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Despite recent claims to the contrary, plant-based fuels developed in economically and environmentally sensible ways can contribute significantly to the nation’s— indeed, the world’s—energy security while providing a host of benefits for many people worldwide.

Agricultural markets often feature significant transport costs and spatially distributed production and processing which causes spatial imperfect competition. Spatial economics considers the firms’ decisions regarding location and spatial price strategy separately, usually on the demand side, and under restrictive assumptions. Therefore, alternative approaches are needed to explain, e.g., the location of new ethanol plants in the U.S. at peripheral as well as at central locations and the observation of different spatial price strategies in the market.

This article addresses development of the Illinois ethanol industry through the period 2007-2022, responding to the ethanol production mandates of the Renewable Fuel Standard by the U.S. Environmental Protection Agency. The planning for corn-based and cellulosic ethanol production requires integrated decisions on transportation, plant location, and capacity.

When the lignocellulosic biofuels industry reaches maturity and many types of biomass sources become economically viable, management of multiple feedstock supplies – that vary in their yields, density (tons per unit area), harvest window, storage and seasonal costs, storage losses, transport distance to the production plant – will become increasingly important for the success of individual enterprises. The manager’s feedstock procurement problem is modeled as a multi-period sequence problem to account for dynamic management over time.

Supply chain management involves all of the activities in industrial organizations from raw material procurement to final product delivery to customers. The main aim in supply chain management is to satisfy production requirements, while optimizing the economic objectives. In traditional fossil fuel supply chains, huge amounts of fossil fuels are transported via pipelines or tankers with very small costs. These fuels can be transformed into other sources of energy or transportation fuels at their destination points.

The use of Geographic Information Systems (GIS) for understanding the geographic context of bioenergy supplies is discussed and a regional-scale, GIS-based modeling system for estimating potential biomass supplies from energy crops is described. While GIS models can capture geographic variation that may in?uence biomass costs and supplies, GIS models are not likely to handle uncertainty well and are often limited by the lack of spatially explicit data.