The objective of this study is to develop a model to evaluate the economic feasibility of biofuels production, and in particular to isolate the variables crucial to feasibility. The model constructed to define these variables is unique in its ability to accommodate a variety of plants and to integrate all portions of the production process; it was tested on a case study of a Euphorbia lathyris industry. The model minimizes costs of production to determine the best configuration for the industry. Total cost equals the sum of costs incurred in each segment of the process: growth, harvest, transport, and extraction. The solution is determined through a non-linear transportation- transshipment algorithm which describes production as a series of nodes and links. Specific application of the model was analysis of E. lathyris biofuel production in Arizona. Simulations were run examining the sensitivity of biocrude cost to changes in input parameters. Conclusions are summarized as follows. * No change in any single element can reduce final cost sufficiently to enable competitive production in the near future. * The major factor necessary to bring cost into range is improvement in biological yield. Two components of equal importance are tonnage produced per acre and percentage extractables recovered in processing. * Lowering cropping costs provided the most effective improvements of economic inputs. Perennial crops significantly reduced farm costs. * Transportation costs outweighed economies of scale in extraction; extractor location close to crops is more efficient than centralized. The cost minimization model was successfully used to isolate the critical factors for an E. lathyris industry in an arid region. Results determine that this industry would not be competitive in Arizona without dramatic improvements in yields and moderate changes in a combination of input costs. Viability is critically dependent on improvements in tonnage yield produced per acre and percent extractables recovered.