this

corresponds to a Total Gross Income of $72.98 per acre. Total Specified Expenses,

Appendix A-Table 4, are $193.07 per acre. Subtracting Total Specified Expenses from

Total Gross Income gives a net return of -$120.09 per acre. In order to determine the

economic return to all resources, Dryland Cash Rent of $25 per acre is subtracted. The

economic return to Dryland Sweet Sorghum production for the production of ethanol is

-$145.09, Table 17.

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64

Table 17. Sweet sorghum yield and economic returns per acre

Sweet sorghum Yield Ethanol Economic returns (fresh wet tons/acre) (gallons/acre) ($/acre)

Irrigated 25.00 216.7 -410.18

Dryland 12.35 97.3 -145.09

Switchgrass

Since there is no market for switchgrass at the farm level, the derived demand

price for switchgrass in the production of ethanol is estimated. Starting with the Final

Demand Price for ethanol of $1.81 per gallon in Texas, the Farm-to-Wholesale Marketing

Margin of $0.9108 is subtracted to obtain the maximum farm level Derived Demand

Price for switchgrass of $0.90. Given the price of ethanol of $1.81, this is the maximum

price that a rational processor would be willing to pay for the amount of sweet sorghum

needed to produce one gallon of ethanol, Table 11.

Evaluations are performed for both irrigated switchgrass production and dryland

switchgrass production. Production levels are determined from the average ethanol yield

per acre reported by the experimental trials at Etter, Texas and Tucumcari, New Mexico,

Appendix B-Table 2. Production costs and input prices are based on 2010 planning

budgets developed by the Texas AgriLife Extension Service for Districts 6 and 10 which

are modified to reflect the input levels and cultural practices reported for the

experimental trials and input prices and adjusted cultural practices reported for District1.

The irrigated switchgrass alternative has a yield of 343.2 gallons of ethanol per

acre. Given the maximum Derived Demand Price per gallon of ethanol of $0.90, this

corresponds to a Total Gross Income of $308.88 per acre. Total Specified Expenses,

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65

Appendix A-Table 5, are $349.05 per acre. Subtracting Total Specified Expenses from

Total Gross Income gives a net return of -$40.17 per acre. In order to determine the

economic return to all resources, Irrigated Cash Rent of $110 per acre is subtracted. The

economic return to Irrigated Switchgrass production for the production of ethanol is

-$150.17, Table 18.

The dryland switchgrass alternative has a yield of 109.2 gallons of ethanol per

acre. Given the maximum Derived Demand Price per gallon of ethanol of $0.90, this

corresponds to a Total Gross Income of $98.28 per acre. Total Specified Expenses,

Appendix A-Table 6, are $102.32 per acre. Subtracting Total Specified Expenses from

Total Gross Income gives a net return of -$4.04 per acre. In order to determine the

economic return to all resources, Dryland Cash Rent of $25 per acre is subtracted. The

economic return to Dryland Switchgrass production for the production of ethanol is

-$29.04, Table 18.

Table 18. Switchgrass yield and economic returns per acre

Switchgrass Yield Ethanol Economic returns

(dry tons/acre) (gallons/acre) ($/acre)

Irrigated 4.4 343.2 -150.17

Dryland 1.4 109.2 -29.04

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CHAPTER V

CONCLUSIONS AND SUGGESTIONS

Rising energy costs, increasing demand for energy, instability in oil exporting

countries, and concerns for the environment stimulate interest in fuels such as ethanol. As

gasoline prices continue to increase and more pressure is put on the government to invest

in or encourage production of alternative fuels, farmers, businesses, cooperatives, and

investors have shown more interest in the feasibility of producing ethanol.

Most of the studies analyzing the feasibility of producing ethanol concentrated on

corn in an array of geographical locations. The economic feasibility of ethanol production

from grain sorghum, sweet sorghum, and switchgrass have not been adequately tested in

the Texas Panhandle.

The evaluation in this study demonstrates that ethanol production from selected

alternative feedstocks: grain sorghum, sweet sorghum, and switchgrass in the Texas

Panhandle Region is not economically feasible given the current price for ethanol in

Texas. Economic returns of grain sorghum, sweet sorghum and switchgrass under

irrigated condition are -$45.37, -$410.18, and -$150.17 and under dryland condition are

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67

-$38.25, -$145.09, and -$29.04 respectively. This is consistent with the status of the

ethanol industry in the Texas Panhandle. An increase in the price of ethanol would seem

to justify a reevaluation of the economic feasibility; however since any increase in the

price of ethanol would occur only with an increase in the prices of energy inputs to the

production process, the economic feasibility is not assured. Decrease in production cost

and increase in productivity may present possibilities for achieving an economic

feasibility.

Sufficient information is not available to evaluate these crop alternatives as water

saving cropping alternatives for the Texas Panhandle. Research to determine the

production per acre at various level of water application is needed to determine the

optimal level of irrigation to apply to these crops. Reevaluation of these alternative

ethanol production alternatives should be done when more research information is

available.

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APPENDIX A

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Table 1. Estimated Costs and Returns per Acre-Grain Sorghum, Center Pivot Irrigated (NG) 2010, Panhandle-TX

Items Unit Price / unit Quantity Total Derived demand price of Feedstock/Gal. Ethanol gallons 1.23 388.600 477.98 Total Gross Income 477.98

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total Seed lb 1.70 5.000 8.50 Fertilizer Fertilizer (N) - ANH3 lb 0.22 65.000 14.30

Fertilizer (P) – Liquid lb 0.51 50.000 25.50

Fertilizer (N) – Liquid lb 0.32 60.000 19.20 Custom fert appl (ANH3) acre 11.00 1.000 11.00

herb&appl acre 23.65 1.000 23.65

insect&appl acre 14.50 0.330 4.79

harvest &haul bu 0.49 134.000 65.66 Crop Insurance Sorghum Irrigated acre 21.00 1.000 21.00 Operator Labor Implements hour 10.80 0.323 3.48

Tractors hour 10.80 0.422 4.55 Hand labor Implements hour 10.80 0.153 1.65 Irrigation Labor Center Pivot NG hour 10.80 0.896 9.68 Diesel fuel Tractors gallon 2.05 2.344 4.81 Gasoline Pick up gallon 2.36 2.010 4.74 Natural Gas Center Pivot ac-in 6.75 14.000 94.50 Repair and Maintenance Implements acre 5.75 1.000 5.75

Tractors acre 4.75 1.000 4.75

Pick up acre 0.16 1.000 0.16

LEPA ac-in 2.03 14.000 28.42

Interest on Operating Capital acre 7.80 1.000 7.80 Total Variable Cost (Direct Expenses)

363.89

Returns above Direct Expenses

114.09 Fixed Expenses

Implements acre 8.80 1.000 8.80

Tractors acre 6.82 1.000 6.82

Self-Propelled Eq. acre 0.24 1.000 0.24

Center Pivot acre 33.60 1.000 33.60 Total Fixed Expenses

49.46

Total Specified Expenses

413.35

Returns above Total specified Expenses

64.63 Allocated Cost Items

Irrigated Land Cash Rent acre 110.00 1.000 110.00 Residual Returns(Economic Returns)

-45.37

Source: Amosson et al. 2009

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Table 2. Estimated Costs and Returns per Acre-Grain Sorghum, Dryland 2010, Panhandle-TX

Items Unit Price / unit Quantity Total Derived Demand Price of Feedstock/Gal. Ethanol gallons 1.23 104.400 128.41 Total Gross Income 128.41

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total Seed lb 1.70 2.250 3.83 Fertilizer

Fertilizer (N) - ANH3 lb 0.22 30.000 6.60

Custom

fert appl (ANH3) acre 11.00 1.000 11.00

herb&appl acre 18.00 1.000 18.00

insect&appl acre 14.50 0.330 4.79

custom harv-sorgh dry acre 20.00 1.000 20.00

cust haul-sorgh dry bu 0.22 36.000 7.92

Crop Insurance

Sorghum Dryland acre 20.00 1.000 20.00

Operator Labor

Implements hour 10.80 0.157 1.69

Tractors hour 10.80 0.441 4.76

Hand labor

Implements hour 10.80 0.310 3.35

Diesel fuel

Tractors gallon 2.05 2.451 5.02

Gasoline

Self-Propelled Eq. gallon 2.36 2.010 4.74

Repair and Maintenance

Implements acre 5.81 1.000 5.81

Tractors acre 5.02 1.000 5.02

Self-Propelled Eq. acre 0.16 1.000 0.16

Interest on Operating Capital acre 2.84 1.000 2.84

Total Variable Cost (Direct Expenses) 125.54

Returns above Direct Expenses 2.87

Fixed Expenses

Implements acre 8.66 1.000 8.66

Tractors acre 7.22 1.000 7.22

Self-Propelled Eq. acre 0.24 1.000 0.24

Total Fixed Expenses 16.12 Total Specified Expenses 141.66

Returns above Total specified Expenses -13.25

Allocated Cost Items

Dryland Cash Rent acre 25.00 1.000 25.00 Residual Returns (Economic Returns) -38.25

Source: Amosson et al. 2009

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Table 3. Estimated Costs and Returns per Acre-Sweet Sorghum, Center Pivot Irrigated (NG) 2010, Panhandle-TX

Items Unit Price / unit Quantity Total Derived Demand Price of Feedstock/Gal. Ethanol gallons 0.75 216.700 162.53 Total Gross Income 162.53

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total Seed lb 3.40 6.500 22.10 Fertilizer Fertilizer (N) - ANH3 lb 0.22 225.000 49.50

Fertilizer (P) - Liquid lb 0.51 40.000 20.40 Custom fert appl (ANH3) acre 6.00 1.000 6.00

herb&appl acre 6.00 1.000 6.00

insect&appl acre 14.50 0.330 4.79

harvest &haul acre 102.70 1.000 102.70 Crop Insurance Sorghum Irrigated acre 21.00 1.000 21.00 Operator Labor Implements hour 10.80 0.364 3.93

Tractors hour 10.80 0.515 5.56 Hand labor Implements hour 10.80 0.212 2.29 Irrigation Labor Center Pivot hour 10.80 0.576 6.22 Diesel fuel Tractors gallon 2.05 2.462 5.05 Gasoline Pick up gallon 2.36 2.010 4.74 Natural Gas Center Pivot ac-in 6.75 15.750 106.31 Repair and Maintenance Implements acre 4.47 1.000 4.47

Tractors acre 5.55 1.000 5.55

Pick up acre 0.16 1.000 0.16

LEPA ac-in 2.03 15.750 31.97

Interest on Operating Capital acre 4.94 1.000 4.94 Total Variable Cost (Direct Expenses) 413.68

Returns above Direct Expenses -251.16 Fixed Expenses Implements acre 7.14 1.000 7.14

Tractors acre 8.05 1.000 8.05

Self-Propelled Eq. acre 0.24 1.000 0.24

Center Pivot acre 33.6 1.000 33.60 Total Fixed Expenses 49.03 Total Specified Expenses 462.71

Returns above Total Specified Expenses -300.19 Allocated Cost Items Irrigated Land Cash Rent acre 110.00 1.000 110.00

Residual Returns (Economic Returns) -410.19

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Table 4. Estimated Costs and Returns per Acre-Sweet Sorghum, Dryland 2010, Panhandle-TX

Items Unit Price / unit Quantity Total

Derived Demand Price of Feedstock/Gal. Ethanol gallons 0.75 97.300 72.98

Total Gross Income 72.98

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total

Seed lb 0.32 30.000 9.60

Fertilizer

nitrogen dry lb 0.50 80.000 40.00

phospate lb 0.40 40.000 16.00

Misc Admin O/H

mis admin o/h past acre 4.00 1.000 4.00

Custom

harvest &haul acre 50.94 1.000 50.94

Operator Labor

Tractors hour 10.80 1.347 14.55

Diesel fuel

Tractors gallon 2.05 5.909 12.11

Gasoline

Pick up, 3/4 ton gallon 2.36 0.910 2.15

Repair and Maintenance

Implements acre 4.47 1.000 4.47

Tractors acre 5.55 1.000 5.55

Pick up, 3/4 ton acre 1.00 1.000 1.00

Interest on Operating Capital acre 10.04 1.000 10.04

Total Variable Cost (Direct Expenses) 170.41

Returns above Direct Expenses -97.43

Fixed Expenses

Implements acre 6.15 1.000 6.15

Tractors acre 13.51 1.000 13.51

Pick up, 3/4 ton acre 3.00 1.000 3.00

Total Fixed Expenses 22.66

Total Specified Expenses 193.07

Returns above Total specified Expenses -120.09

Allocated Cost Items

Dryland Cash Rent acre 25.00 1.000 25.00

Residual Returns (Economic Returns) -145.09

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Table 5. Estimated Costs and Returns per Acre-Switchgrass, Center Pivot Irrigated (NG) 2010, Panhandle-TX

Items Unit Price / unit Quantity Total

Derived Demand Price of Feedstock/Gal. Ethanol gallons 0.90 343.200 308.88 Total Gross Income 308.88

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total Fertilizers N-32 in water lb 0.10 20.000 2.00

Urea, solid (46% N) lb 0.21 45.000 9.46 Herbicides 2,4 - D Amine 4 oz 0.12 40.000 4.80 Operator Labor Tractors hour 10.80 0.973 10.51

Self-Propelled hour 10.80 0.880 9.50 Irrigation Labor NG hour 10.80 0.064 0.70 Hand labor Special Labor hour 10.80 0.140 1.51

Implements hour 10.80 0.056 0.61 Diesel fuel Tractors gallon 2.05 4.689 9.61

Self-Propelled gallon 2.05 4.800 9.84 Natural Gas NG ac-in 6.75 14.700 99.23 Repair and Maintenance Implements acre 0.83 1.000 0.83

Tractors acre 1.21 1.000 1.21

Self-Propelled acre 2.84 1.000 2.84

NG ac-in 2.03 14.700 29.84

Interest on Operating Capital acre 3.52 1.000 3.52

Total Variable Cost (Direct Expenses) 196.01

Returns above Direct Expenses 112.87

Fixed Expenses Implements acre 4.94 1.000 4.94

Tractors acre 8.16 1.000 8.16

Self-Propelled Eq. acre 5.73 1.000 5.73

NG each 10619.74 0.008 88.14

Switchgrass establishment acre 46.06 1.000 46.06 Total Fixed Expenses 153.03 Total Specified Expenses 349.05

Returns above Total specified Expenses -40.17 Residual Items Irrigated Land Cash Rent acre 110.00 1.000 110.00 Residual Returns (Economic Returns) -150.17

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Table 6. Estimated Costs and Returns per Acre-Switchgrass, Dryland 2010, Panhandle-TX

Items Unit Price / unit Quantity Total

Derived Demand Price of Feedstock/Gal. Ethanol gallons 0.90 109.200 98.28

Total Gross Income 98.28

Variable Cost Description (Direct Expenses) Unit Price / unit Quantity Total

Fertilizers

Urea, solid (46% N) lb 0.21 45.000 9.46

Herbicides

2,4 - D Amine 4 oz 0.12 40.000 4.80

Operator Labor

Tractors hour 10.80 0.973 10.51

Self-Propelled hour 10.80 0.880 9.50

Hand labor

Special Labor hour 10.80 0.140 1.51

Implements hour 10.80 0.056 0.61

Diesel fuel

Tractors gallon 2.05 4.689 9.61

Self-Propelled gallon 2.05 4.800 9.84

Repair and Maintenance

Implements acre 0.83 1.000 0.83

Tractors acre 1.21 1.000 1.21

Self-Propelled acre 2.84 1.000 2.84

Interest on Operating Capital acre 2.93 1.000 2.93

Total Variable Cost (Direct Expenses) 63.66

Returns above Direct Expenses 34.62

Fixed Expenses

Implements acre 4.94 1.000 4.94

Tractors acre 8.16 1.000 8.16

Self-Propelled Eq. acre 5.73 1.000 5.73

Switchgrass establishment acre 19.83 1.000 19.83

Total Fixed Expenses 38.66 Total Specified Expenses 102.32

Returns above Total specified Expenses -4.04

Residual Items

Dryland Cash Rent acre 25.00 1.000 25.00

Residual Returns (Economic Returns) -29.04

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APPENDIX B

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Table 1. Yield of Sweet Sorghum and Ethanol Produced per Acre from TAMU Experiment Station at Bushland, TX and NMSU Experiment Station at Clovis, New Mexico, 2008-2009

Sweet sorghum Irrigated Dryland

Bushland Clovis Mean Bushland Clovis Mean

Fresh weight (T/A) 21.50 28.30 24.90 7.00 17.70 12.35

Brix value 14.30 15.60 14.95 17.36 17.20 17.28

Sugar@65% (T/A) 1.17 1.59 1.38 0.47 0.82 0.65

Ethanol@65% (Gal/A) 182.40 251.00 216.70 68.60 126.00 97.30

Sugar@95% (T/A) 1.71 - - 0.69 - -

Ethanol@95% (Gal/A) 270.30 - - 104.00 - -

Seasonal precipitation (inch) 8.50 14.10 11.30 8.50 13.30 10.90

Irrigation (ac-inch) 22.80 8.70 15.75 5.30 0.00 -

Note: T/A = Tons/Acre, Gal/A = Gallons/Acre, 65% = 65% Juice recovery, 95% = 95% Juice recovery Source: Bean et al. 2009, Marsalis 2010 Table 2. Yield of Switchgrass and Ethanol Produced per Acre from TAMU Experiment Station at Etter, TX and NMSU Experiment Station at Tucumcari, New Mexico, 2009

Switchgrass

Blackwell Switchgrass

Full Limited Dryland

Etter Tucumcari Mean

Yield (DT/A) 4.90 3.90 4.40 2.50 1.40

Ethanol (Gal/A) 382.20 304.20 343.20 195.00 109.20

Precipitation (inch) 5.82 - 5.82 - 5.82

Irrigation (ac-inch) 14.70 - 14.70 - 0.00

Note: DT/A = Dry Tons/Acre, Gal/A = Gallons/Acre Source: Buttrey et al. 2009, Lauriault 2010

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APPENDIX C

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Table 1. Corn-Acreage Planted, Acreage Harvested, Yield per Harvested Acre and Total Production for 26 Counties in the Texas Panhandle, (2005-2008)

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2008 2008 2008 2008

Armstrong *

Briscoe *

Carson 23.3 22.3 193 4,305

Castro 130.8 108.8 221 24,015

Childress *

Collingsworth *

Dallam 129.3 124.6 186 23,138

Deaf Smith 41.3 25.3 189 4,776

Donley *

Gray *

Hall *

Hansford 49.4 45.7 223 10,210

Hartley 115.5 106 210 22,250

Hemphill *

Hutchinson 15.9 14 202 2,826

Lipscomb *

Moore 60.2 54.3 224 12,145

Ochiltree 20.4 20.4 229 4,670

Oldham *

Parmer 86.6 67.3 184 12,385

Potter *

Randall *

Roberts *

Sherman 84.7 75.7 221 16,692

Swisher 22.5 22.3 171 3,816

Wheeler *

Total

686.7

141,228

Note: * = No production data

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Table 1. Continued…

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2007 2007 2007 2007

Armstrong 1 1 194 194

Briscoe 1.1 1.1 136 150

Carson 21.3 21.3 218 4,652

Castro 125 110.1 215 23,628

Childress *

Collingsworth *

Dallam 131.7 129 198 25,550

Deaf Smith 34.9 25.5 196 5,000

Donley 1.5 1.5 197 295

Gray 6.9 6.9 206 1,420

Hall *

Hansford 51.2 47.8 196 9,383

Hartley 126.4 119.1 221 26,307

Hemphill *

Hutchinson 14.7 14.2 219 3,116

Lipscomb 4.4 4.4 199 875

Moore 63.8 61.7 223 13,758

Ochiltree 22.6 22.6 207 4,680

Oldham *

Parmer 82.1 62.1 202 12,520

Potter *

Randall *

Roberts *

Sherman 85.9 81 221 17,928

Swisher 24.4 24.1 201 4,836

Wheeler *

Total

733.4

154,292

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Table 1. Continued…

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2006 2006 2006 2006

Armstrong *

Briscoe 1.7 1.5 189 283

Carson 9.8 9.7 171 1,662

Castro 78.6 63.2 203 12,819

Childress *

Collingsworth *

Dallam 130.3 124.4 182 22,680

Deaf Smith 23.2 14.2 162 2,306

Donley 1 1 155 155

Gray 4.5 4 174 695

Hall *

Hansford 33.1 27.9 184 5,129

Hartley 110 96.3 208 20,063

Hemphill *

Hutchinson 11.3 10.1 198 2,000

Lipscomb 2.3 2.3 179 412

Moore 50.7 48.1 198 9,502

Ochiltree 14.8 14.6 193 2,817

Oldham *

Parmer 68.2 32.4 188 6,083

Potter *

Randall *

Roberts 1.7 1.7 198 336

Sherman 68.4 61.4 198 12,131

Swisher 11.5 10.3 207 2,129

Wheeler *

Total

523.1

101,202

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89

Table 1. Continued…

Acreage (In 1,000) Yield per harvested

acre (bushels) Production

(1,000 bushels) County Planted Harvested

2005 2005 2005 2005

Armstrong *

Briscoe 5 4.6 105.9 487

Carson 9.5 9.4 187.9 1,766

Castro 86.7 69.9 205.4 14,356

Childress *

Collingsworth *

Dallam 126.5 122 177.5 21,651

Deaf Smith 32.6 26.7 159.9 4,269

Donley 1.1 1.1 141.8 156

Gray 4.6 3.8 176.8 672

Hall *

Hansford 32 28.4 189.9 5,394

Hartley 114.4 102.5 196.4 20,135

Hemphill *

Hutchinson 9.8 9.5 208.8 1,984

Lipscomb 3.6 3.6 182.5 657

Moore 52.5 51.3 197.1 10,110

Ochiltree 16.7 16.2 229.4 3,716

Oldham *

Parmer 45.2 30.3 184.8 5,600

Potter *

Randall 1.5 0.3 193.3 58

Roberts 1.9 1.9 208.4 396

Sherman 69.7 64.1 195.4 12,527

Swisher 15.7 14 186.4 2,609

Wheeler *

Total

559.6

106,543

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90

Table 2. Cotton-Acreage Planted, Acreage Harvested, Yield per Harvested Acre and Total Production for 26 Counties in the Texas Panhandle, (2005-2008)

Acreage (In 1,000)

Production

(bales) County Planted Harvested

Yield per harvested acre (pounds)

2008 2008 2008 2008

Armstrong *

Briscoe 29.9 26.5 730 40,300

Carson 32.6 28.1 752 44,000

Castro 25 19 740 29,300

Childress 38 21.6 620 27,900

Collingsworth 39.3 34.3 585 41,800

Dallam *

Deaf Smith 12.1 6.6 727 10,000

Donley 11.7 10 792 16,500

Gray 14.1 12.4 631 16,300

Hall 76 54.9 550 62,900

Hansford 5.7 5.1 913 9,700

Hartley *

Hemphill *

Hutchinson *

Lipscomb *

Moore 11.3 9.6 755 15,100

Ochiltree 5.6 5.6 1,071 12,500

Oldham *

Parmer 26.9 17.6 927 34,000

Potter *

Randall 1.5 1 720 1,500

Roberts *

Sherman 14.7 14.3 896 26,700

Swisher 68.6 62 801 103,500

Wheeler 9.2 8.6 653 11,700

Total

337.2

503,700

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91

Table 2. Continued…

Acreage (In 1,000)

Production

(bales) County Planted Harvested

Yield per harvested acre (pounds)

2007 2007 2007 2007

Armstrong *

Briscoe 24.9 23 1,023 49,000

Carson 25 24.6 1,044 53,500

Castro 26.5 23.9 1,225 61,000

Childress *

Collingsworth 46 45.3

864 81,500

Dallam *

Deaf Smith 13.1 11.2 900 21,000

Donley 10.1 10.1 950 20,000

Gray 11.2 11 864 19,800

Hall 80 80 744 124,000

Hansford 4 3.1 697 4,500

Hartley *

Hemphill *

Hutchinson 3 3 1,120 7,000

Lipscomb *

Moore 11.4 10.8 1,200 27,000

Ochiltree 6.1 5.3 598 6,600

Oldham *

Parmer 23.8 16.9 1,307 46,000

Potter *

Randall 1.7 1.6 720 2,400

Roberts *

Sherman 15.8 14 1,063 31,000

Swisher 54.3 48.7 1,078 109,400

Wheeler 8.6 7.7 873 14,000

Total

340.2

677,700

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Table 2. Continued…

Acreage (In 1,000)

Production

(bales) County

Planted Harvested Yield per harvested acre (pounds)

2006 2006 2006 2006

Armstrong 5.1 3 832 5,200

Briscoe 41.1 28 665 38,800

Carson 45.5 37.2 662 51,300

Castro 83.8 74.5 1,075 166,800

Childress 50.7 24.5 419 21,400

Collingsworth 62.9 55 675 77,400

Dallam 1.5 1.5 704 2,200

Deaf Smith 54.6 27.8 924 53,500

Donley 14.5 8.5 1,045 18,500

Gray 25.3 17.6 589 21,600

Hall 84.6 53.4 509 56,600

Hansford 7.8 7.8 763 12,400

Hartley 11 11 1,095 25,100

Hemphill *

Hutchinson 3.5 3.5 1,248 9,100

Lipscomb 1.3 0.9 587 1,100

Moore 32.4 30.9 861 55,400

Ochiltree 11.4 11.2 733 17,100

Oldham *

Parmer 77.9 75.8 1,211 191,200

Potter *

Randall 3.7 2.1 846 3,700

Roberts 1 0.8 960 1,600

Sherman 23.7 23.3 1,265 61,400

Swisher 93.3 66.1 862 118,700

Wheeler 10.6 9.8 470 9,600

Total

574.2

1,019,700

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93

Table 2. Continued…

Acreage (In 1,000) Yield per harvested

acre (pounds) Production

(bales) County Planted Harvested

2005 2005 2005 2005

Armstrong 4.4 2.7 800 4,500

Briscoe 35.8 26.8 736 41,100

Carson 41.9 40 817 68,100

Castro 74.7 68 1,091 154,600

Childress 47.6 47.6 605 60,000

Collingsworth 52.6 52.4 797 87,000

Dallam *

Deaf Smith 40.5 27.3 1,007 57,300

Donley 12.4 11.9 766 19,000

Gray 19.7 14 768 22,400

Hall 85 84.5 636 112,000

Hansford 4.4 4.3 1,049 9,400

Hartley 7.9 7.7 979 15,700

Hemphill *

Hutchinson 2.4 2.4 880 4,400

Lipscomb *

Moore 26.8 26.4 1,038 57,100

Ochiltree 7.8 7.8 849 13,800

Oldham *

Parmer 80.2 65.2 1,163 158,000

Potter *

Randall 4 2.2 764 3,500

Roberts 1.3 1.3 849 2,300

Sherman 12.6 12.2 999 25,400

Swisher 86 71 818 121,000

Wheeler 10.5 9.8 789 16,100

Total

585.5

1,052,700

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Table 3. Wheat-Acreage Planted, Acreage Harvested, Yield per Harvested Acre and Total Production for 26 Counties in the Texas Panhandle, (2005-2008)

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2008 2008 2008 2008

Armstrong 61.1 36.1 15.5 554

Briscoe 44.3 23.3 24 559

Carson 87.5 57.1 19 1,072

Castro 163 61.8 45.5 2,825

Childress 45 26.9 25 667

Collingsworth 52 28.6 20 575

Dallam 128 93.7 38.5 3,608

Deaf Smith 199 80.5 27 2,156

Donley 14.5 9.3 25.5 235

Gray 46.2 36.3 24 878

Hall *

Hansford 213.5 88.6 26 2,321

Hartley 92.5 56 43 2,395

Hemphill 13.5 8.2 23 190

Hutchinson 75 31.4 23 717

Lipscomb 24.3 17 27.5 468

Moore 127.5 60.9 35 2,130

Ochiltree 182 152.1 24.5 3,693

Oldham 42.2 9.7 15.5 151

Parmer 184.5 79.6 34.5 2,766

Potter 15.4 3.5 20.5 72

Randall 106.5 35.9 15 546

Roberts 7.9 5.2 20 104

Sherman 142.5 89.1 41 3,637

Swisher 157.5 52 26 1,364

Wheeler 22.1 11.1 21.5 236

Total

1153.9

33,919

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Table 3. Continued….

Acreage (In 1,000)

Production

(1,000 bushels) County Planted Harvested

Yield per harvested acre (bushels)

2007 2007 2007 2007

Armstrong 67.7 47.9 41 1,970

Briscoe 47.5 28.7 33 938

Carson 101.5 87.1 46 3,966

Castro 180.3 98.9 45 4,453

Childress 47.4 30.5 31 945

Collingsworth 42.2 18.4 29 532

Dallam 112.8 102.1 50 5,108

Deaf Smith 249.2 191.9 41 7,918

Donley 14.8 9.7 36 350

Gray 52.9 41.8 42 1,751

Hall 11.6 4.1 44 179

Hansford 234.4 194.1 45 8,811

Hartley 95.4 70.8 52 3,695

Hemphill 14.8 10.3 31 315

Hutchinson 77.5 63.9 44 2,842

Lipscomb 31.2 18.1 36 658

Moore 134.6 104 47 4,921

Ochiltree 196.8 172.2 49 8,396

Oldham 43.9 29.2 29 854

Parmer 197.5 132.2 46 6,033

Potter 18.6 12.2 32 388

Randall 110.1 89.1 39 3,484

Roberts 10.2 8.7 38 332

Sherman 163.1 122.6 45 5,553

Swisher 176.2 98.1 45 4,366

Wheeler 22.8 11 26 287

Total

1797.6

79,045

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Table 3. Continued….

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2006 2006 2006 2006

Armstrong 54.7 14.7 19 272

Briscoe 33.6 9 14 129

Carson 80.4 21.4 16 350

Castro 169.2 51.8 38 1,986

Childress 39 5.4 18 96

Collingsworth 31.7 3.4 10 35

Dallam 122.4 58.5 34 1,994

Deaf Smith 180.7 41.7 27 1,120

Donley 11 1.1 18 20

Gray 37.8 8.8 13 117

Hall 11.8 2.1 12 26

Hansford 223 54.4 21 1,130

Hartley 88.6 40.3 23 942

Hemphill 13.1 3.5 27 96

Hutchinson 71 15.4 24 365

Lipscomb 28.7 10.9 29 316

Moore 104.3 16.7 28 475

Ochiltree 180.3 66.5 21 1,419

Oldham 39.5 4.6 18 83

Parmer 187.7 48.1 29 1,398

Potter 16.4 1.3 19 25

Randall 96.8 7.2 25 180

Roberts 11.6 3.1 17 52

Sherman 143.9 34.6 30 1,034

Swisher 163.2 17.9 21 367

Wheeler 25.1 2.9 12 34

Total

545.3

14,061

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Table 3. Continued….

Acreage (In 1,000)

Yield per harvested acre (bushels)

Production (1,000 bushels) County Planted Harvested

2005 2005 2005 2005

Armstrong 53 34.2 23.4 800

Briscoe 38.7 14.2 26.3 374

Carson 87 80 34 2,720

Castro 163 74 42.6 3,155

Childress 39.2 22.7 26.2 595

Collingsworth 40.8 18.2 22.2 404

Dallam 129 94 48.7 4,575

Deaf Smith 194 134 36 4,830

Donley 15.1 6.8 30.4 207

Gray 47.1 30.9 30.9 955

Hall 14.6 2.8 18.2 51

Hansford 223 183 32 5,855

Hartley 94 76 47.8 3,635

Hemphill 16.5 5.5 25.5 140

Hutchinson 74 48 30.4 1,460

Lipscomb 35.5 24.1 29.3 705

Moore 105 92 34.7 3,195

Ochiltree 178 168 36.5 6,130

Oldham 40.3 30.8 27.5 846

Parmer 187 136 44.7 6,080

Potter 16.5 13 28.9 376

Randall 107.5 49 23.3 1,140

Roberts 13.4 9.4 25 235

Sherman 169 135 35.3 4,770

Swisher 157 82 31.7 2,600

Wheeler 29.4 6.7 24.3 163

Total

1,570.3

55,996

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98

Table 4. Grain Sorghum-Acreage Planted, Acreage Harvested, Yield per Harvested Acre and Total Production for 26 Counties in the Texas Panhandle, (2005-2008)

Acreage (In 1,000) Yield per harvested

acre (bushels) Production

(1,000 bushels) County Planted Harvested

2008 2008 2008 2008

Armstrong 20.1 19 55 1,040

Briscoe *

Carson 40.5 38.4 42 1,606

Castro 51.2 39.9 52 2,090

Childress *

Collingsworth 14.4 13.5 47 638

Dallam 11.8 8.4 62 523

Deaf Smith 89 61.7 44 2,735

Donley *

Gray *

Hall *

Hansford 27.7 24.4 66 1,604

Hartley 16.7 14.9 71 1,056

Hemphill *

Hutchinson 8.4 6.9 63 437

Lipscomb 5.3 4.5 84 377

Moore 32.1 27.7 76 2,100

Ochiltree 40.2 37.6 58 2,191

Oldham 15.8 9.1 32 294

Parmer 61.6 55.2 63 3,460

Potter *

Randall *

Roberts *

Sherman 22.7 17.6 71 1,252

Swisher 57.4 49.4 40 2,000

Wheeler 3.1 3 37 111

Total

431.2

23,514

Page 111: Economic Feasibility of Ethanol Production - Thesis (PDF)

99

Table 4. Continued….

Acreage (In 1,000)

Production

(1,000 bushels) County Planted Harvested

Yield per harvested acre (bushels)

2007 2007 2007 2007

Armstrong 18.6 15.9 65 1,036

Briscoe 19.1 14.9 53 784

Carson 34.5 32.7 60 1,954

Castro 45.2 30.1 60 1,816

Childress 8.1 4.4 37 161

Collingsworth *

Dallam 14 12.6 54 678

Deaf Smith 72.5 47.2 59 2,799

Donley *

Gray 17.2 15 65 979

Hall *

Hansford 19 13.5 49 657

Hartley 15.4 13 67 875

Hemphill *

Hutchinson 5.3 3.6 55 197

Lipscomb *

Moore 34.1 32.2 91 2,925

Ochiltree 41.9 41 61 2,520

Oldham 12.4 9.5 34 325

Parmer 53.5 46 88 4,067

Potter *

Randall 21.4 12.4 66 814

Roberts *

Sherman 18.9 16.1 82 1,321

Swisher 39.4 34.7 61 2,101

Wheeler 2.6 2.1 53 112

Total

396.9

26,121

Page 112: Economic Feasibility of Ethanol Production - Thesis (PDF)

100

Table 4. Continued….

Acreage (In 1,000) Yield per harvested

acre (pounds) Production (1,000 cwt) County Planted Harvested

2006 2006 2006 2006

Armstrong 22.9 10.9 1,568 174

Briscoe 7.8 3.3 2,688 89

Carson 40.2 28.5 2,576 742

Castro 31.6 10.6 3,360 359

Childress *

Collingsworth *

Dallam 24 18 1,960 354

Deaf Smith 85.9 44.7 2,072 927

Donley 1.5 0.5 1,008 5

Gray 12 7.6 2,408 183

Hall *

Hansford 36.4 27.3 2,912 795

Hartley 10 7.9 5,320 422

Hemphill *

Hutchinson 10.3 6.7 1,904 126

Lipscomb 3.9 2.8 3,864 109

Moore 31.2 17.9 4,480 804

Ochiltree 51.8 36.2 3,080 1,105

Oldham 15.7 3.8 2,128 80

Parmer 30.9 18.9 3,640 685

Potter 1.8 1 3,360 34

Randall 19.8 6.4 2,632 168

Roberts *

Sherman 27.6 21.1 3,136 668

Swisher 29.6 18.9 1,736 332

Wheeler 2.2 1.4 2,520 35

Total

294.4 Cwt 8,196

Total Bushels 14,635.71

Page 113: Economic Feasibility of Ethanol Production - Thesis (PDF)

101

Table 4. Continued….

Acreage (In 1,000)

Production (1,000 cwt)

County Planted Harvested Yield per harvested

acre (pounds)

2005 2005 2005 2005

Armstrong 20.7 20.2 3,312 669

Briscoe 12.6 10.1 3,772 381

Carson 31.9 31.1 2,916 907

Castro 21.7 12.4 4,153 515

Childress *

Collingsworth *

Dallam 15.3 14.3 3,552 508

Deaf Smith 64.3 45.2 3,878 1,753

Donley 2 2 2,700 54

Gray 16.1 14.5 3,621 525

Hall *

Hansford 27.8 23.2 2,767 642

Hartley 11.6 11.4 4,026 459

Hemphill *

Hutchinson 8.7 6.5 3,292 214

Lipscomb 4.2 4.2 3,024 127

Moore 22.2 18.9 4,550 860

Ochiltree 45.2 42.3 3,740 1,582

Oldham 11.9 10 2,820 282

Parmer 35.8 27.2 4,088 1,112

Potter 3 2.4 2,792 67

Randall 16.4 11.9 3,025 360

Roberts *

Sherman 17.6 13.4 3,836 514

Swisher 25.7 23.1 3,792 876

Wheeler 1.7 1.1 2,636 29

Total

345.4

Cwt 12,436

Total Bushels 22,207.14