Optimization of the Algal Biomass to Biodiesel Supply Chain: Case Studies of the State of Oklahoma and the United States

Abstract

The goal of this work is to design a supply chain network that distributes algae biomass from supply locations to meet biodiesel demand at specified demand locations, given a specified algae species, cultivation (i.e., supply) locations, demand locations, and demand requirements. The final supply chain topology includes the optimum sites to grow biomass, to extract algal oil from the biomass, and to convert the algae oil into biodiesel. The objective is to minimize the overall cost of the supply chain, which includes production, operation, and transportation costs over a planning horizon of ten years. Algae production was modeled both within the U.S. State of Oklahoma, as well as the entire contiguous United States. The biodiesel production cost was estimated at $7.07 per U.S. gallon ($1.87 per liter) for the State of Oklahoma case. For the contiguous United States case, a lower bound on costs of $13.68 per U.S. gallon ($3.62 per liter) and an upper bound of $61.69 ($16.32 per liter) were calculated, depending on the transportation distance of algal biomass from production locations.