Study: Rural economies to benefit from bioenergy

By Anna Simet | March 13, 2014

According to a new paper authored by two University of Missouri professors, rural regions are poised to benefit from bioenergy.

While remoteness is a penalty in the centralized petroeconomy, due to high power transmission and fuel transportation costs, those expenditures could be erased with development of a distributed bioeconomy. “This is a prediction of impacts if, when and where rural regions become net producers of energy,” said co-author Thomas Johnson, Frank Miller professor of Agricultural and Applied Economics in the MU College of Agriculture, Food and Natural Resources. “[For example] there is evidence that the price of gasoline has declined in most regions where ethanol is produced. This supports the idea that bioenergy will provide a competitive advantage in transportation costs.”

The paper defines the bioeconomy refers to the production of a wide range of goods and services, from plant, animal and forest-based material. Not just for bioenergy, such as small power plants using feedstocks such as crop and forest residues, municipal solid waste and landfill gas, but also plastics, nutriceuticals, pharmaceuticals, and other biomanufacturing.

But the potential of rural energy production will be affected by several factors, Johnson said. “Policy has been the most important. [Policy] has made investment in production capacity more attractive and the returns more certain and stable. In the long term, two other factors will be important—the cost of nonrenewable energy, and research-related increases in the efficiency of converting biomass to energy and products.”

The authors include a cautionary note for regional bioeconomy development, based on real occurrences within regions that have served as sources of nonrenewable energy and resources: “In many (perhaps most) of these regions, the costs of exploiting in situ resources is ultimately borne by the place and its residents. The wealth of the place is temporary, and if this wealth is not reinvested locally, both the place and those unfortunate enough to reside there are impoverished by the mining and environmental degradation. In the bioeconomy, similar impoverishment will occur if the renewable resource base is not protected and if the returns from the resource are not reinvested in the people and places.”