15 MB - Great Lakes Maritime Research Institute

Chapter 4:Potential Economic ImpactsEconomic Impact Modeling: Great Lakes Biodiesel Plant4.1 Biodiesel Plant ImpactThe use of biodiesel fuel by Great Lakes commercial fleets is expected to increase in thefuture. By the end of the decade, the demand for biodiesel could be over 30 milliongallons. Although over 23 million gallons of diesel sales were disclosed by two GreatLakes suppliers for this report, other Great Lakes producers would not reveal salesvolume. Therefore total Great Lakes sales or production could not be reported. Howeverit is possible to assume that a new 30 million gallons biodiesel facility could be supportedas the Great Lakes fleets convert to biodiesel usage. We note from the previous chapter,data show that there was domestic demand for 2.1 billion gallons of distillate fuel oil forvessel bunkering in 2004. How quickly vessels will convert to biodiesel is unknown, butsome of this demand could be supplied by increased biodiesel production. To meet thisincreased demand, a new Great Lakes Biodiesel Plant, of typical production capacity of30 million gallons per year, should be feasible. Our assumptions as inputs to these modelsare constrained to projections for commercial maritime diesel consumption.The following Great Lakes Biodiesel Plant is modeled to be a 30 million gallonproduction facility with a construction cost of $30.98 million. This study is not sitespecificin that the findings are for a facility that can be located anywhere in the eightstateGreat Lakes Region. There would be 37 workers employed at full capacityoperations. These economic model specifications were selected to be conservative andwell under estimated market demand. In reality, sales should be able to supportadditional Great Lakes plants to feed the expanding maritime demand. The economicimpacts presented in this report are for a single plant.The UMD Labovitz School research bureau (Bureau of Business and EconomicResearch) worked with biodiesel industry contacts in determining key assumptions in thedevelopment of the economic impact model. Regional and state data for the impactmodel for Value Added, Employment, and Output is supplied by IMPLAN. [35] Fromthese data, Social Accounts, Production, Absorption, and By­products information aregenerated from the national level data and incorporated into the model.The Study Area. This report measured the economic impact of a Great Lakes BiodieselPlant on the eight­state Great Lakes region. The study area includes the states ofMinnesota, Wisconsin, Michigan, Ohio, Illinois, Indiana, Pennsylvania and New York.26