Next to a busy train station in Buenos Aires, not far from the chic restaurants and condos getting all the attention these days, lies another world. Behind a gate is a long metal shed, once used to store trains. This is La Casa del Afectado Social y Ambiental -- literally, "the house of the enviro-socially affected." Here, amidst the bustle of traffic and commuters, hundreds of people on the flip side of the nation's renewed glitter are taking a stand.

It may have seemed like a good idea at the time: in 1983, on the Paraná River that forms part of the border between Argentina and Paraguay, the World Bank-funded Yacyretá Dam broke ground. One of the largest dams in the world, the Yacyretá eventually flooded 100,000 hectares of wilderness, displacing more than 80,000 people in both countries. It is still unfinished, and has cost more than $12 billion -- well over its original $2.4 billion budget -- while producing far less power than projected. While he was still president of Argentina, Carlos Menem dubbed the 70-kilometer long dam a "monument to corruption." Patrick McCully, executive director of International Rivers, calls Yacyretá "one of the world's most absurdly destructive dams."

Those displaced by the resulting reservoir -- which reached its full extent in 1998 -- were promised resettlement, but this often amounted to unsuitable housing far from anywhere they could practice their livelihoods. The affected joined a sad international brotherhood: the World Bank has funded more than 500 large dams in nearly 100 countries since its inception in 1944, displacing an estimated 10 million people -- the majority of whom, according to the Bank itself, never regain their standard of living.

In 1996, communities displaced by the Yacyretá project filed a complaint with the World Bank and the Inter-American Development Bank. Three years later, 1,200 affected families filed a case in Argentina's Federal Court against the Entidad Binacional Yacyretá, the body that operates the dam.

The cases have, predictably, dragged on. Last year, hundreds of displaced people from the north traveled more than 500 miles to Buenos Aires to make their voices heard in protest. Around 400 of them took up residence as squatters in this abandoned shed. With no options at home -- and no homes -- they are eking out a living picking up the pieces in the booming urban economy: working as freelance "cartineras" (cardboard collectors) while they wait, and wait, and wait for justice.

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Venezuelan President Hugo Chavez pursues energy treaties in South America

Venezuelan President Hugo Chavez is on a four-nation swing through South America this week, using his country's oil riches to win friends and influence people. Yesterday, Chavez signed an "energy security treaty" with Nestor Kirchner, the president of Argentina; he will continue on to Uruguay, Ecuador, and Bolivia, where observers expect similar energy agreements to be cemented. The treaty with Argentina will see Venezuela buy $1 billion of that country's bonds, provide as much as $400 million for a new natural-gas plant, and cooperate on initiatives including oil refining projects, power distribution, and alternative fuels. Kirchner, whose nation is suffering through a winter fuel shortage, welcomed the assistance; others disparaged his reliance on, as one political opponent put it, "his usurious Uncle Hugo." As for Uncle Hugo, analysts say, he's using this "frenetic petro-diplomacy" to push for Latin American unity against the U.S. -- whose energy-sucking ways he compared to Count Dracula.

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Mexico may file complaint over U.S. border fence plans

Mexican environmental officials are the latest to get peeved over the U.S. government's plan to build a 700-mile fence along the countries' shared border. The barrier, intended to stem illegal immigration, would "place at risk the various ecosystems that we share," says Environment Minister Juan Rafael Elvira -- including the Sonora Desert. A report prepared for Mexican officials by experts in both countries said the fence could isolate animals including jaguars, black bears, and the Sonora pronghorn; it said the accompanying radar and lights could also harm nocturnal species. Mexican officials say they may file a complaint with the International Court of Justice, but are exploring their options; Argentine President Nestor Kirchner stoked the fire yesterday by calling the project "an insult ... to all the nations of Latin America and all the nations of the world." Suggested alternatives to the fence include roadless wilderness corridors, permeable fences, and "live" cactus barriers. Ouch.

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Even by Argentine standards, Ricardo Carlstein can talk a blue streak.

Ricardo Carlstein.

I met with the founder of Biofuels SA, an Argentina-based maker of small-scale biodiesel plants, in the posh environs of Buenos Aires. Carlstein sat at his desk and explained how any person can be a fuel plant by using his invention, a technology protocol he calls "high-temperature pressurized" (simply put: a way to cook biofuels at abnormally high temperatures, one that cuts effluence by rendering obsolete the need to "wash" the fuel).

A massive, bearded man in T-shirt, slacks, and New Balance running shoes, he reminded me of my high-school football coach, pointing through charts and graphs, his playbook for debunking South America's increasingly hyped biofuels revolution. For him, getting out of the climate mess means upending the traditional energy matrix of multinational energy firms. "The key is small-scale, decentralized processing, based on individually owned and operated small-scale plants," he says. "We have over 200 units in the market, worldwide, proving this strategy works."

With the precision one would expect of a Princeton-educated aeronautical engineer -- who also has an economics degree from University Catholique de Louvain, Brussels -- Carlstein told how Big Oil and agribusiness are stomping the biofuels buzz, how the only way to fix the world's climate mess is to cook up biofuels at home, how nothing less than a "democratic" revolution is called for.

"There is a tendency to surround all things pertaining to renewable energies with a veil of technical difficulty that is simply nonexistent," he said. "It's easier to make biodiesel than it is to make vichyssoise."

With hardly a dime to his name after a soured business deal left him bankrupt, Carlstein started his company six years ago, "turning an idea and $1,000 [U.S.] into a company invoicing in the low millions of dollars per year but with a backlog of orders."

Homebrew your own biodiesel with the BIO200-MKV.

Photo: Biofuels S.A.

Carlstein's company says its reactors -- which supposedly produce high-quality biodiesel with half the energy input needed in conventional plants -- are capable of churning out 45 to 4,500 tons of biodiesel per year, at a purchase cost of about $4,000 to $210,000. His reactors are designed to be built anywhere, "are meant to be made locally, generating synergy between client and manufacturer," he says, adding that he has sold units to wanna-be producers in several countries from Argentina to Spain, Costa Rica to Canada.

And his customers are happy, he says, in part because the recipe is so simple. He says folks only need the seed or the oil to get started: "Biodiesel can be made from tree oil crops such as jatropha or the Chinese tallow tree, generating fuel and energy while at the same time we reforest the planet and make use of marginal lands presently not suitable for agriculture."

Mainstream green groups have put tentative support behind biofuels, lured by climate-friendly traits but scared by the prospect that agribusinesses such as Monsanto will team with companies such as BP and Exxon to plow South America into a global garden for fuel crops that will feed the developed world's energy addictions.

Carlstein hopes his ideas of keeping diesel production energy efficient and localized will mean fewer industrialized, monoculture plantations; less environmental damage (scientists say stripping down rainforests to plant monoculture fuel plantations can negate any climate benefits); and less social dislocation (indigenous farmers in South America commonly complain of being beaten off land by large-scale producers, both literally and figuratively).

OK, so the biofuels revolution has a dark side, especially if Big Oil and Big Ag drive it. But will the idea of "every person an Exxon" take hold? Can the world get its head around something that seems so simple?

Certainly the concept has yet to get traction here in South America, where biofuel is fast becoming a buzzword in the continent's two agricultural powerhouses. Brazil is the world's ethanol king, producing 16.5 billion liters of sugarcane-based ethanol last year. And Argentina, the world's biggest soybean exporter, is playing catch-up with a new law offering tax credits to registered biodiesel makers, and requiring a 5 percent biofuels mixture at the pump. Meanwhile, big names like George Soros and Archer Daniels Midland are steering millions to biofuels projects on the continent.

All that industrial momentum spells a hard row to hoe for Carlstein's grassroots talk. He says the combination of corporate players, the venture capitalists who back them, and the regulators who oversee them makes a tough match. "No one in power relishes the idea of greater freedom for the people," he says. "Bureaucrats feel their power to regulate disappearing, and financiers find no market to skim."

Sadly, he says, even academia misses a lot of technical points. Not to mention the average Joe, who "needs to hear something in the media before they can believe it."

But he's trying to convert them.

After three hours of talking, he walked me to the door and pointed out two shiny new Volkswagens that he runs off the fuel he makes.

I left his house with a headache and many questions. Can the biofuels revolution ever be more than greenwashing if agribusiness and energy companies take control? Will monoculture plantations and massive, million-dollar biofuel factories help poor farmers, and protect biodiversity and soil quality? Will corporations and politicians continue with fossil-fuel strategies, concentrating energy production and relying on wasteful distribution networks? Or will fuel production become a democratized, down-home kind of thing?

Nothing is clear, but Carlstein is bent on pushing his answers, to get fuel production out of corporate hands and into the backyard and barns of the little guy. The reason: time is running out, as the world faces a climate crisis.

As I walked to the train station, something Carlstein said kept rattling in my brain: "Remember, yesterday used to be tomorrow."

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Crying not for Argentina but for lost patent fees, Monsanto's legal hacks are in European courts suing to block millions of tons of Argentine soybean meal from docking on the continent.

Bean there, sprayed that.

Photo: iStockphoto

Monsanto says that much of the meal crossing the Atlantic to feed Europe's cows and pigs contains traces of its genetically modified Roundup Ready Soybeans. Known as RR, the soybeans are tweaked to withstand the company's Roundup herbicide. This resistance lets farmers blanket entire fields with the chemical mixture rather than surgically applying it to kill off weeds.

Monsanto holds a patent for the seed in Europe, but not in Argentina, where a dispute over technology rights keeps the U.S.-based agri-giant from collecting technology fees on RR seed sales. By using its European patent to disrupt Argentina's lucrative soy-meal trade with Europe, the company hopes to strong-arm Argentine farmers into paying up.

Meanwhile, the tricky lawyering is shedding light on what critics say is a dubious corporate strategy to make Argentina a mega-lab for GM soybeans, one that's already spawned deep environmental and economic problems far off the radar screen of the international media.

Walking into the Social Forum for the Resistance Against Industrialized Agriculture in downtown Buenos Aires last month, I wasn't sure what to expect. Instead of suits and ties, I found lots of facial hair and rumpled clothes -- technology wonks, students, professors, scientists, and landless peasant farmers gathered to protest the sins of large-scale industrial agriculture. One middle-aged water-quality activist wore a papier-mâché spigot on his head. An interpretive artist twirled a rubber hose and let out angry groans. Though less legible than the speakers' PowerPoints, her message seemed thematically congruent: the soy is hitting the fan in Argentina -- and Monsanto's bad behavior is to blame.

I got a café cortado and searched out Adolfo Boy, an agronomist with the Grupo de Reflexion Rural, a technology watchdog group. "Ask yourself why Monsanto, with all its lawyers, never got a patent for gene RR in Argentina," he said, thumbing through a binder exploding with dated newspaper clips.

He rewound to the 1990s, when the firm brought its new genetically tweaked seeds to Argentina. His theory -- shared by many here -- is that Monsanto intentionally left RR seeds in the public domain so Argentine farmers would use them, spread them, create new plant varieties, and, most important, lock themselves into buying the pricey Roundup herbicide.

Argentina first approved RR seeds in 1996, and Monsanto tried to build its royalty fees into the price, but a thriving black market kept the seed prices too low for the company to recoup the fees. Meanwhile, up in the land of strong patent enforcement, U.S. farmers were paying a $6.50 patent-based technology fee every time they bought a 50-pound bag of RR seed. Around that time, seeds that sold for $9 a bag in Argentina were going for $21.50 in the United States. A report issued at the time by the U.S. government's General Accounting Office blamed the price difference on lack of property-rights enforcement in Argentina. The American Soybean Association asked Monsanto to refund more than $300 million to U.S. farmers. The company refused.

As Argentina struggled to recover from a devastating economic collapse that hit in 2001, the illegal trade in RR seeds grew. By 2005, according to one estimate, only 20 percent of Argentina's $1 billion annual soybean seed trade was legal. Monsanto had had enough. It stopped direct seed sales in 2003, though Argentine companies continued to sell seeds containing RR genes and paid some licensing fees.

Having missed out on the chance to collect fees at the point of sale, Monsanto lawyers in 2004 said the company would charge a $1-per-ton export fee on Argentine soy and soy derivatives shipped abroad (and $2.50 per ton between 2006 and 2011). Argentina's farmers and government officials refused.

Monsanto has denied that it made a strategic decision not to pursue patent rights in Argentina. It didn't respond to requests for comment for this story, but in an open letter published in an Argentine paper, El Clarin, Monsanto rebuffed the public-domain theory, claiming the company tried to get a patent but was blocked by legalities.

Evidence suggests otherwise: as farmers were getting to know its RR seeds, Monsanto did not object -- as Argentine law allows it to do -- when farmers registered some 200 plant varieties containing Monsanto's RR technology with the National Seed Institute, according to a report by the French newspaper Le Monde Diplomatic. Had Monsanto been truly interested in exercising legal rights over RR seed, the theory goes, it would have made use of the law, stopping others from incorporating it in other varieties.

What's clearer than Monsanto's patent strategy is the astounding rate at which the RR soybean took hold, and the repercussions it has wrought.

Since RR was approved for use here in 1996, Argentine jungles and savannas have been cleared to make room for more than 34 million acres of the crop. The rate at which forests in northern Argentina are being turned into soy plantations is three to six times higher than the world average, and the country now ranks second only to the United States as the biggest producer of GM crops in the world.

As GM operations push out traditional farming here, civil and environmental groups are crying foul, making Argentina a case study for the technology's unintended economic, social, and environmental consequences. Agronomists say the herbicide-resistant soybean is leading to serious problems, including deforestation, soil degradation, pesticide pollution, and genetic contamination.

Soybean fields forever.

Photo: iStockphoto

"Argentina is placing its future economy and food security in danger by choosing to ignore the ecological downside of such heavy reliance on a no-till, herbicide-based system," said Charles Benbrook, an agronomist and consultant who worked for the Carter administration and conducted a study in 2005 on GM soy's impacts in Argentina. "They are going to run into serious problems."

GM cheerleaders say the crops enhance food security, feeding the hungry masses with higher yield power. But statistics fall crossways. Walter Pengue of the University of Buenos Aires and Miguel Altieri of the University of California-Berkeley report that wheat, dairy, and fruit production has dropped significantly in Argentina as farmland has turned to soybean monoculture.

Monsanto claims RR soybeans decrease the need for repeated herbicide applications. But some weeds build resistance to herbicides, and when they do, different herbicides are needed in the mix. Pengue and Altieri report that in the Argentinean pampas, eight species of weeds exhibit resistance to glyphosate, the active ingredient in Roundup. The fear: the more plants become resistant, the more farmers turn to different pesticides, further complicating the soup of poisons being spread through the country's fields.

There are also concerns that all this genetic tinkering is causing GM soy to have lower protein levels than regular varieties. A study published in the Journal of Agricultural and Food Chemistry in 2004 analyzed soybeans and soybean meal from the world's top producers: Argentina, Brazil, China, India, and the U.S. Those from Argentina, which Benbrook says at the time were 98 percent Roundup Ready, had the lowest crude protein content. Those from China, which grew no GM soy at the time, had the highest. "This points directly to the possibility that RR has resulted in significant decline in protein level," Benbrook said, adding that it mirrors concerns that protein levels in soy and corn in the United States are decreasing.

Meanwhile, experts say that GM crops may be playing a role in rising social dislocation. In 1998 there were 422,000 producers or local farmers in Argentina; by 2002, that number had dropped by 25 percent to 318,000.

And there are health worries stemming from the widespread use of Roundup, which has reportedly been sprayed aerially and drifted onto non-RR crops and into communities. Dario Gianfelici, a general physician from the small town of Cerrito in a soy farming region, says he has seen medical problems in farmhands that stem from herbicide exposure. "I don't have the money or the manpower to [raise awareness] like I would like to do," he said in a telephone interview, "but I continue to talk about this."

With people like Gianfelici and Boy sounding alarms, Monsanto is scrambling to bolster its public image. To create a new generation of customers friendly to the idea of consuming GM products, it has joined the likes of Bayer S.A. and Dow AgroSciences Argentina S.A. in funding ArgenBio, a trade association that offers teacher workshops and downloadable educational materials for use in Argentine schools. Gabriela Levitus, ArgenBio's director, says the group's purpose is "to divulge information about biotechnology."

One woman's information is another woman's propaganda. Said Silvie Sieb, a grade-school teacher from the province of Entre Rios who attended one of the workshops, "It's pure show business so they can turn kids into customers."

Sieb said the presenters explained how "inofensivo" the RR soybeans and Roundup herbicide are. But, she said, "They did not say that it is destroying our soil and reducing biological and productive diversity with a monoculture cultivation that serves to feed the pigs of Europe and Asia, and next the cars of Europe with soy-based biodiesel."

Meanwhile, over in Europe, a body of the European Union released a nonbinding decision in August saying it disagrees with Monsanto's claims that soy meal derived from genetically modified seeds infringes the company's patents. But Monsanto's lawyers are still beavering away, undeterred.

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Save us, [insert techno-fix here], you’re our only hope!

Last week, Chile's government green-lighted a controversial mining project known as Pascua-Lama. If the name rings a bell, odds are a chain email has found its way to your inbox, an appeal to "friends who care about our earth."

Activists hoped Chile's new
president, Michelle Bachelet,
would stop the mine.

Photo: Queen/ WireImage.com.

The far-reaching cyber-alert describes a messy international situation. Indigenous farmers in the mountainous Andean border between Argentina and Chile, it says, are fighting an international company that plans to mine for gold beneath massive glaciers. Doing so, the letter continues, will contaminate two key rivers fed by the glaciers, ruin water systems for the area's impoverished people, and line the pockets of yet another foreign corporate invader. Oh, and the mining company has ties to the elder George Bush.

The message's rounds have been so extensive that hoax-busting websites investigated, and they now report what folks in South America have long known: Pascua-Lama is very real. The proposed open-pit mine would sit at an elevation of about 15,000 feet, yielding an estimated 18 million ounces of gold and 685 million ounces of silver over 20 years. The brainchild of Canada's Barrick Gold, it would be the world's first binational mine, and is slated to begin operations in 2009.

Though the email played loose with some facts, it was enough on target to prick Barrick into crafting a point-by-point rebuttal -- choosing to clarify, for instance, that former U.S. President Bush served in an "honorary capacity as an adviser to Barrick's international advisory board for two years in the mid-1990s" and "was neither a director nor officer of the company."

But other than causing a PR headache, the e-protest has failed to make real-space dents. Now that the government of Chilean President Michelle Bachelet has given Pascua-Lama the OK -- rejecting 44 of 46 complaints filed by local opponents after Barrick's environmental impact study was initially approved in February -- the company simply awaits a nod from Argentina. That country, which would host one quarter of the mine, has left the decision in the hands of provincial officials who are said to favor the deal.

While opposition to Pascua-Lama continues in the form of lawsuits filed by indigenous-rights groups, last week's decision drained many green hopes. It was, however, a feather in the cap of Barrick's public-relations team.

For well over a year, Barrick has worked to break the ice with locals -- who it says wrongly believe the mine will hurt water supplies -- and to dispel the concerns of activists around the world.

It's just an "ice reservoir" -- what's
the big deal?

Photo: Eduardo Ubal, courtesy of OLCA.

Vince Borg, the company's vice president for corporate communications, declined to comment for Grist. However, he has worked through other media channels to downplay negative portrayals of the project -- stressing, for example, that glaciologists declared that the ice fields in question were not glaciers, but "ice reservoirs." Barrick has also worked to counter claims that the entire lode is located under ice. "This is simply not the case," says the company's rebuttal to the chain mail. "[Ninety-five percent] of the orebody is not under glaciers/ice fields. Protection of the remaining 5 percent is a key condition of the Chilean authorities' approval of the project."

Ana Lya Uriarte, director of the Chilean environmental commission that gave the approval, assured local media last week that the glaciers "would not be removed, transferred, or interfered with, much less destroyed." And Barrick Chile Director Jose Antonio Urrutia issued a statement saying that "as with all of its other operations around the world, in Chile Barrick will maintain its philosophy of responsible mining."

But those promises are worth a bucket of melting ice to Lucio Cuenca of the Chile-based Latin American Observatory of Environmental Conflicts. "People don't have trust in the government, and the [government's announcement] is rhetorical, saying only that there will be no harm done to the glacier," Cuenca says. "But the deposits are under or near the glaciers, so it is very hard to believe they are not going to destroy [them]." Another major concern for activists is the plan to use a common mining technique involving cyanide, which they worry could contaminate local river systems.

For now, opposition groups are pinning their remaining hopes on Argentine authorities. But Raúl Montenegro, president of the Foundation for the Defense of the Environment in Cordoba, Argentina, says local mining officials "are conditioned by political power" and have already made up their minds. He says the technical capacity of Argentina's regulatory machine is lower than Chile's, and accuses Barrick of giving Argentine officials an inferior environmental impact study. "There were two reports filed, and two different levels of information," he says. "It was much deeper for [the] Chilean side."

The controversial lode lies about 400
miles north of Santiago.

What's more, Montenegro says, Argentina's federal mining agency is legally bound to involve itself in Barrick's request. He says leaving the decision to lower-level officials is a way of giving tacit approval while keeping hands clean in the capital, Buenos Aires. San Juan, the province in question, approved a nearby mine also run by Barrick in 2003 -- an ominous bellwether, Montenegro says.

Ana Folgar of Argentina's Mining Secretariat confirmed that the decision has been placed in the hands of officials in San Juan, and referred Grist to them for comment. Those officials did not respond to interview requests.

Understandably, Barrick has played up the economic benefits for locals, promising 5,500 new jobs during the construction stage and 1,660 when the mine is up and running. In addition, the company estimates that each of those jobs will lead to the indirect creation of 2.5 more jobs in the local economy. For any developing country, that kind of promise makes environmental decisions even more complicated.

Residents of Vallenar, Chile, protest
plans for the Pascua Lama mine.

Photo: Natanael Vivanco

Critics say Pascua-Lama is another example of how permissive national laws, lax environmental enforcement, cheap labor, and peaking ore prices are prompting a modern-day gold rush in South America, home to some of the world's most sensitive ecosystems. And as indigenous groups, farmers, and greens butt heads with multinational mining interests and royalty-hungry governments in Argentina, Chile, and Peru, the money machine keeps turning.

A Canada-based consultancy, Metals Economics Group, reports that in 2005, nearly a quarter of worldwide mining exploration budgets -- which totaled $4.89 billion -- found their way to Latin America, making the region "the most popular destination for exploration." Victor Di Meglio, director of the Argentine Mining Chamber, a trade group, told reporters last year that he expects investments of $4.5 billion in Argentina alone over the next five to six years. Chilean officials reportedly expect mining investments to total $10 billion by 2008, and Peru's prospects aren't far off that mark, according to reports.

Those figures give the shakes to activists who say unemployment, poverty, and corrupt governments spell an all but open road for potential environmental abuse. And they are bound and determined to keep Pascua-Lama from being added to the list.

According to Mines and Communities -- an international coalition created by three British-based organizations -- the Pascua-Lama fight isn't over. Legal actions are under way to nullify the environmental-impact approval granted by Chile in February -- and even to challenge the legitimacy of the treaty between Chile and Argentina that laid the foundations for this project in the first place.

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Water privatization falling out of favor

The privatization of water systems took off globally in the '80s and '90s; now it seems to be going the way of ankle zippers and acid-washed denim. At last week's World Water Forum, delegates voted to issue a decree supporting government responsibility for providing safe drinking water. As if on cue, Argentina last week announced it was severing its contract with the French firm Suez and handing control of its water supply to a new government-run entity. Protests against water privatization have cropped up in many Latin American countries in recent years, and the U.N.'s second world water development report, released last week, points toward one reason: it says the main beneficiaries of privatization have been relatively well-off urban pockets, not the poor. In the current climate of volatility and protest, many big multinational water-management companies are backing away from ventures in developing countries. Ironically, many big multinational bottled-water companies are now seeing their sales in the developing world soar.

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In his drab office in the fashion-obsessed chaos of downtown Buenos Aires, Argentina, Edmundo Defferrari cuts a farmhand's figure in a corporate man's world.

Soy is growing up down south.

Photo: USDA/Keith Weller.

The 28-year-old industrial engineer, in cap, jeans, and scruffy beard, taps through a PowerPoint presentation choked with graphs, statistics, and cartoon renderings of how his prototype biodiesel plant can help farmers become self-sufficient. Then he opens a dark brown bottle filled with soybean diesel. "When it burns," he says, "it smells like there's a McDonald's in the field."

Backed by Don Mario, an Argentine seed company, Defferrari has developed what he hopes is a bit of methadone for global oil addiction: a localized way for soybean farmers to turn part of their harvest into homespun fuel. And this entrepreneur is far from alone. Kick-started by high oil prices and talk of peak oil, South America is making an incipient push to reshape the future of fuel.

It's not an easy task. "International financial institutions, from the International Monetary Fund to the Inter-American Development Bank, have loaned with a favorable bias upon extractive industries, and little effort on renewables," says Mark Langevin, a politics professor at Chapman University in Santa Maria, Calif., whose work focuses on Brazil. Observers also say that politics and economies of scale currently mean more noise than payoffs for the South American biofuel industry.

But that's not stopping engineers in the continent's agricultural powerhouses, particularly Brazil and Argentina, from exploring how to make and export cleaner fuels. And as the U.S. prepares to take its own biofuel production to another level, some are wondering if the global market will end up smelling more like salsa or apple pie.

Defferrari hopes his $152,000 prototype plant in Chacabuco, about 145 miles west of Buenos Aires, will herald a trend that will become as common as cow dung. The plant can churn out about 360 gallons of biodiesel and 10 tons of animal feed from 12 tons of soybeans per day. Not only does it produce fuel that's about half diesel's market price, it's automated, requiring humans only to load the contraption and turn it on and off.

"This is about farmer protection, about making them self-sufficient," Defferrari says. "This is the kind of plant that three or four farmers could invest in together." He's got interest -- and not just from farmers. His work has landed him in local magazines, in wire stories, and on CNN. And though he won't give details, the budding entrepreneur says he is planning a trip to Chicago for meetings with a big energy firm.

In Argentina, which reaps high volumes of soybean and sunflower seeds, biodiesel is often pitched by industry watchers as the alternative fuel with the most national potential. But production in the country is currently at an "artisan level, of little volume," says Claudio Molina, head of the Argentine Association of Biofuels. According to AgroDiario, an Argentina-based agriculture magazine, an estimated 20 plants are operating in the country, but they are not legally registered.

Some hope tighter regulation and legal subsidies will help cultivate the fledgling industry here. Argentine lawmakers are mulling a bill that would mandate a 5 percent mix of biodiesel with regular diesel, creating an annual demand of 660,000 tons by 2009. But the bill is stuck -- unlike in Brazil, whose young biodiesel industry is helped by a mandated 2 percent mix by 2008, and 5 percent by 2013. Brazil opened its first commercial biodiesel refinery in March.

And South America's biggest country is a leader in another important fuel. Last year, the global production of ethanol displaced about 3 percent of the 317 billion gallons of gasoline consumed on the planet, according to a report from the Renewable Energy Policy Network for the 21st Century. Nearly 40 percent of that global supply came from Brazil, the largest ethanol market and maker in the world.

It's easy to imagine Eduardo Pereira de Carvalho as a loud-talking channeler of Henry Ford, whose 1920s enthusiasm for crop-based ethanol was eventually drowned by cheap oil. As head of the Sao Paulo Sugarcane Agroindustry Union, Carvalho speaks with a revolutionary's flare, ticking off reasons why his country is the Saudi Arabia of ethanol.

Brazil produced 4 billion gallons of ethanol in 2004, some 37 percent of the world total, while the U.S. churned out 3.4 billion gallons, 31 percent of the world's share. The country also exported 634 million gallons -- 112 million of that to the U.S. -- and its government is pushing to clear more land for production. Its vast size and tropical climate are perfect for the production of sugar cane, which is said to have better energy conversion rates than corn, the primary source for ethanol in the U.S. What's more, Brazilian producers burn cellulosic stalk of sugar cane to make energy that fuels the entire industrial process. "That is why our production costs are half that of corn," Carvalho says.

While Brazil builds its ethanol empire -- eyeing customers from Venezuela to China -- other South American nations are also getting on board. Most are embracing mandatory fuel mixes for cost, security, and environmental reasons, but some hope to become bio-fountains spilling into a global fuel revolution.

In September, Venezuela -- which now mandates ethanol blending in some parts of the country and may require a 10 percent mix nationwide in the future -- said it will spend $900 million over five years to bring 15 new plants online. Colombia passed a law requiring a 10 percent ethanol mix in cities with populations over 500,000, but geography restricts its sugar cane production, meaning it will likely have no exportable surplus. Peru is pushing ethanol, with California as a potential market, while Argentina is putting its ethanol empanada in the mix too. It has become the world's 17th-biggest ethanol maker, producing 42 million gallons last year, according to F.O. Licht (though its output goes mainly to agrochemicals, drinks, and cosmetics). And tiny Paraguay and Uruguay are also seeking to get involved.

That said, nobody holds a caipirinha to Brazil, whose confluence of geography, economics, and politics has spawned an industry that, unlike the U.S.-based ethanol sector, is now capable of standing without the crutch of tax subsidies. And its fortunes rose three years ago when Brazilian automakers began churning out "flex-fuel cars" that run on a combination of power sources, including ethanol. Carvalho says the country's car industry is heading to 100 percent flex fuel, and predicts that "within a year or so there will be no more new gas cars made in Brazil." In early November, automakers rolled out a flex-fuel car that will be sold in the U.S. next year. While all that makes some U.S. ethanol makers nervous, Carvalho and others say there's room for collaboration. In April, Brazil's minister of development, industry, and foreign trade, Luiz Fernando Furlan, traveled to California on an ethanol cheerleading tour. While there, he suggested that U.S. and Brazilian companies could jointly market their products to China, widely considered to be the globe's emerging mega-consumer of energy.

Such a partnership would be a new spin on an old story. Thanks to geography, Uncle Sam has historically been a fossil-fuel friend of its Latin American neighbors, buying black gold from oil-flush nations like Ecuador and Venezuela, which provides some 10 percent of all U.S. oil imports. For many, those historic relations and proximity make bio-imports a no-brainer. But will the U.S. ethanol industry, which some see as a subsidy-heavy pet project of farm-belt politicians, fight that flow? Early signs point to yes.

For instance, U.S. ethanol makers now have their corn boiling over plans by U.S.-based Cargill to build a refinery in El Salvador. The ag giant will take advantage of a trade-law loophole in the Caribbean Basin Initiative: by processing Brazilian ethanol in a CBI signatory country, Cargill can export the fuel duty-free into the U.S. The Central American Free Trade Agreement could have closed the loophole, but didn't.

Cane you dig it?

Photo: iStockphoto.

In reports and position papers, the Minneapolis-based Institute for Agriculture and Trade Policy, a think tank, claimed CAFTA could let millions of gallons of Brazilian ethanol into the U.S. without tariffs. "CAFTA stands to destroy thousands of jobs created by the U.S. ethanol industry and make the U.S. dependent yet again on foreign fuel supplies," says Ben Lilliston of IATP.

And what about the U.S. biodiesel industry, a neophyte with production rates of only 30 million gallons last year? South America will not likely find new amigos there, especially after a boat full of South American biodiesel docked in Florida last month, qualifying for a U.S. biodiesel tax break. The American Soybean Association immediately called on Congress to eliminate a loophole in the 2004 law in question.

Some things are going well for the U.S. biofuel market, like the odd assortment of environmentalists, evangelical Christians, and conservatives running around Washington pitching it as a key to America's fuel security. Lawmakers are drumming up ways to protect ethanol makers from a deluge of imports, and the energy bill President Bush signed this summer requires the country to use an annual 7.5 billion gallons of ethanol and biodiesel by 2012.

But America's homespun biocombustibles industry, especially ethanol, is still in a knot over South American competition. Um, samba lessons anyone?

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The people of Pico Truncado in southern Argentina know the power of the wind that whips through their open land; it rips flags to shreds, dumps dust on clothing, and musses hair. But it also provides more than half of the town's electricity and could bolster its economic future. Pico Truncado already has four working windmills, and a wind-powered hydrogen plant will open in June. A nearby village is participating in a U.N. pilot project as one of five sites worldwide to be powered solely by alternative fuels, and an Argentine oil company has begun looking into financing a $19 billion wind-powered facility in or near Pico Truncado that could export hydrogen around the world. The 15,000 or so residents of the Patagonian town are hoping their, um, windfall will continue, possibly making the area the Middle East of the future. "Why not?" asks resident Mario Salomon. "We lack water, we lack money, but we have never lacked wind. We have plenty to spare."

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Melting of South American Glaciers Leads to Sea-Level Rise

Glaciers in the Patagonia region of southern Argentina and Chile are melting so fast that they are leading to a tiny but notable rise in sea level, U.S. scientists report in the latest issue of the journal Science. The glaciers are melting twice as quickly as they were in 1975, an increase that the researchers attribute to global warming. Between 1995 and 2000, enough ice melted from the Patagonian glaciers to boost sea levels by 0.1 millimeters per year -- okay, not enough to drown anyone's beach home, but, combined with increasing melt from other glaciers around the world, nothing to sneeze at, either. Patagonia's so-called "calving" glaciers are particularly vulnerable to rising temperatures. "Calving glaciers are more sensitive to climate change once pushed out of equilibrium, and make this region the fastest area of glacial retreat on Earth," said lead researcher Eric Rignot of NASA's Jet Propulsion Laboratory.

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The massive economic crisis in Argentina has had an unexpected silver lining for the environment: It has led to a surge in the use of compressed natural gas (CNG) in cars, a cleaner fuel than either diesel or gasoline. Argentina is home to the third-largest natural-gas reserves in Latin America and the world's largest fleet of natural-gas cars, at about 800,000, or 15 percent of personal vehicles. After the peso was devalued in January 2002, gasoline and diesel prices jumped by more than 30 percent, making CNG the most economical fuel available. "There's a revolution going on in the energy sector that developed countries aren't taking notice of. Developed countries are betting on the fuel cell idea, but that's for some 20 years from now," said Gregorio Kopyto of Argentina's Chamber of Compressed Natural Gas. (Enviros will be less thrilled to learn that the Argentinean government has also helped promote CNG use in order to cut costs in public transportation.)

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More than 1,500 farmers now plant 7 million acres of organic crops a year in Argentina, up from 220 farmers and 13,000 acres in 1995. For the most part, people in Argentina haven't developed a taste for the stuff -- 90 percent of the country's organic crops are exported, mostly to the U.S. and Europe. The leading organic crops include soybeans, corn, fruits, rice, sugar, and tobacco. Jose Nanni, who converted his family's 100-year-old vineyard to organic production a few years ago, said, "We don't need to use any type of chemicals because of the characteristics of the area where we grow our grapes."

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Enviros say more than 10,000 endangered crocodiles in Paraguay are dying because a major river that irrigated their swamplands is now being diverted to provide water for agriculture in Argentina. The crocodiles, known as Yacares, are starving to death or being encased in mud as the swamps dry up. Their numbers had been climbing before the Pilcomayo River was diverted in 1996.

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