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August 2010

Model Documentation for the Forest and Agricultural Sector Optimization Model with Greenhouse Gases (FASOMGHG)

Draft Report

Prepared for

Sara Bushey Ohrel

U.S. Environmental Protection Agency

Climate Change Division

1200 Pennsylvania Avenue

Washington, DC 20460
Prepared by
Robert H. Beach

Darius Adams (Oregon State University)

Ralph Alig (U.S. Forest Service)

Justin Baker (Duke University)

Gregory S. Latta (Oregon State University)

Bruce A. McCarl (Texas A&M University)

Brian C. Murray (Duke University

Steven K. Rose (EPRI)

Eric White (Oregon State University)

RTI International

3040 Cornwallis Road

Research Triangle Park, NC 27709

RTI Project Number 0210826.016

RTI Project Number

0210826.016

Model Documentation for the Forest and Agricultural Sector Optimization Model with Greenhouse Gases (FASOMGHG)


Draft Report
August 2010
Prepared for

Sara Bushey Ohrel

U.S. Environmental Protection Agency

Climate Change Division

1200 Pennsylvania Avenue

Washington, DC 20460


Prepared by
Robert H. Beach

Darius Adams (Oregon State University)

Ralph Alig (U.S. Forest Service)

Justin Baker (Duke University)

Gregory S. Latta (Oregon State University)

Bruce A. McCarl (Texas A&M University)

Brian C. Murray (Duke University

Steven K. Rose (EPRI)

Eric White (Oregon State University)

RTI International

3040 Cornwallis Road

Research Triangle Park, NC 27709


Contents

Section Page

Section 1
FASOMGHG Overview and Updates     1

1.1 Model Summary 2

1.2 Brief History and Previous Applications 4

1.3 Recent Developments and Model Updates 6

Section 2
Model Scope      1

2.1 Commodities 1

2.1.1 Primary Commodities 1

2.1.2 Secondary Commodities 5

2.1.3 Bioenergy Products 9

2.1.4 Blended Livestock Feeds 9

2.2 Inputs to Production 10

2.3 U.S. Regional Disaggregation 13

2.4 Land Use Categories 16

2.4.1 Agricultural Land 20

2.4.2 Forestland 22

2.4.3 Developed Land 24

2.4.4 Land Allocation 25

2.5 Market Modeling 26

2.6 International Trade 27

2.6.1 Forestry 27

2.6.2 Agriculture 28

2.7 GHG Accounts 32

2.7.1 Forest GHG Accounts 36

2.7.2 Agricultural GHG Accounts 37

2.7.3 Bioenergy GHG Accounts 38

2.7.4 Developed Land GHG 38

2.8 Other Environmental Impacts 38

Section 3


Economic Theory and Model Structure   1

3.1 Theoretical Basis 1

3.2 Agricultural Sector 6

3.2.1 Key Variables 6

3.2.2 Constraints on Agricultural Production 10

3.3 Forest Sector 12

3.3.1 Key Variables 12

3.3.2 Constraints on Forestry Production 15

3.4 GHG Payments 16

Section 4


Linkages between Forestry and Agriculture         1

4.1 Land Transfers 1

4.2 Commodity Transfers 6

4.3 Consistent Treatment of Time and Discounting 7

Section 5
Bioenergy        1

5.1 Transportation Biofuels 1

5.1.1 Processes Modeled 2

5.1.2 Feedstock Costs 5

5.1.3 Hauling, Storage, and Processing Costs 18

5.1.4 Additional Ethanol Market Penetration Costs 24

5.1.5 Coproducts 25

5.2 Bioelectricity 27

5.2.1 Processes Modeled 28

5.2.2 Feedstock Costs 28

5.2.3 Hauling, Storage, and Processing Costs 30

5.2.4 Bioelectricity Market Penetration Constraints 32

Section 6
Dynamics          1

6.1 Dynamics of Timber Harvest 1

6.2 Discounting and Annuities 1

6.3 Terminal Conditions 3

6.4 Updating Yields, Demand, and Other Factors over Time 4

6.4.1 Crop Yields 5

6.4.2 Livestock Yields 8

6.4.3 Domestic Demand, Export Demand, and Import Supply 9

6.4.4 Timber Yields 10

6.4.5 Bioenergy Feedstock Conversion Rates 11

6.4.6 Bioenergy Processing Costs 14

Section 7


GHG Accounting         1

7.1 GHG Emissions 1

7.1.1 Carbon Dioxide Emissions 1

7.1.2 Methane Emissions 16

7.1.3 Nitrous Oxide Emissions 18

7.2 Carbon Sequestration 24

7.2.1 Forest Carbon Accounting 24

7.2.2 Soil Carbon Sequestration 33

7.3 GHG Accounting for Bioenergy Production 37

7.4 Mitigation Strategies 38

Section 8
Model Output       1

Section 9


Selected Environmental, Resource, and Policy Analysis Applications 1

9.1 Types of Policies and Issues that can be Evaluated using FASOMGHG 1

9.2 Selected Recent Applications 2

9.2.1 GHG Mitigation 2

9.2.2 Bioenergy 4

9.2.3 Climate Impacts 4

Section 10
References       1


List of Figures

Number Page

Figure 2-1. Map of the FASOMGHG Regions 15

Figure 2-2. Baseline FASOMGHG U.S. Land Base by Land Use Category (million acres) 20

Figure 7-1. Carbon Disposition after Timber Harvest 27

Figure 7-2. Wood and Paper Product Carbon Disposition 30

Figure 7-3. Disposition of On-Site Carbon after Deforestation 32

Figure 7-4. Percentage Adjustment over Time to New Soil Carbon Equilibrium Following Change in Land Use or Management 35

Figure 7-5. Change in Soil Carbon for FASOMGHG Northern California Region for Selected Changes in Land Use and Management 36


List of Tables

Number Page

Table 2-1. Primary Commodities 2

Table 2-2. Secondary (Processed) Commodities 6

Table 2-3. Bioenergy Products 9

Table 2-4. Blended Livestock Feeds 10

Table 2-5. Major Categories Included in Crop Budgets in Quantities 11

Table 2-6. Major Categories included in Livestock Budgets in Quantities 12

Table 2-7. Definition of FASOMGHG Production Regions and Market Regions 14

Table 2-8. Aggregated U.S. Regions 16

Table 2-9. Forest Management Intensity Classes (regions of application in parentheses) 24

Table 2-10. Explicitly Traded Commodities and Countries/Regions Trading with the United States 29

Table 2-11. Commodities with Only ROW Export or Import Possibilities 31

Table 2-12. Commodities without International Trade Possibilities Modeled 32

Table 2-13. Categories of GHG Sources and Sinks in FASOMGHG 33

Table 4-1. Conversion Costs Between Forestland and Agricultural Land ($/acre) and Acres Available for Conversion 5

Table 5-1. Starch- and Sugar-Based Ethanol Feedstocks Included in FASOMGHG and Annual Quantity Requirements for a 75 MGY Ethanol Plant (40 MGY for Sweet Sorghum), Base Period (2000–2004) 2

Table 5-2. Cellulosic Feedstocks Included in FASOMGHG and Annual Quantity Requirements for a 100 MGY Ethanol Plant, Base Period (2000–2004) 4

Table 5-3. Biodiesel Feedstocks Included in FASOMGHG and Quantity Requirements per 1,000 Gallons of Biodiesel (2022) 5

Table 5-4. Regional Average Crop Yields for Starch- and Sugar-Based Ethanol Feedstocks, Base Period (2000–2004) 6

Table 5-5. Average State Ethanol Subsidy by Region Used in FASOMGHG (cents/gallon of ethanol produced) 7

Table 5-6. Straw-to-Grain Ratio and Weight Conversion Factor 10

Table 5-7. Sustainably Harvestable Residue Percentages 11

Table 5-8. Regional Average Sustainably Removable Crop Residue for Acres where Residue Can be Removed (Wet Tons per Acre), Base Period (2000–2004) 11

Table 5-9. Ethanol Conversion Rates for Crop Residues, Base Period (2000–2004) 12

Table 5-10. Regional Average Energy Crop Yields (Wet Tons per Acre), Base Period (2000–2004) 14

Table 5-11. Ethanol Conversion Rates for Energy Crops, Base Period (2000–2004) 15

Table 5-12. Ethanol Conversion Rates for Logging and Processing Residues, Base Period (2000–2004) 16

Table 5-13. Regional Average Potential Production of Soybean, Canola, and Corn Oil per Acre, Base Period (2000–2004) 17

Table 5-14. Regional Crop Residue Density (Percentage of Region with Available Feedstock) 19

Table 5-15. Regional Values for Average One-Way Hauling Distance (Miles) for FASOMGHG Standard Plant Sizes, Base Period (2000–2004) 21

Table 5-16. Assumed Storage Costs for Ethanol Feedstocks for FASOMGHG Standard Size Plant, Base Period (2000–2004) 23

Table 5-17. Market Penetration Costs for Ethanol 25

Table 5-18. Production of Ethanol Coproducts by Feedstock 27

Table 5-19. Bioelectricity Feedstocks Included in FASOMGHG and Annual Quantity Requirements per 100 MW Generation Capacity, Base Period (2000–2004) 29

Table 5-20. Regional Values for Average One-Way Hauling Distance (Miles) for FASOMGHG Standard 100 MW Dedicated Bioelectricity Plant, Base Period (2000–2004) 31

Table 6-1. National Average Yields for Major Crops and Annual Yield Growth 6

Table 6-2. Input Elasticities with Respect to Changes in Yield 7

Table 6-3. Yield Growth for Livestock Products over Time 8

Table 6-4. Annual Shifts in Agricultural Commodity Import Supply, Domestic Demand, and Export Demand Curves 9

Table 6-5. Biofuels Feedstock Conversion Rates over Time 12

Table 7-1. Diesel Fuel Usage (gallons/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 2

Table 7-2. Gasoline Usage (gallons/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 3

Table 7-2. Gasoline Usage (gallons/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) (continued) 4

Table 7-3. Electricity Usage (kWh/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 5

Table 7-4. Natural Gas Usage (1,000 cu ft/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 5

Table 7-5. Regional GHG Emissions from Electricity Generation (g CO2eq/kWh) 7

Table 7-6. Nitrogen Fertilizer Usage (lbs/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 9

Table 7-7. Phosphorus Fertilizer Usage (lbs/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 11

Table 7-8. Potassium Fertilizer Usage (lbs/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 12

Table 7-10. Pesticide Usage (pounds of active ingredients/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 15

Table 7-11. Lime Usage (tons of lime/acre) by Crop, Irrigation Status, and Region, Base Period (2000-2004) 16

Table 7-12. Example of Disposition Patterns of Harvested Wood by Region and Harvest Type, 100-Year Period: Southeast 28

Table 7-13. Half-life for Forest Products in End Uses 31

Table 7-14. GHG Mitigation Strategies 39



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