Straw and corn stover can be used to produce ethanol by enzymatic hydrolysis and fermentation, or syndiesel by oxygen gasification and Fischer Tropsch (FT) reaction. FT has a higher processing cost and a higher energy yield of liquid transportation fuel. We analyze the cost of produced liquid fuel as a function of the field cost of biomass. At 80 $ t (1) (dry basis) a crossover point is reached. Below this value, the cost of producing energy as ethanol is lower; above this value, FT syndiesel is lower. However, the crossover point occurs at a very high field cost of biomass, more than 5.50 $ GJ (1), and ethanol plants are less capital intense than FT and hence have a smaller economic size. For both reasons ethanol is likely to be the preferred processing alternative. (C) 2010 Elsevier Ltd. All rights reserved.