Use of contour buffer strips in commodity crop systems in southwestern Wisconsin helps reduce soil loss and traps nutrients on slopes. Photo courtesy of Wisconsin Farm Bureau Federation.
Who are bioenergy consumers?
Householders, small businesses, commercial enterprises, corporations, factories, warehouses, and government entities are all consumers of bioenergy? – at least potentially so (figure 1). At the level of the household, individuals and families need electricity, transportation fuel, and heating/cooling to carry out their daily activities. Small businesses and commercial enterprises likewise need electricity, heating/cooling and possibly also transportation fuel to conduct daily economic activities. Corporations require these same energy products to support their offices and workers. Factories and warehouses require vast amount of energy in manufacturing, storage, and logistic activities. Schools, hospitals, and public buildings require energy to operate daily. So essentially we are all consumers of energy, and substantial amounts of our on non-renewable energy? sources (i.e., fossil fuels) can be replaced with renewable bioenergy sources (figure 1).
Consumer influences on the supply chain
Rapid expansion of bioenergy in the U.S. faces several important barriers: feedstock? availability, cellulosic biomass? conversion, transport and end use. End use is where consumers are connected to the bioenergy supply chain (figure 2). Consumer demand for bioenergy products such as biopower? and biofuels acts like a pulling force that brings biomass from the land, through processes of pre-treatment and conversion, and into distribution networks leading to homes, vehicles, offices, factories, warehouses and public buildings.
Bioenergy will reach its potential when energy companies, vehicle manufacturers, service stations, and consumers all have sufficient incentives to embrace bioenergy. Consumer demand could be influenced through public education campaigns, public and public-private investment in a national-level network of biofuel refueling stations, public-private investments in smaller-scale? distributed biopower facilities, and economic incentives for farm-scale and residential-scale bioenergy such as biogas and biomass furnaces.
For further economic and policy analysis, see:
Wisconsin Bioenergy Council
Economics of Biomass Production in the U.S. (ORNL)
University of Illinois Extension
USDA Market News
Chicken-or-egg dilemma
Oil companies, refineries, car manufacturers, electricity companies and others don’t want to invest in new technologies to distribute and utilize bioenergy until there is widespread feedstock supply and widespread demand by consumers. Cellulosic biomass producers don’t want to invest in production until they are sure there is a demand. Similarly, consumers do not want to invest in new technologies until there is some certainty that their investments will pay off. The current situation in bioenergy development and utilization appears to be a real “chicken-or-egg” problem. How to get growers to grow biomass if there’s no market? How do markets arise without growers? How do consumers get access to bioenergy products if potential developers and suppliers are unable or unwilling to take on high risks of market uncertainty? One side will need to move first, and most likely the demand side. Many experts agree that if demand by consumers is there, agricultural production of biomass and biomass conversion industries are capable of ramping-up quickly. Much will depend on oil prices and supportive public policy at national, state and local levels.