The emerging biorefining industry is dependent on a large and sustainable supply of biomass resources provided at an effective cost and quality. In general, the feedstock cost can be sub­divided into two components: the grower payment (or “stumpage fee” for forest resources) to cover the value of the biomass and the feedstock supply system costs. Feedstock supply system costs include harvesting, collecting, storing, handling, transporting, and any prepro­cessing required. Ultimately, market dynamics will control the grower payment component of the costs, and feedstock supply logistics will dictate supply system costs. Foust and cowork­ers (4) set a target of $35/dry ton (2002 dollars) for the initial deployment of economically viable Phase III biorefineries in the United States, of which $10 was for the grower payment. This is much too low to cover production costs for perennial energy crops. However, consid­ering the 1.3-billion-ton potential, it is estimated that as much as 130 million tons could be accessed for a grower payment of less than or equal to $10/dry ton, primarily from existing agricultural and forestry residues.

As the industry expands from grain ethanol to cellulosic ethanol, it is expected that agri­cultural crop and forest logging residues will be the first resources developed for biorefining. Energy crops will be integrated into the agricultural cropping system as the biorefining in­dustry matures and creates a demand for them. An increase in energy crop production will likely occur as land managers (e. g., farmers and plantation foresters) use the additional crop options provided by the biomass energy market to maximize the productive capacity and economic returns of the land they manage.

The expanding use of lignocellulosic biomass resources will also create a demand for them, resulting in biorefineries paying more to access larger tonnages of the more expensive feedstocks (i. e., resources that require more than a $10/dry ton grower payment). However, feedstock demand will always be limited by the price the biorefining industry can pay while remaining competitive in the ethanol fuel market. Initially, government policies and programs maybe the means to access higher-value feedstocks. Up to and beyond the 2030 time frame, technology advancements will reduce feedstock supply system costs, which will then provide increased purchasing power for biorefineries to access higher-value biomass feedstocks. This strategy of improving supply and conversion technologies to purchase higher-value feedstocks is well established in other processing and refining industries (28). This combination of policy and technology advancement will help develop a biomass resource large enough to support the long-term goals of producing economical biofuels on a large scale.