||The environmental costs and benefits of producing bioenergy crops can be measured both in terms of the relative effects on soil, water and wildlife habitat quality of replacing alternate cropping systems with the designated bioenergy system, and in terms of the quality and amount of energy that is produced per unit of energy expended. While many forms of herbaceous and woody energy crops will likely contribute to future biofuels systems, The Department of Energy’s Bioenegy Feedstock Development Program (BFDP), has chosen to focus its primary herbaceous crops research emphasis on a perennial grass species, switchgrass (Panicum virgatum). The choice of switchgrass as a model bioenergy species was based on its high yields, high nutrient use efficiency and wide geographic distribution. Another important consideration was its positive environmental attributes. The latter include its positive effects on soil quality and stability, its cover value for wildlife, and relatively low inputs of energy, water and agrochemicals required per unit of energy produced. A comparison of the energy budgets for corn, which is the primary current source of bioethanol, and switchgrass reveals that the efficiency of energy production for a perennial grass system can exceed that for an energy intensive annual row crop by as much as 15 times. In addition potential reductions in CO2 emissions, tied to the energetic efficiency of producing transportation fuels and replacing non-renewable petrochemical fuels with ethanol derived from grasses are very promising. Calculated carbon sequestration rates may exceed those of annual crops by as much as 20-30 times, due in part to carbon storage in the soil. These differences have major implications for both the rate and efficiency with which fossil energy sources can be replaced with cleaner burning biofuels. Current research is emphasizing quantification of changes in soil nutrients and soil organic matter to provide improved understanding of the long term changes in soil quality associated with annual removal of high yields of herbaceous energy crops.