Concerns about volatile crude oil prices, energy security, and environmental issues are driving the production and use of renewable energy in the United States. Woody biomass can be used as feedstock for solid or liquid fuels or electricity generation. An economic analysis model was developed to estimate the delivered cost of woody biomass using different woody biomass handling systems. The model was designed to minimize the total annual delivered cost of woody biomass and applied to the central Appalachian region. Six forest districts were used to represent the destination of woody biomass supply. When demand is 900 metric tons (990 short tons) of dry woody biomass per day, for that base case scenario, the average delivered cost per unit of woody biomass ranged from $2.77 to $3.01 per GJ ($44.07 to $47.77 per short ton) among the different handling systems. The delivered cost was found to be mostly affected by woody biomass demand, mill residue availability, and mill residue purchase price, while skidding distance had the least impacts on the delivered cost.

The economic feasibility of a woody biomass-based ethanol facility was analyzed using a mixed integer programming model. The model is designed to maximize the net present value (NPV) of a facility over its economic life. A case study was conducted in the central Appalachian hardwood region. Eleven feasible plant locations were identified based on the requirements of site selection. Results showed that the optimal plant location was in Buckhannon, West Virginia. The NPV of the plant, with a demand of 1,814 metric tons/day of woody biomass and plant life of 20 years, varied from $17.28 million to $35.54 million among different systems. Ethanol production cost averaged approximately US¢ 50.85–52.38 per liter ($1.92–$1.98 per gallon). Factors such as biomass availability, mill residue purchase price, plant investment and capacity, ethanol yield, and financing are sensitive to ethanol production cost. Findings suggest that a woody biomass-based ethanol facility in central Appalachia could be economically feasible under certain operational scenarios.

Liquid fuels from coal and biomass have the potential to reduce petroleum fuel use and CO₂ emission. West Virginia is a heavily forested state and also rich in coal reserves. A multi-equation model was developed to assess the economics of a coal/biomass-to-liquids (CBTL) fuel plant in West Virginia. Specifically, the objective was to minimize the total annual cost subject to a series of regional supply, demand, and other constraints. The results indicated that the required selling price (RSP) of Fischer-Tropsch (FT) diesel for a 40,000 barrel-per-day CBTL plant with coal/biomass ratio of 85/15 varied between $79.30 and $79.57 per barrel using the different biomass handling systems. The RSP of FT diesel heavily depended upon plant capacity, capital cost, coal price, and liquid fuel yield. The crude-oil-equivalent price of FT fuels must be above $62/bbl for a CBTL plant to be profitable and a feasible long-term option in central Appalachia.