The recent meetings between President George W. Bush and Brazilian President Luis Inazio Lula Da Silva have spurred a new interest in the subject of Biofuels as an alternative to petroleum.

Biofuels are touted as a means to reduce dependence on petroleum and help reduce vehicle emissions at the same time. The United Nations expects biofuels to account for a full 25% of world energy needs by 2025. On that scale, there are some serious concerns about the fuel source beyond its relative attractive aspect as an alternative to petroleum.

Most of the attention has been devoted to ethanol which is the subject of the “memorandum of understanding” between the two leaders signed in São Paulo, Brazil in early march. And while the agreement is sent as and important step, it doesn’t address the growing concerns of the other principal biofuel – biodiesel.

On one level, the biofuel option is simple financial sense for most South American countries who have limited petroleum reserves and a standard of living that restricts the ability of a huge swath of the general population to afford gas prices.

In 2005 a 2-percent biodiesel program was implemented on a voluntary basis in Brazil. It becomes mandatory in 2008 with intentions of a 5-percent biodiesel fuel in place by 2013. This would require about 10 million acres of oil seed crops such as castor beans or soybeans.

But to avoid that economic Scylla with biodiesel raises the concern of a possibly more dangerous Charybdis.

One example of that are soybeans, one of the key products used in the Brazilian production of biodiesel. The commitment to biofuels looks a bit different in the light that Brazil, the largest soybean producer in the world, is compelled to keep more of the product at home for this use allowing U.S. exporters greater opportunities on the international market.

Brazil has become the second largest soybean producer, after the United States, providing more than 30 percent of the world's crop – an estimated 57.4 million tonnes in the 2005-2006 period alone. Last year, both South America and the United States had record soybean crops and the South American soybean crop may set a new record in 2007. Moreover, 2006 ended with record U.S. and world soybean stocks.

A 2005 BBC report found between 1990 and 2004, Argentina and Brazil increased the land under soybean cultivation by more than 236 percent. In 1982 US farmers produced just 35 percent of the world’s soybeans, a precipitous drop from the 80 percent they produced two decades prior. Soybean production in the US that year was about 72 million acres, while Argentina and Brazil's totaled a combined 91 million acres.

Environmental groups such as Greenpeace allege that the destruction of 1.2 million hectares of rainforest to grow soybeans. And that foreign companies finance the industry thereby raking in the profits at the expense of Brazilians.

The industry has been taking steps to address these concerns. Last year the Brazilian Association of Vegetable Oil Producers (ABIOVE) and the National Grains Exporters' Association (ANEC) announced in a joint communiqué Monday that their members will stop using soybeans from land that has been cleared to grow soy in the Amazon jungle.

And those ecological concerns could eventually impact the construction sector as well.
The push to connect many of the soybean growing regions in the interior of Brazil to the markets and points of exports has acerbated these concerns as well.

In a report on the issue by Tierramerica, Bill Laurance, an ecologist with the Smithsonian Tropical Research Institution, in Balboa, Panama said the ongoing road projects in the Brazilian interior, like the $450-million BR-163 Amazon highway upgrade were an ecological disaster waiting to happen.

"Huge swaths of unbroken forest will be opened up,” he said. “It's almost an invitation to logging and land speculation."

Lula insists that Brazil can find the balance.

“Brazil has the largest and most important biodiversity on the planet. We have the consciousness of the value that this natural asset represents for our country and for the world,” Lula said in his remarks after meeting with Bush at Camp David on April 1. “Brazil, with 383 million hectares of arable land has the capacity to reconcile food production, biofuel production and the defense of our forests. Our well-known commitment to fight hunger does not allow us that any activity would cause damage to the food production.”