U.S. patent application number 12/548076 was filed with the patent office on 2010-02-25 for forest factory valuation model.
This patent application is currently assigned to Accenture Global Services GmbH. Invention is credited to Luke Leslie, Jonathan A. Millen, II, Paul Sheridan.
Application Number | 20100049673 12/548076 |
Document ID | / |
Family ID | 37199098 |
Filed Date | 2010-02-25 |
United States Patent
Application |
20100049673 |
Kind Code |
A1 |
Millen, II; Jonathan A. ; et
al. |
February 25, 2010 |
Forest Factory Valuation Model
Abstract
Apparatuses, computer media, and methods for determining a value
of a forest factory. A stump land value component and a biomass
component of a forest factory are determined. A value of the forest
factory is obtained by combining the components. The stump land
value component may be normalized by a crop rotation time period. A
carbon value component of a forest factory may be determined and
the value of the forest factory adjusted. A land parcel may be
partitioned into land partitions, in which forest parameters are
associated with each land partition. A stump land value component,
a biomass fuel value component, and a carbon credit value component
may be determined from the land partitions. The carbon credit value
component may be determined a percentage of coniferous trees,
deciduous trees, and corresponding constant values of oxygen
generation.
Inventors: |
Millen, II; Jonathan A.;
(Miami, FL) ; Leslie; Luke; (London, GB) ;
Sheridan; Paul; (East Sussex, GB) |
Correspondence
Address: |
BANNER & WITCOFF, LTD.;ATTORNEYS FOR CLIENT NO. 005222
10 S. WACKER DRIVE, 30TH FLOOR
CHICAGO
IL
60606
US
|
Assignee: |
; Accenture Global Services
GmbH
Schaffhausen
CH
|
Family ID: |
37199098 |
Appl. No.: |
12/548076 |
Filed: |
August 26, 2009 |
Related U.S. Patent Documents
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Application
Number |
Filing Date |
Patent Number |
|
|
11533158 |
Sep 19, 2006 |
|
|
|
12548076 |
|
|
|
|
60721183 |
Sep 27, 2005 |
|
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Current U.S.
Class: |
705/500 |
Current CPC
Class: |
Y02P 80/20 20151101;
Y02A 40/286 20180101; G06Q 20/102 20130101; G06Q 20/105 20130101;
Y02A 40/28 20180101; Y02P 90/90 20151101; G06Q 40/00 20130101; G06Q
99/00 20130101; G06Q 30/02 20130101; Y02P 80/21 20151101 |
Class at
Publication: |
705/500 |
International
Class: |
G06Q 90/00 20060101
G06Q090/00 |
Claims
1. A method for determining a value of a land parcel, comprising:
(a) determining a stump land value component of the land parcel;
(b) determining a biomass fuel value component of the land parcel;
and (c) combining the stump land value component and the biomass
fuel value component to obtain a forest value of the land
parcel.
2. The method of claim 1, further comprising: (d) determining a
carbon credit value component of the land parcel; and (e) adjusting
the forest value with the carbon credit value component.
3. The method of claim 1, further comprising: (d) normalizing the
stump land value component by a crop rotation time period.
4. The method of claim 1, further comprising: (a)(i) determining a
corresponding stump land value portion for a corresponding land
partition, the land parcel having a plurality of land partitions;
(a)(ii) determining another stump land value portion for another
land partition; and (a)(iii) combining the corresponding stump land
value portion and the other stump land value portion to obtain the
stump land value component.
5. The method of claim 1, further comprising: (b)(i) determining a
corresponding biomass fuel value portion for a corresponding land
partition, the land parcel having a plurality of land partitions;
(b)(ii) determining another biomass fuel value portion for another
land partition; and (b)(iii) combining the corresponding biomass
fuel value portion and the other biomass fuel value portion to
obtain the biomass fuel value component.
6. The method of claim 2, further comprising: (d)(i) determining a
corresponding carbon credit value portion for a corresponding land
partition, the land parcel having a plurality of land partitions;
(d)(ii) determining another carbon credit value portion for another
land partition; and (d)(iii) combining the corresponding carbon
credit value portion and the other carbon credit value portion to
obtain the carbon credit value component.
7. The method of claim 1, further comprising: (d) determining a
development land value of the land parcel; (e) combining the
development land value with the forest value to obtain a total land
value of the land parcel.
8. The method of claim 2, the carbon credit value component being
based on a constant value of oxygen generation.
9. The method of claim 8, the constant value of oxygen generation
being associated with a tree type.
10. The method of claim 9, further comprising: (d)(i) partitioning
the carbon credit value component by the tree type for each tree
type; and (d)(ii) combining a plurality of carbon credit value
partitions to obtain the carbon credit value component.
11. The method of claim 2, further comprising: (f) adjusting the
carbon credit value component based on the stump land value
component.
Description
[0001] This application is a continuation of pending U.S.
application Ser. No. 11/533,158 filed on Sep. 19, 2006 which claims
priority to provisional U.S. Application No. 60/721,183, filed Sep.
27, 2005, the entire disclosure of which is hereby incorporated by
reference.
FIELD OF THE INVENTION
[0002] This invention relates generally to modeling a forest
factory. More particularly, the invention provides apparatuses,
computer media, and methods for determining a value of a forest
factory.
BACKGROUND OF THE INVENTION
[0003] In recent years, pulp, paper, and lumber producers have been
taking a close look at the forests they own in mature markets in
areas such as the United States and Western Europe. In many cases,
the pulp, paper, and lumber producers are concluding that the
wisest course is to sell off those assets. However, evolving
economic realities are bringing new variables into the equation. As
a result, companies that simply follow the current conventional
wisdom of shedding forest real estate may be losing significant and
growing sources of value and limiting their ability to build
high-performance businesses over the long term.
[0004] The trend toward divesting forest assets is driven by a
number of very real issues facing owners of timberland in Europe
and North America. These include the rising costs of key drivers
such as crop protection and mechanical harvesting, the landed price
volatility of harvested timber, and environmental concerns over
harvesting--all of which raise fundamental questions about the
future value of forests in mature markets.
[0005] By selling off those assets, in accordance with the prior
art, companies can focus on reducing the cost of fiber by sourcing
from less expensive regions. Such divestment can also free up cash
from what is seen as a questionable long-term investment, and make
cash available for distribution to investors or for other business
investments. The proceeds from such divestments can be
considerable. From 2000 to 2005, for example, Georgia-Pacific and
International Paper each brought in some US$4 billion from the sale
of timberland as shown in FIG. 1.
[0006] The above divestment strategy is based on the traditional
value streams associated with owning the forest, such as lumber,
pulp and chemical by-products. However, the corresponding list may
be incomplete since the list represents only one aspect of the
forest's broader value. Consequently, the above divestment strategy
may ignore additional streams of revenue.
[0007] There exists a need in the art for systems and methods that
support additional streams of revenue from a forest in order to
increase the profitability of the owner.
BRIEF SUMMARY OF THE INVENTION
[0008] The present invention provides apparatuses, computer media,
and methods for determining a value of a forest factory.
[0009] With one aspect of the invention, a stump land value
component and a biomass component of a forest factory is
determined. A value of the forest factory is obtained by combining
the components. The stump land value component may be normalized by
a crop rotation time period.
[0010] With another aspect of the invention, a carbon value
component of a forest factory is determined and a value of the
forest factory is adjusted.
[0011] With another aspect of the invention, a land parcel is
partitioned into land partitions, in which forest parameters are
associated with each land partition. A stump land value component,
a biomass fuel value component, and a carbon credit value component
may be determined from the land partitions.
[0012] With another aspect of the invention, a carbon credit value
is determined a percentage of coniferous trees, deciduous trees,
and corresponding constant values of oxygen generation.
BRIEF DESCRIPTION OF THE DRAWINGS
[0013] The present invention is illustrated by way of example and
not limited in the accompanying figures in which like reference
numerals indicate similar elements and in which:
[0014] FIG. 1 shows representative timberland sales in accordance
with prior art.
[0015] FIG. 2 shows a computer system that supports an embodiment
of the invention.
[0016] FIG. 3 shows sources of economic value from a forest factory
in accordance with an embodiment of the invention.
[0017] FIG. 4 shows average monthly oil prices (1998-2005)
exemplifying oil prices that embodiments of the invention can
adjust to.
[0018] FIG. 5 shows biomass fuel and total energy consumption
(2002) exemplifying biomass fuel prices that embodiments of the
invention can adjust to.
[0019] FIG. 6 shows a forest value stack in accordance with an
embodiment of the invention.
[0020] FIG. 7 shows an apparatus that determines an annual total
value of a forest factory (TVFF) in accordance with an embodiment
of the invention.
[0021] FIG. 8 shows a layout of a land parcel into a plurality of
land partitions in accordance with an embodiment of the
invention.
DETAILED DESCRIPTION OF THE INVENTION
[0022] FIG. 2 shows computer system 100 that supports an embodiment
of the invention.
[0023] Elements of the present invention may be implemented with
computer systems, such as the system 100 shown in FIG. 2. (System
100 may support apparatus 700 as will be discussed.) Computer 100
includes a central processor 110, a system memory 112 and a system
bus 114 that couples various system components including the system
memory 112 to the central processor unit 110. System bus 114 may be
any of several types of bus structures including a memory bus or
memory controller, a peripheral bus, and a local bus using any of a
variety of bus architectures. The structure of system memory 112 is
well known to those skilled in the art and may include a basic
input/output system (BIOS) stored in a read only memory (ROM) and
one or more program modules such as operating systems, application
programs and program data stored in random access memory (RAM).
[0024] Computer 100 may also include a variety of interface units
and drives for reading and writing data. In particular, computer
100 includes a hard disk interface 116 and a removable memory
interface 120 respectively coupling a hard disk drive 118 and a
removable memory drive 122 to system bus 114. Examples of removable
memory drives include magnetic disk drives and optical disk drives.
The drives and their associated computer-readable media, such as a
floppy disk 124 provide nonvolatile storage of computer readable
instructions, data structures, program modules and other data for
computer 100. A single hard disk drive 118 and a single removable
memory drive 122 are shown for illustration purposes only and with
the understanding that computer 100 may include several of such
drives. Furthermore, computer 100 may include drives for
interfacing with other types of computer readable media.
[0025] A user can interact with computer 100 with a variety of
input devices. FIG. 2 shows a serial port interface 126 coupling a
keyboard 128 and a pointing device 130 to system bus 114. Pointing
device 128 may be implemented with a mouse, track ball, pen device,
or similar device. Of course one or more other input devices (not
shown) such as a joystick, game pad, satellite dish, scanner, touch
sensitive screen or the like may be connected to computer 100.
[0026] Computer 100 may include additional interfaces for
connecting devices to system bus 114. FIG. 2 shows a universal
serial bus (USB) interface 132 coupling a video or digital camera
134 to system bus 114. An IEEE 1394 interface 136 may be used to
couple additional devices to computer 100. Furthermore, interface
136 may configured to operate with particular manufacture
interfaces such as FireWire developed by Apple Computer and i.Link
developed by Sony. Input devices may also be coupled to system bus
114 through a parallel port, a game port, a PCI board or any other
interface used to couple and input device to a computer.
[0027] Computer 100 also includes a video adapter 140 coupling a
display device 142 to system bus 114. Display device 142 may
include a cathode ray tube (CRT), liquid crystal display (LCD),
field emission display (FED), plasma display or any other device
that produces an image that is viewable by the user. Additional
output devices, such as a printing device (not shown), may be
connected to computer 100.
[0028] Sound can be recorded and reproduced with a microphone 144
and a speaker 166. A sound card 148 may be used to couple
microphone 144 and speaker 146 to system bus 114. One skilled in
the art will appreciate that the device connections shown in FIG. 2
are for illustration purposes only and that several of the
peripheral devices could be coupled to system bus 114 via
alternative interfaces. For example, video camera 134 could be
connected to IEEE 1394 interface 136 and pointing device 130 could
be connected to USB interface 132.
[0029] Computer 100 can operate in a networked environment using
logical connections to one or more remote computers or other
devices, such as a server, a router, a network personal computer, a
peer device or other common network node, a wireless telephone or
wireless personal digital assistant. Computer 100 includes a
network interface 150 that couples system bus 114 to a local area
network (LAN) 152. Networking environments are commonplace in
offices, enterprise-wide computer networks and home computer
systems.
[0030] A wide area network (WAN) 154, such as the Internet, can
also be accessed by computer 100. FIG. 2 shows a modem unit 156
connected to serial port interface 126 and to WAN 154. Modem unit
156 may be located within or external to computer 100 and may be
any type of conventional modem such as a cable modem or a satellite
modem. LAN 152 may also be used to connect to WAN 154. FIG. 2 shows
a router 158 that may connect LAN 152 to WAN 154 in a conventional
manner.
[0031] It will be appreciated that the network connections shown
are exemplary and other ways of establishing a communications link
between the computers can be used. The existence of any of various
well-known protocols, such as TCP/IP, Frame Relay, Ethernet, FTP,
HTTP and the like, is presumed, and computer 100 can be operated in
a client-server configuration to permit a user to retrieve web
pages from a web-based server. Furthermore, any of various
conventional web browsers can be used to display and manipulate
data on web pages.
[0032] The operation of computer 100 can be controlled by a variety
of different program modules. Examples of program modules are
routines, programs, objects, components, and data structures that
perform particular tasks or implement particular abstract data
types. The present invention may also be practiced with other
computer system configurations, including hand-held devices,
multiprocessor systems, microprocessor-based or programmable
consumer electronics, network PCS, minicomputers, mainframe
computers, personal digital assistants and the like. Furthermore,
the invention may also be practiced in distributed computing
environments where tasks are performed by remote processing devices
that are linked through a communications network. In a distributed
computing environment, program modules may be located in both local
and remote memory storage devices.
[0033] As will be discussed, system memory 112 may contain computer
executable instructions that are executed by central processor 110
to determine a value of a forest factory using EQ. 1 or EQ. 2.
Also, hard disk drive 118 may contain various forest parameters
that are associated with the forest factory when determining the
value of the forest factory. A user may input relevant information
(e.g., an identification of the forest factory) through keyboard
128 or pointing device 130 and may view results through display
device 142.
[0034] FIG. 3 shows sources of economic value from forest factory
300 in accordance with an embodiment of the invention. In order to
understand the real worth of forest factory 300 in the coming
years, companies should consider developments in the fields of
environmental policy and energy, and the new value streams they
promise to bring forest owners. Sources 301-313 (revenue streams)
of forest factory 300 include sources corresponding to paper
products and to lumber products. Moreover, with a more
comprehensive view of forest factory 300, there are two additional
basic sources of value that companies need to consider:
[0035] the emerging carbon-credit trading system (corresponding to
source 315), which places value on the oxygen production and
carbon-sink qualities of the forest; and the "forest
refinery"--that is, the potential to use wood and recovered fiber
as a source of biomass fuel (corresponding to source 317). Research
suggests that companies that proactively manage these areas may add
10 to 30 percent of economic value to their forest holdings.
[0036] Biomass fuel may be generated from forest components that
are typically considered as being wastes. (Biomass fuel may be
derived from wood chips from diseased trees, tree bark, sap,
branches, leaves, and tree roots. Basically biomass offers the
energy user a chance to convert a biological material, i.e., corn,
wood chips, pig manure, used cooking oil, to a fuel which can be
stored easily and then burned to produce energy.) This approach is
useful when you have waste biological materials and can use them to
produce inexpensive fuel. Thus, each biomass production system is
quite individual, depending on circumstances and available
resources. For example, the waste wood may be converted to a
burnable gas.
[0037] By fundamentally rethinking their concept of the forest
factory 300, companies may be able to tap into these significant
new sources of value. That in turn can help them address
shareholder pressures for improved returns, and ultimately help
them move forward on the road to becoming a high-performance
business--in particular, one that can deliver sustainable results
and consistently outperform their peers over time.
[0038] While no one can predict the future with absolute certainty,
of course, current economic trends suggest that new value streams
will increase. For example, the recently signed U.S. Energy Policy
Act of 2005 and potential global environmental agreements--such as
a modified Kyoto Protocol that may require companies to "pay" for
carbon dioxide emissions--make carbon-credit trading increasingly
viable. In addition, with relatively straightforward
harvest-management and crop-rotation techniques, the carbon-credit
value stream may coexist with the traditional "extraction" value
stream, allowing companies to ensure that approximately 80 percent
of their forest lands are available for carbon credits without
limiting the availability of lumber and pulp (which correspond to a
stump land value). Moreover, the carbon credit value may be
adjusted for the crop rotation period. For example, as the crop
rotation period decreases, less of the forest is available for
carbon credits.
[0039] FIG. 4 shows average monthly oil prices (1998-2005)
exemplifying oil prices that embodiments of the invention can
adjust to. The average monthly oil prices correspond to different
oil markets that include Dubai oil average 401, Dated Brent oil
average 403, and WTI oil average 405. The biomass fuel value stream
(corresponding to source 317) is likely to benefit from rising oil
costs, making alternative energy sources more attractive. Oil
prices have been fluctuating well above US$50 a barrel for more
than a year and currently is approaching US$70/barrel as shown in
FIG. 4. Although these increases have long been viewed as cyclical,
there is now a growing consensus that oil pricing actually
represents a structural change in the market and that high oil
prices are long-term if not permanent.
[0040] FIG. 5 shows biomass fuel and total energy consumption
(2002) (corresponding to pie chart 501), exemplifying biomass fuel
prices that embodiments of the invention can adjust to. While
fossil fuels (corresponding to coal market share 503, natural gas
market share 505, and petroleum market share 507) and nuclear power
(corresponding to nuclear electric power market share 508) dominate
the energy market, renewable energy market share 509 is gaining
more importance. Renewable energy is generated from a number of
energy generation sources including biomass generation 513,
hydroelectric generation 517, geothermal generation 515, wind
generation 519, and solar generation 511. As shown in FIG. 5,
biomass generation 513 and hydroelectric generation 517 provide the
majority share of the renewable energy market share 509. The move
toward biomass fuels is also getting a boost from various "green"
energy incentives already in place in many developed economies.
Political pressure is growing in many parts of the world to
increase the use of renewable energy sources and the governments of
Sweden, Finland and Germany have all sponsored major
electricity-generation projects based on biomass fuels. Biofuels
already account for nearly half the energy produced from renewable
sources in the United States (as shown in FIG. 5).
[0041] FIG. 6 shows a forest value stack 603 in accordance with an
embodiment of the invention. Companies need to evaluate their
holdings not just as a static resource, but rather as a dynamic
"forest factory" that actively produces value in three streams:
traditional wood/pulp products, biomass fuels and carbon-credit
trading. Companies need to factor in both the existing traditional
value and the potential value that the new value streams will
bring, and weigh the two components together. Research suggests
that the ability to balance the needs of today and tomorrow (and
simultaneously manage across near-term, medium-term, and long-term
time horizons) is a fundamental characteristic of high-performance
businesses.
[0042] Industry experience suggests that these developments mean
that companies need to develop a more multifaceted view of forest
assets vis-a-vis a traditional forest value stack 601.
Consequently, forest value stack 603 includes traditional value
component 605, biomass fuel value component 607, and carbon credit
value component 609. The traditional forest component 605 is
typically less than the traditional value for traditional forest
value stack 601; however, the difference is typically exceeded by
the gains for the biomass fuel and carbon credits.
[0043] By taking this comprehensive view, companies are likely to
find that even though the traditionally calculated value of their
holdings in mature markets is declining, the new value streams will
more than make up for that decline.
[0044] Cognizant of these forward-looking and more complete
calculations, companies can then create the business case,
investment strategies and partnership programs needed to make the
best use of their forest assets. If companies decide to retain
their holdings, they can ensure that they have the mechanisms in
place to extract the full value from the forest factory. Above all,
they can avoid losing an important source of value and, ultimately,
achieve high performance and greater profitability.
[0045] Embodiments of the invention quantify the value of forest
factory in relation to the different value components. For example,
the value of a forest value may be analyzed in relation to the
stumpage land value (corresponding to the lumber and pulp), carbon
credit value, and the biomass fuel value. The stumpage land value
is based on harvesting timber on a periodic basis. For example,
timber is harvested every seven years, in which one seventh of the
acreage is cut every year. Embodiments of the invention may
determine a value of a forest factory in which timber is harvested
on a different period basis. Harvesting periods are typically
between seven to twelve years.
[0046] The forest factory may include both coniferous trees
(softwood, e.g., fir and pin) and deciduous trees (hardwood, e.g.,
birch and oak). Typically, different parameters for oxygen
generation are associated with coniferous forests and with
deciduous forest when determining the carbon credit values. CFv
designates the carbon credit value per acre, K.sub.a designates a
constant value of oxygen generation per 1000 acres of coniferous
forest and K.sub.b designates a constant value of oxygen generation
per 1000 acres of deciduous forest.) A forest factory may include a
mixture of coniferous trees and deciduous trees, where C is the
percentage of the forest with coniferous trees and B is the
percentage with deciduous trees.
[0047] According to an embodiment of the invention, one can
approximate the value of a forest factory (per acre) with overall
percentage of coniferous trees and deciduous trees, using the
following relationship:
Annual TVFF=Stumpage Land Price/7+CFv+(K.sub.a*C+K.sub.b*B)/1000
(EQ. 1)
[0048] In EQ. 1, the harvesting time (crop rotation time period) is
seven years, which is typical of a forest factory. Consequently,
the stumpage land price is averaged over seven years. However, the
embodiment may accommodate a different harvest time. Computer
system 100 (as shown in FIG. 2) may be programmed in order to
perform the above calculations.
[0049] FIG. 7 shows a layout of a forest (land parcel 701) that
contain land partitions 703-709.
[0050] Land parcel 701 may have a heterogeneous mixture of trees
that correspond to different stumpage land values (S(i), where n
equals the number of land partitions of the land parcel and i
corresponds to the i.sup.th land partition) and carbon credit
values (CFv(i)). Each land partition may have a different mix of
coniferous trees and with deciduous trees, corresponding to C(i)
and B(i), respectively. The following relationship provides an
approximate the value of a forest factory (per acre):
Annual TVFF = Stumpage Land Price / 7 + CFv + 1 n i = 1 n ( K a * C
( i ) + K b * B ( i ) ) / 1000 ( EQ . 2 ) ##EQU00001##
[0051] While EQ. 1 and EQ. 2 only analyzes the value of a forest
factory with respect to coniferous trees and with deciduous trees,
embodiments of the invention may further refine the tree
classification based on the tree specie (tree type), e.g., fir or
pine rather than coniferous and oak or teak rather than deciduous.
For example, the stumpage land value may be refined based on the
tree specie.
[0052] In order to determine a total land value of the land parcel
701, embodiments of the invention may include a development land
value with the forest value (TVFF). The development land value may
include the value associated with the intrinsic value of the land
(e.g., developing the forest factory into a golf course or
condominiums after realizing the TVFF).
[0053] FIG. 8 shows apparatus 800 that determines an annual total
value of a forest factory (TVFF) in accordance with an embodiment
of the invention. Apparatus 800 may be implemented using computer
system 100 as previously discussed. Apparatus 800 includes
processor 801, valuation database 803, memory 805, and user
interface 807. Processor 801 executes computer-executable
instructions that are contained in memory 805. For example,
computer-executable instructions may be executed to determine the
annual TVFF from EQ. 2.
[0054] A user may identify the location of a forest factory to
apparatus 800 through user interface 807. The forest factory (e.g.,
land parcel 701) may include a plurality of land partitions (e.g.,
land partitions 703-709). Processor 801 may access forest
parameters (e.g., C(i), B(i), S(i), and CFv(i) for the i.sup.th
land partition from valuation database 803). Processor 801
consequently determines the value of the forest value and provides
the results to the user through user interface 807.
[0055] As can be appreciated by one skilled in the art, a computer
system with an associated computer-readable medium containing
instructions for controlling the computer system may be utilized to
implement the exemplary embodiments that are disclosed herein. The
computer system may include at least one computer such as a
microprocessor, a cluster of microprocessors, a mainframe, and
networked workstations.
[0056] While the invention has been described with respect to
specific examples including presently preferred modes of carrying
out the invention, those skilled in the art will appreciate that
there are numerous variations and permutations of the above
described systems and techniques that fall within the spirit and
scope of the invention as set forth in the appended claims.
* * * * *