Increasing concerns about climate change, energy security and rising prices of fossil fuels is creating an unprecedented interest in producing energy from agricultural crops and trees. It is now becoming well understood that native warm season prairie grasses such as switchgrass and big bluestem are amongst the most resource efficient plants to capture and store energy on farms. Experience with the conservation reserve program has also demonstrated prairie grasses can have major benefits to soil and water quality and grassland birds. What is required now is a concerted effort to sustainably develop native prairie grasses into biofuel production systems that maximize the net energy production and ecological benefits of these crops.  It is proposed that the combination of cultivation of perennial grasses and conversion of these grasses into bioheat and biogas is the best large scale option available to most industrialized nations. In temperate areas of the world, biogas and bioheat have superior lifecycles than conversion of plants into liquid fuels and produce more net energy gain/ha. Energy output to input ratios are a good measure of a high energy sustainability of biofuel production systems.  Energy output to input ratios for grass conversion into bioheat, biogas and liquid fuels are estimated at 14:1, 8:1 and 4: 1 respectively compared with corn ethanol at 1-1.0-1.5:1 and soybean biodiesel at 1.5-2:1. The attributes of native warm season grasses which make them sustainable bioenergy feedstocks include: their perennial nature, adaptability to marginal farmland, moisture use efficiency, stand longevity, low requirements for pesticides and fertilizers, and low energy costs for harvest. The ecological and overall biodiversity benefits of prairie grasses could be further enhanced if they are grown in grass mixtures, a biological N supply is used to grow the crop, and the crop is harvested in late fall, winter or early spring.