Recent reports and publications such as that of Perlack et al, 2005 and Burton et al, 2006 indicating a high capacity of this nation's lands to produce feedstocks for renewable fuels have created large expectations in rural America, in Congress, and on Wall Street. Meeting these expectations while preserving our soil and water resources may be a challenge or an opportunity, depending upon how the bioenergy industry develops. It presents a challenge because the plant residues serving as our most important soil and water conservation tool are also required for fuel production in the cellulosic liquid fuel industry. It may be an opportunity because a more diverse variety of plant species may eventually be produced on the landscape and these plants, or crops, which help conserve the soil and water resource, may have a market. As the biofuel industry develops, producers may be able to plant perennial grasses or woody species that both have a favorable impact on natural resources and provide income as liquid fuel feedstocks .