1. Bio-Fuels Project & Industry Introduction Dr. Dawne Martin College of Business July 25, 2012

2. Agenda Project Over – Review Timeline Bio-fuels Industry Drivers – Types of Bio-Mass Used Business Issues in Bio-Fuels Researching Bio-fuels – Sara Kearns, Undergraduate Library Coordinator

3. Identify Bio-Fuel Input June 29, 2011 Overview of the Industry July 5, 2011 Agriculture & Business Issues July 12, 2011 July 19, 2011 Engineering Issues Conclusions about the future July 20, 2011 July 25, 2011 Complete Posters Poster Presentations July 27, 2011 Bio-Fuels Project Timeline

4. Why Are Bio-Fuels Important?

5. Forecast of World Oil Production The Oil Drum, World Oil Production Forecast, May 2009, http:www.oildrum.com/node/5395

6. Petroleum (oil) production peaks between 2014 -2018 not 2030 Supply won’t meet demand in 2015 Climate change on release of CO 2 Hazards of drilling, transporting & refining oil

7. World biofuels Production Millons Tonnes Oil Equivalent Global biofuels production stagnated, rising by just 0.7% or 10,000 barrels per day oil equivalent(b/doe), the weakest annual growth since 2000. Growth in the US (+55,000 b/doe, or 10.9%) slowed as the share of ethanol in gasoline approached the ‘blendwall’, and Brazilian output had the largest decline in our data set (-50,000 b/doe, or -15.3%) due to a poor sugar harvest

8. World Biofuels Production Million tonnes oil equivalent Source: BP Report on Renewable Energy, http://www.bp.com

9. Identify three business related problems with Bio-Fuels

10. Bio-Fuels Supply Chain National BioFuels Action Plan, Oct. 2008. http://www1.eere.energy.gov/biomass/pdfs/nbap.pdf

11. Bio-Fuels Industry Drivers Economic - Price of oil - Cost of capital -Cost of production - Cost of production facilities - Transportation costs - Channels of distribution Technological - New technologies to increase efficiency of process - New inputs Social & Culture - Concern about the environment - Concern about global warming - Green attitudes in general Natural Resources - Land use - Co 2 uptake - Water use - Fertilizer production Political & Legal -Biofuels targets set by US -Biofuels subsidies by federal & state government - CO 2 cap & trade program

12. Some Examples of Business Issues Supply – Will the biomass be available at a reasonable price? Is there enough to meet production demands. Costs – Biomass inputs – Processing – Storage & Transportation Scalability – Can you scale up production enough to reduce costs and meet demand Transportation – Can you put the finished product in a pipeline?

13. Issues (cont.) Profitability – demand, tax incentives, penalties (need to purchase carbon credits) Marketing Accounting – How to account for variations in the cost of inputs, processes and transportation. Environmental impact? Consumer perceptions – Will consumers be adverse to using animal waste? Getting the product to the customer – Is there a way to get the product to the customer? Who will distribute the product? How?

14. Bio-refinery Locations Source: Renewable Fuels Association: Climate of Opportunity, 2010 Ethanol Industry Outlook.

15. Types of Bio-Mass Used

16. US Distribution of Bio-Mass Corps Source: interestingenergyfacts.blogspot.com/2008

17. Web Resources Sciencedaily.com Department of Energy – http://www.eere.energy.gov/topics/biomass.html Renewable Fuels Association Trade and Industry Associations Alternative-energy-news.info

18. Project Interdisciplinary groups of 3 -4 will be assigned Each group will investigate and report on one input for bio-fuels Use internet research, industry tours and panel discussion to gather information Be sure to document (or cite) your information sources Three bio-fuel afternoon sessions to develop your poster and presentation Report will be a poster presentation on Wednesday, July 27, 1:30 – 3:30 pm

19. Project Outline Overview of the industry as a whole – Current products produced – Size and Growth rate of the industry in dollars and output – Driving factors in the external environment – what is affecting this industry? Economic – economic growth, interest rates, number of cars sold Social, cultural and demographic trends – environmental awareness, population growth and more affluent people in China and India requiring more energy Political & legal – restrictions on emissions, subsidies for bio-fuels or for oil and gas Technological advances and changes – changes in technology for both creating bio-fuels and for powering transportation and other uses Natural resources – oil reserves, issues with crops, feeding the world Define the bio-fuels applications for this input – How is the bio-fuel used? Automobiles? Trucks? Energy generation?

20. Project Outline (cont.) What are the agricultural, natural resource and sustainability implications of producing bio-fuel from this input? – Crop modifications, requirements and implications for resources and food stocks – Placement of plants relative to growing areas – Issues of water, run-off and land use What are the engineering and environmental issues associated with producing, distributing and using this product? – Engineering challenges of producing and using the bio-fuel – Special engineering requirements for each input type. – Future developments

21. Project Outline (cont.) What are the business considerations for producing and marketing this product? – Capital requirements – Market(s) for this product – Issues in developing channels of distribution and transportation of the product – Competitors and competitive advantage – New business opportunities What are your conclusions about the future of using your bio-mass “input” for producing bio-fuels? Will this be a good alternative to oil and gas? Is it economically viable? Will the production heavily affect food availability? Are there unintended consequences, for example, excessive water use or pollution.