Venezuela, Brazil at odds over ethanol

Venezuela, Brazil at odds over ethanol

	Published : Mon, 16 Apr 2007 04:39 By : Agencies Print this Story

CARACAS, Venezuela (AP) - Not long ago, President Hugo Chavez was embarking on ambitious plans to produce ethanol as the eco-fuel of choice. But within the past two months, the biofuel has suddenly become a villain for him and a major point of friction with Brazilian leader Luiz Inacio Lula da Silva.

Their dispute, raised in part by a U.S.-Brazil ethanol agreement, threatens to overshadow a South American energy summit starting Monday in Venezuela, where Chavez will be seeking support for projects ranging from a regional bank to a natural gas group similar to OPEC aimed at reducing Washington's influence in Latin America.

The United States and Brazil are the world's two biggest producers of ethanol -- an alcohol-based fuel made from crops like sugar cane or corn. They signed an 'alliance' last month to promote ethanol production in the region and create international quality standards to allow it to be traded as a commodity like oil.

Chavez said last week that Venezuela was working on an alternative proposal to 'overthrow' the U.S.-Brazil agreement, which he characterizes as an ethanol 'cartel' that will monopolize arable lands and starve the poor -- criticisms shared by his Cuban ally, Fidel Castro.

'Bush's plan is impossible,' Chavez said Sunday during his weekly television and radio program.

The Venezuelan leader said formal talks on ethanol as an alternative energy source were not planned for the summit, but he said he was willing to discuss the issue.

'If it comes up during the meeting, we'll discuss it,' he said.

Chavez didn't offer details, alluding only to the role he has played in undermining the U.S.-proposed Free Trade Area of the Americas by promoting an alternative socialist trade pact through which he has pledged millions of dollars in aid to Bolivia, Cuba and Nicaragua.

Leaders of Brazil, Argentina, Chile, Colombia, Ecuador, Paraguay and Bolivia are attending the summit, where Chavez will likely push his favored energy proposals: a South American gas pipeline, an alliance modeled after the Organization of Petroleum Exporting Countries to promote 'a fair price' for natural gas, and a regional 'Bank of the South' that could provide an alternative to Washington-backed lenders such as the International Monetary Fund and World Bank.

Gaining support from regional heavyweight Brazil may require Chavez to swallow the distasteful reality that on ethanol, his ally's Silva's interests lie with his foe, U.S. President George W. Bush.

'Brazil's energy options should not be converted into a platform for political-ideological discussion as though there were two opposing camps in the Americas. The cooperation in biofuels with the United States is valid and does not alter Brazil's foreign policy in the region,' Marco Aurelio Garcia, a special adviser to Silva, wrote in a column published in Venezuelan newspapers Friday.

Chile's leader, Michelle Bachelet, likewise isn't pleased about Chavez' latest efforts to paint Chile as an agent of the 'North American Empire.' Chavez, whose supporters now have near complete control over all branches of Venezuela's government, called the Chilean Senate 'fascist' last week for opposing his decision to shut down a Venezuelan TV station.

Bachelet angrily responded that 'in democracy, different branches of government have the perfect right to make autonomous statements about anything they want,' and Chile said that after Chavez honors her with a lunch in the palace, she plans to meet with the Venezuelan leader's political opponents.

Silva has good reason to work with Washington. Brazil's sugar cane-based ethanol is far cheaper to produce than the U.S. variety made from corn, but gaining access to the huge U.S. market depends on persuading Bush and the U.S. Congress to reduce tariffs. Brazil, already the world's top ethanol exporter, also has plenty of land to produce more.

However, even if all arable land on Earth were turned over to biofuel production, it still would not meet world demand for oil, so Chavez is joined by many experts who caution that promoting ethanol as a substitute for gasoline is environmentally misguided.

Venezuela still plans to expand its own ethanol production for use as a fuel additive -- and reduce dependence on Brazilian imports. Venezuela's $900 million plan envisions becoming self-sufficient in ethanol by 2012 by planting 300,000 hectares of sugar cane, manioc and rice and building up to 17 processing plants.

Other Chavez ethanol projects include a January agreement with Ecuador to study jointly commercializing ethanol, and a February deal with Cuba to jointly build 11 ethanol plants.

Chavez denies any conflict with Silva, and Garcia in turn said the Brazilian leader is coming to the summit on Margarita Island 'in peace and love,' to promote ethanol 'not as an ideological fuel, but simply a fuel.'

Chavez and Silva plan to meet before the summit Monday to praise the construction of a petrochemical complex involving the Brazilian company Braskem and Pequiven, a division of Venezuela's state oil company.

Associated Press writers Al Clendenning in Brazil and Eva Vergara in Chile contributed to this report.