The development of a market for currently non-merchantable forest material, such as harvest residues of tops and limbs of trees or small diameter trees, has been suggested as a possible win-win solution that could: (i) provide a financial incentive to help motivate treatments to reduce wildfire risk or restore forest stands; (ii) provide a material that can be harvested and potentially processed in rural communities reeling from changes in the forest products industry and policy environment; and (iii) capture more value from timber management activities. There is potential for such a market to aid rural communities through the incorporation of intermediate processing centers, depots, as demand locations in a market model of the forest products industry. Intermediate processing centers would gather woody biomass (harvest residues only) for either local use or for refining and shipping to a hypothetical bio-refinery producing jet fuel. Modeling the supply of this traditionally non-merchantable material with spatially explicit potential locations for emerging technologies in biomass processing allows for a realistic analysis of the feasibility of such a market to stimulate rural development. This dissertation models multiple scenarios for the utilization of harvest residues within the current forest products market in western Oregon. Scenarios considered include ones incorporating different establishment and operating costs of the depots and functions of the intermediate processing centers (dependent and independent depots) to model potential options on the demand side. On the supply side, scenarios included incorporation of harvest residues with and without federal lands as sources of biomass material and the inclusion of this material under increases in federal harvest activities, designed to simulate management closer to that outlined in the Northwest Forest Plan. Results suggest that with the modeled exogenous market prices for residuals, there is limited potential for a biomass market for harvest residues to aid some of the hardest-hit rural communities in western Oregon, and there is little improvement in the potential for the market to aid these places under scenarios of increased federal harvest.