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Traffic flows in the U.S. have been affected by the substantial increase and, as of January 2009, decrease in biofuel production and use. This paper considers a framework to study the effect on grain transportation flows of the 2005 Energy Act and subsequent legislation, which mandated higher production levels of biofuels, e.g. ethanol and biodiesels. Future research will incorporate changes due to the recent economic slowdown.

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.

One of the major objectives of the current expansion in bioenergy cropping is to reduce global greenhouse gas emissions for environmental benefit. The cultivation of bioenergy and biofuel crops also affects biodiversity more directly, both positively and negatively.

The National Renewable Energy Laboratory (NREL) originally developed this application for biopower with funding from the Environmental Protection Agency's Blue Skyways Collaborative. The Department of Energy's Office of Biomass Program provided funding for biofuels functionality. More information on funding agencies is available: http://www.blueskyways.org and http://www.eere.energy.gov/biomass/.