This chapter first describes a new lignocellulosic process for the conversion of biomass into ethanol. A simulation model is then used to determine the feasibility of a 30-million-gal/year lignocellulosic ethanol plant in Texas, USA, in comparison to a similar-sized feed grain ethanol plant in the same state. The results support the notion that lignocellulosic-based ethanol production may be a profitable enterprise in Texas. The analysis indicates that the profitability of such a plant will depend greatly on the initial investment costs. The lignocellulosic ethanol plant returned positive net present values and net cash income at each investment level considered in the simulation (US$ 20, 40 and 60 million). Ending cash (EC) balance increases at the US$20 million and US$40 million initial investment level, but decreases at the US$60 million initial investment level with a 40% probability of being negative at the end of the planning period. Comparison with the feed grain ethanol plant shows that the lignocellulosic ethanol plant has a higher projected net cash income, real net worth, and net present value. The latter also has lower probabilities of negative net income and negative EC balances (1% compared to 27%).