Transportation Costs

We assume that the ethanol production facility will be located to minimize the cost of transporting feedstock materials. Studies suggest that distances greater than 40-50 miles become unprofitable for utilizing agricultural waste as biomass feedstock (15). In our analysis, we assume that the cost of transportation to the ethanol facility is zero, because our goal is to compare production costs for alternative feedstock materials. The assumption regarding zero transportation costs may be realistic in cases in which small ethanol production facilities are located near a large source of a byproduct, such as an almond-processing plant. In our analy­sis, the price of each feedstock is based on the postharvest price at the initial point of sale, such as a packinghouse or a processing facility.

Lower transportation costs could ultimately make California-pro­duced ethanol competitive with imported supplies. Ethanol imported from the Midwest is splash-blended at fuel distribution centers. Ethanol plants using California feedstock materials might be located near the distribution centers, to minimize the cost of transporting ethanol before it is blended with gasoline.