Peter Brabeck-Letmathe, chairman of the giant Switzerland-based beverage and snack-food maker Nestlé, told news outlets last weekend that if the world goes ahead and uses biofuels to replace 20 percent of the growing demand for oil products there will be “nothing left to eat.” Sound extreme — or maybe just extremely unlikely?

Nestlé, like many other companies, is concerned about the rising costs of raw materials used to make its products. Those rising costs are at least partially attributable to the growing demand for corn-based biofuels, which are in turn partly spurred by what Brabeck-Letmathe has angrily called “morally unacceptable and irresponsible” subsidies for biofuel production.

In a March 13 press release, Nestlé said,

During 2007 and in the current year, commodity markets have been characterized by sharp upward movements and increased volatility. This reflects strong global demand for food, accelerating usage of food raw materials for biofuels and the decisive presence in the market of non-traditional speculative players.

These higher costs for ingredients “forced” the company to “advance price increases for finished goods in order to partially absorb the higher input costs.” The result: an “outstanding organic growth rate for the first two months” of 2008. As the Times of London noted: “Nestlé is making money from the soaring cost of commodities, with the Swiss multinational forcing consumers to absorb the higher price of its food products containing milk, cocoa, coffee and cereals.” It’s far from clear that biofuels will be bad for Nestle’s bottom line.

Perhaps more worthy of consideration is a new study in the Proceedings of the National Academy of Sciences suggesting the biofuels boom in the U.S. will lead to more nitrogen from fertilized cornfields flowing into the Mississippi and Atchafalaya Rivers and then gradually making its way down to the Gulf of Mexico each summer. The authors, Simon Donner of the University of British Columbia and Christopher Kucharik of the University of Wisconsin, are concerned that growing more corn to produce ethanol as required under the U.S. federal government’s biofuels mandate will load the rivers with nitrogen and increase the size of the huge “dead zone” in the Gulf — the area of low-oxygen waters caused by nitrogen pollution from the Mississippi. The U.S. biofuels mandate will lead to more corn being grown to produce more ethanol (36 billion gallons by 2022) and more fertilizer being used in the process.

The study “is not an indictment of ethanol or biofuels, rather an analysis of the environmental effects of the preferred means of current ethanol production in the US (corn),” Donner said on his blog. “If biofuels were being produced on marginal lands without chemical fertilizer or from wastes, the story would be very different,” he added. The study concludes that “the projected expansion of corn-based ethanol production could make the already challenging goal of reducing nitrogen export by the Mississippi and Atchafalaya Rivers to the Gulf of Mexico practically impossible without radical shifts in feed production, diet and agricultural land management.”

Putting ethanol under the microscope has become a national mission — see Time magazine’s decision last week to label biofuels a “scam” — at a time when U.S. lawmakers are responding to pressure from environmental and national security groups to look for alternatives to oil, even less than perfect ones. If we want new fuels, we’ll have to make some hard choices, as Donner and Kucharik’s study makes clear. Every energy resource leaves its own footprint, and society will have to decide which ones it is willing to tolerate. Coal, nuclear, oil, and liquid natural gas terminals have increasingly been deemed unacceptable. What’s left on the table?

In related news, a study published this week in Chemistry & Sustainability, Energy & Materials says George Huber of the University of Massachusetts-Amherst and his graduate students directly converted plant cellulose into “green” gasoline components — an alternative to bio-based ethanol that apparently uses less energy and could be available in the next five to ten years, according to ScienceDaily.