DEVELOPMENT OF AN OPTIMIZATION MODEL FOR BIOFUEL FACILITY SIZE AND LOCATION AND A SIMULATION MODEL FOR DESIGN OF A BIOFUEL SUPPLY CHAIN

A range of societal issues have been caused by fossil fuel consumption in the transportation sector in the United States (U.S.), including health related air pollution, climate change, the dependence on imported oil, and other oil related national security concerns. Biofuels production from various lignocellulosic biomass types such as wood, forest residues, and agriculture residues have the potential to replace a substantial portion of the total fossil fuel consumption. This research focuses on locating biofuel facilities and designing the biofuel supply chain to minimize the overall cost. For this purpose an integrated methodology was proposed by combining the GIS technology with simulation and optimization modeling methods. The GIS based methodology was used as a precursor for selecting biofuel facility locations by employing a series of decision factors. The resulted candidate sites for biofuel production served as inputs for simulation and optimization modeling. As a precursor to simulation or optimization modeling, the GIS-based methodology was used to preselect potential biofuel facility locations for biofuel production from forest biomass. Candidate locations were selected based on a set of evaluation criteria, including: county boundaries, a railroad transportation network, a state/federal road transportation network, water body (rivers, lakes, etc.) dispersion, city and village dispersion, a population census, biomass production, and no co-location with co-fired power plants. The simulation and optimization models were built around key supply activities including biomass harvesting/forwarding, transportation and storage. The built onsite storage served for spring breakup period where road restrictions were in place and truck transportation on certain roads was limited. Both models were evaluated using multiple performance indicators, including cost (consisting of the delivered feedstock cost, and inventory holding cost), energy consumption, and GHG emissions. The impact of energy consumption and GHG emissions were expressed in monetary terms to keep consistent with cost. Compared with the optimization model, the simulation model represents a more dynamic look at a 20-year operation by considering the impacts associated with building inventory at the biorefinery to address the limited availability of biomass feedstock during the spring breakup period. The number of trucks required per day was estimated and the inventory level all year around was tracked. Through the exchange of information across different procedures (harvesting, transportation, and biomass feedstock processing procedures), a smooth flow of biomass from harvesting areas to a biofuel facility was implemented. The optimization model was developed to address issues related to locating multiple biofuel facilities simultaneously. The size of the potential biofuel facility is set up with an upper bound of 50 MGY and a lower bound of 30 MGY. The optimization model is a static, Mathematical Programming Language (MPL)-based application which allows for sensitivity analysis by changing inputs to evaluate different scenarios. It was found that annual biofuel demand and biomass availability impacts the optimal results of biofuel facility locations and sizes.

EVALUATION OF POTENTIAL TRANSLOAD FACILITY LOCATIONS IN THE UPPER PENINSULA (UP) OF MICHIGAN

Shippers want to improve their transportation efficiency and rail transportation has the potential to provide an economical alternative to trucking, but it also has potential drawbacks. The pressure to optimize transportation supply chain logistics has resulted in growing interest in multimodal alternatives, such as a combination of truck and rail transportation, but the comparison of multimodal and modal alternatives can be complicated. Shippers in Michigan’s Upper Peninsula (UP) face similar challenges. Adding to the challenge is the distance from major markets and the absence of available facilities for transloading activities. This study reviewed three potential locations for a transload facility (Nestoria, Ishpeming, and Amasa) where truck shipments could be transferred to rail and vice versa. These locations were evaluated on the basis of transportation costs for shippers when compared to the use of single mode transportation by truck to Wisconsin, Chicago, Minneapolis, and Sault Ste. Marie. In addition to shipping costs, the study also evaluated the potential impact of future carbon emission penalties on the shipping cost and the effects of changing fuel prices on shipping cost. The study used data obtained from TRANSEARCH database (2009) and found that although there were slight differences between percent savings for the three locations, any of them could provide potential benefits for movements to Chicago and Minneapolis, as long as final destination could be accessed by rail for delivery. Short haul movements of less than 200 miles (Wisconsin and Sault Ste. Marie) were not cost effective for multimodal transport. The study also found that for every dollar increase in fuel price, cost savings from multimodal option increased by three to five percent, but the inclusion of emission costs would only add one to two percent additional savings. Under a specific case study that addressed shipments by Northern Hardwoods, the most distant locations in Wisconsin would also provide cost savings, partially due to the possibility of using Michigan trucks with higher carrying capacity for the initial movement from the facility to transload location. In addition, Minneapolis movements were found to provide savings for Northern Hardwoods, even without final rail access.