After my initial theoretical calculations (see http://sol-biotech.com/wordpress/2011/12/28/biofuel-calculations/) several people greeted my 25 apples/sqft assumption with a lot of skepticism. I also developed a lack of faith in the number when I compared my bushels/acre based on 25/sqft with the actual harvest reported and found that my estimates would require more apples had fallen to the ground than were harvested. Today I finally made the time to count the apples on the ground and the result is quite disappointing. While it is possible some of the apples have been eaten (there were several that looked gnawed on), I doubt that this would amount to a huge difference. In the past I had been looking at the trees at the edge of the orchard and estimating based on what I saw there, but I believe that the trees at the edges are subject to a lot more wind than those in the center and just eyeballing things that turns out to be the case. While there might be a few trees that have the desired 25/sqft, according to my measurements the average at closer to the center of the orchard is a bit more than one per square foot (1.2 according to my measurements with a range that went from zero (I measured 6 adjacent sqft at a time randomly selected under the trees) to a bit over three). The only up-side is it seems that around 40% of the land is covered with trees as opposed to the 25% I initially estimated.
Additional consideration and research indicates that my capital start-up costs are a bit high, I initially estimated the custom harvester at $400K, but I have since become convinced that $100K is much more reasonable by leveraging against the nut harvesting paradigm. I have also convinced myself that it is practical to greatly reduce the expense of treating the ‘waste’ water (indeed, I think it is practical to increase revenue by producing biodiesel with the yeast remains), so I would now reduce that expense by 3/4 (but decided to go ahead and eliminate it for these calculations). However, even if we assume that we can come up with some magical way to greatly reduce the energy cost to extract the ethanol from the yeast/water (there does seem to be a lot of potential, but nothing appears to be at the commercial point yet and I am well aware of the often challenging hurdles that need to be overcome to commercialize a prototype) I don’t think there is any practical business opportunity here, even if the apples were free (see bottom for how likely that is). So now are the new, adjusted numbers for the calculated 3,000 acres that are reported to be locally as apple orchards:
Fermenting vessels: $60K (two now instead of 20)
Storage vessels: $15K (half of a container the size of the fermenting tank)
Land: $0 (the requirements are now so low I could do it on my own property)
Harvester: $100K
Total: $175K
Annual operating costs (this doesn’t change a bit):
Harvesting: $10K
Fermenting: $130K
Labor: $40K
Operations: $40K
Total: $220K
Revenue (@$2/gallon for the 88K gallons produced): $176K
Since the revenue is less than the operating costs, clearly this project is infeasible. Sure, it might be possible to reduce some costs by being draconian, but it won’t likely save more than a few percent, thus not changing the overall picture. While the capital costs have dropped hugely it is irrelevant if the operating costs can’t be less than the revenue.
I also found out this morning by coincidentally bumping into a local friend that the orchards that I thought were locally owned were recently sold to an overseas combine and the likelihood of getting permission without obtaining some sort of liability insurance is likely zero and it is more likely the new owners would insist on some sort of compensation on top of the cost of the liability insurance, which makes this idea even deader.
So, after my initial enthusiasm when preparing the initial post (where I initially expected to calculate then that it wasn’t worth it), it is a bit depressing to once again have my hopes dashed. I so want alternatives to work, but the economics are just not there until conventional prices go up at least 10 fold (after accounting for inflation; check out the inflation adjusted price of gasoline to see what a challenge that is!) and scale are just not there without some significant paradigm shifts (which I think are conceivable, but not likely in the near term).
