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Economic Analysis and Feasibility of Cottonseed Oil as a Biodiesel Feedstock

Executive Summary

This research effort with the National Cottonseed Products Association & the Texas Cottonseed Crushers' Association, in collaboration with PYCO Industries, Inc., is to investigate the costs of manufacturing cottonseed oil based biodiesel. A complex cost model has been developed to determine multiple financial characteristics of using cottonseed oil as a primary feedstock for biodiesel production. An executive summary of the cost model provides pertinent information which includes, total sales revenue, total annual manufacturing& logistics cost, manufacturing & logistics cost/gallon, total annual recovery cost, total capital investment, total annual labor cost, total annual raw material cost, total annual material handling cost, total annual utilities cost, and total annual miscellaneous costs associated with the production of cottonseed oil based biodiesel. A summary of the labor and energy costs by process is included as well.

The first cost model (Full Model) assumes that a biodiesel production facility must be constructed from the ground up, therefore, capital investment costs associated with the construction of a new plant facility are considered. An additional model (Special Oils) has been created to assume that the plant facility is already in place and there is no add-on capital cost of building a new facility. The biodiesel facility has the ability to blend in other oils in the biodiesel production process. Small cottonseed crushing operations with a production facility already in place can blend in various different oil types to produce the most cost efficient biodiesel.

** Cost Model Summary ( MS Word document)

** Cost Model Spreadsheet  (MS Excel spreadsheet)

Two basic software tools were utilized for developing the cost model, Microsoft Excel and Crystal Ball 2000 (Decisioneering, Denver, CO). The spreadsheet included linked organized data and formulas that were necessary to complete the model. Crystal Ball 2000 was used as the simulation software and it was applied to assign statistical distributions to the independent variables and prediction variables for decision analysis and forecasting. A free examination copy of Crystal Ball is available at: http://www.decisioneering.com/, under menu topic "Products".

>> The attached model can only be opened if Crystal Ball is opened first. << The general appearance will be as an Excel worksheets with a Crystal Ball menu line added.