1. Southeastern Regional Center Tennessee Agricultural Experiment Station Agricultural Policy Analysis Center ● The University of Tennessee ● 310 Morgan Hall ● Knoxville, TN 37996-4519 www.agpolicy.org ● phone: (865) 974-7407 ● fax: (865) 974-7298 Tennessee Biofuels Initiative April 3-4, 2007 Jackson, TN Cookeville, TN Dr. Kelly Tiller UT Extension Agent Training Bioenergy Production in Agriculture University of Tennessee … leading the Southeast in biomass research, education, and outreach APCA

2. Southeastern Regional Center Tennessee Agricultural Experiment Station Transportation Fuel Focus Today, 97% of our transportation fuel comes from petroleum sources

3. Southeastern Regional Center Tennessee Agricultural Experiment Station Our Comparative Advantage Logging & Residues Switchgrass Switchgrass (2014, at $50/dt) Ugarte, et al. 2006 (forthcoming). Economic Implications to the Agricultural Sector of Increasing the Production of Biomass Feedstocks to Meet Biopower, Biofuels and Bioproduct Demands. Perlack, R.D., et al. 2005. Biomass as Feedstock for a Bioenergy and Bioproducts Industry: Technical Feasibility of a Billion-Ton Annual Supply.

4. Southeastern Regional Center Tennessee Agricultural Experiment Station TN Bioeconomy Vision Produce & consume at least 1 billion gallons of cellulosic ethanol, at $1.20 per gallon wholesale 10+ new biorefineries operating in Tennessee, employing 4,000 and supporting 12,000 rural jobs –At least 4 of the biorefineries owned and operated by local farmer cooperatives, retaining an additional $40 million in local communities Satellite co-product plants creating an additional 3,000 jobs and $2 billion in revenue More than 20 thousand farmers growing dedicated energy crops, adding $100 million in new farm revenue

5. Southeastern Regional Center Tennessee Agricultural Experiment Station Chicken-or-egg-first problem Sufficient, economical, sustainable sources of cellulose material Efficient, profitable, low-risk fuel production capacity Stable, sufficient, local demand for renewable biofuels

6. Southeastern Regional Center Tennessee Agricultural Experiment Station Cellulosic Ethanol: Good to Go We can make lignocellulosic ethanol today –Proven at a laboratory scale –For $3.00/gallon or more (> double corn-to-ethanol cost) There are no commercial facilities operating in the U.S. today –Abengoa facility near completion in Spain, expected to produce 54 MGY from wheat straw –Small Iogen test plant running on wheat straw in Canada –DOE announced $385 million to fund 6 commercial cellulosic ethanol plants Abengoa, Colwich KS, ag residues & switchgrass, 11.4 mgy ($76m) ALICO, LaBelle FL, yard & wood waste, energycane, 13.9 mgy ($33m) BlueFire Ethanol, Corona CA, landfill green & wood waste, 24 mgy ($40m) Broin ({Poet), Emmetsburg IA, corn stover, 26.4 mgy ($80m) Iogen, Idaho Falls ID, primarily wheat straw, 18 mgy ($80m) Range Fuels, Soperton GA, wood residues & woody biomass crops, 40 mgy ($76m) Making cellulosic ethanol economically feasible is a major part of the President’s Biofuels Initiative –DOE projects cellulosic ethanol at $1.07/gallon by 2012

7. Southeastern Regional Center Tennessee Agricultural Experiment Station The Issue At Hand Sufficient, economical, sustainable supply of cellulosic raw material (biomass) Efficient, profitable, low-risk fuel production capacity Sufficient, stable, local demand for alternative liquid fuels Simultaneous Development

8. Southeastern Regional Center Tennessee Agricultural Experiment Station Building the Bioeconomy A key driver in propelling the biofuels industry forward is the successful construction and operation of cellulosic biorefineries to demonstrate the technology and improve the economics

9. Southeastern Regional Center Tennessee Agricultural Experiment Station The Tennessee Biofuels Initiative Construct a demonstration-scale cellulosic ethanol facility in Tennessee –Utilize 170 tons per day of locally produced switchgrass and wood –Work with partner industries to generate 5 million gallons of ethanol annually for local distribution –Refine the process for local resources to reduce costs, improve process, scale up to commercial –Deploy the model throughout the state

10. Southeastern Regional Center Tennessee Agricultural Experiment Station Research Facility Siting Proximity to researchers (UT and ORNL) Availability of feedstock Transportation infrastructure Not intended to ever be a commercial facility Depends on requirements of technology partner

11. Southeastern Regional Center Tennessee Agricultural Experiment Station The Cellulosic Ethanol Process 1. Preprocessing: Wood chips and switchgrass are delivered for storage, grinding, drying, and classification. 2. Pretreatment: A solvent fractionation process is used to separate the chemical components of the biomass (this step is specific to lignocellulosics). 3. Hydrolysis: Enzymes are used to break down the carbohydrates to their fermentable sugars (5C & 6C) 4. Fermentation & Distillation: Yeast converts the sugars to ethanol (or related alcohols), and water is removed to further concentrate the product.

12. Southeastern Regional Center Tennessee Agricultural Experiment Station Lignin and solid residue will initially provide heat and energy for the process Product diversification is considered important to economic viability of the biorefinery Research will address development of chemical building blocks and novel, value-added products Coproduct utilization

13. Southeastern Regional Center Tennessee Agricultural Experiment Station Grassoline™ Feedstock Needs Requires 62,000 tons of biomass annually Feed plant 170 tons per day Could be supplied with 8,000 acres of switchgrass Grown by about 200-400 farmers within a 30-50 mile radius of plant Easily supplied by a few surrounding counties From land currently idle or in hay or pasture Without reducing other crop or livestock production Abundant forest biomass readily available within transport range, important for smoothing seasonality of feedstock

14. Southeastern Regional Center Tennessee Agricultural Experiment Station Economic Benefits Each commercial facility: – Directly employs 200 – Supports 1,400 jobs indirectly – Increases Gross State Product by $223 million – Generates $40 million in new tax revenue Ownership of a facility by a local cooperative retains an additional $10 million per year in the local economy For a billion gallons of ethanol production, TN gets: –10,000 to 20,000 new jobs –$400 million dollars in new state & local taxes Cellulosic bioeconomy is an opportunity to: –Create rural jobs, development, and wealth –Keep money in the state that is spent today but currently flows out-of-state

15. Southeastern Regional Center Tennessee Agricultural Experiment Station Project Cost Summary One-time costs include pre-construction, construction, and equipment Plant operates on product sales year 6 and beyond (incl. R&D) Plant reaches 5 mgy capacity in year 3 Year 1 Year 2 Year 3 Year 4 Year 5 Construction Operating Costs Total Annual $40.69 $1.25 $45.69 $ - $2.25 $6.00 $ - $3.50 $7.25 $ - $3.50 $7.25 $ - $3.50 $7.25 Project Total$73 million Farmer Incentives $1.75 Research $2.00 Million $

16. Southeastern Regional Center Tennessee Agricultural Experiment Station Annual operating cost... Estimates derived from corn stover model (National Renewable Energy Laboratory, 2002) Linear scaling was used to adjust for plant volume (70M gal/yr conventional to 5M gal/yr Grassoline™ pilot) Assumes recoveries from product sales are reinvested in R&D Annual Operating Cost Estimate - $5.31M

17. Southeastern Regional Center Tennessee Agricultural Experiment Station Feedstock incentives... Incentive is the difference between “operational” feedstock cost and initial farm price required to establish supply, years 1-5 Assumes farmers initially need $55/ton to establish, requiring $28/ton initial establishment incentive payment The average farmer growing about 20 acres of switchgrass would receive about $3,500 per year in incentive payments in years 1-5 Farmer Switchgrass Incentives - $1.75M Paid in years 1 through 5 totaling - $8.75 M By year 6, switchgrass supplied by farmers at - $27/ton

18. Southeastern Regional Center Tennessee Agricultural Experiment Station A Synergistic Fit Builds on the UT/ORNL partnership Unparalleled capacity for discovery and implementation through science, engineering, and outreach Improves competitiveness of GTL Bioenergy Center Proposal Southeastern Sun Grant Center is hub for regional biofuels/bioproducts research Significant UTIA internal redirecting and expansion in this arena State investments in “green corridors” for ethanol distribution

19. Southeastern Regional Center Tennessee Agricultural Experiment Station A concept to solve America's energy needs and revitalize rural communities with Land Grant University Research, Education, and Extension programs on renewable energy and biobased, non-food industries

20. Southeastern Regional Center Tennessee Agricultural Experiment Station Authorized in the 2002 Farm Bill Includes all Land Grant Universities –Research, Education, Extension Organized at a regional level –Five regional Sun Grant Centers –Designed to facilitate coordination and communication A Research & Collaboration Umbrella

21. Southeastern Regional Center Tennessee Agricultural Experiment Station Regional Sun Grant Programs Competitive grants program within region –Centers 25%, Region 75% At least 30% each for: –Technology development –Technology implementation Initial competitive grant proposals in progress –2-years, $1.8 million –SE received 134 LOI, proposals due 4/30 –Internal RFP expected soon Integrate Federal, Regional, Local priorities

22. Southeastern Regional Center Tennessee Agricultural Experiment Station SE Sun Grant Programs Awarding grant funding throughout the Southeast for biomass R&D&E Strengthening our ties with National Labs through faculty fellowships Developing bioenergy curriculum Developing online educational resources Advancing our core research in biomass and bioenergy

23. Southeastern Regional Center Tennessee Agricultural Experiment Station Sun Grant BioWeb? … an online resource for bioenergy and bioproducts –Feedstocks, biofuels, biopower, bioproducts, biorefineries –Comprehensive and consistent content –Tailored to various audiences –Using best available technology to develop, deliver, and maintain –Easy to use and navigate –Ongoing periodic updates

24. Southeastern Regional Center Tennessee Agricultural Experiment Station BioWeb Is … Complements other online resources –Forest Encyclopedia –BioenergyWiki Limited to biomass Restricted contributions Centrally maintained by SunGrant

25. Southeastern Regional Center Tennessee Agricultural Experiment Station

26. Advanced Search Capabilities

27. Southeastern Regional Center Tennessee Agricultural Experiment Station Click to go to “Agriculture” Level II page Click to go to “Forests” Level II page Click to go to “Wastes” Level II page

28. Southeastern Regional Center Tennessee Agricultural Experiment Station Click to see more about each feedstock

29. Southeastern Regional Center Tennessee Agricultural Experiment Station BioWeb Contents

30. Southeastern Regional Center Tennessee Agricultural Experiment Station bioweb.sungrant.org

31. Biomass Curriculum Developing and testing distance-learning curriculum that will be in the public domain Joint project with NC State and NC A&T 6 M.S. classes, 2 B.S. classes, plus individual special topic lectures –Biomaterials science and characterization –Thermal and biological conversion processes –Solid state composites –Environmental and policy studies

32. Southeastern Regional Center Tennessee Agricultural Experiment Station Scope of UT Biomass Program … farm to feedstock … … to fuels, power, products … … to consumers

33. Southeastern Regional Center Tennessee Agricultural Experiment Station UT Biomass Research Core Biomass conversion technologies Biotechnology & plant genomics Feedstock production systems, pretreatment Biobased materials Economic analysis, policy, logistics

34. Southeastern Regional Center Tennessee Agricultural Experiment Station The opportunity is today! Cellulosic ethanol represents the foundation for a new industry sector with value-added processing of Tennessee raw materials The pilot-scale facility will: –Address the nuances of the feedstock and optimize the process –Enable research to expand the biorefinery products and markets –Resolve regulatory and logistical concerns –Streamline the processing system –Lead the commercial deployment of Tennessee’s bio-based economy