Megadams, ‘Soy Highway' Could Transform One of Amazon's Last Wild Watersheds

By Michael Kepp

March 9 — Environmentalists and scientists are warning that one of the Brazilian Amazon's largest watersheds, an expansive rainforest of free-flowing rivers, indigenous tribes and a scattering of towns, is facing significant ecological risks that could transform the region within a decade.

But the government and some big corporations see the coming hydroelectric dams, a paved throughway and expanded Amazon River ports as vital to the region's economy and to the development needs of Brazil.

Agribusiness efforts to expand the lucrative soy frontier and Brazil's need for power are converging in the Tapajós Basin—an area larger than California, but with only about 2 percent of the population—whose first paved highway will soon be completed and whose first half-dozen dams, scheduled to be built by 2023, include three massive hydroelectric plants.

Until 2007, the basin was relatively pristine rainforest almost completely free from development. But that was the year the government and its civil construction company partners began paving more than a 700-mile dirt stretch of the BR-163 highway, which bisects the basin.

Paved Amazon highways have always been a conduit for illegal settlement and deforestation.

Today, only about 180 miles of dirt remains, still enough to make the road impassable during the six-month rainy season, limiting and delaying trucked grain cargos.

But in 2017, when paving is completed, trucks will transport soy and other grains from farms in the southern part of the basin to port towns further north, where it will be barged to export terminals near where the Amazon River flows into the Atlantic Ocean.

Settlers, Land Grabbers, Power 

When you consider Brazil's power needs, it is easy to see why the federal government chose the Tapajós Basin for one of the world's biggest dam-construction programs: Hydropower generates 73 percent of Brazil's electricity, the Amazon is the source of more than 80 percent of the country's untapped hydropower potential, and the Tapajós Basin—with its three major rivers—is where much of that untapped potential can be harnessed.

But the dam-building frenzy (the government is looking at the possibility of putting 41 dams in the basin in the coming decades) also is coinciding with highway and port infrastructure investments expected to turn the Tapajós Basin into a major soy-transport link to the Atlantic.

Paved Amazon highways have always been a conduit for illegal settlement and deforestation. So for the past decade, the government has been declaring huge expanses of federally protected forest along both sides of the BR-163.

But environmental groups contend that federal protection is in name only.

“The Tapajós Basin is home to the biggest concentration of current and near-future infrastructure projects in the Brazilian Amazon,” said Rômulo Batísta, an Amazon campaigner for Greenpeace. “But the government has shown in its not being able to protect against the invasion of protected areas along the BR-163 that it is not likely taking the precautions needed to protect the basin from the social and environmental impacts caused by further developing it.”

‘Mainly on Paper.'

Rubens Gomes, president of the Amazon Work Group, an association of more than 60 nongovernmental organizations, told Bloomberg BNA: “The protected areas that the government created to protect the being-paved stretch of BR-163, in general, remain a blueprint, areas that exist mainly on paper.”

Data from the Institute of Man and the Amazon Environment (Imazon), a research center in the Amazon state of Pará, where much of the basin is located, that uses satellite images to measure Amazon deforestation, shows that deforestation along a 31-mile-wide swath on both sides of the highway increased 266 percent between 2010 and 2013.

“Paving advances made it easier for settlers and land grabbers to invade and illegally clear in these protected areas,” Imazon senior researcher Paulo Barreto told Bloomberg BNA.

A government official with oversight of the region said he does not have the manpower to adequately manage and safeguard federally protected areas in his region. The area along BR-163 in Pará state where paving is nearing completion alone accounts for 20 percent of the deforestation of the Brazilian Amazon, according to IBAMA, the enforcement arm of the Environment Ministry.

‘Insufficient Number of Employees.'

Carlos Augusto de Alencar Pinheiro, who heads the regional office of the arm of the Environment Ministry that manages federally protected areas except for indigenous reserves, told Bloomberg BNA that his agency has 60 employees to patrol what amounts to 20 percent of the entire Tapajós Basin.

The agency—Instituto Chico Mendes de Conservação da Biodiversidade (ICMBio)—oversees 14 federally protected areas in the Tapajós Basin in Pará state, areas totaling 100,000 square kilometers (38,610 square miles).

While the ICMBio will get 15 more employees for the effort this year, it remains “an insufficient number of employees to safeguard this vast a protected region against illegal deforestation and other environmental crimes,” he said.

“But the ICMBio is trying to manage federally protected areas in this region more efficiently by identifying which areas are the most threatened, like those along the BR-163 highway, and by acting in conjunction with IBAMA, the federal police and the military police to crack down against such environmental crimes.”

The Megadams 

Located in central Brazil, the Tapajós Basin, the fifth-largest watershed in the Brazilian Amazon, covers 493,000 square kilometers (190,300 square miles).

The confluence of the Juruena and Teles Pires rivers in the southern part of the basin form its main waterway, the Tapajós River, a major tributary of the Amazon River at the northern end of the basin.

(Click image to enlarge.)

IER story graphic 3/11/2015

Work has begun on a megadam and three medium-sized hydroelectric plants on the Teles Pires River that will have the combined generating capacity of 3,219 megawatts (MW) of power when they go on line by 2018.

The reservoir of the 1,819 MW Teles Pires dam, whose construction is furthest along, already has flooded 150 square kilometers (58 square miles), part of it rainforest, and could go on line this year.

Further downstream on the Tapajós River, the government is planning the 2,338 MW Jatobá dam and the 8,040 MW São Luiz do Tapajós dam, the largest hydroelectric plant scheduled to be built in the Brazilian Amazon, at an estimated cost of 30.6 billion reais ($11.9 billion).

Barreto estimates that once construction starts on the two megadams on the Tapajós River, 25,000 construction workers and 50,000 support personnel, mainly employed in goods and services businesses, will move into the area.

‘Cheapest Source of Energy in Brazil.'

The Tapajós River dams would account for 70 percent of the nearly 15,000 MW of hydropower to be generated in Brazil between 2019 and 2023, according to the latest 10-year energy expansion plan of the Energy Research Enterprise, the planning arm of the Mines and Energy Ministry.

Hydropower from the basin's dams will help boost electricity supply in a country where demand for such energy is projected to grow 4.3 percent annually by 2023.

“The advantage of big dams … is they are the cheapest source of energy in Brazil and, as such, are economically viable, with few exceptions,” Altino Ventura Filho, secretary of planning and energy development at Brazil's powerful Mines and Energy Ministry, told Bloomberg BNA.

“Also, Brazil has the technological know-how to build dams—more than 1,000 of which have been constructed in this country,” he said.

Last year's re-election of President Dilma Rousseff also guarantees continuity of the government's plan to dam and develop the Tapajós Basin. Her campaign platform highlighted her party's role in reviving large dam-construction projects and keeping hydropower output high.

Towns, Topography

Some 42 percent of the Tapajós Basin consists of a mosaic of biodiverse, protected rainforest areas, including state and national parks and the reserves of 10 indigenous tribes.

Most of the basin's 820,000 people live in towns along main rivers or in traditional riverside communities.

Santarém is the largest town, located at its northern tip, at the confluence of the Tapajós and Amazon rivers. The smaller town of Itaitúba is located further upstream on the Tapajós River.

Most of the basin sits in the northern part of Mato Grosso state and the western section of neighboring Pará state.

The ‘Soy Highway.'

The northern stretch of BR-163—which some have dubbed the “soy highway”—has become a conduit for illegal settlers and the soy trucked from Mato Grosso state to Santarém or Itaitúba, from where it is barged to two deepwater Amazon River ports near the Atlantic Ocean.

The government expects a paved BR-163 to allow hundreds of trucks daily to transport grain to Itaitúba and to Santarém during the soy harvesting season.

So the Transport Ministry is studying plans to build a 1,050-km (651-mile) railway from Sinop, a Mato Grosso town in the heart of the soy region, to Itaitúba to ease expected highway cargo traffic.

And the government plans to more easily barge that grain from Itaitúba by dredging short stretches of the Tapajós River below the dams.

Fishing, Biodiversity

The large dams on the Tapajós River will be run-of-the-river dams that will rely on the force of flowing rivers, rather than on huge reservoirs, to generate power, said Mines and Energy Ministry's Venture Filho. Compared to traditional dams, the smaller reservoirs of run-of-the-river dams greatly reduce the area they inundate, which limits their adverse impact on biodiversity.

Others are not so sure.

“These Tapajós Basin dams will not produce enough energy to economically justify the investment needed to build them and could generate cost overruns of 25 percent,” Wilson Cabral de Sousa Júnior, a professor of environmental engineering at the government's Technological Institute of Aeronautics who coordinated a viability study on the project, told Bloomberg BNA. “The study also showed that these dams will result in reduced fishing and water quality, the loss of biodiversity and methane emissions released when, during the rainy season, dam reservoirs swell and inundate surrounding vegetation, causing it to decompose.”

But José Alberto da Silva Colares, head of the Environmental Secretariat of Pará state, does not believe that government and private-sector infrastructure investments will spur increased deforestation.

He noted that grain processors, traders and exporters in Pará state recently agreed to boycott grains cultivated on illegally cleared forest, a two-year accord negotiated with Pará state federal prosecutors. 

The government also has renewed a moratorium that prohibits operators from buying soy in areas of the Amazon cut after July 2008.

Among the signers of both agreements were U.S.-based Bunge, Cargill, Archer Daniels Midland Co., French-based Louis Dreyfus group, and the Brazilian Vegetable Oil Industry Association.

Soy Export 

But Brazil's soy moratorium expires on May 31, 2016.

“The [Pará state] grain agreement is a positive and a preventative step,” Mario Barroso, coordinator of the applied conservation science program of the WWF in Brazil, told Bloomberg BNA. But “because it is confined to Pará state, the accord won't protect against the illegal expansion of the soy frontier into Amazon rainforest in the northern part of Mato Grosso state.”

The Pará State Soy Farmers' Association estimated that by 2020, the amount of land being cultivated for soy in the state will balloon from 237,000 hectares (586,000 acres) to 2 million hectares (4.9 million acres).

Currently, most of the soy grown in Mato Grosso state is trucked much longer distances to the bottlenecked southeastern ports of Santos and Paranaguá, between 2,200 and 2,300 kilometers (1,240 and 1,426 miles) away, for shipment abroad.

Much of the investment to boost the soy transport and export infrastructure in the basin is being made by Bunge; Cargill; Cianport, a joint venture between two Brazilian grain traders; and Hidrovias do Brasil, a logistics company.

Connecting to the Atlantic 

These four companies have partnered to form the Association of Private Port Terminals of the Tapajós River (ATAP), which is spending 600 million reais ($233 million) on the construction of the four grain-storage and loading facilities in Itaitúba, 800 million reais ($311 million) on barges, and another 1.4 billion reais ($544 million) on expanding grain-storage, and unloading and loading capacity at the two deepwater Amazon River ports and export terminals near the Atlantic Ocean.

Paving the northern stretch of BR-163 and expanding the export terminals will divert grain cargo from these southeastern ports and significantly lower soy export costs, ATAP President Kleber Menezes told Bloomberg BNA.

In 2014, 1.5 million tons of grains, mainly soy, were trucked to Itaitúba and Santarém; when the paving of the northern stretch BR-163 is completed in 2017, some 12 million tons of grains will be trucked north up that highway each year, according to the Transport Ministry.

“The investments that we are making will allow us to export soy and other grains, grown in Mato Grosso state, trucked to Itaitúba and barged to near-Atlantic Ocean export terminals directly to Asia, via the Panama Canal, as well as to Europe, much more cheaply than soy is currently being exported via the southeastern Brazilian ports,” said Menezes. “This should make our soy prices much more competitive, especially in Asia, where China is the main buyer.”

Da Silva Colares said the four new grain-storage and loading terminals in Itaitúba should increase the population of the town, as well as traffic there. So the Transport Ministry is building an 8.3-kilometer (5.1-mile) access road for grain cargo trucks that will detour the town to reach these terminals, he said.

To contact the reporter on this story: Michael Kepp in Rio de Janeiro at

To contact the editor responsible for this story: Greg Henderson at