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Development of New Generation Cooperatives in Agriculture for Renewable Energy Research, Development

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Alfalfa stems for power and leaves for meal. Hybrid poplar for co-firing and for wood fiber ... Alfalfa Producers Cooperative. Duality of alfalfa commodity ... – PowerPoint PPT presentation

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Title: Development of New Generation Cooperatives in Agriculture for Renewable Energy Research, Development


1
Development of New Generation Cooperatives in
Agriculture for Renewable Energy Research,
Development, and Demonstration Projects
  • Mark Downing
  • Agricultural Economist
  • Oak Ridge National Laboratory

OAK RIDGE NATIONAL LABORATORY U. S. DEPARTMENT OF
ENERGY
2
Acknowledgements
  • A diverse presentation such as this one benefits
    from years of on-going collaboration with a
    variety of backgrounds and disciplines and
    circumstances. I would like to thank
  • Chris Demeter, Janet Cushman, Lynn Wright,
    Anthony Turhollow, Lynn Kszos, Marie Walsh, Bob
    Perlack, Rich Bain, Rick Freeman, Gregg Marland,
    Robin Graham, Ken Campbell, Chris Hanson, Robert
    Hanson, Bob Hansen, Ralph Overend, Greg Larson,
    Jerry Tuskan, Tom Kroll, Bill Bergusen, Don
    Riemenschneider, Dan Langseth, Dan Netzer, Sarah
    Rensink, Sheila Faber, Michele Bielik, David
    Cobia, Jim Cooper, C. Philip Baumol, John
    Ferrell, Steve Hanson, Marvin Duncan, Randall
    Torgerson, Jerry Nadeau, David Barton, Ralph
    Groschen.
  • Notwithstanding their invaluable contributions,
    any mistakes or errors within this presentation
    remain my own responsibility. The views
    necessarily reflect those of the U.S. Department
    of Energy, the U.S. Government, Oak Ridge
    National Laboratory, and UT-Battelle.

3
Introduction
  • New Generation Cooperatives
  • Bioenergy cooperatives
  • Data
  • Methods
  • Results
  • Discussion

4
Assumptions
  • Closed membership
  • Initial investment equity level high
  • Have the right to deliver
  • Value of delivery rights can appreciate or
    depreciate

5
Agriculture and Energy
  • Commodity production
  • Co-product or bio-refinery approach
  • Biomass Power for Rural Development Initiative

6
Agriculture and Energy
  • Commodity production
  • Alfalfa stems for power and leaves for meal
  • Hybrid poplar for co-firing and for wood fiber
  • Switchgrass for co-firing and as a perennial crop
  • Willow on non-CRP land and for co-firing

7
Agriculture and Energy
  • Biomass Power for Rural Development
  • Power
  • Rural development
  • USDA and DOE joint solicitation
  • Preceded by 12 paper feasibility studies

8
MnVAP
  • Minnesota Valley Alfalfa Producers Cooperative
  • Duality of alfalfa commodity
  • Gasification and high-protein leaf-meal
  • Cooperation with an electric utility confounded
    by a state mandate
  • Production, processing, and marketing

9
Prairie Lands Bio-products
  • Market grass crops in southern Iowa
  • Value-added role for switchgrass
  • Ethanol, co-firing with electric, plastics
  • Deal with production, harvesting, and storage

10
Willow Bioenergy Producers Cooperative
  • Salix Consortium
  • Co-firing option
  • Non-CRP land in New York State
  • Planting, harvesting, storage, marketing

11
Minnesota Agro-Forestry Cooperative
  • Not a Biomass Power for Rural Development
    offspring
  • From DOE Feedstock Development Program at ORNL
  • Fiber commodity, co-firing option second
  • Compounded issues with electric location
  • Historical research was tremendous

12
Necessary conditions
  • Legislative
  • Long term corporate strategy
  • Business viability
  • Economic sustainability
  • Public sector efforts

13
Sufficient conditions
  • Specify plant and construction oversight goals
  • Develop a mutually agreeable and defensible
    mission statement and vision
  • Incorporate planning advisors and consultants
  • Leadership development by producers

14
Sufficiency…
  • Commitment by owners
  • Error recognition by management
  • Identification and management of risk
  • Assumption of options
  • Sufficiency of capital
  • Communication in management

15
Sufficiency…
  • Securing an appropriate business location
  • Projecting the market(s) accurately
  • Projecting operating costs accurately
  • Assumed reliance on government-based marketing
  • Excessive debt/equity ratio

16
Discussion
  • How you set up a cooperative
  • Ability to control production
  • Stock vs non-stock form of business
  • Exclusivity in the farming community
  • Plant and social science research
  • Business culture
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