The Worldwatch Institute and the German government have just announced that they are working on this very thing.

Two crucial paragraphs from their press release:

"Soaring oil prices, growing security concerns, and farmers' search for new markets have combined to create a super-charged market for biofuels, boosting consumption by 70 percent over the past three years," said Worldwatch Institute president Christopher Flavin. "With country after country adopting tax breaks and regulations designed to boost the use of biofuels, it is urgent that governments assess strategies for maximizing the economic, social, and environmental benefits of biofuels development."

The biofuels project will also assess the broader impacts of large-scale development of biofuels, focusing on the implications for the size of farms, the health of rural communities, the energy and chemical requirements of agriculture, impacts on rural landscapes and biodiversity, air and water quality, climate change, and international trade balances.

"The book of nature is always open." - Louis Agassiz

Though I agree that there could be several negative outcomes to increasing non-food agricultural production, namely, as both Corey and the author of the Bad Idea post mentioned, an increase in high-volume pesticide use due to the looser environmental regulations afforded agriculture that is not intended for human consumption,and an increase in high-volume monocultures that threaten biodiversity and increase pest-control problems.  These are both issues in contemporary agricultural practice regardless of whether or not agri-business turns to the production of bio-mass derivative plastics.  Petroleum-based plastics are created from a non-renewable, nearly exhausted resource that poses many environmental and health complications

An issue that Corey touched upon in his post, that I want to re-emphasize is the harmful effects of petroleum-based plastics on the health.  Grist's Umbra Fisk gives a good outline of some of the negative effects of plastic in Bottle Racket. Plastic particles can be found in many bodies of water, including the oceans and have been linked to reproductive deficiencies in aquatic life.  Maybe most people do not think about those poor hermaphrodite frogs out in the local pond that have been genetically confused by the overload of estrogen-mimicing plastics in the water, but you most certainly will worry when your intersexed child is birthed into this world that refuses to accept something in between male and female (I am not necessarily implying that drinking from a nalgene (#7 plastics) will cause hermaphrodism in your children as I have no evidence of this fact.  I am just attempting to make a point. Reproductive problems in women have been linked to the substance.).  

This is an issue worth watching.  Who else is reporting on this topic aside from the LA Times (the initial article Corey linked to)?  Has any other alternative media outlet picked up on the issue?