This thesis seeks to establish the private and external costs of the production of cellulosic biofuel from woody biomass. A model is presented which explores the economic feasibility of a firm producing this biofuel using a particular process. Specifically, it examines the input costs including the external costs of transportation, the external cost of pollutants produced by the firm, and potential cost reductions that may be applied as a result of learning from accumulated experience. In order to evaluate the feasibility of the plant, a spreadsheet model is built and a Monte Carlo simulation is run in order to evaluate profitability under different scenarios. An examination of the concept of the duality between the cost and profit functions and the production function is also examined. The methods used to find the appropriate values for the plant are partly qualitative and involve the studying of literature of closely related topics and products. The ultimate goal is to establish a reasonable basis for understanding and estimating the costs associated with this biofuel plant based on synthesis and induction, while also using a Monte Carlo analysis to take into account some of the many uncertain variables involved.
Berube, Maxwell, "Modeling the Costs of Cellulosic Biofuel" (2014). Honors College. 146.